RAJNANDINI FOODS PRIVATE LIMITED,KOLHAPUR vs. ASST COMMISSIONER OF INCOME TAX , CENTRAL CIRCLE 2(2), MUMBAI

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ITSSA 1203/MUM/2025Status: DisposedITAT Mumbai16 September 2025AY 2019-2020 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal allowed the additional ground of appeal raised by the assessee concerning the validity of the notice under Section 153C and the AO's assumption of jurisdiction for assessment years 2015-16 to 2020-21. The Tribunal held that no additions could be made under Section 153A (and by implication, 153C) in the absence of incriminating material found during the search. For assessment year 2021-22, the additional ground challenging the Section 153C notice was dismissed as the assessment was completed under Section 143(3) and not under Section 153C. However, on merits, the Tribunal found that the additions under Section 69C for all assessment years were not based on seized or incriminating material but on a statement recorded during a survey action. The Tribunal reiterated that a statement recorded during a survey has no evidentiary value unless corroborated by material evidence, citing S. Khader Khan Son (SC). Since no material evidence was found to support the AO's estimation of unexplained expenditure, the additions were held to be unsustainable and based on presumption. Consequently, all grounds of appeal were allowed, and the additions were directed to be deleted.

What were the facts?

The assessee, Rajnandini Foods Private Limited, is in appeal before the Income Tax Appellate Tribunal (ITAT) against orders of the CIT(A) for assessment years 2015-16 to 2021-22. The appeals stem from additions made by the Assessing Officer (AO) under Section 69C of the Income Tax Act, 1961, concerning alleged unaccounted expenditure on wages. A survey action was conducted on the assessee's premises on February 8, 2021, following a search action on the JMJ Group. The AO made additions based on statements recorded during the survey, estimating cash wages paid to workers. The assessee contended that these statements were retracted and lacked corroborative evidence. The assessee also raised an additional ground challenging the validity of the notice issued under Section 153C and the AO's assumption of jurisdiction.

What were the issues?

1. Whether the addition made by the Assessing Officer under Section 69C on account of alleged unaccounted expenditure towards wages paid to workers is legally sustainable, especially when based solely on a statement recorded during survey proceedings, which was subsequently retracted, and in the absence of any incriminating material seized during the survey or subsequent inquiries. 2. Whether the notice issued under Section 153C of the Act is bad in law and the Assessing Officer erred in assuming jurisdiction under Section 153C, as the mandatory conditions for invoking such jurisdiction did not exist. Assessee's Contentions: - The addition under Section 69C is not sustainable as it is based on a retracted statement without corroborative evidence. The AO failed to discharge the onus of proving the expenditure and its chargeability as undisclosed income. - Reliance is placed on S. Khader Khan Son (SC) and Concord of India Insurance Co. Ltd. v. Smt. Nirmala Devi & Ors. (SC) for the proposition that statements recorded during survey/search have no evidentiary value without corroborating material. - The notice under Section 153C is bad in law as the mandatory conditions for invoking its jurisdiction were not met. Revenue's Contentions: - The judgment records no specific contentions for the revenue regarding the additions under Section 69C or the validity of the Section 153C notice.

Which sections of the Income-tax Act were involved?

Section 69C,Section 153C,Section 132(1),Section 131,Section 143(3),Section 153A

AI-generated summary — verify with the full judgment below

PER BENCH;

1.

This group of seven appeals are directed against the separate orders

of ld. CIT(A) – 48, Mumbai. In all the appeals, the assessee has raised

certain common grounds of appeal, facts in all the appeals are almost

similar except various of figure of addition under section 69C. Thus,

with the consent of parties all the appeals were clubbed, heard

together and are decided by common order to avoid the conflicting

decision. For appreciation of fact, facts in A.Y. 2015-16 in ITA No.

1199/M/2025 is treated as lead case. The assessee has raised

following grounds of appeal:

“1. On the facts and circumstances of the case and in law, the Ld. CIT(Appeals) erred in confirming the addition made by the Assessing Officer u/s 69C of the Act, without fully considering the entire facts and submissions made by the appellant before the Ld. CIT(Appeals). The Ld. CIT(Appeals) has given findings on certain selected points of the submission, whereas remained silent on the other points which are adverse to the revenue. The order passed by the Ld.CIT(Appeals) deserves to be quashed on various grounds.

