ACIT CENTRAL CIRCLE-2(1), MUMBAI vs. M/S. G NINE MODULAR PVT. LTD., MUMBAI

PER OM PRAKASH KANT, AM PER OM PRAKASH KANT, AM

These appeals by the Revenue are directed against separate These appeals by the Revenue are directed against separate These appeals by the Revenue are directed against separate order passed by the Ld. Commissioner of Income order passed by the Ld. Commissioner of Income-tax (Appeals) vide tax (Appeals) vide dated 20.10.2022 in the case of G dated 20.10.2022 in the case of G-Nine Modular Pvt. Ltd. Nine Modular Pvt. Ltd. and 27.10.2022 in the case of G 27.10.2022 in the case of G-Trade Capital Venture and Pvt. Ltd. Trade Capital Venture and Pvt. Ltd. The facts and circumstances of the cases and grounds raised cts and circumstances of the cases and grounds raised cts and circumstances of the cases and grounds raised being identical, same were heard together and disposed off by way of this , same were heard together and disposed off by way of this , same were heard together and disposed off by way of this consolidated order for convenience. consolidated order for convenience.

M/s G Nine Modular and M/s G Trade Capital M/s G Nine Modular and M/s G Trade 3 ITA Nos. 3212 to 3214 and 3247/M/2022 ITA Nos. 3212 to 3214 and 3247/M/2022

assessment order without appreciating the facts that assessment order without appreciating the facts that assessment order without appreciating the facts that the identity, genu the identity, genuineness and creditworthiness of the ineness and creditworthiness of the lenders were not established after giving ample lenders were not established after giving ample lenders were not established after giving ample opportunity to the assessee. opportunity to the assessee. 4. Whether on the facts and circumstances of the case and Whether on the facts and circumstances of the case and Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) in law, the Ld. CIT(A)-48, Mumbai is right in allowing 48, Mumbai is right in allowing the appeal filed by the assessee the appeal filed by the assessee relying on the decision relying on the decision of the Hon’ble Bombay High Court in the case of CIT v. of the Hon’ble Bombay High Court in the case of CIT v. of the Hon’ble Bombay High Court in the case of CIT v. Continental Warehousing Corporation [2015 374 ITR Continental Warehousing Corporation [2015 374 ITR Continental Warehousing Corporation [2015 374 ITR 645] ignoring the fact that appeal is pending before the 645] ignoring the fact that appeal is pending before the 645] ignoring the fact that appeal is pending before the Hon’ble Supreme Court of India on this issue of power Hon’ble Supreme Court of India on this issue of power Hon’ble Supreme Court of India on this issue of power conferred by se conferred by section 153A of the Act which was not ction 153A of the Act which was not adjudicated upon. adjudicated upon. 3. Briefly stated, facts of fact are that the assessee filed its Briefly stated, facts of fact are that the assessee filed its Briefly stated, facts of fact are that the assessee filed its regular return of income for assessment year under consideration regular return of income for assessment year under consideration regular return of income for assessment year under consideration on 30.09.2015 declaring loss of Rs.194,06,767/ on 30.09.2015 declaring loss of Rs.194,06,767/- -. The scrutiny assessment was completed u/s 143(3) of the Income completed u/s 143(3) of the Income completed u/s 143(3) of the Income-tax Act, 1961 (in short ‘the Act’) determining total income at Rs.82,83,510/- (in short ‘the Act’) determining total income at Rs.82,83,510/ (in short ‘the Act’) determining total income at Rs.82,83,510/ wherein addition for ‘ ‘bogus unsecured loan’ was made u/s 68 of the was made u/s 68 of the Act.

3.1 Subsequently, a search action u/s 132 of the Act was carried Subsequently, a search action u/s 132 of the Act was carried Subsequently, a search action u/s 132 of the Act was carried out at the premises of the assessee on 30.11.2019 along with out at the premises of the assessee on 30.11.2019 along with out at the premises of the assessee on 30.11.2019 along with search action at the other entities of the group. The case of the search action at the other entities of the group. The case of the search action at the other entities of the group. The case of the assessee was then centralized with the Dy. CIT Central Circle-2(1), assessee was then centralized with the Dy. CIT Central Circle assessee was then centralized with the Dy. CIT Central Circle Mumbai by way of order u/s 127 of the Act passed by the Ld. Mumbai by way of order u/s 127 of the Act passed by the Ld. Mumbai by way of order u/s 127 of the Act passed by the Ld. CIT(A). The DCIT-2(1) (hereinafter shall be referred as ‘the Assessing 2(1) (hereinafter shall be referred as ‘the Assessing 2(1) (hereinafter shall be referred as ‘the Assessing Officer’) issued notice u/s 153A of the Act asking the assessee to file Officer’) issued notice u/s 153A of the Act asking the assessee to file Officer’) issued notice u/s 153A of the Act asking the assessee to file return of income. In response, the assessee filed return of income return of income. In response, the assessee filed return of income return of income. In response, the assessee filed return of income on 08.01.2021 declaring loss of Rs.59,68,271/ on 08.01.2021 declaring loss of Rs.59,68,271/-. The Assessing . The Assessing

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Officer brought to the notice of the assessee the unsecured loans Officer brought to the notice of the assessee the unsecured loans Officer brought to the notice of the assessee the unsecured loans received by the assessee during the year under consideration and in received by the assessee during the year under consideration and in received by the assessee during the year under consideration and in the light of the observations during the search/survey proceedings, the light of the observations during the search/survey proceedings the light of the observations during the search/survey proceedings the Assessing Officer held the unsecur he Assessing Officer held the unsecured loans received from ed loans received from parties namely (i) Ella Finetex Co. Pvt. Ltd., (ii) Kathakali Vincom Ella Finetex Co. Pvt. Ltd., (ii) Kathakali Vincom Ella Finetex Co. Pvt. Ltd., (ii) Kathakali Vincom Pvt. Ltd. (iii) NCL Research and Financial Services Ltd. (iv) Ojas Pvt. Ltd. (iii) NCL Research and Financial Services Ltd. (iv) Ojas Pvt. Ltd. (iii) NCL Research and Financial Services Ltd. (iv) Ojas Assets Reconstruction Ltd. & (v)TanayaVincom Pvt. Ltd., as Assets Reconstruction Ltd. & (v)TanayaVincom Pvt. Ltd. Assets Reconstruction Ltd. & (v)TanayaVincom Pvt. Ltd. unexplained cash credit. unexplained cash credit. Further, the Assessing Officer noted that Assessing Officer noted that unsecured loan of Rs.1,25,00,000/ unsecured loan of Rs.1,25,00,000/- received from received from ‘TanayaVincom Pvt. Ltd’. and ‘Kathakali Vincom Pvt. Ltd Kathakali Vincom Pvt. Ltd’. was already already added into the income of the assessee in the the income of the assessee in the assessment order passed u/s order passed u/s 143(3) of the Act dated 26.12.2017 143(3) of the Act dated 26.12.2017 and therefore, in the impugned and therefore, in the impugned assessment order passed u/s 153A of the Act on 08.08.2021, the assessment order passed u/s 153A of the Act on 08.08.2021 assessment order passed u/s 153A of the Act on 08.08.2021 Assessing Officer considered only the balance amounts of Assessing Officer considered only the balance amounts of Assessing Officer considered only the balance amounts of unsecured loan of Rs.1,75,00,000/ unsecured loan of Rs.1,75,00,000/- as accommodation entry as accommodation entry and added the same as unexplained cash credit added the same as unexplained cash credit u/s 68 of the Act. The u/s 68 of the Act. The Assessing Officer also made addition for the disallowance of interest Assessing Officer also made addition for the disallowance of interest Assessing Officer also made addition for the disallowance of interest on those accommodation entries of unsecured loan for the amount on those accommodation entries of unsecured loan for the amount on those accommodation entries of unsecured loan for the amount of Rs.14,45,620/- and and also, he made addition for the commission he made addition for the commission for for arranging arranging those those accommodation accommodation entries e ntries amounting amounting to to Rs.75,000/-.

M/s G Nine Modular and M/s G Trade Capital M/s G Nine Modular and M/s G Trade 5 ITA Nos. 3212 to 3214 and 3247/M/2022 ITA Nos. 3212 to 3214 and 3247/M/2022

Ld. CIT(A) in combined Ld. CIT(A) in combined appellate order for assessment year 2014 appellate order for assessment year 2014-15 to 2018-19 held that there was no incriminating material found 19 held that there was no incriminating material found 19 held that there was no incriminating material found during the course of the search action at the premises of the during the course of the search action at the premises of the during the course of the search action at the premises of the assessee and those assessment being unabated assessee and those assessment being unabated, no addition could no addition could have been made without aid of incriminating material found during have been made without aid of incriminating material have been made without aid of incriminating material the course of search, f the course of search, following the finding of the Hon’ble Bombay ollowing the finding of the Hon’ble Bombay High Court in the case of High Court in the case of Continental Warehousing Corporation Continental Warehousing Corporation 374 ITR 645 (Bom).

