A ONE SIZING WORKS,BHIWANDI vs. THE ASST COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 3 , THANE

3.1 In view of search action carried out at the premises of the search action carried out at the premises of the search action carried out at the premises of the assessee notices u/s 153A of the Act were issue u/s 153A of the Act were issued for assessment years from 2014-15 to 2020 15 to 2020-21 and assessment u/s 153A of the u/s 153A of the Act were accordingly completed on 28.09.2021, were accordingly completed on 28.09.2021, wherein, the were accordingly completed on 28.09.2021, Assessing Officer made Assessing Officer made additions for the various loans and interest rious loans and interest thereon in relevant assessment years. relevant assessment years.

3.2 In assessment year 2014 In assessment year 2014-15, the Assessing Officer made 15, the Assessing Officer made addition of Rs.55 lakhs u/s 68 of the Act for alleged accommodation addition of Rs.55 lakhs u/s 68 of the Act for alleged accommodation addition of Rs.55 lakhs u/s 68 of the Act for alleged accommodation entry of unsecured loan received from entry of unsecured loan received from three parties namely arties namely, (i) Mili Commodities Pvt. Ltd. (Rs.15,00,000/ Commodities Pvt. Ltd. (Rs.15,00,000/-); (ii) Value Added Merchants Value Added Merchants Pvt. Ltd. (Rs.20,00,000/ Pvt. Ltd. (Rs.20,00,000/-); and (iii) Dolphin Commerce Pvt. Ltd. Dolphin Commerce Pvt. Ltd. & IT(SS)A. 6459, 6460, 6461, 6462 & IT(SS)A. 6459, 6460, 6461, 6462 & 6463/MUM/2024 (Rs.20,00,000/-). Further, interest of Rs.17,18,794/ ). Further, interest of Rs.17,18,794/ ). Further, interest of Rs.17,18,794/- paid in respect of these loans was also disall respect of these loans was also disallowed.

3.3 In assessment year 2015 In assessment year 2015-16 addition for unsecured loan of 16 addition for unsecured loan of Rs.1,50,00,000/- from Vinam Finance Pvt. Ltd. was disallowed from Vinam Finance Pvt. Ltd. was disallowed from Vinam Finance Pvt. Ltd. was disallowed invoking section 68 of the Act. Further interest expenditure of invoking section 68 of the Act. Further interest expenditure of invoking section 68 of the Act. Further interest expenditure of Rs.17,84,744/- in respect of loans claimed by the assessee was in respect of loans claimed by the assessee was in respect of loans claimed by the assessee was also disallowed.

3.4 In assessment year 2016 In assessment year 2016-17, the Assessing Officer made 17, the Assessing Officer made addition of Rs.1,95,00,000/ addition of Rs.1,95,00,000/- u/s 68 of the Act for treating the loans u/s 68 of the Act for treating the loans as accommodation entries from (i) Manyata Merchants Pvt. Ltd. entries from (i) Manyata Merchants Pvt. Ltd. entries from (i) Manyata Merchants Pvt. Ltd. (Rs.75,00,000/-), (ii) Safalta Vinimay Pvt. Lt ), (ii) Safalta Vinimay Pvt. Ltd. (Rs.45,00,000/ d. (Rs.45,00,000/-) and (iii) Vinam Finance Pvt. Ltd. (Rs.75,00,000/ Vinam Finance Pvt. Ltd. (Rs.75,00,000/-). The Assessing Officer ). The Assessing Officer also disallowed the interest of Rs.43,36,689/ also disallowed the interest of Rs.43,36,689/- claimed by the claimed by the assessee as revenue expenditure in respect of these unsecured assessee as revenue expenditure in respect of these unsecured assessee as revenue expenditure in respect of these unsecured loans.

3.5 In assessment year 2017 In assessment year 2017-18, the Assessing Officer disallowed , the Assessing Officer disallowed loan of Rs.50,00,000/ loan of Rs.50,00,000/- received from Kirteshwari Vintrade Pvt. Ltd. received from Kirteshwari Vintrade Pvt. Ltd. invoking section 68 of the Act and disallowed interest of invoking section 68 of the Act and disallowed interest of invoking section 68 of the Act and disallowed interest of Rs.46,67,717/- claimed in respect of unsecured loans. claimed in respect of unsecured loans. claimed in respect of unsecured loans.

3.6 In assessment year 2018 In assessment year 2018-19, the Assessing Officer made ssing Officer made disallowance of Rs.34,03,144/ disallowance of Rs.34,03,144/- on account of interest which was on account of interest which was claimed by the assessee as revenue expenditure holding the same claimed by the assessee as revenue expenditure holding the same claimed by the assessee as revenue expenditure holding the same paid towards bogus and unsecured loans. paid towards bogus and unsecured loans.

& IT(SS)A. 6459, 6460, 6461, 6462 & IT(SS)A. 6459, 6460, 6461, 6462 & 6463/MUM/2024 3.7 Similarly, in assessment year 2019 Similarly, in assessment year 2019-2020 also the Assessing 2020 also the Assessing er made disallowance of interest of Rs.30,90,985/- holding to Officer made disallowance of interest of Rs.30,90,985/ er made disallowance of interest of Rs.30,90,985/ be paid in respect of bogus and unsecured loans. be paid in respect of bogus and unsecured loans.

