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DEPUTY COMMISSIONER OF INCOME-TAX, MADURAI vs M/S INDUSTRIAL MINERAL CO., 100% EOU, TUTICORIN | BharatTax

DEPUTY COMMISSIONER OF INCOME-TAX, MADURAI vs. M/S INDUSTRIAL MINERAL CO., 100% EOU, TUTICORIN

ITA 529/CHNY/2023Status: DisposedITAT Chennai21 May 2025Bench: HON’BLE SHRI MANOJ KUMAR AGGARWAL (Accountant Member), SHRI MANU KUMAR GIRI (Judicial Member)1 pages

AI SummaryPartly Allowed

Facts

Cross appeals arose from an order of the CIT(A) concerning assessment framed under section 153A. The assessee was engaged in processing and sale of beach minerals, and a search action was conducted. Additions were made concerning unaccounted investment in property and disallowance of purchases and other expenses.

Held

The Tribunal held that for unabated assessments, additions can only be made based on incriminating material found during the search. Loose sheets without corroboration do not constitute sufficient evidence. Additions based solely on such documents were deleted.

Key Issues

Whether additions under Section 153A can be made in unabated assessment years without incriminating material found during search? Whether loose sheets, without corroboration, can form the basis for additions?

Sections Cited

153A, 69B, 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, CHENNAI

Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & HON’BLE SHRI MANU KUMAR GIRI, JM

O R D E R Manoj Kumar Aggarwal (Accountant Member) 1.1 Aforesaid cross appeals for Assessment Year 2012-13 arises out of an order of learned Commissioner of Income Tax (Appeals)-19, Chennai [CIT(A)] dated 27-02-2023 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) r.w.s. 153A of the Act on 30-07-2021. 1.2 The grounds raised by the assessee read as under: -

1.

1. The order of the Commissioner of Income Tax (Appeals) in so far as it is against the assessee, is contrary to law, erroneous and unsustainable on the facts the case. A. Jurisdiction

2. The CIT(A) erred in upholding the assumption of jurisdiction by the assessing officer under sec.153A of the Act.

3. The CIT(A) failed to appreciate that the asst. year 2012-13 falls beyond the period of six years from the relevant asst. year 2019-20 (search conducted on 25.10.2018) and hence the notice u/s.153A and the consequent assessment are not in accordance with law and liable to treated as void in law.

4. The CIT(A) further failed to appreciate that the case of assessee does not fall for consideration within the 4th Proviso to sec.153A(1) since the investment in immovable property is recorded in the books of assessee and there was no new asset that remained undisclosed by the assessee.

5. The CIT(A) further failed to appreciate that the loose sheet relied on by the officer to bring the case of assessee within the 4th Proviso would not enable the officer to issue notice beyond the period of six years, in as much as no evidentiary value can be attached to the loose sheet as expounded by the Supreme Court in various decisions and hence the impugned proceedings are untenable in law.

6. The CIT(A) further failed to appreciate that surmises and conjectures by the officer cannot be the basis to extend the time limit beyond the six years and hence the notice u/s.153A and the assessment framed are liable to be annulled.

3. Without prejudice to the grounds raised on the merits of the case, it is submitted that the Ld.CIT(A) erred in deleting the addition of Rs.24,85,17,972/-towards disallowance of purchase of materials, Rs.12,71,95,200/- towards purchase of materials from V.V.Indech, Rs.5,11,80,421 towards land development expenses for AY 2012-13 stating for the reason that these disallowances made in the unabated assessments have no nexus with incriminating materials found and seized during the course of search. 3.1 The Ld.CIT(A) erred in failing to appreciate that as per the provisions of Sec.153A of the Act, the assessing officer has to mandatorily issue notice u/s.153A of the Act to assess or reassess the total income of each of the six assessment years immediately preceding the year in which search action u/s.132 of the Act was initiated or requisition u/s.132A was made. The Ld.CIT(A) failed to appreciate that total income of the assessee cannot be brought to tax if the scope of Section 153A is limited to only undisclosed income on the basis of seized materials 3.2 The Ld.CIT(A) erred in failing to appreciate that on the issue of addition to be made in the assessments framed u/s.153A on the basis of seized materials, the SLP filed by the Revenue has been accepted the Hon'ble Apex Court in the case of Pr.CIT Vs Gahoi Foods Pvt Ltd (117 Taxmann.com 118) and is still pending, thus the issue has not attained finality. 3.3 The Ld.CIT(A) erred in failing to appreciate that there is no express provision in the Act that the additions made in the search assessment can be made only on the basis of incriminating seized materials. 3.4 The Ld.CIT(A) erred in deleting the disallowance of Rs.42,68,93,593/- by giving narrow interpretation to the provisions of Sec.153A of the Act. For these grounds and any other ground including amendment of grounds that may be raised during the course of the appeal proceedings, the order of learned CIT(Appeals) may be set aside and that of the Assessing Officer be restored As is evident, the subject matter of appeals is various additions which are arising out of search proceedings on the assessee.

