ACIT, CENTRAL CIRCLE-2(4), BANGALORE vs. RAMCHANDRA NAVEEN, BANGALORE

Per Laxmi Prasad Sahu, Accountant Member : All these three appealsare filed by the Revenue against the common Order passed by the CIT(A) on the following grounds :

ITA Nos.2081 to 2083/Bang/2024
CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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Grounds raised in ITA No.2081/Bang/2024:

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CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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Grounds raised in ITA No.2082/Bang/2024:

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CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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Grounds raised in ITA No.2083/Bang/2024:
2. Cross Objections (COs) have been filed by the assessee for the common issue raised regarding upholding of addition for redemption of reward points credit received from IOCL. Grounds taken in CO are as under:

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CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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Grounds of Cross-objection raised in CO No.45/Bang/2024
Grounds of Cross-objection raised in CO No.46/Bang/2024

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CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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Grounds of Cross-objection raised in CO No.47/Bang/2024
3. Briefly stated the facts of the case are that a search under section 132
of the Act was carried out on 19.07.2017 at the business premises as well as at the residential premises of the assessee and various incriminating documents were found. During the search proceedings, assessee was hospitalized because of Dengu Fever. Statement was recorded under section 132(4) of the Act. as per question and Answer No. 32 which is as under:

ITA Nos.2081 to 2083/Bang/2024
CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
REWARD POINTS FROM IOCL NOT OFFERED TO TAX
15000
626817
825600
2308000
3007000
3431600
4071200
1741600
CASH ALLOWANCE TO EMPLOYEES
1776050
2477000
2658000
2427660
1972800
1965000
1604500

192000

UNACCOUNTED
TOURIST RECEIPTS
6000000
860000

15333732
60282366
96834205

UNACCOUNTED
EXPENDITURES ON SAM
FARM HOUSE
4640000
12027504

UNACCOUNTED
EXPENDITURES ON SAM
CHAMBERS
1003803
9579040

PARKING CGARGES
PAID IN CASH
908330
1222132
1990050
3417000
460600

UNACCOUNTED
PROPERTY
PURCHASEDIN FAVOUR
OF RESHMA
953000

ONMOMEY PAID TO CHETAN GOPAL FOR PURCHASING OF THE PROPERTY
4900000

ONMOMEY PAID TO SMT NIRMLA FOR PURCHASING OF THE PROPERTY
4765000

CASH PAID OUTSIDE
BOOKS FOR ELECTRICITY
CONNECTION
1100000

UNACCOUNTED CASH
FOUND IN THE OFFICE

3596000
UNACCOUNTED CASH
FOUND IN THE RESIDENCE
330000
UNACCOUNTED
JEWELLARY FOUND IN THE RESIDENCE
7479827
UNACCOUNTED
EXPENDITURES ON SAM
NATURE CAMP
10000000

ITA Nos.2081 to 2083/Bang/2024
CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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The return of income filed by the assessee u/s 139(1) and 153A is as under 4. During the course of search proceedings, it was found that assessee suppressed tour receipts from vehicle bookings. The vehicle bookings are classified as “BB” and “QN”. A statement was recorded under section 132(4) of the Act from the assessee in which assessee admitted that the bookings made under QN are unaccounted and cash receipts in “BB” are unaccounted.
The question answer Nos.18 and 19 are as under:

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CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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5. In the sworn statement recorded under section 132(4) of the Act, assessee himself declared suppressing of tour receipts and he further admitted that tour receipts are suppressed in order to generate cash for making payments to various authorities and drivers. In this regard, notice under section 142(1) of the Act dated 18.11.2019 was issued to the assessee asking

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CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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to furnish details of booking receipts in “QN” and “BB” forms. Further, in show cause notice it was asked to explain whether receipts from “QN” and “BN” bookings are disclosed in the return of income filed under section 153A of the Act for the respective Assessment Years. Assessee replied on 28.11.2019 as under:-
“1. Ticket booking in “qn” and “bb” form are not the actual sale receipts they are only quotations, projections and imaginations of future business that may take place. Hence no details are there or to be given as these are only scribbling and are not a part of books of accounts.
2. Since these are not real sales receipts as explained above in point 01 either accounting them or including in the return of income is not proper. However, certain portion of sale receipts which were not accounted has now been accounted in the revised return of income filed.”
6. The above reply furnished by the assessee were examined with the documents found during the course of search and it was noticed during the search that once the clients books, tourist vehicle request would be entered in BB form or “QN” form based on the selection of the tourist. Once the trip is over, accounts section receives “BB” or “QN” form. If it is “BB” form, invoice will be raised and dispatched to the clients and once the amount is received, “BB” form is updated and sent to the assessee for reconciliation. In case of “QN” form invoice will not be raised and will be recorded manually.
Payments would be received in cash and not recorded in the books of accounts. The entire mode of operation was admitted by the assistant accountant of assesseeMst. Lalitha in the statement recorded under section 132(4) of the Act. The same is reproduced as under:

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CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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7. From the above statement, it was noted that modus of generating unaccounted tour receipts was confirmed in the statement recorded under section 132(4) of the Act, accountant Shri. Raghunath. He had admitted that “QN” receipts and some cash receipts in “BB” receipts are not accounted in the books of accounts as per the direction of the assessee. The summary of “QN” and “BB” receipts not accounted in the books of accounts are found and seized and it is annexed to the statement recorded under section 132(4) of the Act from Shri. Raghunath and the same is reproduced in the Assessment Order. Further, on verification of the records it was found that the assessee is systematically suppressed tour receipts in order to make illegal

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CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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and unaccounted payments in cash. Assessee’s business in local tours and travels is carried out entirely in cash. Incentive major of the tour receipts are in cash. Accordingly, AO made addition for different Assessment Years. In this regard, question answer Nos.28 and 29 are very relevant for making addition by the AO which is as under:
8. From the above statements, the AO has made addition as under:
Assessment Year

Amount(Rs.)
2016-17

3,70,00,000
2017-18

8,50,00,000

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CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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9. Aggrieved from these additions, assessee filed appeal before learned
CIT(A). During the course of appellate proceedings, assessee filed detailed written submissions. Remand report was also called for from the AO which is placed at Paper Book. It was brought into the knowledge of the assessee, the assessee also filed rejoinder. After considering the remand report and rejoinder filed by the assessee, the learned CIT(A) has allowed observing as under:

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CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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10. Reward Points from IOCL
Further, during the course of search proceedings, material found and seized marked as 16/SAM/T&T/132/82017-18 Pages 76 to 79 and 81 to 97. The seized material contained details of reward points which are redeemed but not disclosed in the books of accounts. Statement was recorded under section 132(4) of the Act from the assessee in which assessee admitted to have received reward points from IOCL for purchase of fuel from Nikhil &
Co. but not disclosed in the return of income. The relevant part of the statement is as under:

ITA Nos.2081 to 2083/Bang/2024
CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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11. During the course of search proceedings, sworn statement under section 132(4) of the Act in which assessee confirmed that the reward points are received but not accounted in the books of accounts, the seized material was examined. Assessee had received reward points for purchase of fuels for the operation of assessee’s vehicles. Assessee has received these reward points on monthly basis. Assessee confirmed receipt of reward points in the statement under section 132(4) of the Act as above. In this regard, a show cause notice was issued under section 142(1) of the Act on 18.11.2019 asking to explain whether reward points are offered in the return of income filed under section 153A of the Act. In reply on 28.11.2019 assessee stated as under:

ITA Nos.2081 to 2083/Bang/2024
CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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12. The AO on the basis of submissions made, observed as under:
13. After examining the above observation, the AO made addition as under AY