AY 2014-15:

6. On the facts and in the circumstances of the appellant's case and On the facts and in the circumstances of the appellant's case and On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in in law, the Ld. Commissioner of Income Tax (Appeals) erred in in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs.72,18,794/ upholding the addition of Rs.72,18,794/- in absence of any in absence of any incriminating material whatsoever found du incriminating material whatsoever found during the course of search ring the course of search & seizure action, pertaining to the year under & seizure action, pertaining to the year under consideration consideration AY 2015-16:

6. On the facts and in the circumstances of the appellant's case and On the facts and in the circumstances of the appellant's case and On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in in law, the Ld. Commissioner of Income Tax (Appeals) erred in in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the addition of upholding the addition of Rs 1,67,84,744/- in absence of any in absence of any incriminating material whatsoever found during the course of search incriminating material whatsoever found during the course of search incriminating material whatsoever found during the course of search & seizure action, pertaining to the year under & seizure action, pertaining to the year under consideration. consideration. AY 2016-17

6. On the facts and in the circumstances of the appellant's case and On the facts and in the circumstances of the appellant's case and On the facts and in the circumstances of the appellant's case and in law, the Ld. Ld. Commissioner of Income Tax (Appeals) erred in Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs 2,25,18,835/ upholding the addition of Rs 2,25,18,835/- in absence of any in absence of any incriminating material whatsoever found during the course of search incriminating material whatsoever found during the course of search incriminating material whatsoever found during the course of search & seizure action, pertaining to the year under & seizure action, pertaining to the year under consideration. consideration.

& IT(SS)A. 6459, 6460, 6461, 6462 & IT(SS)A. 6459, 6460, 6461, 6462 & 6463/MUM/2024

AY 2017-18

6. On the facts and in the circumstances of the appellant's case and On the facts and in the circumstances of the appellant's case and On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in in law, the Ld. Commissioner of Income Tax (Appeals) erred in in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs 89,01,817/ upholding the addition of Rs 89,01,817/- in absence of any in absence of any incriminating material whatsoever found during the course of search incriminating material whatsoever found during the course of search incriminating material whatsoever found during the course of search & seizure action, pertaining to the year under seizure action, pertaining to the year under consideration. consideration. AY 2018-19

3. On the facts and in the circumstances of the appellant's case and 3. On the facts and in the circumstances of the appellant's case and 3. On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in in law, the Ld. Commissioner of Income Tax (Appeals) erred in in law, the Ld. Commissioner of Income Tax (Appeals) erred in upholding the addition of Rs 24,00,526/ upholding the addition of Rs 24,00,526/- in absence in absence of any incriminating material whatsoever found during the course of search incriminating material whatsoever found during the course of search incriminating material whatsoever found during the course of search & seizure action, pertaining to the year under & seizure action, pertaining to the year under consideration consideration AY 2019-2020

3. On the facts and in the circumstances of the appellant's case and On the facts and in the circumstances of the appellant's case and On the facts and in the circumstances of the appellant's case and in law, the Ld. Commissioner of in law, the Ld. Commissioner of Income Tax (Appeals) erred in Income Tax (Appeals) erred in upholding the addition of Rs 18,28,145/ upholding the addition of Rs 18,28,145/- in absence of any in absence of any incriminating material whatsoever found during the course of search incriminating material whatsoever found during the course of search incriminating material whatsoever found during the course of search & seizure action, pertaining to the year under & seizure action, pertaining to the year under consideration. consideration. 4.1 We have heard rival submissions o We have heard rival submissions of the parties f the parties on the specific issue in dispute as regards to the existence of incriminating issue in dispute as regards to the existence of incriminating issue in dispute as regards to the existence of incriminating material qua the assessment years 2014 material qua the assessment years 2014-15 to AY 2018 15 to AY 2018-19 and whether any addition could be sustained in those assessment whether any addition could be sustained in those assessment whether any addition could be sustained in those assessment orders passed u/s 153A of the Act in absence orders passed u/s 153A of the Act in absence of any incriminating of any incriminating material found and seized from the premises of the assessee. The material found and seized from the premises of the assessee. material found and seized from the premises of the assessee. issue is no longer res integra. In Abhisar Buildwell Pvt. Ltd. v. Abhisar Buildwell Pvt. Ltd. v. issue is no longer res integra. PCIT [(2023) 454 ITR 212 (SC)], the Hon’ble Supreme Court held [(2023) 454 ITR 212 (SC)], the Hon’ble Supreme Court held [(2023) 454 ITR 212 (SC)], the Hon’ble Supreme Court held completed assessments, no addition that in the case of unabated or in the case of unabated or completed assessments can be made under Section 153A of the Act in the absence of any can be made under Section 153A of the Act in the absence of any can be made under Section 153A of the Act in the absence of any incriminating material incriminating material found during the search. In case of abated In case of abated & IT(SS)A. 6459, 6460, 6461, 6462 & IT(SS)A. 6459, 6460, 6461, 6462 & 6463/MUM/2024 assessment years, the AO could make addition on the basis of any assessment years, the AO could make addition on the basis of any assessment years, the AO could make addition on the basis of any e return of income along with addition if information or entry in th information or entry in the return of income along with addition if any on the basis of incriminating material. any on the basis of incriminating material. The relevant finding of The relevant finding of Hon’ble Supreme Court (supra) is reproduced as under: Hon’ble Supreme Court (supra) is reproduced as under: Hon’ble Supreme Court (supra) is reproduced as under:

“14. In view of the above and for the reasons stated above, it is 14. In view of the above and for the reasons stated above, it is 14. In view of the above and for the reasons stated above, it is concluded as under: concluded as under: i) that in case of search under Section 132 or requisition under Section at in case of search under Section 132 or requisition under Section at in case of search under Section 132 or requisition under Section 132A, the AO assumes the jurisdiction for block assessment under 132A, the AO assumes the jurisdiction for block assessment under 132A, the AO assumes the jurisdiction for block assessment under section 153A; ii) all pending assessments/reassessments shall stand abated; ii) all pending assessments/reassessments shall stand abated; ii) all pending assessments/reassessments shall stand abated; iii) in case any incriminating material is fou iii) in case any incriminating material is found/unearthed, even, in case nd/unearthed, even, in case of unabated/completed assessments, the AO would assume the of unabated/completed assessments, the AO would assume the of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the ‘total income’ taking into jurisdiction to assess or reassess the ‘total income’ taking into jurisdiction to assess or reassess the ‘total income’ taking into consideration the incriminating material unearthed during the search and consideration the incriminating material unearthed during the search and consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the other material available w ith the AO including the income declared in the returns; and iv) in case no incriminating material is unearthed during the in case no incriminating material is unearthed during the in case no incriminating material is unearthed during the search, search, search, the the the AO AO AO cannot cannot cannot assess assess assess or or or reassess reassess reassess taking taking taking into into into consideration the other material in respect of completed consideration the other material in respect of completed consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of assessments/unabated . Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in completed/unabated assessments, no addition can be made by the AO in completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search absence of any incriminating material found during the course of search absence of any incriminating material found during the course of search under Section 132 or requisition under Section 132A of the Act, 1961. under Section 132 or requisition under of the Act, 1961. However, the completed/unabated assessments can be re However, the completed/unabated assessments can be re-opened by the However, the completed/unabated assessments can be re AO in exercise of powers under Sections 147/148 of the Act, subject to AO in exercise of powers under of the Act, subject to fulfilment of the conditions as envisaged/mentioned under fulfilment of the conditions as envisaged/mentioned under sections fulfilment of the conditions as envisaged/mentioned under 147/148 of the Act and those powers are saved. of the Act and those powers are saved.” (emphasis supplied externally) hasis supplied externally) 4.2 To ascertain the applicability of the ratio in To ascertain the applicability of the ratio in Abhisar Buildwell Abhisar Buildwell (supra), it is necessary to determine whether the assessments for , it is necessary to determine whether the assessments for , it is necessary to determine whether the assessments for & IT(SS)A. 6459, 6460, 6461, 6462 & IT(SS)A. 6459, 6460, 6461, 6462 & 6463/MUM/2024 each of the years in question were abated or not as on the date of each of the years in question were abated or not as on the date of each of the years in question were abated or not as on the date of search, i.e., 27.11.2019. It is not in dispute that the limitation for search, i.e., 27.11.2019. It is not in dispute that the limitation for search, i.e., 27.11.2019. It is not in dispute that the limitation for issuance of notice under Section 143(2) had already expired in issuance of notice under Section 143(2) had already expired in issuance of notice under Section 143(2) had already expired in respect of AYs 2014 respect of AYs 2014–15 to 2018–19, and no scrutiny proc 19, and no scrutiny proceedings were pending on the date of search. Therefore, assessments for were pending on the date of search. Therefore, assessments for were pending on the date of search. Therefore, assessments for those years stood completed and fall within the category of those years stood completed and fall within the category of those years stood completed and fall within the category of unabated assessments unabated assessments. Conversely, AYs 2019–20 and 2020 20 and 2020–21 were within the limitation period for issuance of notice under were within the limitation period for issuance of notice under were within the limitation period for issuance of notice under Section 143(2), and hence are to be treated as ion 143(2), and hence are to be treated as abated abated assessments.

4.3 Accordingly, in the case of assessee in the case of assessee status of of assessment as abated or unabated for unabated for relevant current year and six preceding relevant current year and six preceding assessment years is summarised is summarised as under:

Assessment Due Limitation Whether any Abated/unabated year date/date /date of for issue of scrutiny filing filing of of notice u/s proceeding Return 143(2) of the pending for Act the AY 2014-15 31/10/2014 31/10/2014 30/09/2015 No unabated 2015-16 31/10/2015 31/10/2015 30/09/2016 No unabated 2016-17 31/10/2016 31/10/2016 30/09/2017 No unabated 2017-18 31/10/2017 31/10/2017 30/09/2018 No unabated 2018-19 31/10/2018 31/10/2018 30/09/2019 No unabated 2019-20 31/10/2019 31/10/2019 30/09/2020 No Abated 2020-21 31/10/2020 31/10/2020 30/09/2021 No Abated (current year) 4.4 There is no dispute between parties on the issue of particular There is no dispute between parties on the issue of particular There is no dispute between parties on the issue of particular assessment year as abated or unabated as summarised in above assessment year as abated or unabated as summarised in above assessment year as abated or unabated as summarised in above table. Therefore, the issue of whether there was any incriminating Therefore, the issue of whether there was any incriminating Therefore, the issue of whether there was any incriminating & IT(SS)A. 6459, 6460, 6461, 6462 & IT(SS)A. 6459, 6460, 6461, 6462 & 6463/MUM/2024 material found from the premises of the assessee in respect of material found from the premises of the assessee in respect of material found from the premises of the assessee in respect of i.e. unabated assessment assessment years 2014 2014-15 to 2018-19 i.e. unabated assessment years , is to be examined in the case of the assessee for complying is to be examined in the case of the assessee for complying is to be examined in the case of the assessee for complying with the ratio of the Hon’ble Supreme Court in the case of Abhisar with the ratio of the Hon’ble Supreme Court in the case of Abhisar with the ratio of the Hon’ble Supreme Court in the case of Abhisar Buildwell Pvt. Ltd. (supra). Buildwell Pvt. Ltd. (supra).

4.6 We note that i We note that in assessment year 2014-15, the Assessing 15, the Assessing Officer in the assessment order has issued show case notice which Officer in the assessment order has issued show case notice which Officer in the assessment order has issued show case notice which is available on page 3 to 4 of the assessment order, for ready is available on page 3 to 4 of the assessment order is available on page 3 to 4 of the assessment order reference, which is reproduced as under: reference, which is reproduced as under:

“You have been provided with several opportunities by this You have been provided with several opportunities by this You have been provided with several opportunities by this office to make submissions/explanations in your case. But it is seen that you make submissions/explanations in your case. But it is seen that you make submissions/explanations in your case. But it is seen that you have not made any submissions in response to the notices issued till have not made any submissions in response to the notices issued till have not made any submissions in response to the notices issued till date. Hence one final/last opportunity is being presented to you vide date. Hence one final/last opportunity is being presented to you vide date. Hence one final/last opportunity is being presented to you vide this showcause notice to make submissi this showcause notice to make submissions/explanations. It is seen that for the year under consideration, you have taken It is seen that for the year under consideration, you have taken It is seen that for the year under consideration, you have taken unsecured loans from the following companies as mentioned below: unsecured loans from the following companies as mentioned below: unsecured loans from the following companies as mentioned below: FY Loan Taken By Loan Taken From Amount of Loan Taken By Amount of Loan Amount of received (Rs) interest interest (Rs) (Rs) 2013^14 A One Sizing Works Dolphin Commerce P. Ltd 20,00,000 86,137 86,137 A One Sizing 2013-14 15,00,000 7,06,685 A One Sizing Works Mili Commodities P. Limited 7,06,685 A One Sizing Works 2013-14 20,00,000 1,59,123 A One Sizing Works Value Added Merchants P. 1,59,123 A One Sizing Works Limited 2014-15 A One Sizing Works Vinam Finance P. Limited 1,50,00,000 65,950 65,950 A One Sizing Works 2015-16 A One Sizing Works Manyata Merchants P. Limited 75,00,000 6,35,506 6,35,506 A One Sizing Works 2015-16 A One Sizing Works Safalta Vinimay P. Limited 45,00,000 3,15,124 3,15,124 A One Sizing Works 2015-16 A One Sizing Vinam Finance P. Limited 75,00,000 16,01,315 A One Sizing 16,01,315 Works 2016-17 Sizing Works KirteshwariVintrade P. Limited 50,00,000 3,31,028 3,31,028 A One Sizing Works Total4,50,00,000 39,00,868 39,00,868

As per the enquiries conducted by the department As per the enquiries conducted by the department, it has been , it has been established that the above mentioned companies from which you have established that the above mentioned companies from which you have established that the above mentioned companies from which you have taken unsecured loans are bogus. Hence one more opportunity is taken unsecured loans are bogus. Hence one more opportunity is taken unsecured loans are bogus. Hence one more opportunity is being given to you to present the directors of the above mentioned being given to you to present the directors of the above mentioned being given to you to present the directors of the above mentioned