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proceedings u/s 133A of the Act were also carried out at the proceedings u/s 133A of the Act were also carried out at the proceedings u/s 133A of the Act were also carried out at the premises of the unsecured loan provider entities during which it unsecured loan provider entities during which it unsecured loan provider entities during which it was observed that those entities were not found was observed that those entities were not found in existence at their existence at their premises. This fact of non premises. This fact of non-existence of those unsecured loan existence of those unsecured loan provider companies was also brought to the notice of the Director of provider companies was also brought to the notice of the Director of provider companies was also brought to the notice of the Director of the assessee company Mr. Kumar Pal Banda on sessee company Mr. Kumar Pal Banda on 14/11/ 2019 and 14/11/ 2019 and 20.01.2020 and he could not satisfactorily explain genuineness of 20.01.2020 and he could not satisfactorily explain genuineness of 20.01.2020 and he could not satisfactorily explain genuineness of the loan and he admitted that part of the loan the loan and he admitted that part of the loan was settled in cash. The Ld. DR submitted that while arriving on the conclusionthat no The Ld. DR submitted that while arriving on the conclusionthat no The Ld. DR submitted that while arriving on the conclusionthat no incriminating material existed in the case of the assessee, the Ld. criminating material existed in the case of the assessee, the Ld. criminating material existed in the case of the assessee, the Ld. CIT(A) ignored the statement of Shri Kumar Pal Banda recorded u/s CIT(A) ignored the statement of Shri Kumar Pal Banda recorded u/s CIT(A) ignored the statement of Shri Kumar Pal Banda recorded u/s 132(4) of the Act on 14.11.2019 132(4) of the Act on 14.11.2019 wherein he admitted the loan admitted the loan received from certain parties were not genuine and settled in c certain parties were not genuine and settled in cash. certain parties were not genuine and settled in c The The The learned learned learned DR DR DR also also also referred referred referred to to to the the the statement statement statement of of of Shri Shri Shri JayantilalOtmal Jain Jain, promoter of the GM group dated 30/11/2019 , promoter of the GM group dated 30/11/2019 and submitted that he could not substantiate genuineness of the and submitted that he could not substantiate genuineness of the and submitted that he could not substantiate genuineness of the unsecured loans in the light of evidence unsecured loans in the light of evidences gathered dur gathered during the course of search and and survey actions at the premises of the creditors survey actions at the premises of the creditors appearing in the books of accounts of the assessee and third-party appearing in the books of accounts of the assessee and third appearing in the books of accounts of the assessee and third inquiries carried out by the inquiries carried out by the Income-tax department. He submitted tax department. He submitted that in view of the decision of the Hon’ble that in view of the decision of the Hon’ble Madras Court in the case Court in the case of B Kishore Kumar Vs DCIT Kumar Vs DCIT (62 taxmann.com 215) statement taxmann.com 215) statement recorded under section 132(4) is an admissible evidence and Ld. recorded under section 132(4) is an admissible evidence and Ld. recorded under section 132(4) is an admissible evidence and Ld. CIT(A) has completely ignored such a statement. CIT(A) has completely ignored such a statement.

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6.1 The Ld. DR further submitted that disclosure of any DR further submitted that disclosure of any DR further submitted that disclosure of any transaction in the books of accounts is not material and even if n in the books of accounts is not material and even if n in the books of accounts is not material and even if some transaction is disclosed in the books of accounts and as a some transaction is disclosed in the books of accounts and as a some transaction is disclosed in the books of accounts and as a result of such action, the contents of such disclosure are found to result of such action, the contents of such disclosure are found to result of such action, the contents of such disclosure are found to be incorrect or false, the discovery of such a document indicating be incorrect or false, the discovery of such a document indicating be incorrect or false, the discovery of such a document indicating disclosed transactions would form the incriminating material. sclosed transactions would form the incriminating material. sclosed transactions would form the incriminating material. According to the Ld. DR in the light of the facts observed during the According to the Ld. DR in the light of the facts observed during the According to the Ld. DR in the light of the facts observed during the course of survey proceedings, proceedings, including non-existence of the existence of the unsecured loan parties, the claim of the loan unsecured loan parties, the claim of the loans recorded in the bo recorded in the books of accounts was fals of accounts was false and therefore seizure of regular books of and therefore seizure of regular books of accounts indicating the falsity of transaction accounts indicating the falsity of transaction ma made the regular books of accounts as as incriminating material. In support of his n support of his contention, he relied of the decision of the Hon’ble Gujarat the Hon’ble Gujarat High in the case of N.K. Industries Ltd. 72 taxmann.com 289 N.K. Industries Ltd. 72 taxmann.com 289 N.K. Industries Ltd. 72 taxmann.com 289.

6.2 According to him, the incriminating material did not always According to him, the incriminating material did not always According to him, the incriminating material did not always have to be tangible material or document indicating name of the to be tangible material or document indicating name of the to be tangible material or document indicating name of the assessee but gathering of information or finding of the investigation assessee but gathering of information or finding of the investigat assessee but gathering of information or finding of the investigat disclosing that assessee has not shown its income correctly in the disclosing that assessee has not shown its income correctly in the disclosing that assessee has not shown its income correctly in the return of income filed return of income filed, also constitute incriminating material. The also constitute incriminating material. The Ld. DR also relied on the decision in the case of JCIT (OSD) Nitin JCIT (OSD) Nitin Ld. DR also relied on the decision Kumar Didwania in in ITA No. 2092/M/2019 dated 23.01.2023. ITA No. 2092/M/2019 dated 23.01.2023. The Ld. DR summarize The Ld. DR summarized that the finding of the Ld. CIT(A) is not that the finding of the Ld. CIT(A) is not correct due to reasons that firstly, in search proceedings correct due to reasons that search proceedings key persons of the assessee admitted the non persons of the assessee admitted the non-genuineness of the genuineness of the

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unsecured loan parties in view unsecured loan parties in view of the facts of their nonexistence of the facts of their nonexistence brought to their notice brought to their notice, Secondly, in the simultaneous survey , in the simultaneous survey action carried out in the action carried out in the cases of related parties related parties, certain documents were impounded documents were impounded which are incriminating which are incriminating, thirdly, the incriminating material incriminating material has been gathered in the search and survey athered in the search and survey action of key persons of the assessee group and key persons of the assessee group and they have admitted they have admitted falsity in the books of accounts, in falsity in the books of accounts, in their statement recorded u/s their statement recorded u/s 132(4) of the Act.

M/s G Nine Modular and M/s G Trade Capital M/s G Nine Modular and M/s G Trade 9 ITA Nos. 3212 to 3214 and 3247/M/2022 ITA Nos. 3212 to 3214 and 3247/M/2022

7.1 The Ld. Counsel submitted that not a single document or The Ld. Counsel submitted that not a single document or The Ld. Counsel submitted that not a single document or electronic evidence was found during electronic evidence was found during the course of the search the course of the search which could indicate which could indicate in-criminality in obtaining unsecured loan by obtaining unsecured loan by the assessee. He further submitted that in the case of survey action the assessee. He further submitted that in the case of survey action the assessee. He further submitted that in the case of survey action carried out independently at the premises of the unsecured loan carried out independently at the premises of the unsecured loan carried out independently at the premises of the unsecured loan parties, no incriminating mater no incriminating material was found except that those ial was found except that those parties were not found at parties were not found at their addresses. The Ld. Counsel addresses. The Ld. Counsel submitted that without prejudice even the observation made during submitted that without prejudice even the observation made during submitted that without prejudice even the observation made during the course of survey proceedings cannot be treated as material the course of survey proceedings cannot be treated as material the course of survey proceedings cannot be treated as material found during the course of search at found during the course of search at the premises of the assessee. the premises of the assessee. According to him, the survey proceedings carried out at the According to him, the survey proceedings carried out at the According to him, the survey proceedings carried out at the premises of the unsecured loan parties are independent and not premises of the unsecured loan parties are independent and not premises of the unsecured loan parties are independent and not part of the search proceedings carried out at the premises of the part of the search proceedings carried out at the premises of the part of the search proceedings carried out at the premises of the assessee and therefore for utilizing assessee and therefore for utilizing the such information found information found during the course of survey proceedings during the course of survey proceedings, the AO he AO may invoke provisions other than section 153A of the Act for assessing income provisions other than section 153A of the Act for assessing income provisions other than section 153A of the Act for assessing income on the basis of those observations on the basis of those observations, but certainly cannot invoke , but certainly cannot invoke provisions of section 153A of the Act. provisions of section 153A of the Act. Further, regarding admission regarding admission u/s 132(4) of the Act u/s 132(4) of the Act, the Ld. Counsel submitted that Hon’ble Delhi the Ld. Counsel submitted that Hon’ble Delhi High Court in the case of High Court in the case of Best Infrastructure(india) pvt india) pvt ltd (2017) 8 TMI 250 (Delhi High Court), High Court), has held that statement that statement/confession u/s 132(4) of the Act is not an incriminating material found during u/s 132(4) of the Act is not an incriminating material found during u/s 132(4) of the Act is not an incriminating material found during the course of search unless corroborated with seized documents. unless corroborated with seized documents. In view of the arguments, the Ld. Counsel supported the order of the view of the arguments, the Ld. Counsel supported the order of the view of the arguments, the Ld. Counsel supported the order of the

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Ld. CIT(A) and submitted that order of the Ld. CIT(A) on the issue- Ld. CIT(A) and submitted that order of the Ld. CIT(A) Ld. CIT(A) and submitted that order of the Ld. CIT(A) in-dispute should be upheld. dispute should be upheld.

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issue-in-dispute before us is whether any incriminating material dispute before us is whether any incriminating material dispute before us is whether any incriminating materialqua the addition of unsecured loan made by the Assessing addition of unsecured loan made by the Assessing addition of unsecured loan made by the Assessing Officer, was found during the course of search action. found during the course of search action. The arguments of ld DR The arguments of ld DR are not acceptable due to following reasons: are not acceptable due to following reasons:

8.1 Firstly, the Ld. DR has he Ld. DR has referred to the statement of Shri statement of Shri Kumar Pal Banda record recorded on 14.11.2019, in which which he stated that part of the unsecured loan part of the unsecured loan wasnot genuine and settled in cash. The genuine and settled in cash. The Ld. Counsel has submitted that the said statement has already Ld. Counsel has submitted that the said statement has already Ld. Counsel has submitted that the said statement has already been withdrawn. No other corroborative evidence or seized material No other corroborative evidence or seized material No other corroborative evidence or seized material has been found dur has been found during the course of the search ing the course of the search which could indicate that those unsecured loans are not genuine. The Ld. indicate that those unsecured loans are not genuine. indicate that those unsecured loans are not genuine. Counsel has referred to the decision of the Hon’ble Delhi Delhi High Court in the case of PCIT v. PCIT v. Best Infrastructure (India) Pvt. Ltd. 2017 est Infrastructure (India) Pvt. Ltd. 2017 (8) TMI 250. The relevant finding of the Hon’ble Delhi High Court The relevant finding of the Hon’ble Delhi High Court The relevant finding of the Hon’ble Delhi High Court (supra) is reproduced as under: (supra) is reproduced as under:

“38. Fifthly, statements recorded under Section 132 (4) of 38. Fifthly, statements recorded under Section 132 (4) of 38. Fifthly, statements recorded under Section 132 (4) of the Act of the Act do not by themselves constitute the Act of the Act do not by themselves constitute the Act of the Act do not by themselves constitute incriminating material as has been explained by this Court incriminating material as has been explained by this Court incriminating material as has been explained by this Court in Commissioner of Income Tax v. Harjeev Aggarwal n Commissioner of Income Tax v. Harjeev Aggarwal n Commissioner of Income Tax v. Harjeev Aggarwal (supra). Lastly, as already pointed out hereinbefore, the (supra). Lastly, as already pointed out hereinbefore, the (supra). Lastly, as already pointed out hereinbefore, the facts in the present case are different from the facts in Smt. facts in the present case are different from the facts in Smt. facts in the present case are different from the facts in Smt. Dayawanti Gupta v. CIT (supra) where the admission by Dayawanti Gupta v. CIT (supra) where the admission by Dayawanti Gupta v. CIT (supra) where the admission by the Assessees themselves on crit the Assessees themselves on critical aspects, of failure to ical aspects, of failure to maintain maintain maintain accounts accounts accounts and and and admission admission admission that that that the the the seized seized seized documents reflected transactions of unaccounted sales and documents reflected transactions of unaccounted sales and documents reflected transactions of unaccounted sales and purchases, is non purchases, is non-existent in the present case. In the said existent in the present case. In the said case, there was a factual finding to the effect that the case, there was a factual finding to the effect that the case, there was a factual finding to the effect that the Assessees were habitual offenders, indulging in clandestine sees were habitual offenders, indulging in clandestine sees were habitual offenders, indulging in clandestine operations whereas there is nothing in the present case, operations whereas there is nothing in the present case, operations whereas there is nothing in the present case, whatsoever, to suggest that any statement made by Mr. whatsoever, to suggest that any statement made by Mr. whatsoever, to suggest that any statement made by Mr.

M/s G Nine Modular and M/s G Trade Capital M/s G Nine Modular and M/s G Trade 12 ITA Nos. 3212 to 3214 and 3247/M/2022 ITA Nos. 3212 to 3214 and 3247/M/2022

Anu Aggarwal or Mr. Harjeet Singh contained any such Anu Aggarwal or Mr. Harjeet Singh contained any such Anu Aggarwal or Mr. Harjeet Singh contained any such admission.” B Kishore ishore Kumar Kumar (supra), (supra), 8.1.1 In In the the case case of of the statement/confession of assessee was duly corroborated with statement/confession of assessee was duly corroborated with statement/confession of assessee was duly corroborated with incriminating material/documents found during the course of incriminating material/documents found during the course of incriminating material/documents found during the course of search and therefore, such statement was accepted by the Hon’ble search and therefore, such statement was accepted by the Hon’ble search and therefore, such statement was accepted by the Hon’ble High Court as basis for confirming the additi High Court as basis for confirming the addition. The relevant on. The relevant finding of the Hon’ble High Court is reproduced as under: finding of the Hon’ble High Court is reproduced as under: finding of the Hon’ble High Court is reproduced as under:

“5. We have perused the orders passed by the Tribunal and the 5. We have perused the orders passed by the Tribunal and the 5. We have perused the orders passed by the Tribunal and the authorities below. Though the assessee was at pains to make out an authorities below. Though the assessee was at pains to make out an authorities below. Though the assessee was at pains to make out an issue that he has made certain submissions and those issue that he has made certain submissions and those submissions were not considered by the Assessing Officer and therefore, the were not considered by the Assessing Officer and therefore, the were not considered by the Assessing Officer and therefore, the Assessing Officer has misdirected himself in determining the tax Assessing Officer has misdirected himself in determining the tax Assessing Officer has misdirected himself in determining the tax liability, on going through the order of the Tribunal, we find that the liability, on going through the order of the Tribunal, we find that the liability, on going through the order of the Tribunal, we find that the case of the assessee was decided on the ba case of the assessee was decided on the basis of his own sworn sis of his own sworn statements dated 29.8.2006 and 10.10.2006 and admitted statements dated 29.8.2006 and 10.10.2006 and admitted statements dated 29.8.2006 and 10.10.2006 and admitted documents. We extract that portion of the order as has been documents. We extract that portion of the order as has been documents. We extract that portion of the order as has been recorded by the Assessing Officer in paragraph (11), which clinches recorded by the Assessing Officer in paragraph (11), which clinches recorded by the Assessing Officer in paragraph (11), which clinches the whole issue: 11. Therefore, reliance is placed on the admission of the assessee at 11. Therefore, reliance is placed on the admission of the assessee at 11. Therefore, reliance is placed on the admission of the assessee at the time of search, which is reproduced as under: the time of search, which is reproduced as under: Sworn statement of Shri Kishore Kumar dt. 29.8.2006: Sworn statement of Shri Kishore Kumar dt. 29.8.2006: 'Qn.11: I am showing you the three print 'Qn.11: I am showing you the three print-out of amounts totaling to out of amounts totaling to Rs.52,73,920 (Rs.3,31,336 + Rs.15,05,158 + Rs.34,37,427). Please (Rs.3,31,336 + Rs.15,05,158 + Rs.34,37,427). Please (Rs.3,31,336 + Rs.15,05,158 + Rs.34,37,427). Please explain this? Ans: These are the details of loans given by me to various parties as Ans: These are the details of loans given by me to various parties as Ans: These are the details of loans given by me to various parties as mentioned in the printouts. This is a separate business carried out mentioned in the printouts. This is a separate business carried out mentioned in the printouts. This is a separate business carried out by me which was not included in the income by me which was not included in the income-tax returns filed by me. ns filed by me. Qn.12: Please explain the source for the total outstanding amounts Qn.12: Please explain the source for the total outstanding amounts Qn.12: Please explain the source for the total outstanding amounts which are given by you? which are given by you?

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Ans: The loans totaling to Rs.52,73,920 given to various parties as Ans: The loans totaling to Rs.52,73,920 given to various parties as Ans: The loans totaling to Rs.52,73,920 given to various parties as per the list were from my undisclosed income. I agree to pay the per the list were from my undisclosed income. I agree to pay the per the list were from my undisclosed income. I agree to pay the relevant income-tax dues for the above declared undisclosed tax dues for the above declared undisclosed tax dues for the above declared undisclosed income.' Sworn statement of Shri Kishore Kumar dt. 10.10.2006 (in income.' Sworn statement of Shri Kishore Kumar dt. 10.10.2006 (in income.' Sworn statement of Shri Kishore Kumar dt. 10.10.2006 (in Tamil): 'Qn.1: I am showing you Ann/BL/B&D/S 'Qn.1: I am showing you Ann/BL/B&D/S-3 and sl.No.5, which are 3 and sl.No.5, which are telephone index books wherein amounts given in cash to various telephone index books wherein amounts given in cash to various telephone index books wherein amounts given in cash to various persons were found recorded. Whom do they belong to? In whose found recorded. Whom do they belong to? In whose found recorded. Whom do they belong to? In whose handwriting it is write? What do these amounts represent? handwriting it is write? What do these amounts represent? handwriting it is write? What do these amounts represent? Ans: They belong to me. Signature is mine and the notings relate to Ans: They belong to me. Signature is mine and the notings relate to Ans: They belong to me. Signature is mine and the notings relate to loans given by me on various dates. This constitutes my separate loans given by me on various dates. This constitutes my separate loans given by me on various dates. This constitutes my separate finance business. There are no regular books for this. According to . There are no regular books for this. According to . There are no regular books for this. According to the documents shown, as on date outstanding loans to be recovered the documents shown, as on date outstanding loans to be recovered the documents shown, as on date outstanding loans to be recovered is in the range of Rs.25 Lakhs to 30 Lakhs. The rate of interest is is in the range of Rs.25 Lakhs to 30 Lakhs. The rate of interest is is in the range of Rs.25 Lakhs to 30 Lakhs. The rate of interest is 18% (i.e. Rs.1.50 per 100 per month). The interest income is also not 18% (i.e. Rs.1.50 per 100 per month). The interest income is also not 18% (i.e. Rs.1.50 per 100 per month). The interest income is also not shown in the accounts. The borrowers have committed defaults in shown in the accounts. The borrowers have committed defaults in shown in the accounts. The borrowers have committed defaults in repaying the loans and more than 50% of the outstandings are to be repaying the loans and more than 50% of the outstandings are to be repaying the loans and more than 50% of the outstandings are to be treated as bad debts. All the advances were not disclosed in the treated as bad debts. All the advances were not disclosed in the treated as bad debts. All the advances were not disclosed in the returns filed.'This has been relied upon by the Tribunal in full force. returns filed.'This has been relied upon by the Tribunal in returns filed.'This has been relied upon by the Tribunal in 6. With regard to the undisclosed income of Rs.52,73,920/- 6. With regard to the undisclosed income of Rs.52,73,920/ 6. With regard to the undisclosed income of Rs.52,73,920/ supported by printouts, in the sworn statement dated 29.8.2006, the supported by printouts, in the sworn statement dated 29.8.2006, the supported by printouts, in the sworn statement dated 29.8.2006, the assessee says that he had separate business income which was not assessee says that he had separate business income which was not assessee says that he had separate business income which was not included in his income tax returns. Therefore, admission of included in his income tax returns. Therefore, admis included in his income tax returns. Therefore, admis undisclosed income of Rs.52,73,920/ undisclosed income of Rs.52,73,920/- is categoric and undisputed. is categoric and undisputed. The assessee in the sworn statement made on 10.10.2006, stated The assessee in the sworn statement made on 10.10.2006, stated The assessee in the sworn statement made on 10.10.2006, stated that outstanding loans to the tune of Rs.25 Lakhs to 30 Lakhs are to that outstanding loans to the tune of Rs.25 Lakhs to 30 Lakhs are to that outstanding loans to the tune of Rs.25 Lakhs to 30 Lakhs are to be recovered with interest at the rate of 18%. Thi be recovered with interest at the rate of 18%. This is a clear s is a clear admission. This amount has also been calculated and added as admission. This amount has also been calculated and added as admission. This amount has also been calculated and added as undisclosed income. When there is a clear and categoric admission undisclosed income. When there is a clear and categoric admission undisclosed income. When there is a clear and categoric admission of the undisclosed income by the assessee himself, in our considered of the undisclosed income by the assessee himself, in our considered of the undisclosed income by the assessee himself, in our considered opinion, there is no necessity to scrutinize th opinion, there is no necessity to scrutinize the documents. The e documents. The document can be of some relevance, if the undisclosed income is document can be of some relevance, if the undisclosed income is document can be of some relevance, if the undisclosed income is determined higher than what is now determined by the department. determined higher than what is now determined by the department. determined higher than what is now determined by the department. Moreover, it is not the case of the assessee that the admission made Moreover, it is not the case of the assessee that the admission made Moreover, it is not the case of the assessee that the admission made by him was incorrect or there is mistake. by him was incorrect or there is mistake. In fact, when there is a In fact, when there is a clear admission, voluntarily made, by the assessee, that would clear admission, voluntarily made, by the assessee, that would clear admission, voluntarily made, by the assessee, that would constitute a good piece of evidence for the Revenue. constitute a good piece of evidence for the Revenue. 7. The learned counsel for the assessee relied upon a decision of the 7. The learned counsel for the assessee relied upon a decision of the 7. The learned counsel for the assessee relied upon a decision of the Delhi High Court in Delhi High Court in Commissioner of Income Tax v. Girish Commissioner of Income Tax v. Girish

