SHRI PRAVINCHANDRA R PATEL,VADODARA vs. DCIT, CENTRAL CIRCLE-2, VADODARA

First we take ITA No.135/Ahd/2019 in the case of Neotech Education Foundation for the Asstt.Years 2012-13. In this appeal, the assessee has raised the following grounds: “1.0 On the facts and in the circumstances of your appellant's case and in law, the Ld. CIT (A), has erred in confirming the re-opening of the assessment u/s 147/148 of the Act and thereby not holding the order u/s 143(3) r.w.s. 147 of the Act as bad in law. (Para 35.2 on page 120 of the Ld. CIT(A)'s order). 2.0 On the facts and in the circumstances of your appellant's case and in law, the Ld. CIT (A) has erred in confirming the addition of Rs.1,98,00,000/- on substantive basis as unexplained investment u/s 69B of the Act and also erred in holding and directing the Id. AO that the said amount be taxed on protective basis the hands of Shri Pravinchandra Patel and also in the hands of all the directors of the appellant as their joint and several liabilities. (Para 36.4 on page 122/123/124 of the Ld. CIT(A)'s order). 3.0 On the facts and in the circumstances of your appellant's case and in law, the Ld. CIT (A) has erred in confirming the addition of Rs.37,12,000/- (actually 39,12,000 due to apparent mistake) as unexplained expenditure u/s 69C of the Act. (Para 37.4 on page 126 of the Ld. CIT(A)'s order). 4.0 Without prejudice to the specific grounds of appeal taken above and those taken in appeals for AY 2013-14 and AY 2014-15, on the facts and circumstances of the case and in law, the LdCIT(A) has erred in not allowing telescoping / offsetting of the alleged unexplained expenses / investment against the items treated as incomes as well as against disclosures made by the individuals in the Promoter Group. (Para 20.6 on page 103 of the Ld. CIT(A)'s order).”

The first issue raised by the assessee is that learned CIT(A) erred in holding the reopening under section 147 of the Act as valid.

At the outset, the learned AR for the assessee at the time of hearing submitted that he has been instructed by the appellant not to press this ground of appeal. Hence, the ground of appeal raised by the assessee is dismissed being not pressed.

At the outset we note that the issue on the hand is interconnected with issue raised by the assessee in ground 2 and 3 for A.Y. 2013-14 and issue raised by the Revenue in ground 1 for A.Y. 2014-15 and 2015-16. However, the appeal of the revenue for A.Y. 2015-16 has been dismissed being low tax effect. Therefore we proceed to decide to adjudicate the issue in the year under considerationjointly with the issue raised by the assessee in A.Y. 2013-14 and by the Revenue in in A.Y. 2014-15. The relevant ground of appeal of the assessee for the AY 2013-14 and Revenue for the A.Y. 2014-15 reads as under:

Assessee’s grounds of appeal in ITA No. 136/AHD/2019 for the A.Y. 2013-14. The ground no.1 and 2 read as under: “1.0 On the facts and in the circumstances of your appellant's case and in law, the Ld. CIT (A), has erred in confirming the re-opening of the assessment u/s 147/148 of the Act and thereby not holding the order u/s 143(3) r.w.s. 147 of the Act as bad in law. (Para 39.1 on Pg 127 referring to Para 35.2 on page 120 of the Ld. ClT(A)'s order). 2.0 On the facts and in the circumstances of your appellant's case and in law, the Ld. CIT (A) has erred in confirming the addition of Rs.1,00,00,000/- on substantive basis as unexplained investment u/s 69B of the Act and also erred in holding and directing the Id. AO that the said amount be taxed on protective basis the hands of Shri Pravinchandra Patel and also in the hands of all the directors of the appellant as their joint and several liabilities. (Para 39.2 and 39.3 on page 127/128 of the Ld. CIT(A)'s order).”

Revenue’s ground of appeal in ITA No. 194/AHD/2019 for A.Y. 2014-15 Ground No.1 “On the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in deleting the addition of Rs.1,35,00,OOQ/-on account of unexplained investment u/s 69B of the I. T. Act, when the seized document itself proves that the assessee had made investment of Rs.1,35,00,000/- (altogether Rs.5,68,00,000/- for different years) in the purchase of land for A.Y.2014-15.”