A One Sizing Works 10 & IT(SS)A. 6459, 6460, 6461, 6462 & IT(SS)A. 6459, 6460, 6461, 6462 & 6463/MUM/2024 companies in the undersigned office for cross companies in the undersigned office for cross verification on verification on 20/09/2021 at 11:30 alongwith documentary evidences. On account 20/09/2021 at 11:30 alongwith documentary evidences. On account 20/09/2021 at 11:30 alongwith documentary evidences. On account of failure to present the directors of the above mentioned companies of failure to present the directors of the above mentioned companies of failure to present the directors of the above mentioned companies before the undersigned on or before 20/09/2021, you are before the before the undersigned on or before 20/09/2021, you undersigned on or before 20/09/2021, you are are showcaused as to why the unsecured loans amounting showcaused as to why the unsecured loans amounting showcaused as to why the unsecured loans amounting to Rs 4,50,00,000/- taken from the above mentioned companies anies taken from the above mentioned companies anies should not be treated as unexplained credit and added in your income should not be treated as unexplained credit and added in your income should not be treated as unexplained credit and added in your income and the interest paid thereon of Rs.39,00,868/ and the interest paid thereon of Rs.39,00,868/-by you, should not be by you, should not be disallowed. As per the loose paper/documents (Bund As per the loose paper/documents (Bundle No-1, page 1, page-8) seized during the course of search action u/s 132 on 27/11/2019 from during the course of search action u/s 132 on 27/11/2019 from during the course of search action u/s 132 on 27/11/2019 from the residence of Shri Harakchand M Dodhia, the residence of Shri Harakchand M Dodhia, Mulund (W), a Mulund (W), a transaction amounting to Rs 1,27,000/ transaction amounting to Rs 1,27,000/- is noticed. Shri Harakchand is noticed. Shri Harakchand M Dodhia has explained that the details are of M Dodhia has explained that the details are of expenses of Rs expenses of Rs 1,27,000/-. In this connection you were requested to submit whether . In this connection you were requested to submit whether . In this connection you were requested to submit whether the expenses of Rs 1,27,000/ the expenses of Rs 1,27,000/- has been recorded in the books of has been recorded in the books of accounts with documentary evidences in support. Till date no accounts with documentary evidences in support. Till date no accounts with documentary evidences in support. Till date no submissions in this regard has been received fr submissions in this regard has been received from your end. om your end. Therefore, in view of the above, you are hereby required to showcause Therefore, in view of the above, you are hereby required to showcause Therefore, in view of the above, you are hereby required to showcause as to why the expenses amounting to Rs 1,27,000/ as to why the expenses amounting to Rs 1,27,000/- may not be may not be treated as unexplained expenditure and added to your income. treated as unexplained expenditure and added to your income. treated as unexplained expenditure and added to your income. If you fail to make submissions/ explanations in re If you fail to make submissions/ explanations in response to this sponse to this showcause notice, it will be presumed that you have nothing to say in showcause notice, it will be presumed that you have nothing to say in showcause notice, it will be presumed that you have nothing to say in the matter and you accept proposed additions as stated above vide the matter and you accept proposed additions as stated above vide the matter and you accept proposed additions as stated above vide this show cause notice and assessment will be completed on the basis this show cause notice and assessment will be completed on the basis this show cause notice and assessment will be completed on the basis of material available of material available on record." 4.7 In above show cause notice, In above show cause notice, the Assessing Officer has referred the Assessing Officer has referred proposing addition of unsecured loan, firstly, the to two sources for proposing addition of unsecured loan proposing addition of unsecured loan inquiry conducted by the Department for considering the unsecured inquiry conducted by the Department for considering the unsecured inquiry conducted by the Department for considering the unsecured oans as unexplained cash credit, secondly, loose paper loans as unexplained cash credit loose paper/document (Bundle No. 1, page 8) seized during the course of search action u/s (Bundle No. 1, page 8) seized during the course of search action u/s (Bundle No. 1, page 8) seized during the course of search action u/s 132 from the residence residence of Shri Harakchand M Dodhia, Mulund of Shri Harakchand M Dodhia, Mulund (West) for transaction amounting to Rs.1,27,000/ (West) for transaction amounting to Rs.1,27,000/- i.e. pertain i.e. pertaining to assessment year 2020 assessment year 2020-21. Thirdly, the Assessing the Assessing officer also referred to question No. 60 of the statement of Shri Bhadresh question No. 60 of the statement of Shri Bhadresh question No. 60 of the statement of Shri Bhadresh Dodhia, wherein he was question wherein he was questioned regarding page No. 36 to 38 of regarding page No. 36 to 38 of the Bundle No. 3 found during the course of search action at the the Bundle No. 3 found during the course of search action at the the Bundle No. 3 found during the course of search action at the A One Sizing Works 11 & IT(SS)A. 6459, 6460, 6461, 6462 ITA No. 6458, & IT(SS)A. 6459, 6460, 6461, 6462 & 6463/MUM/2024 residence of Shri Divyesh Dhanani. In the said residence of Shri Divyesh Dhanani. In the said ques question, he was paper alleging to be asked regarding the column “return” regarding the column “return” in loose paper alleging return of cash after deducting the commission of 3%. The relevant return of cash after deducting the commission of 3%. The relevant return of cash after deducting the commission of 3%. The relevant question and answer is reproduced as under: question and answer is reproduced as under:

Q.60 I am showing you page no. 36 to 38 of the Bundle no.3 found Q.60 I am showing you page no. 36 to 38 of the Bundle no.3 found Q.60 I am showing you page no. 36 to 38 of the Bundle no.3 found and seized during the course of search action at the residence of d seized during the course of search action at the residence of d seized during the course of search action at the residence of Shri Divyesh Dhanani. These pages contain the details of loans Shri Divyesh Dhanani. These pages contain the details of loans Shri Divyesh Dhanani. These pages contain the details of loans from some of the Kolkata based companies mentioned above. As from some of the Kolkata based companies mentioned above. As from some of the Kolkata based companies mentioned above. As per these pages it is clear that Interest paid in cheque has been per these pages it is clear that Interest paid in cheque has been per these pages it is clear that Interest paid in cheque has been received back (mentioned under column "return")in cash after ceived back (mentioned under column "return")in cash after ceived back (mentioned under column "return")in cash after deducting the commission of 3%. Hence, it shows that, loans from deducting the commission of 3%. Hence, it shows that, loans from deducting the commission of 3%. Hence, it shows that, loans from these companies are accommodation entries taken in the books of these companies are accommodation entries taken in the books of these companies are accommodation entries taken in the books of Dodhia group. Dodhia group. Ans. Cash is not mentioned in these pages. I am not able to Cash is not mentioned in these pages. I am not able to Cash is not mentioned in these pages. I am not able to explain the column "return" as of now. will go through the books explain the column "return" as of now. will go through the books explain the column "return" as of now. will go through the books and verify the same and and verify the same and submit a reply. 4.8 In addition to the above sources, in AY In addition to the above sources, in AY 2015-16 16 to 2016-17, , statement of sh Sushil Goyal statement of sh Sushil Goyal , a Kolkata based entry operator , a Kolkata based entry operator provided by the investigation wing and statements of Shri Bhavik provided by the investigation wing and statements of Shri provided by the investigation wing and statements of Shri Jakharia and sh Minesh Dhodia i.e Directors of Vinam Finance p Minesh Dhodia i.e Directors of Vinam Finance p Minesh Dhodia i.e Directors of Vinam Finance p ltd have been referred. ltd have been referred. In AY 2017-18 in post search investigation 18 in post search investigation, commission was issued to commission was issued to Investigation wing Kolkata for verification Investigation wing Kolkata for verification of the unsecured loan parties and report obtained has also been of the unsecured loan parties and report obtained has also been of the unsecured loan parties and report obtained has also been referred by the Assessing Officer in assessment. referred by the Assessing Officer in assessment.

4.9 In the light of above sources for making addition, the assessee In the light of above sources for making addition, the assessee In the light of above sources for making addition, the assessee agitated the issue before t agitated the issue before the Ld. CIT(A) that no incriminating that no incriminating material was found from the premises of the assessee qua the AYs material was found from the premises of the assessee qua the AY material was found from the premises of the assessee qua the AY 2014-15 to AY 2018- -19 , but the Ld. CIT(A) dismissed the ground of but the Ld. CIT(A) dismissed the ground of A One Sizing Works 12 & IT(SS)A. 6459, 6460, 6461, 6462 & IT(SS)A. 6459, 6460, 6461, 6462 & 6463/MUM/2024 the assessee. The relevant finding . The relevant finding of ld CIT(A) in AY 2014 in AY 2014-15 is reproduced as under: as under:

“42. For the year under consideration, the appellant had raised 42. For the year under consideration, the appellant had raised 42. For the year under consideration, the appellant had raised a technical ground (ground no. 3) that no addition could have a technical ground (ground no. 3) that no addition could have a technical ground (ground no. 3) that no addition could have been made by the AO in the absence of any incriminating been made by the AO in the absence of any incriminating been made by the AO in the absence of any incriminating material found during the search operation. In this regard, no material found during the search operation. In this regard, no material found during the search operation. In this regard, no separate sub separate submission has been made by the appellant during mission has been made by the appellant during the appellate proceedings indicating that the appellant does not the appellate proceedings indicating that the appellant does not the appellate proceedings indicating that the appellant does not want to press this ground. In any case, as discussed while want to press this ground. In any case, as discussed while want to press this ground. In any case, as discussed while adjudicating the appeal for AY 2013 adjudicating the appeal for AY 2013-14, it is seer that two 14, it is seer that two pages (page no. 37 and 38 pages (page no. 37 and 38 of bundle no: 3/Party no. MN5, from of bundle no: 3/Party no. MN5, from the premises of Shri Divyesh Dhanani) were seized. These the premises of Shri Divyesh Dhanani) were seized. These the premises of Shri Divyesh Dhanani) were seized. These documents have details of various loans raised and interest documents have details of various loans raised and interest documents have details of various loans raised and interest paid by entities of Dodhia Group including the appellant. As per paid by entities of Dodhia Group including the appellant. As per paid by entities of Dodhia Group including the appellant. As per these seized pages, the amount of inte these seized pages, the amount of interest paid was received rest paid was received back by the group entities, after deducting a commission of 3% back by the group entities, after deducting a commission of 3% back by the group entities, after deducting a commission of 3% and the figure of arnount, received back from the loan creditors and the figure of arnount, received back from the loan creditors and the figure of arnount, received back from the loan creditors is mentioned under the column 'return'. The name of the is mentioned under the column 'return'. The name of the is mentioned under the column 'return'. The name of the assessee is also appearing at seized page no. 37 assessee is also appearing at seized page no. 37 and the name and the name of M/s. Dolphin Commerce Pvt. Ltd. and M/s. Value Added of M/s. Dolphin Commerce Pvt. Ltd. and M/s. Value Added of M/s. Dolphin Commerce Pvt. Ltd. and M/s. Value Added Merchants Pvt. Ltd is mentioned on this page, along with the Merchants Pvt. Ltd is mentioned on this page, along with the Merchants Pvt. Ltd is mentioned on this page, along with the details of amount received back. The said page was confronted details of amount received back. The said page was confronted details of amount received back. The said page was confronted with Shri Bhadresh Dhodia in the statement recorded during with Shri Bhadresh Dhodia in the statement recorded during with Shri Bhadresh Dhodia in the statement recorded during the search in question no. 60 of the statement and he could not earch in question no. 60 of the statement and he could not earch in question no. 60 of the statement and he could not explain the same. Furthermore, it is seen from the statement of explain the same. Furthermore, it is seen from the statement of explain the same. Furthermore, it is seen from the statement of Shri Bhadresh Dhodia that documents relating to loans taken Shri Bhadresh Dhodia that documents relating to loans taken Shri Bhadresh Dhodia that documents relating to loans taken from various shell companies by the group entities were found from various shell companies by the group entities were found from various shell companies by the group entities were found during the search and the same were confronted with Shri search and the same were confronted with Shri search and the same were confronted with Shri Bhadresh Bhadresh Bhadresh Dhodia Dhodia Dhodia and and and he he he could could could not not not give give give satisfactory satisfactory satisfactory explanation. Furthermore, he admitted in reply to question no. explanation. Furthermore, he admitted in reply to question no. explanation. Furthermore, he admitted in reply to question no. 70 and 72 that the cash available with the Dhodia Group was 70 and 72 that the cash available with the Dhodia Group was 70 and 72 that the cash available with the Dhodia Group was routed in the form of accommodation routed in the form of accommodation entries through M/s. entries through M/s. Vinam Finance Pvt. Ltd. In this background, during the post Vinam Finance Pvt. Ltd. In this background, during the post Vinam Finance Pvt. Ltd. In this background, during the post search investigation, the DDIT (Inv.) got conducted independent search investigation, the DDIT (Inv.) got conducted independent search investigation, the DDIT (Inv.) got conducted independent investigation regarding the existence of various loan creditors of investigation regarding the existence of various loan creditors of investigation regarding the existence of various loan creditors of Dhodia Group These enquiries were conducted Dhodia Group These enquiries were conducted at Kolkata as at Kolkata as well as Mumbai and these enquiries suggested that the so well as Mumbai and these enquiries suggested that the so well as Mumbai and these enquiries suggested that the so- called loan creditors were not existing on the given addresses. called loan creditors were not existing on the given addresses. called loan creditors were not existing on the given addresses.