Amount (RS.)
2011-12
15,000
2012-13
6,26,817
2013-14
8,25,000
2014-15
23,08,000
2015-16
30,07,000
2016-17
34,31,600
2017-18
40,71,200
2018-19
17,41,600
14. The entire facts have been dealt in assessee’s own case for the Assessment Years 2011-12 to 2015-16 in ITA No. 2149 to 2152/Bang/2024
order dated 19.09.2025. The same are reproduced as under except the difference in figures and the figures are quantified in the above table. The ITA Nos.2081 to 2083/Bang/2024
CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
Page 28 of 44
submission of the Counsel and learned DR were common for the Assessment
Years 2011-12 to 2015-16 and the findings are also same.
15. Assessee has raised issue regarding reward points received which are not recorded in the books of accounts of Rs.15,000/- Rs.6,26,817/-,
Rs.8,25,600/- and Rs.23,08,000/- for the Assessment Years 2011-12, 2012-
13, 2013-14and 2014-15. During the course of statement recorded under section 132(4) of the Act, based on the seized material i.e., page Nos.76-79,
81 to 97 of diary No.16/SAM/T&T/132/2017-18 which is as per question and answer No.25 of the statement noted supra, during the course of post search investigation, assessee had stated that it will be offered in the income tax return under section 153A of the Act. However, same was not offered. It was noted that there is arrangement with the petrol bunk M/s. Nikhil and Co.
Assessee is purchasing fuel for his vehicles in bulk quantity from time to time. Therefore, IOCL has given reward points on monthly basis. As per submission of the assessee, these reward points are redeemed in the next purchase as payments made towards purchase of fuel. The purchase made out of redemption points are also not recorded in the books of accounts and not debited into the P & L Account. Had the reward points recorded as income in the books of accounts, the assessee would have debited the corresponding figures under the fuel expensesaccordingly, there is no impact on the profitability of the assessee. Applying the principle of real income theory.
we noted that no reward points had reached the assessee by any other mode except utilization for purchase of fuel. The learned Counsel fairly conceded that the reward point has not been credited into the bank account of the assessee and Revenue has also not objected on this argument of the learned
Counsel. It cannot be considered as income. We accept the submission of the assessee and we are allowing this ground because there is no impact on the profitability of the assessee.

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CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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16. Since the issues are similar for all the AYs 2011-12 to 2018-19
accordingly the CO No. 45/Bang/2024 to 47/Bang/2024 for the AYs 2016-
17 to 2018-19 filed by the assessee are allowed. In above terms.
17. Unaccounted cash payments to employees;-
The relevant seized materials were examined. As per the seized material, the person named Sridhar and Gururaj are employees of the assessee. Assessee is making payments to the employees who makes payments to RTO and Police. The same is confronted to the assessee and had admitted the same in the statement recorded under section 132(4) of the Act. During the course of assessment proceedings, a notice under section 142(1) of the Act dated 18.11.2019 asking to explain whether cash paid outside the books are disclosed in the return of income filed under section 153A of the Act. On 28.11.2019, assessee replied as under:
18. The above submission of the assessee was examined. Assessee furnished salary ledger for the respective Assessment Years as proof for the payment of cash to various employees of the assessee. The AO examined submission and noted as under:

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CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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19. On the basis of above observation of the assessee, AO made addition under section 69C of the Act as unexplained expenditure for the Assessment
Years as under Assessment Year

Amount
2016-17

19,65,000/-
2017-18

16,04,500/-
20. During the course of appellate proceedings, assessee had raised alternative ground regarding telescoping from the excess income offered in the income tax return filed by the assessee in pursuance to notice under section 153A of the Act and the learned CIT(A) has allowed telescoping of the same the various additions as per para 20 of his Order.

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CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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21. Further, during the course of search as per materials found and seized in the premises of the assessee marked as 05/SAM/T&T/103/2017-18
pageNo.155, the seized material contains details of cash payment in SAM house which was not disclosed in the books of accounts. A statement was recorded under section 132(4) of the Act and assessee admitted that it is his unaccounted investment in SAM nature camp. In this regard, relevant question answer No.18 is reproduced as under:

ITA Nos.2081 to 2083/Bang/2024
CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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22. Unexplained investment in purchase of property of Rs.49,00,000/- for Assessment Year 2016-017:
During the course of post search enquiry assessee admitted that it is not accounted in the books of accounts for the Financial Years 2015-16 and 2016-17. From the seized materials, it was observed that assessee had made payments to various parties for construction of the farm house. The diary entry pertains to Financial Years 2015-16 and 2016-17 expenses were incurred. The seized material is a personal diary in which assessee entered all the expenses incurred in construction of farm house is in one single page and the same was accepted in the statement under section 132(4) of the Act that the payments had not been accounted. Accordingly, the AO made addition of Rs.46,40,000/- for the Assessment Year 2016-17 and Rs.20,27,504/- for the Assessment Year 2017-18. In this regard, show cause notice was issued to the assessee and assessee furnished reply which is incorporated in the Assessment Order. After analysis of the submissions, the AO noticed that assessee has not explained source of investments and made addition under section 69 as unexplained investment. This issue was raised before the learned CIT(A) and the learned CIT(A) has allowed telescoping from the additional income disclosed in section 153A of the Act over the regular income as per return under section 139(1) of the Act as noted supra.
23. Further, during the course of search proceedings, material was found and marked as 13/SAM/T&T/132/2017-18 in page No.56A. From the seized material and instatement recorded u/s132(4) the assessee had made payment over and above the sale consideration which are not recorded in the books of accounts it was noticed that the assessee has made caption payments for the purchase of property from Chetan Gopal. A sworn statement was recorded which is dealt by the AO and during the course of assessment proceedings,