M/s G Nine Modular and M/s G Trade Capital M/s G Nine Modular and M/s G Trade 14 ITA Nos. 3212 to 3214 and 3247/M/2022 ITA Nos. 3212 to 3214 and 3247/M/2022

Chaudhary, [2008] 296 ITR 619 to plead that loose sheets of papers , [2008] 296 ITR 619 to plead that loose sheets of papers , [2008] 296 ITR 619 to plead that loose sheets of papers should not be taken as a basis for determining undisclosed income. should not be taken as a basis for determining undisclosed income. should not be taken as a basis for determining undisclosed income. However, in the case on hand, loose sheets found during the search However, in the case on hand, loose sheets found during th However, in the case on hand, loose sheets found during th are not the sole basis for determining the tax liability. It is a piece of are not the sole basis for determining the tax liability. It is a piece of are not the sole basis for determining the tax liability. It is a piece of evidence to prove undisclosed income. The printout statements of evidence to prove undisclosed income. The printout statements of evidence to prove undisclosed income. The printout statements of undisclosed income is not disputed by the assessee and in his undisclosed income is not disputed by the assessee and in his undisclosed income is not disputed by the assessee and in his sworn statements it is accepted. In fact, he sworn statements it is accepted. In fact, he admitted that admitted that outstanding loans to be recovered are in the range of Rs.25 Lakhs to outstanding loans to be recovered are in the range of Rs.25 Lakhs to outstanding loans to be recovered are in the range of Rs.25 Lakhs to 30 Lakhs. We find no error in the procedure followed by the 30 Lakhs. We find no error in the procedure followed by the 30 Lakhs. We find no error in the procedure followed by the Assessing Officer on admitted facts. The entire exercise by the Assessing Officer on admitted facts. The entire exercise by the Assessing Officer on admitted facts. The entire exercise by the department to bring to tax undisclosed income, we department to bring to tax undisclosed income, we find has been find has been generous and simple. There appears to be no confusion in the generous and simple. There appears to be no confusion in the generous and simple. There appears to be no confusion in the quantification of the tax liability and we uphold the order of the quantification of the tax liability and we uphold the order of the quantification of the tax liability and we uphold the order of the Tribunal.” 8.1.2 The decision in the case of B Kishore Kumar (supra) is 8.1.2 The decision in the case of B Kishore Kumar (supra) is 8.1.2 The decision in the case of B Kishore Kumar (supra) is therefore distinguishable on facts. therefore distinguishable on facts. In view of decision of the Hon’ble ew of decision of the Hon’ble Delhi High Court in the case of Best Infrastructure p Ltd (supra), in the case of Best Infrastructure p Ltd (supra), it in the case of Best Infrastructure p Ltd (supra), is undisputed that merely on the basis of the confession u/s 132(4) is undisputed that merely on the basis of the confession u/s 132(4) is undisputed that merely on the basis of the confession u/s 132(4) of the Act, without any other corroborative material found without any other corroborative material found, no without any other corroborative material found addition could be made tr be made treating the statement u/s 132(4) of the the statement u/s 132(4) of the Act as incriminating material. as incriminating material.

8.2 Secondly, the learne the learned DR has referred to the statement of Sri DR has referred to the statement of Sri JayantilalOtmaljain dated 30/11/2019 to support that same dated 30/11/2019 to support that same constitute incriminating material. On perusal of the copy of said constitute incriminating material. On perusal of the copy of said constitute incriminating material. On perusal of the copy of said statement, which is produced before us by the learneddepartmental statement, which is produced before us by the learne statement, which is produced before us by the learne representative, we find that he was questioned to comment on the representative, we find that he was questioned to comment on the representative, we find that he was questioned to comment on the confession of Sri Kumarpal Banda of unsecured loan parties being marpal Banda of unsecured loan parties being marpal Banda of unsecured loan parties being not genuine, but he simply replied that at the time he was not able he simply replied that at the time he was not able he simply replied that at the time he was not able to reply as he had to check it. The relevant question and answer is to reply as he had to check it. The relevant question and answer is to reply as he had to check it. The relevant question and answer is reproduced for ready reference: reproduced for ready reference:

M/s G Nine Modular and M/s G Trade Capital M/s G Nine Modular and M/s G Trade 15 ITA Nos. 3212 to 3214 and 3247/M/2022 ITA Nos. 3212 to 3214 and 3247/M/2022

“Q.17 Mr. Kumarpal Banda in his statement i Q.17 Mr. Kumarpal Banda in his statement in reply to n reply to Q.30 & 31 has stated that unsecured loans from various Q.30 & 31 has stated that unsecured loans from various Q.30 & 31 has stated that unsecured loans from various parties in different financial years have been settled later in parties in different financial years have been settled later in parties in different financial years have been settled later in cash and they are not genuine. The same is reproduced as cash and they are not genuine. The same is reproduced as cash and they are not genuine. The same is reproduced as under for your convenience. under for your convenience. Q.30 Kindly explains the name of the part Q.30 Kindly explains the name of the parties form which ies form which unsecured loan has been taken by the company M/s. G.M unsecured loan has been taken by the company M/s. G.M unsecured loan has been taken by the company M/s. G.M Modular Pvt. Ltd. Also explain the creditworthiness and Modular Pvt. Ltd. Also explain the creditworthiness and Modular Pvt. Ltd. Also explain the creditworthiness and genuineness of unsecured loan taken by M/s. G.M Modular genuineness of unsecured loan taken by M/s. G.M Modular genuineness of unsecured loan taken by M/s. G.M Modular Pvt. Ltd. Ans. Sir, M/s. G.M Modular Put. Ltd. has taken loans from Ans. Sir, M/s. G.M Modular Put. Ltd. has taken loans from Ans. Sir, M/s. G.M Modular Put. Ltd. has taken loans from various parties in different financial years and the same parties in different financial years and the same parties in different financial years and the same have been settled later. have been settled later. However I can recollect the following names of parties from However I can recollect the following names of parties from However I can recollect the following names of parties from which the unsecured loan is taken and they are not which the unsecured loan is taken and they are not which the unsecured loan is taken and they are not genuine:- 1. M/s. Essar india Ltd. 1. M/s. Essar india Ltd. 2. M/s. Matarani Commodities Pvt. 2. M/s. Matarani Commodities Pvt. Ltd. 3. M/s. Morya Industries Ltd. 3. M/s. Morya Industries Ltd. 4. M/s. NCL Research Financial Service Ltd. 4. M/s. NCL Research Financial Service Ltd. 5. M/s. Shivam Investment & Consultancy Ltd. 5. M/s. Shivam Investment & Consultancy Ltd. 6. M/s. Ojas Assets Reconstruction Company Ltd. 6. M/s. Ojas Assets Reconstruction Company Ltd. 6. M/s. Ojas Assets Reconstruction Company Ltd. Q.31 On what basis you are saying that the loans from the Q.31 On what basis you are saying that the loans from the Q.31 On what basis you are saying that the loans from the abovementioned parties is abovementioned parties is not genuine. Ans. Sir, I confirm that the above mentioned parties from Ans. Sir, I confirm that the above mentioned parties from Ans. Sir, I confirm that the above mentioned parties from which the unsecured loan has been taken by M/s. G.M which the unsecured loan has been taken by M/s. G.M which the unsecured loan has been taken by M/s. G.M Modular Pvt. Ltd are not genuine as they are settled in cash Modular Pvt. Ltd are not genuine as they are settled in cash Modular Pvt. Ltd are not genuine as they are settled in cash during repayment to these parties. during repayment to these parties. Please offer your comments. Please offer your comments. Ans: Sir, at present I am not able to comment as I have at present I am not able to comment as I have at present I am not able to comment as I have check it.”

M/s G Nine Modular and M/s G Trade Capital M/s G Nine Modular and M/s G Trade 16 ITA Nos. 3212 to 3214 and 3247/M/2022 ITA Nos. 3212 to 3214 and 3247/M/2022

8.3 He was further asked to provide contact details of the parties e was further asked to provide contact details of the parties e was further asked to provide contact details of the parties from whom unsecured loans were taken by the assessee company from whom unsecured loans were taken by the assessee company from whom unsecured loans were taken by the assessee company and other entities of the group, in response to which also he replied and other entities of the group, in response to which also he replied and other entities of the group, in response to which also he replied that at the time he was not able to provide the details as he had to that at the time he was not able to provide the details as he had to that at the time he was not able to provide the details as he had to check it.