A One Sizing Works 13 & IT(SS)A. 6459, 6460, 6461, 6462 & IT(SS)A. 6459, 6460, 6461, 6462 & 6463/MUM/2024

Accordingly, Accordingly, Accordingly, the the the ground ground ground no. no. no. 3 3 3 raised raised raised by by by the the the appellant is DISMISSED.” 4.10 Upon careful scrutiny of the assessment orders and material Upon careful scrutiny of the assessment orders and material Upon careful scrutiny of the assessment orders and material relied upon by the Revenue, it is evident that the documents and relied upon by the Revenue, it is evident that the documents and relied upon by the Revenue, it is evident that the documents and statements relied upon by the Assessing Officer (AO) were either: statements relied upon by the Assessing Officer (AO) were either: statements relied upon by the Assessing Officer (AO) were either:

 Seized from third party premises third party premises (such as residence of Shri (such as residence of Shri Divyesh Dhanani); or ivyesh Dhanani); or  Statements of third parties Statements of third parties recorded during search or post recorded during search or post- search; or  Post-search investigation reports search investigation reports obtained from the Kolkata obtained from the Kolkata Investigation Wing. Investigation Wing.

4.11 We find that the Assessing Officer has no where referred to We find that the Assessing Officer has no where referred to We find that the Assessing Officer has no where referred to ing material found from the premises of the any of the incriminat any of the incriminating material found from the premises of the assessee in respect of AYs 2014 in respect of AYs 2014–15 to 2018–19. In fact, the AO’s 19. In fact, the AO’s show cause notices themselves refer to seized materials from other show cause notices themselves refer to seized materials from other show cause notices themselves refer to seized materials from other premises and persons. The materials relied upon premises and persons. The materials relied upon — including pages 36–38 of Bundle No. 3 38 of Bundle No. 3 — were found from the residence of a third were found from the residence of a third party and not from the assessee. Therefore, such documents, in the rty and not from the assessee. Therefore, such documents, in the rty and not from the assessee. Therefore, such documents, in the absence of invocation of Section 153C of the Act, absence of invocation of Section 153C of the Act, cannot be utilized cannot be utilized to make additions in the hands of the assessee to make additions in the hands of the assessee under Section 153A. under Section 153A. As far as statements of Shri Bhadresh Dodhia and other persons As far as statements of Shri Bhadresh Dodhia and other As far as statements of Shri Bhadresh Dodhia and other are concerned, not a single statement has been recorded from the are concerned, not a single statement has been recorded from the are concerned, not a single statement has been recorded from the premises of the assessee and therefore, same cannot be treated as premises of the assessee and therefore, same cannot be treated as premises of the assessee and therefore, same cannot be treated as incriminating material seized or found from the premises of the incriminating material seized or found from the premises of the incriminating material seized or found from the premises of the A One Sizing Works 14 & IT(SS)A. 6459, 6460, 6461, 6462 & IT(SS)A. 6459, 6460, 6461, 6462 & 6463/MUM/2024 assessee. We also found that Hon’ble Delhi High Court in the case assessee. We also found that Hon’ble Delhi High Court assessee. We also found that Hon’ble Delhi High Court CIT vs. Harjeev Aggarwal reported in 290 CTR 263 held that of CIT vs. Harjeev Aggarwal reported in 290 CTR 263 CIT vs. Harjeev Aggarwal reported in 290 CTR 263 statement recorded u/s 132(4) of the Act do not constitute statement recorded u/s 132(4) of the Act do not constitute statement recorded u/s 132(4) of the Act do not constitute incriminating material found from the premises of the assessee. incriminating material found from the premises of the assessee. incriminating material found from the premises of the assessee. Further, even the Ld. CIT(A) in his appellate order admitted that Further, even the Ld. CIT(A) in his appellate order admit Further, even the Ld. CIT(A) in his appellate order admit pages 37 and 38 of Bundle No. 3 were seized from a third party and pages 37 and 38 of Bundle No. 3 were seized from a third party and pages 37 and 38 of Bundle No. 3 were seized from a third party and confronted to Shri Bhadresh Dodhia, who could not explain the confronted to Shri Bhadresh Dodhia, who could not explain the confronted to Shri Bhadresh Dodhia, who could not explain the same. However, such confrontation cannot substitute for the same. However, such confrontation cannot substitute for the same. However, such confrontation cannot substitute for the statutory requirement that statutory requirement that incriminating material must be incriminating material must be found from the premises of the assessee from the premises of the assessee, not third parties, in order to not third parties, in order to sustain additions in unabated assessments. sustain additions in unabated assessments.