2.

On the facts and circumstances of the case and in law, the Ld. Assessing Officer erred in making disallowance u/s 69C of the Income Tax Act on account of unaccounted expenditure towards wages paid workers merely on the basis of statement recorded on oath and especially when, there was no incriminating material/evidence was seized during the course of survey proceedings with respect to such expenditure incurred. Further, during the course of assessment proceedings also, no proper enquiries were carried out and no material/corroborative evidence was collected with respect to such alleged expenditure. The addition made by the Assessing Officer is not legally sustainable.

3.

On the facts and circumstances of the case and in law, the Ld. Assessing Officer erred in making disallowance u/s 69C of the Income Tax Act on account of unaccounted expenditure, when the statement given by the appellant during the course of search proceedings was retracted within reasonable time. Thus, the onus was heavily shifted on the Assessing Officer to prove with necessary supporting evidences that, the alleged expenditure was actually incurred by the assessee and chargeable to tax as his undisclosed income. The Assessing Officer made disallowance without discharge the onus lies on him. Therefore, the addition made by the Assessing Officer is legally not sustainable.

4.

On the facts and circumstances of the case and in law, the Ld. CIT(Appeals) erred in not considering the settled legal proposition of law that the statement recorded during survey has no evidentiary value (reliance is placed on S. Khader Khan Son [2012] 25 taxmann.com 413/210 Taxman 246/362 ITR 480 (SC) confirming CIT vs S. Khadar Khan Son [2008] 300 173157 (Madras)).Further, when the statement has been retracted by the appellant and there was no incriminating material available on record, the addition made u/s 69C is baseless. It is a trite law that surrender without any basis cannot be a basis of making addition in the hands of the assesse.

5.

On the facts and circumstances of the case and in law, the Ld. CIT(Appeals) erred in not considering the consistent view that has been expressed in series of decisions of the various Hon. Courts that, the statements recorded on oath by itself cannot constitute evidence found as a result of search for the purpose of determining undisclosed income, when no incriminating material whatsoever was found. [reliance is placed on Concord of India Insurance Co. Ltd. v. Smt. Nirmala Devi &Ors. (1979) 118 ITR 507 (SC); Dy. CIT v. SanmukhdosWadhwani (2003) 85 ITD 734 (Nag)]. In the present case, no incriminating material was brought on record either by the Survey party during survey or by the Assessing Officer during the assessment proceedings. The addition made by the Assessing Officer is baseless and illogical.

6.

On the facts and circumstances of the case and in law, the Ld. CIT(Appeals) erred in not considering that, the appellant has retracted his statement recorded during the course of survey proceedings within reasonable time and therefore, the Assessing Officer was duty bound to prove beyond doubt by collecting corroborative evidence that the transactions recorded in the statement on oath belongs to the assesse only. The addition in the present case was made by the Assessing Officer only on presumption and without collecting an iota of material/evidence or conducting any enquiries during the course of assessment proceedings, which was failure on the part of Assessing Officer. The addition made is therefore legally not sustainable.

7.

The Appellant craves leaves to alter, amend, withdraw or substitute any ground or grounds or to add any new ground or grounds of appeal on or before the hearing."

2.

Vide application dated 11.06.2025, the assessee has raised following additional

ground of appeal:

“On the facts and in the circumstances of the case and in law the notice issued under section 153C of the Act dated 11.01.2022 is bad in law and the assessing officer has erred in assuming the jurisdiction under section 153C of the Act as the mandatory condition to invoke the jurisdiction under section 153C of the Act did not exist and consequently the assessment is liable to be set aside.”

3.

Brief facts of the case as stated are that assessee is a company engaged in

the business of manufacturing of Pan Masala and allied products. A search

action under section 132(1) was carried out on 08.02.2021 in case of JMJ

Group, Mumbai. The A survey action on assesses premises was carried out

on 08.02.2021 at NARS No. 46211, P.B. Road, NH-4, Vill. Koganoli, Nr.

