ITO CEN -1 NASHIK., NASHIK vs. SHRI BHUPANDRA SHANTILAL SHAH,, NASHIK

3 Bhupendra S. Shah 5. Before the CIT(A), the assessee reiterated the submission as made before the Assessing Officer. However, the CIT(A) following its own decision in assessment year 2003-04 in assessee’s own case confirmed the addition made by the Assessing Officer. 6. Aggrieved with the said decision of the CIT(A), the assessee is in appeal before us with the above extracted ground. 7. Before us, at the outset, ld. Counsel for the assessee submitted that the Assessing Officer does not refer to any search material. In fact, the Assessing Officer in para 5.3.1 of the assessment order refers to “during the course of assessment proceedings ……..” meaning thereby stating the assessment records as the basis for addition. Ld. Counsel further submitted that the transactions of making payment by bearer cheques are part of the regular bank account and they are duly reflected in the bank statements. The said bank account is part of the regular accounts of the assessee as can be seen from the Balance Sheet reflecting the bank account at page 106 of the Paper Book. The ld. Counsel submitted that there was no incriminating material found during the course of search. In this regard, the ld. Counsel filed an affidavit of the assessee, copy of the same is placed on record and submitted that no bearer cheques were found as referred to in the assessment order for the purpose of making disallowance u/s 40A(3) of the Act. The contents of para 1 to 5 of the said affidavit are relevant in this regard.

4 Bhupendra S. Shah 8. The ld. Counsel for the assessee further placed reliance on the Jurisdictional High Court judgement in the cases of (i) CIT vs. AI Cargo Global Logistics Ltd., 374 ITR 645 and (ii) CIT vs. Deepak Kumar Agarwal, 398 ITR 586) and also the Hon’ble Gujarat High Court judgement in the case of PCIT vs. Dipak J. Panchal, 397 ITR 153, stating that there cannot be addition in search assessment proceedings which is not based on any incriminating material. 9. On the other hand, ld. DR for the Revenue relied heavily on the orders of the Assessing Officer and the CIT(A). 10. We heard both the sides on this legal issue, perused the orders of the revenue authorities and the judicial precedents filed by the assessee on this issue and also the affidavit filed by the assessee. First, we find relevant to extract relevant para 1 to 5 of the affidavit filed by the assessee and the same are extracted hereunder :- “1. A search action was carried out at my premises on 08.02.2008. 2. Assessments were framed for, among other years, for A.Y. 2003-04, which were agitated in appeal before CIT(A). 3. The CIT(A) in his order passed for A.Y. 03-04 has in para 6.2.2 made the following observation : “During the course of search certain incriminating documents indicating receipts and payments of cash through bearer cheques, otherwise than an account payee cheque drawn on bank or account payee bank draft were found and seized. Two such notable set of documents are in the loose bundles containing page Nos.1 to 166 of Annexure A-3 and pages 1 to 195 seized at Annexure A-5 to the Panchnama.” 4. It is in this connection that this affidavit is being made to affirm the fact that the aforesaid search material seized did not contain any bearer cheques issued by me. 5. This affidavit is being made to assert this factual position in the ongoing appeal proceedings before the Hon. ITAT, Pune.”

5 Bhupendra S. Shah

6 Bhupendra S. Shah ITA Nos.796 & 797/PUN/2012 – A.Ys. 2003-04 & 2004-05 – - By the Assessee 15. Since the ground raised by the assessee in rest of two appeals is identical to ground raised in ITA No.795/PUN/2012 for the assessment year 2002-03, therefore, our decision in ITA No.795/PUN/2012 shall apply mutatis mutandis to rest of these two appeals of the assessee. Accordingly, the ground raised by the assessee in rest of two appeals is allowed. 16. In the result, all the three appeals (i.e. ITA Nos.795 to 797/PUN/2012) of the assessee are allowed. 17. Now, we shall take up the revenue’s appeals for adjudication in the following manner. ITA Nos.825 to 828/PUN/2012 – A.Ys. 2003-04, 2005-06, 2007-08 & 2008-09 - By the Revenue 18. Since the appeals of the assessee are allowed on the legal issue, therefore, we are of the opinion that the adjudication of the cross-appeals filed by the Revenue are required to be dismissed as the same becomes infructuous. Therefore, all the four appeals of the Revenue (i.e. ITA Nos.825 to 828/PUN/2012) are dismissed as infructuous. In the result, all the four appeals of the Revenue are dismissed. 19. 20. Now, coming to the Cross Object filed by the assessee. C.O. No.101/PUN/2013 – A.Y. 2005-06 - By the Assessee 21. This cross objection filed by the assessee against the appeal of the Revenue in ITA No.826/PUN/2012 for the assessment year 2005-06.

7 Bhupendra S. Shah Since the appeal of the Revenue for the assessment year 2005-06 is dismissed, therefore, the adjudication of the cross objection for this year i.e. A.Y. 2005-06 becomes academic exercise only. Therefore, the cross objection filed by the assessee is dismissed as academic. In the result, the cross objection of the assessee is dismissed. 22. 23. To sum up, all the 3 appeals (ITA Nos.795 to 797/PUN/2012) filed by the assessee are allowed, 4 appeals (ITA Nos.825 to 828/PUN/2012) filed by the Revenue are dismissed and 1 cross objection (C.O. No.101/PUN/2013) filed by the assessee is dismissed. Order pronounced on 05th day of September, 2019. Sd/- Sd/- (िवकास अव�थी /VIKAS AWASTHY) (डी. क�णाकरा राव/D. KARUNAKARA RAO) �याियक सद�य/JUDICIAL MEMBER लेखा सद�य/ACCOUNTANT MEMBER पुणे / Pune; �दनांक / Dated : 05th September, 2019. Sujeet आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(A)-I, Nashik. 4. The CIT (Central), Nagpur. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “ए” ब�च, 5. पुणे / DR, ITAT, “A” Bench, Pune. गाड� फ़ाइल / Guard File. 6. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.