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CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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as per notice issued under section 142(1) of the Act dated 18.11.2019 and assessee filed reply on 28.11.2019. The reply is as under:-
“During the FY 2015-16 property was purchased from ChetanGopal and the sseized material contains the rough working made with regard to the consideration to be paid by me.
Sale deed for the said property purchased has been provided in the Annexure
F.
Ledger extract for the same has been provided in Annexure F
No amount has been paid over and above the sale consideration.
Investment for the said property has been made from the receipts generated from the business which have been offered to tax in the respective years.”
24. During the Assessment Year 2015-16, property was purchased from Chetan Gopal and the seized material contained rough working made with regard to the consideration paid by him. Sale deed of the said property purchased is provided in Annexure E. Ledger extract for the same has been provided in Annexure F. as per the said document no amount has been paid over and above the sale consideration. Investment for the said property has been made from the receipts generated from the business which has been offered to tax in the respective years in return filed under section 153A of the Act. The submission of the assessee was considered. The total consideration as per the ledger account is Rs.1,15,00,000/- only. However, as per seized material, the total consideration paid is Rs.1,64,00,000/- for the said property.
Assessee has not recorded the excess cash paid of Rs.49 lakhs in the accounts.
The expenses of the assessee was not accepted and made addition under section 69 of the Act as unexplained investment of Rs.49 lakhs. The learned
CIT(A), after considering submissions, has allowed telescoping benefit and the Revenue has filed appeal against telescoping.

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CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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25. Unexplained investment in purchase of property Rs.47,65,000/-
Assessment Year 2016-17:
During the course of search proceedings, material found and seized as 12/SAM/T&T/132/2017-18 pageNo.2. The seized material contains details of cash payment for the purchase of property from Smt. Nirmala. A statement was recorded under section 132(4) of the Act in which the assessee admitted the same as unexplained investment for the Financial Year 2015-
16. The assessee confirmed the same in the sworn statement recorded under section 131 of the Act and admitted the cash paid as unexplained investment for the Financial Year 2015-16. Assessee confirmed the same in the statement recorded under section 131 of the Act and admitted as unexplained investment for the Financial Year 2015-16. The same is reproduced in the Assessment Order. On analysis of the seized material, it was noticed that there are 2 entries viz., DD component of Rs.29,70,000/- and cash component including fee of Rs.47,65,000/-. The property was registered only for the DD component. In this regard, show cause notice under section 142(1) of the Act was issued to the assessee dated 18.11.2019. In this regard, assessee furnished reply on 28.11.2019 as under:
“The amount mentioned in the sale deed has been paid and has been properly accounted in the books of accounts. Since no money other than mentioned in the sale deed is paid accounting it doesn’t arise.
Since the property purchased has been accounted as per the sale deed hence any no addition is called for.”
26. From the above statement, it is observed that the amount mentioned in the sale deed has been paid and has been properly accounted in the books of accounts since no other money other than mentioned in the sale deed is paid. Therefore, there is no need to record in the books of accounts. From ITA Nos.2081 to 2083/Bang/2024
CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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the analysis of the above finding, the submission made by the assessee are not in line with the seized material found. The seized material clearly says
DD and cash component for the purchase of property. Assessee has not explained source of cash paid. Accordingly, cash component of Rs.47,65,000/- was treated as unexplained income under section 69 of the Act. In this regard, assessee filed detailed written submissions and the learned CIT(A) has given telescoping benefit over and above.
27. Unaccounted cash seized of Rs.65,96,000/- (Assessment Year
2018-19)
Further, during the course of search proceedings, cash of Rs.30 lakhs was found and seized from the residential premises of the assessee and cash of Rs.35,96,000/- was found and seized from the business premises of the assessee. During the course of statement recorded under section 132(4) of the Act, assessee admitted total amount of Rs.65,96,000/- as undisclosed income of the assessee for the Financial Year 20171-8. Thus, undisclosed income was confirmed by the assessee in sworn statement recorded under section 139(1) of the Act. However, while filing return of income under section 153A of the Act, the same was not disclosed but the cash was found during the course of search and seizure. However, there was no explanation about the source of cash. Subsequently, during the course of assessment proceedings, assessee furnished cash book showing cash balance of Rs.35,96,000/- for the Financial Year 2017-18. There are receipts from individual persons in the cash book for which assessee has not given any confirmation. It was noted that whether the receipts are from sale or loan taken is not explained by the assessee. The AO noted that cash seized from the business premises and residence of the assessee were unexplained and made addition under section 69Aof the Act of Rs.65,96,000/-. During the ITA Nos.2081 to 2083/Bang/2024
CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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course of appellate proceedings assessee furnished detailed reply and learned
Counsel has given telescoping benefit from the income declared in response to notice issued under section 153A of the Act. In this regard, the Revenue has filed appeal before the Tribunal.
28. Learned DR relied on the Order of the AO and strongly submitted that statement recorded during the search proceedings as per question answer
No.29 is very much clear which is also referred to by the learned Counsel which is as under:
29. The learned DR further submitted that statement recorded during the course of search proceedings on the basis of seized materials found has great evidentiary value. Assessee is not recording the entire receipts in his books of accounts which is clear from the statement of Ms. Lalitha and accountant
Shri. Raghunath. The bookings are quoted as “BB” and settlement of tour is also quoted as “QN”. The statement of both staff were confronted to the assessee and assessee was aggrieved to offer in the income for the respective
AYs. In his statement recorded during search proceedings under section 132(4) of the Act, assessee himself has quantified the disclosure amount which cannot be denied as per Ques & Ans. No. 32. The learned CIT(A) has wrongly partly allowed considering question answer Nos.28 and 29 and he