Rajasthan RajpurohitDhaba Taluka Chikoti, District Belgaum. Consequent

upon search action, the case of assessee was also centralised with the

office of DCIT CC-2(2), Mumbai. On the basis of said search action, notice

under section 153C was issued to the assessee for filing return of income

for various assessment years on 11.01.2022. In response to notice under

section 153C, the assessee filed its return of income for AY 2015-16 on

11.02.2022 declaring loss of Rs. 3.79 crores. During the assessment, the

assessing officer recorded that during survey proceeding statement of

Bharat Veer Singh Deora and Arun Mohanlal Joshi were recorded. In the

statement of Bharat Veer Singh Deora, it was disclosed that approximately

50 workers were working in the factory premises of the assessee and they

were paid wages in cash ranging from Rs. 8000/- to Rs. 10000/- per

month. The assessing officer worked out average monthly wages of all

workers of Rs. 4,50,000/- paid in cash. Further, on the basis of monthly

average wage of all employee assessing officer worked out annual wages

of workers at Rs. 54.00 lakhs and for six financial years it was estimated at

Rs. 3.24 crores. The assessing officer on perusal of cash withdrawal from

bank was of the view that withdrawal was less than the cash payment of

wages. On confronting such fact it was explained that cash was generated from cash sales across the counter which was used for making cash

payment of wages. On the basis of aforesaid observation, the assessing

officer issued show cause notice to the assesseethat in absence of proper

details of cash expenditure why the payment of cash wages should not be

treated as unexplained expenditure. The relevant part of show cause

notice is extracted in para 7.4 of assessment order. In response to show

cause notice, the assessee furnished their reply. The assessing officer has

not recorded the contents of reply of assessee. However, he noted that in

the reply, the assessee stated that there is nothing on record to show that

50 workers were working in the factory. Further, Bharat Veer Singh Deora

and ArunMohanlal Joshi whose statement were recorded, have retracted

their statement. The assessing officer, further, recorded that in response to

question no. 54 to 62, Bharat Veer Singh Deora accepted that

approximately 50 workers were working in the factory and were paid

wages in cash. However, on perusal of details of workers shown in

Annexure-C with reply, the assessee furnished list of 49 workers. Except

contract persons in Annexure C, rest of 47 employees were paid in cash of

Rs. 18,29,390/-. The assessing officer extrapolated an estimated

unexplained expenditure of Rs. 28,73,290/- as per observation in para 7.7

of assessment order is extracted below:

“7.7 Further, on perusal to the Annexure C of the submission dated 12.03.2022, it is seen that majority of the workers has received salary in the bracket of Rs.30,000 to 45,000 per year, which is too low. As during the survey action, Shri Bharat Veer Singh Deora has stated that minimum per month salary was paid from Rs.8,000/- to Rs.10,000/-per month. Hence, the detail provided by the assessee that total salary paid to the workers of Rs.25,26,710/- is not accepted. Therefore, the calculation of salary paid for a year of Rs.54,00,000/- is appropriate. Hence, the payment made over and above salary shown in the books of accounts of Rs.28,73,290/- 154,00,000 25,26,710) is still unexplained.”

4.

The assessing officer passed the assessment order with the approval of

Addl. Commissioner Central Range – 2, vide assessment order dated

30.03.2022 passed under section 153C. Similar order were made in

assessment order passed under section 153C upto A.Y. 2020-21. However,

assessment order for A.Y. 2021-22 was passed under section 143(3).

However, the additionsin AY 2021-22 were made on similar lines.

5.

Aggrieved by the addition of unexplained expenditure in the assessment

order, the assessee filed appeal before ld. CIT(A). Before ld. CIT(A), the

assessee filed details written submission. The submission of assessee are

recorded in para 5.1 of order of CIT(A). The assessee assailed the order

on factual as well as on legal grounds. On the legality of assessment order,

the assesse stated that in the survey proceedings, no evidence in the form

of excess cash, difference in stock, unaccounted sales, unaccounted

purchases, duplicate bills were found. In the absence of evidence, there

was no scope for making addition under section 69C. On facts, the

assessee stated that statement of Bharat Veer Singh Deora and

ArunMohanlal Joshi were retracted within a reasonable period.