2.

Assessment Proceedings 2.1 Addition of unaccounted investment in property for Rs.90.45 Lacs This addition has been made on account of a property purchased by the assessee at 2nd Avenue, Harrington Road. The Ld. AO referred to Page No.75 of loose sheets as seized from the office of the assessee at Chetpet vide Annexure-132/S&S/IMC/CHE/RR-2 dated 27-10-2018. The same contained details of property transactions that happened on 14-03- 2012. The recorded value of the property was Rs.163.36 Lacs as against actual sale consideration of Rs.253.81 Lacs. The Ld. AO alleged that the assessee made cash payment of Rs.90.45 Lacs and accordingly, the same was added to the income of the assessee as unexplained investment u/s 69B. 2.2 Disallowance of purchases and other expenses etc. This addition was made on the basis of Page Nos.34 & 35 of bunch of loose sheets seized vide Annexure-132/S&S/IMC/CHE/RR-4 dated 27- 10-2018. The same allegedly contained Profit & Loss Account of the assessee for financial year 2011-12. The profit as per this Profit & Loss Account was Rs.17.25 Crores and purchases were Rs.69.61 Crores. The purchase amount include figure of Rs.32 Crores given as transfer from VV through arbitration and Rs.12.71 Crores claimed as purchase from VV Ind Tech. No supporting documents were found for the same during search. During assessment proceedings, it transpired that in the process of arbitration settlement of dispute, Shri S. Chandrasen received various properties including business assets, land, building, Vehicles, stock of raw material, finished goods, stores and spares. The business assets relating to mining activities were transferred to the assessee-firm. The materials were transferred directly from VV Minerals and delivered at various godowns / factory belonging to Shri S. Chandrasen based on the arbitration award and the same were recorded as transferred from VV through arbitration and received from VV Ind. Tech in the books of the assessee-firm. However, Ld. AO questioned the debit of this expenditure in the Profit & Loss Account and finally, in the absence of any supporting documents, rejected the explanation of the assessee. Finally, the entire purchases of Rs.69.61 Crores were added to assessee’s income. The Ld. AO also noted that the assessee debited land refilling & environment expense for Rs.511.80 Lacs in the Profit & Loss Account as extracted from tally software in Accountant’s laptop. The net profit as shown therein was Rs.62.29 Crores as against the profit of Rs.17.78 Crores as reflected by the assessee leaving a gap of Rs.44.51 Crores. After adjusting depreciation component, the net gap was Rs.41.87 Crores. The difference of Rs.32 Crores was nothing but transfer from VV through Arbitration. The remaining difference was on account of difference in closing stock valuation, discrepancy in other income & expenses which has been tabulated at para-131 of the assessment order. Accordingly, Ld. AO added the remaining component of Rs.9.87 Crores to the income of the assessee. The Land refilling expenses for Rs.5.11 Crores were separately disallowed. The assessee contended that the tally data was an incomplete data and it was not the final data which was used to file the return of income. However, Ld. AO rejected the explanation of the assessee and framed the assessment by making following additions: -

3.