8.4 Regarding arguments of the learne arguments of the learned DR that incriminating DR that incriminating information regarding unsecured loan parties regarding unsecured loan parties was gathered was gathered during the survey u/s 133A of the Act carried out at the premises of the the survey u/s 133A of the Act carried out at the premises of the the survey u/s 133A of the Act carried out at the premises of the unsecured loan parties unsecured loan parties, we may like to refer to the we may like to refer to the observation of the Assessing Officer, made in the assessment order. The relevant the Assessing Officer, made in the assessment order. The relevant the Assessing Officer, made in the assessment order. The relevant observations of the Assessing Officer are extracte of the Assessing Officer are extracted as under: d as under:

“1.1. The assessee vide its letter dated26.01.2021 has 1.1. The assessee vide its letter dated26.01.2021 has 1.1. The assessee vide its letter dated26.01.2021 has submitted its explanation which has been considered submitted its explanation which has been considered submitted its explanation which has been considered however the same is not found to be acceptable due to the however the same is not found to be acceptable due to the however the same is not found to be acceptable due to the following reasons: following reasons:- (i) (i) (i) The The The following following following facts facts facts establish establish establish that that that there there there is is is no no no creditworthiness of the lenders: rthiness of the lenders:- Name and Address of Remarks Directors the party Ella Finetex Co. Pvt. Directors are Non filer of ITR. Negligible Directors are Non filer of ITR. Negligible 1. Kakali Ghosh 2. Sanjay Ltd. profits shown. AY 2015-16 shows a low 16 shows a low PAN : AABCE3795J PBT of Rs 1.31 lacs which does not justify PBT of Rs 1.31 lacs which does not justify Sarkar Room No. 12, 1 R N the huge loan of Rs 1.10 crores. Even the the huge loan of Rs 1.10 crores. Even the Mukherjee Road, interest on Rs 1.10 crore is not offered to interest on Rs 1.10 crore is not offered to Mezanine Floor, tax. tax. This This is is a a normal normal practice practice in in Kolkata, West Bengal accommodation entry because the interest n entry because the interest earned is not real but notional, only for earned is not real but notional, only for book accounting purpose whereas the tax book accounting purpose whereas the tax outflow would be on real basis. 11 R N Mukherjee Road, Kolkata location is 11 R N Mukherjee Road, Kolkata location is well known to be a hub for shell company well known to be a hub for shell company as is seen for many company data base in ata base in searches conducted by Kolkata directorate searches conducted by Kolkata directorate in recent and earlier past. This adds in recent and earlier past. This adds

M/s G Nine Modular and M/s G Trade Capital M/s G Nine Modular and M/s G Trade 17 ITA Nos. 3212 to 3214 and 3247/M/2022 ITA Nos. 3212 to 3214 and 3247/M/2022

credence to the belief that the company has credence to the belief that the company has merely provided book entries in books of merely provided book entries in books of assessee. 1. Nirmal Kathakali Vincom Pvt. Directors are Non filer of IT. For AY 2016- Ltd. 17 shows a low PBT of Rs 0.21 lacs which 17 shows a low PBT of Rs 0.21 lacs which Kumar PAN : AAECK3364N does not justify the huge loan of Rs 50 does not justify the huge loan of Rs 50 Manna Mezanine Floor, Room lacs. Even the interest on Rs 50 lacs is not s 50 lacs is not 2. Sandip No. 12, 1 R N Mukherjee offered to tax. Thisis a normal practice in offered to tax. Thisis a normal practice in Kumar Jain Road, Dalhousie, accommodation entry because the interest accommodation entry because the interest Kolkata, earned is not real but notional, only for earned is not real but notional, only for West Bengal – 700001. book accounting purpose whereas the tax book accounting purpose whereas the tax outflow would be on real basis. 1 R N Mukherjee Road,Kolkata location is well known to be a hub for shell companies well known to be a hub for shell companies as is seen for many company data base in as is seen for many company data base in searches conducted by Kolkata directorate searches conducted by Kolkata directorate in recent and earlier past. This adds in recent and earlier past. This adds credence to the belief that the company has credence to the belief that the company has merely provided book entries in books of merely provided book entries in books of assessee. NCL Research and The said company is involved in arranging The said company is involved in arranging 1. Vijay Poddar Financial Services Pvt. LTCG from Penny stock as per the Kolkata 2. Gautam Bose Ltd. Investigation directorate report (Ref: F.No Investigation directorate report (Ref: F.No PAN : AAACN5752D 75A/2015-16/257-273 dated 27.04.2015 273 dated 27.04.2015 3rd floor, Bhagyodaya of Pr.DIT (Inv.), \Kolkata). The statement of Kolkata). The statement of Building, 79, Nagindas Goutam Bose, one of the directors of the Goutam Bose, one of the directors of the Master Road, Fort, company wherein he admitted on oath that company wherein he admitted on oath that Mumbai-400023 he is a dummy director in the said company. Thus it clearly shows that the company. Thus it clearly shows that the conduct of directors are dubious and conduct of directors are dubious and doubtful in nature with regard to financial doubtful in nature with regard to financial transactions undertaken. Tanaya Vincom Pvt. Directors are Non • filer of ITR. Negligible Directors are Non • filer of ITR. Negligible 1. Sandip Ltd. profits shown. AY 2015-16 shows a low 16 shows a low Kumar Jain PAN : AADCT8361K PBT of Rs 5.90 lacs which does not justify PBT of Rs 5.90 lacs which does not justify 2. Om Prakash Room No. 310, 3rd floor, the huge loan of Rs 1.40 crores. Even the the huge loan of Rs 1.40 crores. Even the Saraswat 7A Bentinck Street, interest on Rs 1.40 crore is not offered to interest on Rs 1.40 crore is not offered to Dalhousie, Kolkata, tax. This is eet, a normal practice in ax. This is eet, a normal practice in West Bengal-700001. accommodation Vest entry because the accommodation Vest entry because the interest earned is not real but notional, interest earned is not real but notional, only for book accounting purpose whereas only for book accounting purpose whereas the tax outflow would be on real basis. 7A Bentick Street, Kolkata location is well 7A Bentick Street, Kolkata location is well known to be a hub for shell company as is a hub for shell company as is seen for many company data base in seen for many company data base in searches conducted by Kolkata directorate searches conducted by Kolkata directorate in recent and earlier past. This adds in recent and earlier past. This adds credence to the belief that the company has credence to the belief that the company has merely providedbook entries in books of merely providedbook entries in books of assessee.

M/s G Nine Modular and M/s G Trade Capital M/s G Nine Modular and M/s G Trade 18 ITA Nos. 3212 to 3214 and 3247/M/2022 ITA Nos. 3212 to 3214 and 3247/M/2022

(i) The assessee has been failed in establishing the identity, (i) The assessee has been failed in establishing the identity, (i) The assessee has been failed in establishing the identity, genuineness and creditworthiness of lenders in respect of genuineness and creditworthiness of lenders in respect of genuineness and creditworthiness of lenders in respect of following lender entities: following lender entities:- (i)&(ii)-Ella Finetex Co Pvt Ltd and KathakaliVincomPvt Ltd: Ella Finetex Co Pvt Ltd and KathakaliVincomPvt Ltd: Ella Finetex Co Pvt Ltd and KathakaliVincomPvt Ltd: • The companies M/s Ella Finetex Co Pvt Ltd and M/s • The companies M/s Ella Finetex Co Pvt Ltd and M/s • The companies M/s Ella Finetex Co Pvt Ltd and M/s KathakaliVincom Pt Ltd are registered at the address Room KathakaliVincom Pt Ltd are registered at the address Room KathakaliVincom Pt Ltd are registered at the address Room No. 12, Mazanine Floor, 1 R N Mukherjee Road, Lal Bazar, No. 12, Mazanine Floor, 1 R N Mukherjee Road, Lal Bazar, No. 12, Mazanine Floor, 1 R N Mukherjee Road, Lal Bazar, Kolkata- 700001.A survey u/s 133A was carried out at the 700001.A survey u/s 133A was carried out at the 700001.A survey u/s 133A was carried out at the registered address of these comp registered address of these companies on 13.11.2019. The anies on 13.11.2019. The authorization could not be executed as the companies were authorization could not be executed as the companies were authorization could not be executed as the companies were not found at the registered address. Statement of Mr. not found at the registered address. Statement of Mr. not found at the registered address. Statement of Mr. Kailash KumarKedia was recorded us 131 of the Income Kailash KumarKedia was recorded us 131 of the Income Kailash KumarKedia was recorded us 131 of the Income- tax Act, 1961 on 13.11.2019. He in his statement has tax Act, 1961 on 13.11.2019. He in his statement has tax Act, 1961 on 13.11.2019. He in his statement has stated that h stated that he is working in the office at R.No. 12 Mezanine e is working in the office at R.No. 12 Mezanine Floor, 1 R N Mukherjee Road, Kolkata since 1997 and he Floor, 1 R N Mukherjee Road, Kolkata since 1997 and he Floor, 1 R N Mukherjee Road, Kolkata since 1997 and he has never heard of the companies MIs Ella Finetex Co Pt Ltd has never heard of the companies MIs Ella Finetex Co Pt Ltd has never heard of the companies MIs Ella Finetex Co Pt Ltd and MIs KathakaliVincom Pvt Ltd. An opportunity was and MIs KathakaliVincom Pvt Ltd. An opportunity was and MIs KathakaliVincom Pvt Ltd. An opportunity was given to the assesseei.e. Mr. Jayantilal given to the assesseei.e. Mr. Jayantilal Jain, Promoter of Jain, Promoter of GM Group on 12.01.2020, to produce the party to verify its GM Group on 12.01.2020, to produce the party to verify its GM Group on 12.01.2020, to produce the party to verify its claim that the unsecured loan is genuine. But the assessee claim that the unsecured loan is genuine. But the assessee claim that the unsecured loan is genuine. But the assessee failed to produce the party and thus failed to discharge its failed to produce the party and thus failed to discharge its failed to produce the party and thus failed to discharge its onus to explain the credit. onus to explain the credit. (iii)NCL Research and Financial (iii)NCL Research and Financial Services Ltd: The company is a proven penny scrip as per the report of The company is a proven penny scrip as per the report of The company is a proven penny scrip as per the report of Kolkata Investigation Directorate (Ref: F.No 75A/2015 Kolkata Investigation Directorate (Ref: F.No 75A/2015 Kolkata Investigation Directorate (Ref: F.No 75A/2015- 16/257-273 dated 27.04.2015 of Pr.DIT (Inv.), Kolkata). 273 dated 27.04.2015 of Pr.DIT (Inv.), Kolkata). 273 dated 27.04.2015 of Pr.DIT (Inv.), Kolkata). Statement of Mr.Mahavir Prasad Saraswat one of the Statement of Mr.Mahavir Prasad Saraswat one of the Statement of Mr.Mahavir Prasad Saraswat one of the director of the company director of the company Ms NCL Research and Financial Ms NCL Research and Financial Services Ltd was recorded u/s 131 of the Income Services Ltd was recorded u/s 131 of the Income Services Ltd was recorded u/s 131 of the Income-tax Act, 1961 on 27.05.2015 by DDIT(In) Kolkata. He was asked 1961 on 27.05.2015 by DDIT(In) Kolkata. He was asked 1961 on 27.05.2015 by DDIT(In) Kolkata. He was asked about the business activities of the company, questions about the business activities of the company, questions about the business activities of the company, questions about the books of accounts of the company and the about the books of accounts of the company and the about the books of accounts of the company and the number of AM attended. He was not able to answer these f AM attended. He was not able to answer these f AM attended. He was not able to answer these questions. He has agreed that he is just a dummy director questions. He has agreed that he is just a dummy director questions. He has agreed that he is just a dummy director in the company and has no knowledge about the business in the company and has no knowledge about the business in the company and has no knowledge about the business of the company. A statement of Mr. Vijay Poddar, the of the company. A statement of Mr. Vijay Poddar, the of the company. A statement of Mr. Vijay Poddar, the director of M/s NCL Research and Financial director of M/s NCL Research and Financial Services Ltd Services Ltd was also recorded us 131 of the Income was also recorded us 131 of the Income-tax Act, 1961 on tax Act, 1961 on 27.05.2015 during the process of Survey u/s 133A of the 27.05.2015 during the process of Survey u/s 133A of the 27.05.2015 during the process of Survey u/s 133A of the Income-tax Act, 1961 at the registered premises of the tax Act, 1961 at the registered premises of the tax Act, 1961 at the registered premises of the