Thestatementswere recorded by putting extra mental pressure and

coercion and they were made to sign the statement, the way it was

recorded by survey party. No cognisance of such statement can be taken.

The assessee prayed to delete the additions of unexplained expenditure.

6.

The ld. CIT(A) on considering the submission of assessee upheld the

action of assessing officer on the validity of passing assessment order as

well as on merit. On merit, the ld. CIT(A) held that at the time of survey

50 persons were employed which were paid wages in cash. However, in

the submission dated 13.03.2022, the assessee provided list of 49 workers.

The assessee has shown cash withdrawal of Rs. 9.00 lakhs only which

clearly established with workers was paid from undisclosed cash. Further,

aggrieved, the assessee has filed present appeal before Tribunal.

7.

We have heard the submissions of learned Authorised Representative (ld.

AR) of the assessee and learned Commissioner of Income Tax –

Departmental Representative (ld. CIT-DR) for the revenue. The ld. AR of

the assessee submits that in appeal for A.Y. 2015-16 to 2020-21 he has

raised additional ground of appeal vide application dated 11.06.2025. The

additional ground of appeal is purely legal in nature and goes to the root

of the matter. No new or additional facts are required to be brought on

record for adjudication of additional ground of appeal. The facts necessary

for adjudication of additional ground of appeal are emanating from the

orders of lower authorities or material available on record. Being legal

issue, it can be raised at any stage of proceedings. To support

hissubmissions, he relied upon the decision of Hon’ble Apex Court in

National CIT Vs Thermal Power Co. Ltd. vs CIT (229 ITR 383-SC).

8.

While making submissions in support of additional ground of appeal, the

ld. AR of the assessee invited our attention on para-7 of assessment order

and would submit that a search action was carried out on JMJ and AMJ Group on 08.02.2021. However, the assessee was only subjected to survey

action at their premises at NARS No. 46211, P.B. Road, NH-4, Vill.

Koganoli, Nr. RajasthaniRajpurohitDhaba, Tal. Chikoti, District Belgaum.

Thus, it is case of survey. The right course of action for assessing officer

was to frame assessment order under section 147 rws 143(3). And if no

seized material is gathered, it could not be a case of search action for

either for issuing notice under section 153A or 153C. Even in satisfaction

note recorded for issuing notice under section 153C in respect of A.Y.

2015-16 to 2020-21, the assessing officer clearly recorded that a survey

action was carried out at the factory premises of assessee and rest of the

facts are mentioned in satisfaction note. The ld. AR of the assessee

submits that in fact, no adverse evidence during the survey action was

found. The assessing officer relied on a general statement of Bharat Veer

Singh where he has stated that approximately 50 persons were employed.

Thus, exact 50 employees were never admitted by him. However, in

response to show cause, the assessee furnished the list of 49 persons, 49

numbers is approximate to 50. In the entire assessment order, the

assessing officer merely relied on such statement which was later on

retracted; otherwise, there is no reference that any unaccounted cash

sales or cash generated on counter sales or unaccounted cash was found.

No evidence of unexplained expenditure was found in the survey action.

The plain reading of section 153A/153CA, trigger point to exercise of

power thereunder is a search under section 132 or a requisition under

section 132A of the Income Tax Act. Only in case of search, the assessing officer is empowered to issue notice under section 153A or notice under

section 153C as the case may be. The object of search under section 132

and requisition under section 132A is to bring to tax undisclosed income

which is found during the course of search or pursuant to requisition.