The facts in brief are that the assessee in the present case is an educational institution registered under section 25 of the companies Act 1956. The assessee company was incorporated as on 24th November 2011 with the object of imparting education. Subsequently the assessee, acquired 3 pieces of land vide registered sale deed dated 12th January 2012 for the construction of building for the purpose of the education. The educational activities of the assessee were commenced from the July 2013 corresponding to assessment year 2014-15.

There was a search and seizure operation under section 132 of the Act dated 13th November 2014 carried in case of the directors of the assessee company. Parallelly, there was survey operation under section 133A of the Act carried at the premises of the assessee.As result of survey, there was an email found from the computer of 1 of the director of the assessee company namely Shri Manish Shah which was written to another director namely Shri Praveen Patel. In the said email, there were among other documents, two-piece of papers bearing No. 157 and 158 of annexure A1 were found. These documents were containing the details of the payment made by the assessee for the purchase of lands. Page No. 157 was containing the details of the cash payment made by the assessee against the purchase of land which was duly signed by the recipient as well as the director of the company namely Shri Praveen Patel. The breakup of the cash payment stands as under: 1. November/December 2011 Rs. 1,98,00,000/- 2. November/December 2012 Rs. 1,00,00,000/- 3. November/December 2013 Rs. 1,35,00,000/- 4. November/December 2014 Rs. 1,35,00,000/- 5. November/December 2015 Rs. 50,00,000/-

From the above details it was revealed that the cash payment was made by the assessee before and after the registration of the land i.e. 12th January 2012. Likewise, the scheduled for the cash payment was also falling prior to the date of survey as well as subsequent date of survey i.e. 13th November 2014. In other words prior to the date of survey, the cash payment of Rs. 1.98, 1 and 1.35 crores was appearing in the payment schedule. Likewise, the page No. 158 was containing the details of the cheque payment made by the assessee against the purchase of land which was duly signed by the recipient as well as the director of the company namely Shri Praveen Patel. The breakup of the cheque payment stands as under: 205 50 + 40 40 40 35 12/1/12 15/5/12 18/7/13 18/7/14 18/7/15 106 22 + 21 21 21 21 12/1/12 15/5/12 15/7/13 18/7/14 18/7/15

From the above details it was revealed that the cheque payment was made by the assessee at the time registration of the land property i.e. 12-1-2012 and after the registration of the land. Likewise, the scheduled for the cheque payment was also falling prior to the date of survey as well as subsequent to the date of survey. In other words prior to the date of survey, the cheque payment of Rs. 3.51 crores was appearing in the payment schedule. All the details of cheque payment were matching with the registered documents, books of accounts and bank statement.

However, the AO during the assessment proceedings found that the cash payment made by the assessee were not recorded in the books of accounts. As per the AO, all the cheque payments were matching. Therefore, the AO was of the view that the cash payment recorded on the seized documents bearing page No. 157was also genuine and represents the payment made by the assessee against the purchase of land which was not recorded in the books of accounts. Consequently, the AO was of the opinion that the cash payment represents the unaccounted investment of the assessee under section 69B of the Act. Accordingly, the AO issued a show cause notice to the assessee for affording the opportunity of being heard to the assessee for its explanation.

The assessee in response to such show cause notice contended that its commercial activity started from July 2013. Therefore question of any source of income during the period of incorporation and commencement of activity does not arise. Further the impugned loose paper does not contain name of the assessee or any information about land being purchased. Hence, there cannot be any conclusion that the amount was paid by the assesse. Furthermore the directors disclosed the income of Rs. 3.21 crore owned to have made cash payment against the purchase of land to the tune of Rs.2.98 crores being Rs. 1.98 crores in Nov/Dec 2011 and Rs. 1 crores in Nov/Dec 2012 only against which the signature of the directors as well as

Aggrieved assessee preferred an appeal to the learned CIT (A).