M/s G Nine Modular and M/s G Trade Capital M/s G Nine Modular and M/s G Trade 19 ITA Nos. 3212 to 3214 and 3247/M/2022 ITA Nos. 3212 to 3214 and 3247/M/2022

company.In reply to Q.56 Mr. Vijay Poddar had accepted company.In reply to Q.56 Mr. Vijay Poddar had accepted company.In reply to Q.56 Mr. Vijay Poddar had accepted that the company is a that the company is a penny stock company and is in the penny stock company and is in the business of providing accommodation entries. A survey business of providing accommodation entries. A survey business of providing accommodation entries. A survey action u/s 133A of the Income action u/s 133A of the Income-tax Act, 1961 was carried tax Act, 1961 was carried out at the registered address of the company on13.11.2019. out at the registered address of the company on13.11.2019. out at the registered address of the company on13.11.2019. Statement of Mr. Mayank Singh, the CFO of the compan Statement of Mr. Mayank Singh, the CFO of the compan Statement of Mr. Mayank Singh, the CFO of the company was recorded us 131 of the Income was recorded us 131 of the Income-tax Act, 1961 on tax Act, 1961 on 15.11.2019. Mr. Mayank Singh in his statement has 15.11.2019. Mr. Mayank Singh in his statement has 15.11.2019. Mr. Mayank Singh in his statement has accepted that Mr. Goutam Bose is now the Managing accepted that Mr. Goutam Bose is now the Managing accepted that Mr. Goutam Bose is now the Managing Director of the company.Statement of Mr. Goutam Bose was Director of the company.Statement of Mr. Goutam Bose was Director of the company.Statement of Mr. Goutam Bose was recorded by DDIT(In) Kolkata on 27.05.2015.Mr. recorded by DDIT(In) Kolkata on 27.05.2015.Mr. recorded by DDIT(In) Kolkata on 27.05.2015.Mr.Goutam Bose in his statement has accepted that he is a dummy Bose in his statement has accepted that he is a dummy Bose in his statement has accepted that he is a dummy director in the company and has no idea about the affairs of director in the company and has no idea about the affairs of director in the company and has no idea about the affairs of the company. An opportunity was given to the assessee i.e. the company. An opportunity was given to the assessee i.e. the company. An opportunity was given to the assessee i.e. Mr. Jayantilal Jain, Promoter of GM Group on 12.01.2020, Mr. Jayantilal Jain, Promoter of GM Group on 12.01.2020, Mr. Jayantilal Jain, Promoter of GM Group on 12.01.2020, to produce the par to produce the party to verify its claim that the unsecured ty to verify its claim that the unsecured loan is genuine. But the assessee failed to produce the loan is genuine. But the assessee failed to produce the loan is genuine. But the assessee failed to produce the party and thus failed to discharge its onus to explain the party and thus failed to discharge its onus to explain the party and thus failed to discharge its onus to explain the source of credit. source of credit. (iv)Ojas Assets Reconstruction Ltd: (iv)Ojas Assets Reconstruction Ltd: The company M/s Ojas Assets Reconstruction Lt The company M/s Ojas Assets Reconstruction Lt The company M/s Ojas Assets Reconstruction Ltd (Now known as Tyam Industries Ltd) has registered address at known as Tyam Industries Ltd) has registered address at known as Tyam Industries Ltd) has registered address at 503, Shri Krishna Complex, New Link Road, Opp.Laxmi 503, Shri Krishna Complex, New Link Road, Opp.Laxmi 503, Shri Krishna Complex, New Link Road, Opp.Laxmi Industrial Estate, Andheri West, Mumbai Industrial Estate, Andheri West, Mumbai- 400064.The 400064.The company was Non filer for the assessment year in which company was Non filer for the assessment year in which company was Non filer for the assessment year in which loan has been given. The company i loan has been given. The company is said to be transacting s said to be transacting in huge transaction to the tune of Rs.37 lacs and still a non in huge transaction to the tune of Rs.37 lacs and still a non in huge transaction to the tune of Rs.37 lacs and still a non filer adds credence to the fact that this could be merely a filer adds credence to the fact that this could be merely a filer adds credence to the fact that this could be merely a book entry. The identity of the lender is not established. Mr. book entry. The identity of the lender is not established. Mr. book entry. The identity of the lender is not established. Mr. Kumarpal Banda, the director of M/s GM Modular Kumarpal Banda, the director of M/s GM Modular Kumarpal Banda, the director of M/s GM Modular Pt Ltd in his statement recorded u/s 132(4) of the Income his statement recorded u/s 132(4) of the Income his statement recorded u/s 132(4) of the Income-tax Act, 1961 on 14.11.2019 has submitted that they have accepted 1961 on 14.11.2019 has submitted that they have accepted 1961 on 14.11.2019 has submitted that they have accepted loan loan loan entries entries entries from from from the the the company company company M/s M/s M/s Ojas Ojas Ojas Assets Assets Assets Reconstruction Ltd in reply to Q.30 and Q.31 of the Reconstruction Ltd in reply to Q.30 and Q.31 of the Reconstruction Ltd in reply to Q.30 and Q.31 of the statement, which are not genuine. statement, which are not genuine.The family members of The family members of the group have also declared the amount taken as LTCG in the group have also declared the amount taken as LTCG in the group have also declared the amount taken as LTCG in the company scrip in income Declaration Scheme the company scrip in income Declaration Scheme-2016 (IDS 2016 (IDS- 2016). This fact only reinforces that the company is in the 2016). This fact only reinforces that the company is in the 2016). This fact only reinforces that the company is in the business business business of of of providing providing providing accommodation accommodation accommodation entries.An entries.An entries.An opportunity w opportunity was given to the assesseeie. Mr. Jayantilal as given to the assesseeie. Mr. Jayantilal Jain, Promoter of GM Group on 12.01.2020 to produce the Jain, Promoter of GM Group on 12.01.2020 to produce the Jain, Promoter of GM Group on 12.01.2020 to produce the

M/s G Nine Modular and M/s G Trade Capital M/s G Nine Modular and M/s G Trade 20 ITA Nos. 3212 to 3214 and 3247/M/2022 ITA Nos. 3212 to 3214 and 3247/M/2022

party to verify its claim that the unsecured loan is genuine. party to verify its claim that the unsecured loan is genuine. party to verify its claim that the unsecured loan is genuine. But the assessee failed to produce the party and thus failed But the assessee failed to produce the party and thus failed But the assessee failed to produce the party and thus failed to discharge its onus to explain t to discharge its onus to explain the source of credit. he source of credit. (v) TanayaVincomPvt Ltd: (v) TanayaVincomPvt Ltd: A survey action u/s 133A of the Income A survey action u/s 133A of the Income-tax Act, 1961 was tax Act, 1961 was carried out in the premises of the company M/s carried out in the premises of the company M/s carried out in the premises of the company M/s TanayaVincom TanayaVincom TanayaVincom Pt Pt Pt Ltd Ltd Ltd on on on 13.11.2019. 13.11.2019. 13.11.2019. The The The survey survey survey authorization could not be served as the company was not authorization could not be served as the company was not authorization could not be served as the company was not found at the premises. Efforts were also made to record the nd at the premises. Efforts were also made to record the nd at the premises. Efforts were also made to record the statement statement statement of of of Mr.Sandip Mr.Sandip Mr.Sandip Kumar Kumar Kumar Jain Jain Jain and and and Mr. Mr. Mr. Om Om Om PrakashSaraswat, Directors of the company but the same PrakashSaraswat, Directors of the company but the same PrakashSaraswat, Directors of the company but the same were not traceable at the address provided in the IT. An were not traceable at the address provided in the IT. An were not traceable at the address provided in the IT. An opportunity was given to the assessee i.e. opportunity was given to the assessee i.e.Mr.Jayantilal Mr.Jayantilal Jain, Promoter of GM Group on 12.01.2020, to produce the Jain, Promoter of GM Group on 12.01.2020, to produce the Jain, Promoter of GM Group on 12.01.2020, to produce the party to verify its claim that the unsecured loan is genuine. party to verify its claim that the unsecured loan is genuine. party to verify its claim that the unsecured loan is genuine. But the assessee failed to produce the party and thus failed But the assessee failed to produce the party and thus failed But the assessee failed to produce the party and thus failed to discharge its onus to explain the source of credit. to discharge its onus to explain the source of credit. to discharge its onus to explain the source of credit.” 8.5 We note that in the case of note that in the case of ‘Ella Fintex Co. P ltd Ella Fintex Co. P ltd’, the assessee was intimated regarding negligible profit of said company and was intimated regarding negligible profit of said company and was intimated regarding negligible profit of said company and directors of the said company being non directors of the said company being non-filer of ITR. Further filer of ITR. Further it was intimated that the area in which said unsecured loan party located intimated that the area in which said unsecured loan party l intimated that the area in which said unsecured loan party l was a well-known hub of hub of shell companies. In our opinion, certain shell companies. In our opinion, certain information regarding the unsecured loan party gathered by the information regarding the unsecured loan party gathered by the information regarding the unsecured loan party gathered by the investigation wing pre search period pre search period and thereafter thereafter confronted the same to the key person of the assessee company to the key person of the assessee company during during the course of search, cannot be said that incriminating material was found , cannot be said that incriminating material was found , cannot be said that incriminating material was found during the course of the search qua the addition. Similar during the course of the search qua the addition. Similar during the course of the search qua the addition. Similar observations have been made in respect of the other unsecured loan observations have been made in respect of the other unsecured loan observations have been made in respect of the other unsecured loan parties. Further, independent survey was carried out in the case of parties. Further, independent survey was carried out in parties. Further, independent survey was carried out in ‘Ella Fintex Co Pvt Ltd Ella Fintex Co Pvt Ltd’and‘KathakaliVincom P Ltd KathakaliVincom P Ltd’ on