Since, additions in the assessment order passed under section 153C are

not based on incriminating material or document found during the search,

even otherwise assessment order does not speak about any seized

material, the assessment cannot be made under section 153A or 153C as

has been held in a series of decision by various High Courts and ultimately

by Apex Court in PCIT Vs Abhishar Build Well (P) Ltd. (2023) SCC online

SC 481. The ld. AR of assessee submits in assessees group case in a

similar cases wherein ArunMohanlal Joshi was also covered in a survey

action, similar assessment order was framed under section 153A for

various assessment years in making addition of unexplained expenditure,

and on appeal before CIT(A) the additions were upheld. However, on

further appeal before Tribunal all assessment order passed under section

153A were quashed in IT(SS)A No. 1169 to 1176/Mum2025 dated

10.06.2025, copy of which is filed. The ld. AR submits, he has also filed

copy of statement of Bharat Veer Singh Deora and his retraction statement

dated 08.07.2021 along with record of survey proceedings. The ld AR of

the assessee submits that grounds of appeal raised in all the appeals are

now covered in favour of assessee by the decision of Tribunal in case of

Arun Mohanlal Joshi in in IT(SS)A No. 1169 to 1176/Mum2025 dated

10.06.2025.

9.

On merits of original grounds of appeal, the ld. AR of the assessee submits

that Karnataka High Court in DCIT Vs Sunil Kumar Sharma (2024) 159

taxmann.com 179 (Karnataka) held that satisfaction note is required to be

recorded under section 153C of the Income Tax Act for each assessment

year and in the impugned proceedings, a consolidated satisfaction note

has been recorded for different Assessment Years (AYs), which also vitiates

the entire assessment proceedings. The decision of Karnataka High Court

has been affirmed by Hon’ble Apex Court in DCIT Vs Sunil Kumar Sharma

(2024) 168 taaxmnn.com 77 (SC). Further, Mumbai Tribunal in D G Land

Developers (P) Ltd. Vs ACIT (2024) 166 taxmann.com 620 (Mumbai –

Trib.) also held that where pursuant to search conducted upon director of

assessee company while he was travelling, cash of certain amount was

seized and further a survey was also conducted upon assessee and

addition was made on account of 'on-money' computed on basis of diaries

seized during survey and money seized from his director, cash found

during search could not be automatically considered as undisclosed income

of assessee, and additions on account of 'on-money' made without any

incriminating material found in search, were to be deleted.

10.

Against the addition of unexplained expenditure, the ld AR of the assessee

also submits that the additions are based merely on presumption and

assumptions. No cash was found or seized during the survey action 133A

at the premises of assessee. The action of assessing officer in making

addition is not based on evidence. The assessing officer made addition of

unexplained expenditure without establishing actual receipt of wages. The statement recorded during survey action under section 131 has no

evidentiary value as has been held in S. Khader Khan Son [2012] 25

taxmann.com 413/210 Taxman 246/362 ITR 480 (SC) confirming CIT vs S.

Khadar Khan Son [2008] 300 173157 (Madras)).Further, when the

statement has been retracted by the assessee and there was no other

incriminating material available on record, the addition made under section

69C is baseless.The foundation of addition is without any basis and liable

to be deleted.

11.To support his other various contentions, the ld. AR of the assessee also

relied on the following decision:  Sai Shraddha Enterprises vs ACIT (ITA Nos. 1803, 1804, 1805 & 1807/Mum/2020 dated 29.12.2022)  Rangamani Krishnan vs DCIT (2025) 176 taxmann.com 912 (Chennai – Trib.)  DCIT vs Sunil Kumar Sharma (2024) 168 taxmann.com 77 (SC)  CIT vs Jasjit Singh (2023) 155 taxmann.com 155 (SC) 12.On the other hand, learned Commissioner of Income Tax-Departmental

Representative (CIT-DR) for the revenue supported the order of lower

authorities. The ld. CIT-DR for the revenue submits that admittedly a

search action was carried out on the assessee and its group. Consequent

upon search action, the case of assessee group was centralised. The

assessing officer recorded satisfaction under section 153C on the basis of

incriminating material and issued notice under section 153C. The assessee

never objected about issuance of such notice under section 153C. For

recording satisfaction under section 153C, two conditions must be fulfilled

i.e. seized material pertains to or belongs to other person and assessing

officer recorded satisfaction and handover the material to the assessing officer having jurisdiction over such person. In the present case the

assessing officer of searched person and the assessee is same. Once, the

case was centralised, the assessment was completed. The assessment was

completed pursuant to material gathered in the survey and search action.