The assessee before the learned CIT (A) reiterated the submissions as made before the AO during the assessment proceedings. The assessee further contended that it is activities were commenced with effect from July 2013. Therefore, there cannot be any question of having any unaccounted income in its hands which could have deployed in the impugned land. Whatever amount of cash payment made was from the accounts of the directors which was duly disclosed by them in their personal capacity. As such, an amount of Rs.2.98 crores was paid in cash by the directors which was duly admitted by them. Beyond this, there was no cash payment made to the vendors of the land. Moreover, the payment in cash made by the directors was crossed and signed as evident from the seized documents. In other words, there was no cross on the cash payment except for the payment of ₹ 2.98 crores which was duly disclosed by the directors in their individual hands. Thus the cash entries which were not crossed and signed evidence that no payment in cash against such entries was made. It was also submitted that there is neither the name of the assessee nor the details of the impugned land is appearing on page 157 of the seized documents. Thus, there cannot be established any link of the cash entries appearing therein that these entries belong to the assessee or related with the land purchased by the assessee. The AO has not made any cross verification from the seller of the lands to find out the fact whether there was any element of cash in the transaction of the purchase of the impugned land.

The provisions of section 132 (4A) of the Act does not deal with the presumption of income rather it provides the presumption with respect to the ownership of the assets found during the search. Further it provides the presumption about the contents of the books of accounts and documents, signature, handwriting and execution of the documents. The necessities for the presumption of income are contained under the provisions of section 68 to 69D of the Act. Thus the presumption provided under section 132 (4A) of the Act does not affix any liability on the assessee with respect to the income. In other words, the provisions of section 132 (4A) of the Act cannot be used to hold any item as income in terms of the

However, the sum and the substance of the remand report furnished by the AO on different dates is summarized as under: The AO in his remand report submitted that the email dated 22nd July i. 2014 containing the seized documents was impounded from the director, namely Shri Manish Shah of the assessee company. The director is not a different person to the assessee company. Therefore there is a presumption under section 132(4A) of the Act that the documents belong to the assessee and its contents are true. ii. The directors of the assessee company have admitted in the course of search to have purchased the land for the construction of the campus which is also evident from the seized document bearing page No. 158. The land was purchased from Shri Shashikant Patel. The signature of Shashikant Patel was very much appearing on the seized document bearing page No. 158. Similarly the seized document bearing page No. 157 of annexure A1 was containing the schedule for the cash payment which was also signed by Shri Shashikant Patel, the vendor of the land and the director of the assessee company Shri Praveen Patel. Thus, the documents seized in the course of survey belongs to the company and not with the directors in his individual capacity. iii. The contention of the assessee that the cash entries appearing on page 157 of annexure A1 may relate to the land the bearing No. 245/B which was not materialized, is afterthought and misleading. The contents of the seized documents on page 158 with respect to the payment schedule is similar with the contents of on page 157 of annexure A1. Thus, it cannot be said that the cash entries relates to the plot bearing No. 245/B which was not materialized. Further the directors of the assessee have admitted to have made the payment of ₹ 2.98 crores as shown on page 157 of the seized documents for the purchase of plots and thus it is transpired that

The learned CIT (A) after considering the submission confirmed the addition for the AYs 2012-13 and 2013-14. But the ld. CIT-A deleted the addition made by the AO for the AYs 2014-15 and 2015-16. The relevant finding of the ld. CIT-A is summarized as under:

The loose paper bearing page No. 157 and 158 of annexure A-1 is a valid piece of evidence as it contains the detail of payment in cash in relation to land purchased by the assessee which has been signed by director of the assessee company as well as the vendor. Further, the papers were found from the computer of the director, Shri Manish Shah which was installed at the premises of assessee. Therefore, the presumption is that the document belongs to assessee which a valid piece of evidence. Likewise, it was not denied in the statement of Shri Manish Shah recorded under section 132(4) of the Act that the impugned document does not belong to the assessee and cash was not paid in relation to the purchase of land by the assessee.

First, two payment of Rs. 1.98 crore and 1 crore is duly signed and crossed and also admitted to have been paid over and above documented price. Similarly, the contention of the assessee that cash of Rs. 2.98 crores was paid out of undisclosed income of the directorsof Rs. 3.21 crores is not accepted for the reason that there was no evidence that the disclosure was made against unaccounted investment. The return was filed by the directors and their relatives under section 139(4) disclosing brokerage income and not against the disclosure of unaccounted/ additional income. The ld. CIT-A further found that such cash payment is also corroborating from another seized documents bearing page 33 of A-3. Accordingly, the ld. CIT-A confirmed the addition of Rs. 1.98 crores and 1 crores for A.Y. 2012-13 and 2013-14. The learned CIT(A) also added the same amount in the hands of Director Shri Parvinchandra Patel on protective basis and also same addition was made on protective basis in the hands of all the director jointly. However, the

The learned ARbefore us filed a paper book running from pages 1 to 80 and reiterated the contentions made before the Authorities below.