Appellate Proceedings 3.1 The Ld. CIT(A) rejected legal grounds qua applicability of 4th Proviso to Sec.153A and held that the contents of the loose sheet revealed payment of consideration in cash for purchase of immoveable property over and above registered sale consideration Reference was made to CBDT Circular No.2/2018 dated 15-02-2018 to hold that undisclosed investment in an asset was wide enough to cover not only the investment in an undisclosed asset but also undisclosed investment in an asset which was otherwise disclosed in the Balance Sheet. Accordingly, the assumption of jurisdiction u/s 153A was held to be valid one. 3.2 On merits of addition of Rs.90.45 Lacs, the Managing Partner, in replies to Q. Nos. 7,8 & 9 stated that the loose sheet was prepared in order to show a higher value for the concerned property in connection with offering the said property as collateral security to the bank for obtaining loan for a sister concern M/s Q2Q solutions Pvt. Ltd. The cash payment was shown only for the purpose of boosting the value of the land to obtain bank loans. He subsequently disowned the loose sheet. The assessee required cross-examination of the author of the sheet. During appellate proceedings, the assessee contended that it was a dumb document having no evidentiary value. However, Ld. CIT(A) held that loose sheet contained all the details required to ascertain the nature, characteristics and timing of the transaction and therefore, it was a speaking document. The onus was on assessee to rebut the presumption of Sec. 132(4A) and 292C which was not discharged by the assessee. Accordingly, this addition was confirmed. Aggrieved, the assessee is in further appeal before us. 3.3 The disallowance of balance purchase of Rs.24.85 Crores was based on material found for AY 2013-14. The assessee contended that in the absence of any incriminating material as found for this year, this addition could not be made in terms of various judicial decisions. The same found concurrence of Ld. CIT(A) who observed that this disallowance was made with reference to facts pertaining to AY 2013-14. The Ld. AO concurred that figures of purchases in loose sheets were matching with the returned figures for AY 2013-14. The return of income for AY 2012-13 was already scrutinized u/s 143(3) and this year was unabated year and therefore, in the absence of any incriminating material, no such addition could be made in the hands of the assessee. Similar findings were rendered on the issue of purchases of Rs.12.75 Crores stated to be made from VV Ind Tech as well as land development expenses for Rs.511.80 Lacs stated to be incurred by the assessee. Accordingly, all these additions were deleted. Aggrieved, the revenue is in further appeal before us. 3.4 On the issue of purchase of material from M/s VV Minerals for Rs.32 Crores, the assessee contended that the material was received based on arbitration award and memorandum of settlement (MOS) between the Managing Partner and his brothers as per the directions of competent court which was duly and correctly recorded in the books of accounts. The Ld. CIT(A) accepted the fact the dispute was resolved through arbitration award dated 13-07-2011 which was awarded by a former judge of the Supreme Court and MOS was signed by the parties to the dispute which was part and parcel of the arbitration award. Pursuant to the same, the assessee was in receipt of semi-processed minerals and processed minerals from VV Minerals during the year on giving effect to the said arbitration award. The value to the same was debited as purchase of material. The Ld. AO doubted the valuation for want of documentary evidences. It was also held by Ld. AO that the claim was not genuine claim. The claim made for purchases in the return of income was higher than the purchase shown in the tally data as seized from the laptop. Even if the material was received from sister concern pursuant to award, the same could not be claimed as an expenditure since the assessee did not incur any cost towards acquisition of the said material. Accordingly, the addition for Rs.32 Crores was sustained against which the assessee is in further appeal before us. 3.5 The addition of net profit difference of Rs.9.87 Crores was confirmed on the ground that the assessee merely made a claim regarding reduction in value of closing stock due to revaluation without furnishing any details of such revaluation. Aggrieved, the assessee is in further appeal before us. Our findings and Adjudication 4. From the facts, it emerges that the assessee-firm is engaged in processing of beach sand and sale of beach minerals. The assessee’s regular return of income was duly scrutinized u/s 143(3). The assessee was subjected to search on 25-10-2018 based on which impugned assessment has been framed. It is quite clear that this year is a case of unabated assessment year and therefore, the additions which could have been made, are to be based strictly on the basis of incriminating material as found during search on the assessee. This is as per the decision of Hon’ble Supreme Court in the case of Pr. CIT vs. Abhisar Buildwell Pvt. Ltd. (149 Taxmann.com 399) wherein the Hon’ble Court, considering all the earlier decisions holding the field, held as under: - 5. We have heard learned counsel for the respective parties at length. The question which is posed for consideration in the present set of appeals is, as to whether in respect of completed assessments/unabated assessments, whether the jurisdiction of AO to make assessment is confined to incriminating material found during the course of search under section 132 or requisition under section 132A or not, i.e., whether any addition can be made by the AO in absence of any incriminating material found during the course of search under section 132 or requisition under section 132 A of the Act, 1961 or not.

ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words, there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax". iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material. v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153A is relatable to abated proceedings (i.e., those pending on the date of search) and the word 'reassess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. 7.2 Thereafter in the case of Saumya Construction (supra), the Gujarat High Court, while referring the decision of the Delhi High Court in the case of Kabul Chawla (supra) and after considering the entire scheme of block assessment under section 153A of the Act, 1961, had held that in case of completed assessment/unabated assessment, in absence of any incriminating material, no additional can be made by the AO and the AO has no jurisdiction to re-open the completed assessment. In paragraphs 15 & 16, it is held as under: "15.On a plain reading of section 153A of the Act, it is evident that the trigger point for exercise of powers thereunder is a search under section 132 or a requisition under section 132A of the Act. Once a search or requisition is made, a mandate is cast upon the Assessing Officer to issue notice under section 153A of the Act to the person requiring him to furnish the return of income in respect of each assessment year falling within six assessment years immediately preceding the' assessment year relevant to the previous year in which such search is conducted or requisition is made and assess or reassess the same. Since the assessment under section 153A of the Act is linked with search and requisition under sections 132 and 132A of the Act, it is evident that the object of the section is to bring to tax the undisclosed income which is found during the course of or pursuant to the search or requisition. However, instead of the earlier regime of block assessment whereby; it was only the undisclosed income of the block period that was assessed, section 153A of the Act seeks to assess the total income for the assessment year, which is clear from the first proviso thereto which provides that the Assessing Officer shall assess or reassess the total income in respect of each assessment year, falling within such six assessment years. The second proviso makes the intention of the Legislature clear as the same provides that assessment or reassessment, if any, relating to the six assessment years referred to in the sub-section pending on the date of initiation of search under section 132 or requisition under section 132A, as the case may be, shall abate. Sub- section (2) of section 153A of the Act provides that if any proceeding or any order of assessment or reassessment made under sub-section (1) is annulled in appeal or any other legal provision, then the assessment or reassessment relating to any assessment year which had abated under the second proviso would stand revived. The proviso thereto says, that such revival shall cease to have effect if such order of annulment is set aside. Thus, any proceeding of assessment or reassessment falling within the, six assessment years prior to the search or requisition stands abated and the total income of the assessee is required to be determined under section 153A, of the Act. Similarly, sub-section (2) provides for revival of any assessment or reassessment which stood abated, if any proceeding or any order of assessment or reassessment made under section 153A of, the Act is annulled in appeal or any other proceeding.

16.

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

9. While considering the issue involved, one has to consider the object and purpose of insertion of Section 153A in the Act, 1961 and when there shall be a block assessment under section 153A of the Act, 1961. 9.1 That prior to insertion of Section 153A in the statute, the relevant provision for block assessment was under section 158BA of the Act, 1961. The erstwhile scheme of block assessment under section 158BA envisaged assessment of 'undisclosed income' for two reasons, firstly that there were two parallel assessments envisaged under the erstwhile regime, i.e., (i) block assessment under section 158BA to assess the 'undisclosed income' and (ii) regular assessment in accordance with the provisions of the Act to make assessment qua income other than undisclosed income. Secondly, that the 'undisclosed income' was chargeable to tax at a special rate of 60% under section 113 whereas income other than 'undisclosed income' was required to be assessed under regular assessment procedure and was taxable at normal rate. Therefore, section 153A came to be inserted and brought on the statute. Under Section 153A regime, the intention of the legislation was to do away with the scheme of two parallel assessments and tax the 'undisclosed' income too at the normal rate of tax as against any special rate. Thus, after introduction of Section 153A and in case of search, there shall be block assessment for six years. Search assessments/block assessments under section 153A are triggered by conducting of a valid search under section 132 of the Act, 1961. The very purpose of search, which is a prerequisite/trigger for invoking the provisions of sections 153A/153C is detection of undisclosed income by undertaking extraordinary power of search and seizure, i.e., the income which cannot be detected in ordinary course of regular assessment. Thus, the foundation for making search assessments under sections 153A/153C can be said to be the existence of incriminating material showing undisclosed income detected as a result of search.