The estimation of addition by assessing for unexplained expenditure is

made on reasonable basis, thus, he fully supports the order of lower

authorities. On the submissions of ld AR of the assessee that separate

satisfaction must be recorded for each of the assessment year, the ld CIT-

DR for the revenue submits that Income Tax Act does not speaks about to

recording of satisfaction for each of the assessment year separately,

combined satisfaction for all assessment years is valid. At the time of

conclusion of hearing, the ld. CIT-DR for the revenue was asked to furnish

his short written submission within 10 days. Despite allowing 10 days time,

no written submission is filed till today; hence we considered his oral

submission.

13.

We have considered the rival submissions of both the parties and have

gone through the orders of lower authorities carefully. We have also

deliberated on various case laws relied by ld. AR of the assessee. We find

that a search action was carried out on JMJ and AMJ Group on 08.02.2021.

The assessee was subjected to survey action only. In the said survey

action, Arun Mohanlal Joshi was also a subject to survey action. In case of

Arun Mohanlal Joshi, assessment was completed under section 153A in

making addition on account of unaccounted expenditure under section

69C. On appeal before ld. CIT(A), the similar addition was confirmed.

However, on further appeal before Tribunal on similar additional ground of

appeal, by considering similar submissions of both the parties, assessment

under section 153A framed against ArunMohanlal Joshi was quashed in

IT(SS)A No. 1169 to 1176/Mum/2025. The relevant part of order of

Tribunal is extracted below;

“14. Since the additional ground raised by the assessee relates to challenging the legality and maintainability of the assessment order. In this regard, we have heard both the parties and perused the material available on record, Judgments cited before us and also perused the orders passed by the revenue authorities. From the records, we notice that the case of the revenue is that during the course of search action in the JMJ and AMJ group, a survey proceedings u/s 133A of the Income Tax Act, 1961 in the case of M/s Raj Impex at Room No. 101, 101A, Devi Darshan complex, Tembhi Naka, Bhawani Chowk, Thane,Maharashtra-400601, certain Note books, Diary, loose papers were found and impounded and placed and Inventory of books & documents found and impounded from the survey premises. The impounded diaries and note books are depicted below: - A) The pages of the small pocket maroon color notebook (written pages from 1 to 15) placed as inventory of the books and documents found and impounded from the survey premises. (B) Yellow color small spiral notebook titled EKAL (written pages from 1 to 4) placed as inventory of the books and documents found and impounded from the survey premises. (C) Blue note book titled SUNDARAM (written pages from 1 to 6) placed as inventory of the books and documents found and impounded from the survey premises. (D) Loose papers found and placed as inventory of books and documents found and impounded from the survey premises. On the page no. 2, some calculation and transaction details in cash and cheque written by hand on 18.09.2018.

15.

Now admittedly, the facts of the case are not in dispute, wherein we find that additions in these cases are not based on any seized material found during the course of search, which is crystal clear for the facts narrated by the AO in the order of assessment.

16.

Admittedly, the said documents, were find in the course of Survey Action u/s.133A of the Act and has nothing to do with the search and the additions are based on the so called incriminating material that was found not in a search but in a survey, that too on the firm and not the individual.

17.