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CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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relied on the judgment of Hon’ble Apex Court in the case of Roshan Lal
Sancheti reported in [2023] 150 taxmann.com228 (SC) and he further submitted that the AO observed that assessee has suppressed tour receipts and assessee has accepted in 153A return also and the assessee has paid tax on some amounts for smooth running of his business which not are accounted in the books of accounts of the assessee. The learned CIT(A) has wrongly given telescoping benefit to the assessee as per para No.20 of his order. However, during the course of search proceedings, categorically assessee has stated that those investments are his undisclosed investments as quantified in question answer No.32 and it was also confirmed in sworn statement recorded under section 131 of the Act.
30. On the other hand, in the appeal filed by the Revenue, the learned
Counsel for the assessee supported the Order of the learned CIT(A) and he submitted in question answer No.28 that assessee has himself quantified the undisclosed income and in question answer No.29 the disclosure for the same
Assessment Year has been made. Accordingly, assessee has suo moto declared income under section 153A of the Act return for Assessment Year
2015-16
of Rs.1,53,33,732/-, for Assessment
Year
2016-17
of Rs.2,32,82,366/- and for Assessment Year 2016-17 of Rs.1,18,34,205/-.
However, during the course of search, the documents found in the computer system was only for Assessment Year 2015-16 but not for any other years.
Therefore, the voluntary disclosure made by the assessee without any documentary support is in favour of the Revenue. The documents found during the course of search cannot be relied only on the basis of statement of the staff members. The additions made by the AO are not based on any supporting documents. The documents found through servers recorded in different sheets under the caption “QN” and “BB” from the statement recorded of Ms. Lalitha it appears that she had stated that figures recorded in ITA Nos.2081 to 2083/Bang/2024
CO Nos.45 to 47/Bang/2024
(in ITA Nos. 2081 to 2083/Bang/2024)
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the sheets bearing “QN” and “BB” represented receipts that are not recorded in the books of accounts and the data found in the server are only from January 2016 to March 2016. The statement of Shri. Raghunath, Accountant was also recorded and AO had relied in the statements only. The annexures containing alleged unaccounted “QN” receipts for the Financial Year 2014-
15 to Financial Year 2016-17. However, said annexure forming part of statement is not based on any material found and seized and no such reference to seized material is forthcoming from his statement recorded for that matter.
However, the AO has made addition for earlier years also which are not part of the annexure found. The circumstances in which the statements were recorded of the assessee he was hospitalized therefore the entire statement recorded was from unstable mind of the assessee should not be considered for making addition. Thus no reliance can be placed upon the statement of the assessee that for the Financial Years 2014-15, 2016-17, the additional disclosure was of Rs.3,70,00,000/- and Rs.8,50,00,000/- for clouser to the search. He further submitted that assessee is regularly filing is return of income under section 139(1) of the Act which has been accepted by the Department and no further action has been taken. While filing return in response to notice under section 153A of the Act, assessee has offered income for the Assessment Years 2015-16, 2016-17 and 2017-18 of Rs.1,53,33,732/-, Rs.2,32,82,366/- and Rs.1,18,34,205/- respectively towards tour receipts additionaly. which is also evident from the computation of income filed during the course of assessment proceedings under section 153A of the Act. Apart from the above, the AO has made addition of Rs.3,70,00,000/- and Rs.8,50,00,000/- for the Assessment Years 2016-17,
2017-18 only based on question answer No.29 recorded during the course of search and there is no basis for the aforesaid figures addition by the AO and which are not based on any materials found and seized except the statement of the assessee that has been recorded in the circumstances of the assessee