M/s G Nine Modular and M/s G Trade Capital M/s G Nine Modular and M/s G Trade 21 ITA Nos. 3212 to 3214 and 3247/M/2022 ITA Nos. 3212 to 3214 and 3247/M/2022

13/11/2019 and those parties were not found at the registered 13/11/2019 and those parties were not found at the registered 13/11/2019 and those parties were not found at the registered address, however this fact of nonavailability of those parties at the address, however this fact of nonavailability of those parties at the address, however this fact of nonavailability of those parties at the registered address was only communicated to shJayantilal Jain in registered address was only communicated to shJayantilal registered address was only communicated to shJayantilal post-search proceeding on 12/01/2020 and therefore also it cannot search proceeding on 12/01/2020 and therefore also it cannot search proceeding on 12/01/2020 and therefore also it cannot be said that said information was confronted to the assessee during d information was confronted to the assessee during d information was confronted to the assessee during the course of search proceeding. the course of search proceeding. Regarding, the unsecured loan Regarding, the unsecured loan party namely ‘NCL Research and Financial Services NCL Research and Financial Services NCL Research and Financial Services ltd’,the Assessing Officer observed that in Assessing Officer observed that in the information gathered by the the information gathered by the Kolkata investigation report dated 27/04/ Kolkata investigation report dated 27/04/2015, said party 2015, said party has been referred. Further during during the survey action, the CFO of the the CFO of the companyunder section 131 of the Act dated 15/11/2019 under section 131 of the Act dated 15/11/2019 under section 131 of the Act dated 15/11/2019 stated that Mr Gautam was the managing director of the said company, that Mr Gautam was the managing director of the that Mr Gautam was the managing director of the but that fact in itself is not any incriminating material. In case of in itself is not any incriminating material. In case of in itself is not any incriminating material. In case of the other unsecured loan parties i.e the other unsecured loan parties i.e Ojas Assets Reconstruction Ojas Assets Reconstruction Ltd and TanayaVincom P Ltd TanayaVincom P Ltd also there is no reference also there is no reference of any incriminating material except statement of Sri Kumarpalbanda and incriminating material except statement of Sri Kumarpalbanda and incriminating material except statement of Sri Kumarpalbanda and shJayantilaljain, which we have already dealt above. shJayantilaljain, which we have already dealt above. shJayantilaljain, which we have already dealt above.

8.6 Further, we agree with the contention of the Ld. Counsel of the e agree with the contention of the Ld. Counsel of the e agree with the contention of the Ld. Counsel of the assessee that those survey proceedings are independent action assessee that those survey proceedings are independent assessee that those survey proceedings are independent though carried out simultaneously. Those inquiries are not part of though carried out simultaneously. Those inquiries are not part of though carried out simultaneously. Those inquiries are not part of the search proceedings u/s 132 of the Act the search proceedings u/s 132 of the Act.The ld DR referred to The ld DR referred to the case of CIT v. Sky Infra Pvt. Ltd. by the Tribunal CIT v. Sky Infra Pvt. Ltd. by the Tribunal decision in the case of in order dated 28.02.2023 28.02.2023, to support that informat , to support that information found in simultaneous survey could be treated as incriminating material. simultaneous survey could be treated as incriminating material. simultaneous survey could be treated as incriminating material.

M/s G Nine Modular and M/s G Trade Capital M/s G Nine Modular and M/s G Trade 22 ITA Nos. 3212 to 3214 and 3247/M/2022 ITA Nos. 3212 to 3214 and 3247/M/2022

But we find that in said case of CIT v. Sky Infra Pvt. Ltd. (supra) , But we find that in said case of CIT v. Sky Infra Pvt. Ltd. (supra) , But we find that in said case of CIT v. Sky Infra Pvt. Ltd. (supra) , inquiries were carried out by the Inspectors of the income-tax inquiries were carried out by the Inspectors of the income inquiries were carried out by the Inspectors of the income department as part of the search proceedings department as part of the search proceedings itself, therefore facts itself, therefore facts of said case are distinguishable. of said case are distinguishable.

8.7 Further, the information gathered , the information gathered during independent survey during independent survey actions was not confronted not confronted to the assessee during the course of during the course of search proceedings and it was only confronted in post search search proceedings and it was only confronted in search proceedings and it was only confronted in proceedings on 20/01/2020 20/01/2020.

8.8 For invoking sustaining addition in sustaining addition in proceedings u/s 153A of proceedings u/s 153A of the Act in case of non in case of non-abated assessments , the prerequisite he prerequisite is that incriminating material material should be found during the course of search found during the course of search at the premises of the assessee at the premises of the assessee qua the adition. If any material is . If any material is found during the course of search during the course of search of third party or material is found third party or material is found during the course of other actions i.e. like survey or by the action of during the course of other actions i.e. like survey or by the action of during the course of other actions i.e. like survey or by the action of other agencies, then, the provisions to deal with those materials or hen, the provisions to deal with those materials or hen, the provisions to deal with those materials or observations, are different from the provisions u/s 153A of the Act. different from the provisions u/s 153A of the Act. different from the provisions u/s 153A of the Act. The Ld. CIT(A) in the case of the assessee for assessment year The Ld. CIT(A) in the case of the assessee for assessment year The Ld. CIT(A) in the case of the assessee for assessment year 2014-15 after considering various decisions on the issue 15 after considering various decisions on the issue-in-dispute 15 after considering various decisions on the issue has concluded as under: has concluded as under:

“6.15 Conclusion 6.15 Conclusion-The aforesaid detailed discussion with discussion with respect to various judicial decisions clearly laid down the respect to various judicial decisions clearly laid down the respect to various judicial decisions clearly laid down the following principles following principles - (i) the assessments which have been concluded us 143(3) of (i) the assessments which have been concluded us 143(3) of (i) the assessments which have been concluded us 143(3) of the Act and not pending at the time of search proceedings, do the Act and not pending at the time of search proceedings, do the Act and not pending at the time of search proceedings, do not abate.

M/s G Nine Modular and M/s G Trade Capital M/s G Nine Modular and M/s G Trade 23 ITA Nos. 3212 to 3214 and 3247/M/2022 ITA Nos. 3212 to 3214 and 3247/M/2022

(ii) for this purpose, in (ii) for this purpose, intimation u/ 143(1) would constitute an timation u/ 143(1) would constitute an assessment, relying on the decision of Hon'ble Bombay High assessment, relying on the decision of Hon'ble Bombay High assessment, relying on the decision of Hon'ble Bombay High Court in CIT V/s Gurinder Singh Bawa (79 taxmann.com Court in CIT V/s Gurinder Singh Bawa (79 taxmann.com Court in CIT V/s Gurinder Singh Bawa (79 taxmann.com 398) (iii) the proceedings us 153A of the Act do not empower the (iii) the proceedings us 153A of the Act do not empower the (iii) the proceedings us 153A of the Act do not empower the Assessing officer to re Assessing officer to re-adjudicate the settled issues again, ettled issues again, unless fresh incriminating material for the relevant year is unless fresh incriminating material for the relevant year is unless fresh incriminating material for the relevant year is found during the course of search proceedings. found during the course of search proceedings. (iv) the Assessing officer does not have jurisdiction to make (iv) the Assessing officer does not have jurisdiction to make (iv) the Assessing officer does not have jurisdiction to make additions/disallowances which are not based on relevant additions/disallowances which are not based on relevant additions/disallowances which are not based on relevant incriminating material found during the course of search ting material found during the course of search ting material found during the course of search proceedings. proceedings. (v) in the case of completed/un (v) in the case of completed/un-abetted assessments, where abetted assessments, where no incriminatingmaterial is found during the course of no incriminatingmaterial is found during the course of no incriminatingmaterial is found during the course of search, the assessment u/s 153A of the Act is to be made on search, the assessment u/s 153A of the Act is to be made on search, the assessment u/s 153A of the Act is to be made on originally assessed/r originally assessed/returned income and no addition or eturned income and no addition or disallowance can be made de hors the incriminating disallowance can be made de hors the incriminating disallowance can be made de hors the incriminating evidences for the relevant year are recovered during the evidences for the relevant year are recovered during the evidences for the relevant year are recovered during the course of search. course of search. (vi)Any admission or confession needs corroboration with (vi)Any admission or confession needs corroboration with (vi)Any admission or confession needs corroboration with evidences. In order to make a genuine a evidences. In order to make a genuine a evidences. In order to make a genuine and legally sustainable addition on the basis of admission or confession sustainable addition on the basis of admission or confession sustainable addition on the basis of admission or confession during search action, it is necessary that some incriminating during search action, it is necessary that some incriminating during search action, it is necessary that some incriminating material must have been found to correlate the undisclosed material must have been found to correlate the undisclosed material must have been found to correlate the undisclosed income with such statement. income with such statement. (vii) Any statement recorded under (vii) Any statement recorded under section 132(4) cannot be section 132(4) cannot be considered as incriminating material found in the course of considered as incriminating material found in the course of considered as incriminating material found in the course of search search search as as as these these these are are are recorded recorded recorded to to to elicit elicit elicit more more more information/explanation of the search person on the information/explanation of the search person on the information/explanation of the search person on the incriminating incriminating incriminating documents/gold/jewellery documents/gold/jewellery documents/gold/jewellery found found found during during during search. 6.16 Conclusion 6.16 Conclusion- In the present case, additions have been In the present case, additions have been made on account of accommodation entry of unsecured loan made on account of accommodation entry of unsecured loan made on account of accommodation entry of unsecured loan of Rs.70,00,000/ of Rs.70,00,000/-, as unexplained expenditure u/s. 69C due , as unexplained expenditure u/s. 69C due to interest on accommodation entry of unsecured loan of Rs. to interest on accommodation entry of unsecured loan of Rs. to interest on accommodation entry of unsecured loan of Rs. 3,87,764/-, and as unexplained expend , and as unexplained expenditure us. 69C due to iture us. 69C due to commission for arranging accommodation entry of unsecured commission for arranging accommodation entry of unsecured commission for arranging accommodation entry of unsecured loan of Rs. 17,500/ loan of Rs. 17,500/- . As stated above, the AO has not . As stated above, the AO has not