The learned DR before us vehemently supported the stand of the authorities below by reiterating the findings contained in the respective orders which we have already adverted to in the preceding paragraph. Therefore we are not repeating the same for the sake of brevity.

We have heard the rival contentions of both the parties and perused the materials available on record. In the present case, the AO found that the assessee has made cash payment against the purchase of land amounting to ₹ 5.68 crores in different assessment years. The view of the AO was based on the seized document found during the survey proceedings. Thus, the addition was made by the AO in different assessment years as discussed above. On appeal, the learned CIT (A) was pleased to confirm the addition of Rs. 1.98 crores and 1 crores for the AYs 2012-13 and 2013-14 and deleted the addition made by the AO for the AYs 2014-15 and 2015-16 for Rs. 1.35 crores for both the AYs on the reasoning as discussed in the preceding paragraph.

Now, first we take up the issue of the investment made by the assessee in the purchase of land as discussed above for the assessment year 2012-13 and 2013- 14 for the amount of Rs.1.98 crores and 1 crores respectively. From the preceding discussion, there remains no issue to the fact that there was cash payment made by the assessee for the purchase of impugned land amounting to Rs.1.98 crores and 1 crores. The assessee qua to such cash payment contended that the commercial activities were commenced in the month of July 2013 and therefore there is no

We also find that during the survey at the premises of assessee, another paper bearing page number 35 of annexure A-3 was found where it was noted that till 28th February 2014 the assessee has received fund amounting to Rs.3,97,37,485/- in cash from director namely Shri Pravinchandra Patel. Such cash was treated as unexplained investment in the hand of Shri Pravinchnadra Patel. Thus, from this it can be transpired that the cash was received by the assessee from director which would have been utilized for the payment of Rs. 2.98 crores against purchase of land. This presumption also gets strength from the fact that assessee was not having any source of income until July 2013. Further the assessee time and again contended that the cash was paid out of cash received from the directors and directors have offered the cash income in their individual returns. Therefore

Now we proceed to adjudicate the issue of addition of Rs. 1.35 crores made in AY 2014-15 which was delete by the learned CIT(A). On perusal of the seized document, we note that there was no signature either of the party was appearing against such amount like the first two payment made to the vendor. Accordingly, we are of the view that there was no such payment made by the assessee as alleged by the AO. The learned CIT-A has given detailed finding based on reasons and deleted the addition made by the AO. It is also important to note that there was also not any other piece of document found during the search and survey proceedings at the premise of the directors and the assessee suggesting that the payment of ₹ 1.35 crore was made by the assessee to the vendor. In view of the above, we do not find any infirmity in the order of the learned CIT-A. Hence, the ground of appeal of the revenue is dismissed.

In view of the above assessee ground of appeal for A.Ys. 2012-13 and 2013- 14 is allowed whereas Revenue ground of appeal for A.Y. 2014-15 is dismissed.

Next issue raised by the assessee in ground no. 3 and 4 is that the learned CIT(A) erred in confirming the addition of Rs. 39,12,000/- being unexplained expenses on basis of seized paper bearing page 33 of annexure A-3.

At the outset we note that the issue on the hand is interconnected with issue raised by the assessee in ground 1 to 5 of its appeal for the A.Y. 2014-15. Therefore

There was found a piece of paper bearing page no. 33 of annexure A-3 from the premises of the cabin of the Director namely Shri Manish B Shah. This paper was containing various types of recording in six different compartment. Out of them some were recorded in the books of account and some were not recorded in the books of accounts of the assessee which were treated by the AO detailed as under: Total C. amount Addition No Heading (Rs.) (Rs.) Treated as 1 Never show in books of account 3,81,12,000 83,12,000 unaccounted expenses 2 Account not closed till date 93,52,385 59,45,153/- unaccounted expenses 3 As per new Diary 50,14,800 50,14,800 unaccounted receipt 4 (Blank) 3,41,32,693 98,80,193 unaccounted receipt 2,85,22,60 5 Amount paid by GVG NA 0 unexplained loan and interest 6 (Blank) 53,06,500 53,06,500 unaccounted expenses