Even On a plain reading of section 153A of the Act, it is evident that the trigger point for exercise of powers thereunder isa search under section 132 or a requisition under section 132A of the Act. Once a search or requisition is made, a mandate is cast upon the Assessing Officer to issue notice under section 153 A of the Act to the person, requiring him to furnish the return of income in respect of each assessment year falling within six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and assess or reassess the same. Since the assessment under section 153A of the Act is linked with search and requisition under sections 132 and 132A of the Act, it is evident that the object of the section is to bring to tax the undisclosed income which is found during the course of or pursuant to the search or requisition. However, instead of the earlier regime of block assessment whereby, it was only the undisclosed income of the block period that was assessed, section 153A of the Act seeks to assess the total income for the assessment year, which is clear from the first proviso thereto which provides that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years. The second proviso makes the intention of the Legislature clear as the same provides that assessment or reassessment, if any, relating to the six assessment years referred to in the sub-section pending on the date of initiation of search under section 132 or' requisition under section 132A, as the case may be, shall abate. Sub-section (2) of section 153A of the Act provides that if any proceeding or any order of assessment or reassessment made under sub-section (1) is annulled in appeal or any other legal provision, then the assessment or reassessment relating to any assessment year which had abated under the second proviso would stand revived. The proviso thereto says that such revival shall cease to have effect if such order of annulment is set aside. Thus, any proceeding of assessment or reassessment falling within the six assessment years prior to the search or requisition stands abated and the total income of the assessee is required to be determined under section 153A of the Act. Similarly, sub-section (2) provides for revival of any assessment or reassessment which stood abated, if any proceeding or any order of assessment or reassessment made under section 153A of the Act is annulled in appeal or any other proceeding.

18.

Section 153A bears the heading "Assessment in case of search or requisition". It is well settled as held by the Supreme Court in a catena of decisions that the heading or the Section can be regarded as a key to the interpretation of the operative portion of the section and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens that meaning. From the heading of section 153 the intention of the Legislature is clear, viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment In case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition, in other words, the assessment should connected With something found during the search or requisition viz., incriminating material which revealsundisclosed income. Thus, while in view of the mandate of subsection (1) of section 153 A of the Act, in every case where there is a search or requisition, the Assessing Officer is obliged to issue notice to such person to furnish returns of income for the six years preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made, any addition or disallowance can be made only on the basis of material collected during the search or requisition, in case no incriminating material is found, as held by-the Rajasthan High Court in the case of Jai Steel (India)v. Asst. CIT (supra), the earlier assessment would have to be reiterated, in case where pending assessments have abated, the Assessing Officer can pass assessment orders for each of the six years determining the total income of the assessee which would include income declared in the returns, if any, furnished by the assessee as well as undisclosed income, if any, unearthed during the search or requisition. In case where a pending reassessment under section 147 of the Act has abated, needless to state that the scope and ambit of the assessment would include any order which the Assessing Officer could have passed under section 147 of the Act as well as under section 153A of the Act.

19.

We find that the additions made in the assessment order passed in the present case are not based on any incriminating material or documents found during search. In fact, the assessment order does not refer to any seized material or any incriminating material found during the course of search. This position of law (that addition u/s 153A/153C can be made onlyon the basis of incriminating material etc. found during search), has been elaborated by the Hon'ble jurisdictional High Court in a plethora of cases as discussed above: CIT vs Kabul Chawla, 380 ITR 570 (Delhi) and Pr CIT vs MeetaGutgutia, 395 ITR 526(Delhi).

20.

However, we find that the said documents were found during the course of survey action u/s.133A of the Act and has nothing to do with the seized material found during the search.

21.

In this view of the nature, when in the order of assessment, there is no reference of any material found during search, thus no additions could have been made u/s 153A of the Act. Our this view is fully supported by the decision of the Hon’ble Supreme Court in the Case of PCIT vs Abhihsar Build Well(P) Ltd. (2023) SCC online SC. 481. Wherein the Hon’ble Supreme Court has expounded that no additions can be made when the assessment is farmed u/s.153A of the Act, dehors incrementing material found during the search.

22.

Therefore, we are of the considered view that no incrementing material was found in this case during the course of search. Thus no additions u/s.153 of the act were warranted. Thus, we allow Additional ground raised by the assessee and direct the AO to delete the addition.

23.

Accordingly, this ground raised by the assessee is allowed.

24.

Since we have allowed additional ground and deleted the additions, therefore, there is no need to adjudicate other grounds. 25. In the result, the appeal filed by the assessee is allowed.

I.T.(SS).A.No. 1170 to 1176/Mum/2025 AY: 2015-16 to 2021-22

26.