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during ill health and he further submitted that the learned CIT(A) has rightly allowed telescoping benefit from the additional income offered by the assessee in response to notice u/s 153A of the Act. He further submitted that the judgement relied on by the ld. DR noted supra are not applicable because there was no any incriminating material found during the course of search which can be co-relate with the statements .
31. Considering the rival submissions and on perusal of the entire material available on records and Orders of the authorities below, we noted that during the course of search proceedings suppression of tour receipts observed on the basis of statement recorded of the staff members of the assessee and the informations were available in the computer system only for the limited period and to which as per question answer No.28, assessee himself has offered as income on the basis of material found and seized, annexures prepared by the accountant to which assessee has offered in the income tax return under section 153A of the Act in addition to which income declared under section 139(1) of the Act towards tour receipts. However, the AO has made addition of Rs.3,70,00,000/- and Rs.8,50,00,000/- only on the basis of the statement recorded of the assessee without referring to any incriminating materials and this disclosure was made as per question answer No.29 to closer to the proceedings and to avoid litigation. We also noted from question answer No.32 the assesseehas quantified towards suppression of tour receipts
Rs.6,02,82,366/- for the Assessment Year 2016-17 and Rs.9,68,34,205/- and for Assessment Year 2017-18noted supra. On going through question answer
Nos.28,29 & 32, the declaration made by the assessee are different but during the course of search proceedings as well as post search proceedings, the investigation wingdid not ask any question about the difference noted by us as well as during the course of u/s 131proceedings even the AO has not asked any question about the difference as noted by us. Towards suppression of ITA Nos.2081 to 2083/Bang/2024
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tour receipts whatever the amount offered by the assessee in his return of income under section 153A of the Act are on the basis of seized materials found during the course of search proceedings but the amount disclosed in question answer Nos.28,29& 32 are without any basis. For tour receipts. It is merely on the basis of statements. The AO could have investigated further or he could have asked the assessee to reconcile the difference. If the AO’s view is accepted it would be double addition on the same search and for the same assessment year. Accordingly, we uphold the Order of the learned
CIT(A).
32. The other additions made by the AO i.e., payment to employees parking charges, unaccounted investment in SAM farm house, cash payment to Chetan Gopal and Nirmala, assessee raised alternative grounds before the learned CIT(A) towards allowing telescoping from the undisclosed income found during the course of search and seizure as per return filed under section 153A of the Act in which income is declared. Here in the case on hand, assessee has declared the amount as per question answer No.28 and it has been offered in the return of income filed under section 153A of the Act which is over and above income declared under section 139(1) of the Act.
Therefore, the excess income declared in 153A of the Act in the return, assessee is eligible for telescoping for other additions s made by the AO towards unexplained expenditures / investments under section 69 of the Act.
Accordingly, the learned CIT(A) has done good reasoned Order. We do not find any infirmity in the order of the ld. CT(A). Accordingly, the learned
CIT(A) has rightly allowed telescoping from the undisclosed income unearthed during the course of search as under.