The assessee in response to such notice submitted that it came into existence dated 24th of November 2011 whereas the land was acquired dated 12th January 2012 for the construction of its campus for providing education. Likewise its activities i.e. providing education were commenced from July 2013. Thus, it becomes evident that it did not had any source of income till financial year 2013-14 i.e. A.Y. 2014-15 which could have been utilized for incurring the impugned expenses. Accordingly, in the absence of any source of money in the hands of the assessee, it was not possible for it to incur any expense in cash and that too without recording the same in the books of accounts. The seized document bearing page number 33 of Annexure A-3 is a dumb document which not containing its name (assessee) neither signed by any authorized person nor dated. Therefore, the same is not reliable document as there was not any corroborative material found during search and survey proceeding with respect to impugned page no-33.It was purposed to treat compartment No. 1 ,2 and 6 as expenses and compartment number 3, 4 and 5 as receipt whereas no such specification is written on impugned paper. Further, it was purposed to consider compartment number 1 in A.Y. 2012-13 and remaining in A.Y. 2014-15. Thus, the purposed addition in 2 different assessment year on account of different footing is purely based on surmise and conjecture.

Furthermore, if at all the impugned expenses have been incurred in connection with the levelling of the land and construction of campus owned by the assessee, these expenses must have been incurred by the directors as there was no source of income in the hands of the assessee till July 2013 which was also admitted by them in their individual capacity.

There was no corroborative evidences/materials brought on record by the AO suggesting that the impugned expenses were incurred or cash was received. As such, there cannot be any addition merely based on a piece of paper found during the survey until and unless some corroborative evidence are brought on record. May be this paper was maintained for budgeting purposes. Therefore whatever the transaction actually took place were accounted in the books and remaining transactions which did not take place were not accounted.

In view of the above, the AO has made the addition based on seized paper bearing page No. 33 of Annexure A3 in assessment years 2012-13 for the amount

Aggrieved assessee preferred an appeal to the learned CIT (A).

The assessee before the learned CIT(A) has made various submissions with respect to different kinds of additions which have been compartmentalized in the manner as discussed above. However, the assessee has also made general submissions which were applicable to all the additions made by the AO. These general submissions stand as under: i. The assessee is a private limited company and registered under section 25 under the companies Act 1956 as not for profit organization. Whatever transactions carried out by it for the payment and receipt were duly recorded in the books of accounts which were audited by the qualified chartered accountant. None of the transactions has been carried out by the assessee in cash and that too without recording in the books of accounts. ii. The seized document bearing No. 33 was found from the possession of Shri Manish B Shah. The purpose of preparing such document was only known to him i.e. Shri Manish be Shah. It is very much possible that Shri Manish B Shah might have prepared such document for budgetary purposes. As such, Shri Manish B Shah can only explain the purpose for which such transactions were recorded in the seized documents. Since the document was found from the possession of Shri Manish B Shah, then the presumption provided under section 132(4A) of the Act postulates that such document belongs to Shri Manish B Shah. Accordingly, no inference can be drawn against the assessee based on such document. If any addition is required to be made based on such document, the same can be made in the hands of Shri Manish B Shah. The assessee also contended that based on the impugned seized document, an addition of ₹ 72 Lacs and 7.9 Lacs has already been made in the hands of Manish B Shah for

The assessee without prejudice to the above, also made compartment wise submissions as discussed above which are elaborated as under: Compartment No. 1, unexplained expenditure of ₹ 83.12 Lacs I. in the assessment year 2012-13. There were certain entries of expenditure in cash appearing at serial No. 2, 22 and 23 representing the amount of ₹ 15 Lacs, 17.50 Lacs and 11.50 Lacs which were duly recorded in the books of accounts. Therefore, no addition is warranted. ₹ II. Compartment No. 2, unexplained expenditure of 59,45,153in the assessment year 2014-15. The cash entries reflected in such compartment which were not recorded in the regular books of accounts, does not suggest that these entries reflect the unexplained expenditure from the unrecorded source. Compartment No. 3, unaccounted receipts of ₹ 50,14,800 in III. the assessment year 2014-15. Under this compartment, the addition was made for the cash entries shown under the head “new diary” which contains different page numbers against the amounts. None of the amount is ascertainable whether it represents the receipt or the expenditures. Furthermore, there is not appearing any date therein. Therefore, no addition is warranted with respect to such entries found in the seized document. IV. Compartment No. 4, unaccounted share application and cash receipt from the directors for ₹ 96,80,193in the assessment year 2014-15. The assessee with respect to the addition of ₹ 1,58,300.00 and 4 Lacs submitted that addition has already been made in the hands of the director namely Shri Praveen R. Patel and therefore no further addition can be made in the hands of the assessee. Likewise, there was increased in the share capital of Rs. 66,86,500/- in the financial year ending as on 31 March 2014. Therefore, to this extent, no addition is warranted.