4.12 In view of the above analysis, we hold that: In view of the above analysis, we hold that: viz. AYs 2014–15 to  For the unabated assessment years unabated assessment years viz. AYs 2018–19, no addition could have been , no addition could have been made under Section made under Section 153A of the Act in the absence of any incriminating material 153A of the Act in the absence of any incriminating material 153A of the Act in the absence of any incriminating material found during the course of search from the premises of the found during the course of search from the premises of the found during the course of search from the premises of the assessee.  Statements of third parties, or material found from other Statements of third parties, or material found from other Statements of third parties, or material found from other premises, not being relatable to the assessee's p premises, not being relatable to the assessee's p premises, not being relatable to the assessee's premises, cannot form the basis for additions in a 153A proceeding in cannot form the basis for additions in a 153A proceeding in cannot form the basis for additions in a 153A proceeding in respect of completed assessments, unless proceedings under respect of completed assessments, unless proceedings under respect of completed assessments, unless proceedings under which has not been other provisions other provisions are separately initiated — which has not been done in this case. done in this case.

A One Sizing Works 15 & IT(SS)A. 6459, 6460, 6461, 6462 & IT(SS)A. 6459, 6460, 6461, 6462 & 6463/MUM/2024

 Consequently, all additions made in respect of Consequently, all additions made in respect of Consequently, all additions made in respect of unsecured loans and disallowances of interest for the above assessment for the above assessment loans and disallowances of interest years are unsustainable in law unsustainable in law.

4.13 For the reasons stated above and in view of the settled position For the reasons stated above and in view of the settled position For the reasons stated above and in view of the settled position of law laid down by this Court in of law laid down by this Court in Abhisar Buildwell Abhisar Buildwell (supra), we are of the considered opinion that the additions made in assessment of the considered opinion that the additions made in assessment of the considered opinion that the additions made in assessment years 2014–15 to 2018 15 to 2018–19 under Section 153A of the Act are under Section 153A of the Act are without jurisdiction and liable to be deleted. without jurisdiction and liable to be deleted. Accordingly, the Accordingly, the ground of appeals related to existence of incriminat appeals related to existence of incriminat appeals related to existence of incriminating material raised in AYs 2014-15 to AY 2018 15 to AY 2018-19 is allowed. Since we have 19 is allowed. Since we have held that in absence of incriminating material, no addition could held that in absence of incriminating material, no addition could held that in absence of incriminating material, no addition could have been made in the case of the assessee from AYs 2014-15 to AY have been made in the case of the assessee from AYs 2014 have been made in the case of the assessee from AYs 2014 2018-19 therefore, all other ground raised by t 19 therefore, all other ground raised by the assessee are he assessee are rendered academic and hence, we are not adjudicating upon the rendered academic and hence, we are not adjudicating upon the rendered academic and hence, we are not adjudicating upon the same.

5. As far as appeal for AY 2019 As far as appeal for AY 2019-2020 is concerned, the Assessing 2020 is concerned, the Assessing Officer has made addition in respect of interest related to the Officer has made addition in respect of interest related to the Officer has made addition in respect of interest related to the unsecured loans which have been held as unsecured loans which have been held as bogus or unexplained bogus or unexplained cash credit by the AO in assessment year cash credit by the AO in assessment years 2014- -15 to 2017-18, which we have already deleted and therefore, the addition of which we have already deleted and therefore, the addition of which we have already deleted and therefore, the addition of interest in respect of those unsecured loans also cannot survive. interest in respect of those unsecured loans also cannot surv interest in respect of those unsecured loans also cannot surv Accordingly, the addition of interest Accordingly, the addition of interest made in assessment year assessment years 2019-2020 is also deleted. also deleted.

A One Sizing Works 16 & IT(SS)A. 6459, 6460, 6461, 6462 & IT(SS)A. 6459, 6460, 6461, 6462 & 6463/MUM/2024

Order pronounced in the open Order pronounced in the open Court on 10 10/07/2025.