10.

On a plain reading of Section 153A of the Act, 1961, it is evident that once search or requisition is made, a mandate is cast upon the AO to issue notice under section 153 of the Act to the person, requiring him to furnish the return of income in respect of each assessment year falling within six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made and assess or reassess the same. Section 153A of the Act reads as under: "153A. Assessment in case of search or requisition - (1) Notwithstanding anything contained in Section 139, Section 147, Section 148, Section 149, Section 151 and Section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132-A after the 31st day of May, 2003, the Assessing Officer shall— (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made: Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this sub-section pending on the date of initiation of the search under section 132 or making of requisition under section 132-A, as the case may be, shall abate. (2) If any proceeding initiated or any order of assessment or reassessment made under sub section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or Section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner:

11. As per the provisions of Section 153A, in case of a search under section 132 or requisition under section 132A, the AO gets the jurisdiction to assess or reassess the 'total income' in respect of each assessment year falling within six assessment years. However, it is required to be noted that as per the second proviso to Section 153A, the assessment or re-assessment, if any, relating to any assessment year falling within the period of six assessment years pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate. As per sub- section (2) of Section 153A, if any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner. Therefore, the intention of the legislation seems to be that in case of search only the pending assessment/reassessment proceedings shall abate and the AO would assume the jurisdiction to assess or reassess the 'total income' for the entire six years period/block assessment period. The intention does not seem to be to re-open the completed/unabated assessments, unless any incriminating material is found with respect to concerned assessment year falling within last six years preceding the search. Therefore, on true interpretation of Section 153A of the Act, 1961, in case of a search under section 132 or requisition under section 132A and during the search any incriminating material is found, even in case of unabated/completed assessment, the AO would have the jurisdiction to assess or reassess the 'total income' taking into consideration the incriminating material collected during the search and other material which would include income declared in the returns, if any, furnished by the assessee as well as the undisclosed income. However, in case during the search no incriminating material is found, in case of completed/unabated assessment, the only remedy available to the Revenue would be to initiate the reassessment proceedings under sections 147/48 of the Act, subject to fulfilment of the conditions mentioned in sections 147/148, as in such a situation, the Revenue cannot be left with no remedy. Therefore, even in case of block assessment under section 153A and in case of unabated/completed assessment and in case no incriminating material is found during the search, the power of the Revenue to have the reassessment under sections 147/148 of the Act has to be saved, otherwise the Revenue would be left without remedy.

14.

In view of the above and for the reasons stated above, it is concluded as under: (i) that in case of search under section 132 or requisition under section 132A, the AO assumes the jurisdiction for block assessment under section 153A; (ii) all pending assessments/reassessments shall stand abated; (iii) in case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the 'total income' taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and (iv) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under section 132 or requisition under section 132A of the Act, 1961. However, the completed/unabated assessments can be re-opened by the AO in exercise of powers under sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved. The question involved in the present set of appeals and review petition is answered accordingly in terms of the above and the appeals and review petition preferred by the Revenue are hereby dismissed. No costs. Civil Appeal Nos.7738-7739/2021, 7736- 7737/2021, 7732-7735/2021 and 7740-7743/2021 15. Insofar as the aforesaid Civil Appeals preferred by the assessee – M/s Kesarwani Zarda Bhandar Sahson, Allahabad are concerned, these appeals have been preferred against the impugned judgment and order dated 6-9-2016 passed in 269/2014, 15/2015, TANVI 16/2015, 268/2014 and 17/2015, as also, against the order dated 21-9-2017 passed in the review applications. It is required to be noted that the issue before the Allahabad High Court was, whether in case of completed/unabated assessments, the AO would have jurisdiction to re-open the assessments made under section 143(1)(a) or 143(3) of the Act, 1961 and to reassess the total income taking notice of undisclosed income even found during the search and seizure operation. 15.1 In view of the discussion hereinabove, once during search undisclosed income is found on unearthing the incriminating material during the search, the AO would assume jurisdiction to assess or reassess the total income even in case of completed/unabated assessments. Therefore, the impugned judgment(s) and order(s) passed by the High Court taking the view that the AO has the power to reassess the return of the assessee not only for the undisclosed income, which was found during the search operation but also with regard to material that was available at the time of original assessment does not require any interference. Under the circumstances, the aforesaid appeals preferred by the assessee – M/s Kesarwani Zarda Bhandar, Sahson, Allahabad deserve to be dismissed and are accordingly dismissed. In the facts and circumstances of the case, no costs.