As the facts and circumstances in these appeals are identical to ITA No. 1169/Mum/2025 for the A.Y 2014-15 (except variance in figures) therefore it is not imperative to repeat the facts and grounds raised in the above appeals. Hence, the bench fills that on the decision taken by us in ITA No. 1169/Mum/2025 for the AY: 2014-15 shall apply ‘mutatis mutandis’ for these appeals also. Accordingly, the ground of appeal of the assessee are allowed in the above appeals as well.”

14.We find that facts of the appeal in hand from A.Y. 2015-16 are based on

similar set of facts. In the present appeal as well, the additions are not

based on the seized or incriminating material, rather made on the basis of

statement. Therefore, respectfully following the decision of co-ordinate

bench, as recorded above the additional ground of appeal raised by

assessee is allowed and consequently, we hold that no addition under

section 153C can be made in case of assessment based on survey action.

15.Even otherwise, mere statement cannot be treated as evidence unless

it is corroborative with material evidence. There in no material

evidence on record to strengthen the case of assessing officer. Even, on

considering from other point of view, the survey and search action was

carried out on assessee and its group on 08.02.2021, the assessing

officer made addition on extrapolation on the basis of statement of

Bharat Veer Singh Deora for AY 2015-16 to 2020-21, without any

reference of evidence. No stretch of imagination such addition can be made in unabated assessments. Thus, the assessee also succeeded

even on merit as per our additional observations.

16.In the result, additional ground of appeal is allowed.

17.

Considering the fact that we have allowed additional ground of appeal,

therefore, adjudication of other grounds of appeal raised by assessee have

become academic. In the result, appeal of the assessee for A.Y. 2015-16 in

ITA No. 1199/Mum/2025 is allowed.

IT(SS)A No. 1200 to 1204/Mum/2025 (A.Y. 2016-17 to 2020-21)

18.

As recorded above, the assessee has raised similar ground of appeal and

additional ground of appeal in all these appeals, as raised in appeal for A.Y.

2015-16 which we have already allowed by allowing additional ground of

appeal. Therefore, all these appeals are allowed with similar direction.

19.

In the result, all the appeals of the assessee for AY 2016-17 to 2020-21

are allowed with similar directions.

IT(SS) A No. 1205/Mum/2025 (AY 2021-22).

20.

We find that the assessee has also raised similar additional ground of

appeal as raised in AY 2015-16 to 2020-21 that notice under section 153C

is bad in law and that assessing officer erred in assuming jurisdiction

under section 153C. Perusal of assessment shows that assessment in AY

2021-22 was completed under section 143(3) on 07.04.2022. Though, the

assessee has got his appeal categorised under the heading of “Search as

Seizure Appeal”, with appeals of other years. Thus, such additional ground

of appeal raised by assessee in this appeal is without any basis and is

dismissed as such.

21.

So far as merits of the additions are concerned, we find that assessing

officer made addition under section 69C on account of unexplained

expenditure. The basis of making additions is the same as discussed in AY

2015-16. We find that a survey action was carried out on 08.02.2021 that

is during the currency of financial year under consideration. The assessing

officer relied on the statement of Bharat Veer Singh Deora recorded under

section 131 of Act and estimated the figure of addition of unexplained

expenditure. Admittedly no cash was found, no books was seized or

impounded during survey action.It is admitted position in law that

statement recorded during survey action under section 131 has no

evidentiary value unless it is corroborated with other evidences. Similar

view was taken in S. Khader Khan Son [2012] 25 taxmann.com 413/210

Taxman 246/362 ITR 480 (SC) confirming CIT vs S. Khadar Khan Son

[2008] 300 173157 (Madras). Thus, the addition of unexplained

expenditure is not based on evidence rather based on the presumption of

assessing officer. Hence, we do not find any justification in the addition

made by assessing officer. In the result, the grounds of appeal raised by

the assessee are allowed.

22.

In the result, the appeal of assessee for AY 2021-22 is also allowed.

Order was pronounced in the open Court on 16/09/2025.

Sd/- Sd/-

PRABHASH SHANKAR PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER

MUMBAI, Dated: 16/09/2025 Biswajit Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order

Assistant Registrar ITAT, Mumbai

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