M/s G Nine Modular and M/s G Trade Capital M/s G Nine Modular and M/s G Trade 24 ITA Nos. 3212 to 3214 and 3247/M/2022 ITA Nos. 3212 to 3214 and 3247/M/2022

brought on record through the assessment order or through brought on record through the assessment order or through brought on record through the assessment order or through any communication regarding any incriminating document or any communication regarding any incriminating document or any communication regarding any incriminating document or material found or seized during the Search and Seizure al found or seized during the Search and Seizure al found or seized during the Search and Seizure action us 132 of the Act, which can be linked /correlated action us 132 of the Act, which can be linked /correlated action us 132 of the Act, which can be linked /correlated with the impugned additions made. Considering the totality with the impugned additions made. Considering the totality with the impugned additions made. Considering the totality of the facts and circumstances of the issues involve, I am of of the facts and circumstances of the issues involve, I am of of the facts and circumstances of the issues involve, I am of the considered opinion that the considered opinion that these additions cannot survive these additions cannot survive de hors the incriminating evidences as held in the above de hors the incriminating evidences as held in the above de hors the incriminating evidences as held in the above binding judicial decisions. The AO is accordingly directed to binding judicial decisions. The AO is accordingly directed to binding judicial decisions. The AO is accordingly directed to delete the impugned additions made in the assessment delete the impugned additions made in the assessment delete the impugned additions made in the assessment order. Thus, the grounds of appeal no. 1 & 2 are allo order. Thus, the grounds of appeal no. 1 & 2 are allo order. Thus, the grounds of appeal no. 1 & 2 are allowed.” 8.9 For the year under consideration, the Ld. CIT(A) has followed For the year under consideration, the Ld. CIT(A) has followed For the year under consideration, the Ld. CIT(A) has followed his finding in assessment year 2014 his finding in assessment year 2014-15 and observed as under: 15 and observed as under:

“13. The appellant has made identical submissions as The appellant has made identical submissions as The appellant has made identical submissions as that that that made made made in in in Appeal Appeal Appeal No. No. No. CIT(A) CIT(A)-48, CIT(A) Mumbai/10716/2013 Mumbai/10716/2013-14 for AY 2014-15, 5, as as reproduced above. eproduced above. Other facts and backgrounds of the Other facts and backgrounds of the case remain the same. Since all the grounds involved in case remain the same. Since all the grounds involved in case remain the same. Since all the grounds involved in Appeal No. CIT(A) Appeal No. CIT(A)-48, Mumbai/10634/2014-15 for A.Y. 15 for A.Y. 2015-16 are identical to the one that is discussed above 16 are identical to the one that is discussed above 16 are identical to the one that is discussed above in Appeal No. CIT(A) in Appeal No. CIT(A)-48, Mumbai/10716/2013- -14 for AY. 2014-15, the undersigned findings for AY.2014 15, the undersigned findings for AY.2014 15, the undersigned findings for AY.2014-15 with respect to these grounds would mutatis mutandis with respect to these grounds would mutatis mutandis with respect to these grounds would mutatis mutandis apply to this appeal for AY 2015 apply to this appeal for AY 2015-16 as well. 14. Hence, it is held that in the absence of any 14. Hence, it is held that in the absence of any 14. Hence, it is held that in the absence of any incriminating material, the additions incriminating material, the additions made i.e., (i) ) made i.e., (i) ) Addition on account of accommodation entry of Addition on account of accommodation entry of Addition on account of accommodation entry of unsecured loan u/s 68 of Rs. 1,75,00,000/ unsecured loan u/s 68 of Rs. 1,75,00,000/-, (i) Addition , (i) Addition on account of unexplained expenditure us 69C on on account of unexplained expenditure us 69C on on account of unexplained expenditure us 69C on account account account of of of interest interest interest on on on accommodation accommodation accommodation entry entry entry of of of unsecured loan of Rs. 14,45,626/ unsecured loan of Rs. 14,45,626/- and (ji)Addition on Addition on account of unexplained expenditure us 69C on account account of unexplained expenditure us 69C on account account of unexplained expenditure us 69C on account of commission for arranging accommodation entry of of commission for arranging accommodation entry of of commission for arranging accommodation entry of unsecured loan of Rs. 75,000 / unsecured loan of Rs. 75,000 /-. for A.Y. 2015 . for A.Y. 2015-16 deserved to be deleted. deserved to be deleted.” 8.10 In view of the above discussion, the Ld. DR has failed to In view of the above discussion, the Ld. DR has failed to In view of the above discussion, the Ld. DR has failed to substantiate any incriminating material found during the course of substantiate any incriminating material found during the course of substantiate any incriminating material found during the course of

M/s G Nine Modular and M/s G Trade Capital M/s G Nine Modular and M/s G Trade 25 ITA Nos. 3212 to 3214 and 3247/M/2022 ITA Nos. 3212 to 3214 and 3247/M/2022

search which could establish non search which could establish non-genuineness of the unsecured genuineness of the unsecured loan. As far as his arguments of As far as his arguments of falsity of the books of accounts falsity of the books of accounts is concerned, we are of the opinion that any entry in the books of we are of the opinion that any entry in the books of we are of the opinion that any entry in the books of accounts could be false as a accounts could be false as a result of any incriminating material any incriminating material discovered during the search. So, falsity of books of account during the search. So, falsity of books of account in during the search. So, falsity of books of account recording the entries of unsecured loan recording the entries of unsecured loan may be as a result of may be as a result of any incriminating material found and incriminating material found and but those entries ar but those entries are not incriminating material in itself unless established to be false by way incriminating material in itself unless established to be incriminating material in itself unless established to be of other incriminating material. In view of above discussion, finding of other incriminating material. In view of above discussion, finding of other incriminating material. In view of above discussion, finding of the Ld. CIT(A) on the issue of the Ld. CIT(A) on the issue-in-dispute is well reasoned easoned,and we do not find any infirmity in not find any infirmity in the same. Accordingly, we uphold the same. The grounds of appeal of the Revenue are accordingly . The grounds of appeal of the Revenue are accordingly . The grounds of appeal of the Revenue are accordingly dismissed.

M/s G Nine Modular and M/s G Trade Capital M/s G Nine Modular and M/s G Trade 26 ITA Nos. 3212 to 3214 and 3247/M/2022 ITA Nos. 3212 to 3214 and 3247/M/2022

below the threshold limit of below the threshold limit of Rs. 30 lakh and therefore case should 30 lakh and therefore case should have been assessed by the officer of the rank of have been assessed by the officer of the rank of Income ncome-tax officer (ITO) only, hence the assessment made by (ITO) only, hence the assessment made by the officer in the rank of the officer in the rank of Asst Commissioner of Income Asst Commissioner of Income-tax/Deputy Commissioner of Income tax/Deputy Commissioner of Income- tax is invalid and deserve to be quashed as tax is invalid and deserve to be quashed as void ab initio void ab initio.

9.1 We find that the appeal of the revenue has already been We find that the appeal of the revenue has already been We find that the appeal of the revenue has already been dismissed and therefore the issue raised in th dismissed and therefore the issue raised in the application filed e application filed under rule 27 of the ITAT rules is merely academic and therefore we under rule 27 of the ITAT rules is merely academic and therefore we under rule 27 of the ITAT rules is merely academic and therefore we are not adjudicating upon the same and has dismissed as are not adjudicating upon the same and has dismissed as are not adjudicating upon the same and has dismissed as infructuous.

9.2 We find that the grounds raised in other appeals and We find that the grounds raised in other appeals and We find that the grounds raised in other appeals and application under rule 27 of the ITAT Rul application under rule 27 of the ITAT Rules, 1963 being identical es, 1963 being identical grounds grounds raised raised in in assessment assessment year year 2015- 2015 -16 and ITA No.3212/Mum/2022, therefore same are decided 3212/Mum/2022, therefore same are decided mutatis mutandis mutatis mutandis to our decision in ITA No. ITA No.3212/Mum/2022.

Order pronounced in the open Court on pronounced in the open Court on 28/0 04/2023. Sd/- Sd/- - (PAVAN KUMAR GADALE PAVAN KUMAR GADALE) (OM PRAKASH KANT OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 28/04/2023 Rahul Sharma, Sr. P.S.

M/s G Nine Modular and M/s G Trade Capital M/s G Nine Modular and M/s G Trade 27 ITA Nos. 3212 to 3214 and 3247/M/2022 ITA Nos. 3212 to 3214 and 3247/M/2022

Copy of the Order forwarded to Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file.

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