9.

The last issue in the appeal is addition of unexplained investment in the immoveable property which is based on Page No. 75 of loose sheets as seized from the office of the assessee at Chetpet vide Annexure-132/S&S/IMC/CHE/RR-2 dated 27-10-2018. The same has been extracted at para-4 of the assessment order. Upon perusal of the same, it could be seen that it does not contain any date of alleged cash payment by the assessee. The same is merely in the shape of rough scribblings only. There is no acknowledgement of receipt of cash by any of the party. It is noteworthy that no enquiry has been carried out by Ld. AO with the seller of the property to corroborate the same. Nothing has been shown that similar addition has been made for the seller. The Managing Partner, in replies to Q. Nos. 7,8 & 9 merely stated that the loose sheet was prepared in order to show a higher value for the concerned property in connection with offering the said property as collateral security to the bank for obtaining loan for a sister concern M/s Q2Q solutions Pvt. Ltd. The cash payment was shown only for the purpose of boosting the value of the land to obtain bank loans. There is no admission of any cash payment. On all these facts, it could be concluded that the loose sheet was merely in the nature of dumb document only which was not sufficient enough to drawn conclusion of alleged cash payment by the assessee. There is neither any corroboration of this document nor any admission by any of the parties who have entered into the transactions. The Hon’ble Karnataka High Court in the case of CIT vs. Sunil Kumar Sharma (159 Taxmann.com 179; 22.01.2024) held that a sheet of paper containing typed entries and in loose form, not shown to form part of the books of accounts regularly maintained by the assessee or his business entities, do not constitute material evidence. The Hon’ble Court referred to the decision of Hon’ble Supreme Court in the case of CBI vs. V.C. Shukla (3 SCC 410) as well as another decision in Common Cause vs. UOI (supra) while arriving at such a conclusion. The Hon’ble Supreme Court in the case of CBI vs. V.C. Shukla (3 SCC 410) held that every transaction as recorded in the regular books needs to be independently corroborated and proved when some liability is to be fastened in respect of such transactions. The legal principle as laid down by Hon’ble Supreme Court is that independent corroborative evidence is required in respect of entries in regular books of accounts and the same would apply in the present case. Pertinently, Special Leave Petition (SLP) of revenue against this decision has been dismissed by Hon’ble Supreme Court on 20-08-2024 which is reported as 165 Taxmann.com 846. We are of the opinion that aforesaid principle as laid down by Hon’ble Court would apply to the facts of the present case before us and the same strengthens the arguments of Ld. AR. Similarly, Mumbai Tribunal, in the case of ITO vs. Kranti Impex Pvt. Ltd. (ITA No.1229/Mum/2013) held that when the seized papers were undated having no acceptable narration and did not bear the signature of any party, they are in the nature of dumb documents having no evidentiary value and could not be taken to be the sole basis for determination of undisclosed income of the assessee. The onus would be on revenue to collect cogent evidences to corroborate the nothings therein. Upon cumulative consideration of given facts, we would hold that impugned additions as made by Ld. AO merely on the basis of loose sheets without any corroboration thereof, was not adequate enough to draw adverse inference of unexplained investment in the hands of the assessee. Therefore, we delete the same and allow the corresponding grounds as raised by the assessee.