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33. The assessee while filling return of income u/s 153A, he has offered additional income over and above the regular return filed as per section 139(1) for indicated in the earlier part of the order and in above table and assessee has paid due taxes for the respective assessment year. Therefore, he is eligible for telescoping of undisclosed income from the disclosed income.
We do not find any infirmity in the view taken by the Ld. CIT (A) on allowing telescoping. Accordingly, we dismiss grounds raised by the Revenue for all these three assessment years i.e.2016-17,2017-18 & 2018-19. In above terms.
34. Unexplained Jewellery
Further, in the case of Assessment for Assessment Year 2018-19, during the course of search proceedings in the residential premises of the assessee, jewellery worth Rs.74,79,827/- was found. In the statement

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recorded under section 132(4) of the Act, assessee stated that jewelleries were received from parents, in-laws and friends during marriage and purchased over the years. Assessee has not filed any wealth tax return to show that these jewelleries were received earlier and the same was confronted. During the sworn statement recorded under ection 132(4) of the Act, assessee admitted as undisclosed income as investment in jewellery and in show cause notice issued under section 142(1) of the Act dated 18.11.2019 asking to explain the source of investment in jewellery and the assessee stated that the jewellery worth Rs.38,97,864/- as undisclosed income for Assessment Year 2017-18
in the hands of the Reshma Naveen and the assessee also submitted that the CBDT has issued instruction No.1916 dated 11.05.1994 is applicable to the assessee but the AO noted that this instruction has been issued for not to seize certain quantum of jewellery during the course of search assessments. It does not give clean chit to the assessee for unexplained jewellay found.
Accordingly, assessee was unable to prove the source of investmentsin the jewellery and AO was satisfied that the investment in jewellery is unexplained investment. Since Rs.38,97,864/- was offered as income in the hands of the spouse, therefore, the balance investment in jewellery of Rs.35,81,963/- was added to the total income of the assessee without given benefit as per CBDT instruction No.1916 dated 11.05.1994. 35. Aggrieved form the above Order, assessee made detailed written submissions before the learned CIT(A). Assessee relied on the judgment of Co-ordinate Bench in ITA No.645/Bang/2015 dated 23.10.2017 in the case of M/s.Dinesh Kumar Vs. DCIT and in ITA No.737/Bang/2016 dated
06.12.2016 in the case of P. Gowtham Chand Vs. DCIT, Central Circle – 1. The learned CIT(A) has dealt with issue in his Order in Para Nos.17.6, 17.7,
17.7.1 and 17.8 and he gave benefit as per instruction contained in CBDT
Circular and about 1200 gms of jewellery out of 2927 gms and 2555.45 gms

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were considered in the income of the spouse Mrs. Reshma Naveen.
Accordingly, the learned CIT(A) deleted the addition to the extent of Rs.30,66,550/- being the value of 1200 gms of gold jewellery. In this regard, the learned DR submitted that learned CIT(A) has wrongly given benefit of the CBDT instruction. This instruction was issued to the investigation wing for not to seize gold jewellery found during the course of search to certain quantity but during the course of assessment proceeding, the AO has to examine the source of investments in jewellery.
36. On the other hand, learned AR submitted that learned CIT(A) has rightly deleted the addition of Rs.30,66,500/- being value of 1200 gms of jewellery as benefit given relying on CBDT instruction No.1916 dated
11.05.1994 which can be given over and above the explained, jewellery to the assessee during the course of assessment proceedings and submitted that the case law relied on during the appellate proceedings are squarely applicable in the present case. In the assessee’s family there are 2 married women and 2 men.
37. Considering the rival submissions, we noted that learned CIT(A) has given benefit to the assessee after relying on the CBDT instruction No.1916
dated 11.05.1994. Though similar issue has been dealt by the Co-ordinate
Vs. (O )-II, Central Circle-7 in ITA Nos.711 to 715, 857 to 862 (Mumbai) of 2011 and 3579 to 3583 (Mumba) of 2013 reported in (2017) 88
taxmann.com 408 (Mumbai).

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38. A similar issue has been dealt by the Co-ordinate Bench of ITAT in the case of N. Roja v. Assistant Commissioner of Income-tax [2020] 117
taxmann.com 90 (Cuttack - Trib.). Accordingly, this issue is rightly decided by the learned CIT(A).
39. In the result, we do not find any infirmity in the Order of the learned
CIT(A). The issue raised by the Revenue on this ground is deleted.
To sum up, Cos No. 45 to 47/Bang/2024 filed by the assessee are allowed and the grounds raised by the Revenue are dismissed in ITA Nos.2081 to 2083/Bang/2024 for all the 3 years.
40. A common Order passed shall be kept in respective case files.
Pronounced in the court on the date mentioned on the caption page. (KESHAV DUBEY)
Accountant Member
Bangalore,
Dated : 26.09.2025. /NS/*
Copy to:
1. Appellant 2. Respondent 3. Pr.CIT4.CIT(A)
5. DR, ITAT, Bangalore.
By order