The assessee with respect to the amount of interest of Rs. 16,11,300/- submitted that it has been shown as interest to be paid to Shri GVG. Thus it is implied that no interest payment has been done by the assessee. The assessee, further contended that the amount of interest of Rs. 5,22,300/- and 6,89,000/- has been added two times which is against the provisions of law. The assessee with respect to the cash entry of Rs.68 Lacs submitted that the same has already been added to the total income of Shri Manish B. Shah in the assessment year 2014-15.

The assessee without prejudice to the above further contended that the actual amount of loan from Shri GVG stands at ₹ 10 Lacs which was duly recorded in the books of accounts and same was squared up in the year under consideration. Thus, it was contended by the assessee that there cannot be any addition to the total income of the assessee.

Without prejudice to the above i.e. general and compartment wise contention, the assessee submitted that seized document contain various noting which has been described as unaccounted expenses and unaccounted receipt by the AO. Therefore expenses and income cannot be added to income of the assessee separately. As such only profit element as per telescoping should be taxed. The assesse accordingly submitted the working of the telescoping and prayed only an amount of Rs. 8,40,140/- can be added as per sheet bearing page no. 33 of A-3.

The learned CIT(A) found that the amount of petty cash for Rs. 1,58,300 and share application of Rs. 4 Lacs has been added in hand of Shri Parvin R Patel. Hence no further addition is required. The Assessee claimed that the amount of petty cash of Rs. 7,51,893/- also owned by Shri Pravin R Patel. Hence,the same should be deleted subject to verification. With regard to the amount of Rs. 83.70 Lacs being shares issued to Shri Preet Patel, the learned CIT(A) found that during the year new shares for Rs. 66,86,500 were allotted to Shri Preet Patel which were duly recorded

Being aggrieved by the order of the learned CIT (A), the assessee is in appeal before us. The assessee is in appeal against the direction of the addition for Rs. 39.12 Lacs and Rs. 3,84,61,253/- for the AY under consideration and for the AY 2014-15.

The learned AR before us filed a paper book from pages 1 to 284 and filed written submissions running from pages 1 to 15 which are available on record. The learned AR for the assessee before us reiterated the submissions as made before the authorities below. The learned AR further, among other arguments, contended that the income based on seized document bearing page 33 can be worked out on the

On the contrary, the learned DR before us vehemently supported the stand of the authorities below by reiterating the findings contained in the respective orders which we have already adverted to in the preceding paragraph. Therefore we are not repeating the same for the sake of brevity.

We have heard the rival contentions of both the parties and perused the materials available on record. The facts of the case have already been elaborated in the preceding paragraph which are not in dispute. Therefore, for the sake of brevity and convenience, we are not inclined to repeat the same. From the preceding discussion, the following issues require consideration and adjudication. i. Whether the document bearing page number 33 seized during the search proceedings is a dumb document. ii. Whether the provisions of section 69C can be invoked in a situation where the particular assessment year is not a certain. iii. Whether the document found during the search proceedings belongs to the assessee or Manish B Shah, the director of the company. iv. Whether the benefit of telescoping can be extended to the assessee in the given facts and circumstances.

We proceed to adjudicate the question No. 4 as discussed above so as to see whether the concept of telescoping can be applied in the given facts and circumstances. Admittedly, the seized document bearing page No. 33 contains various financial transactions. This document has been divided in 6 compartments by the Revenue. Three of the compartments out of 6 were treated as the receipts and the remaining 3 compartments were treated as the payments. The authorities below have added each compartment separately as being unaccounted receipt and unexplained expenses after providing adjustment of amount already recorded in the books of accounts and added separately in hands of directors. To our mind the approach adopted by the authorities below is not justifiable for the reason that it is

Now the question arises can entire unaccounted receipt should be added or only the profit element after adjusting the expenses against such unaccounted receipt should be added as income in the hands of the assessee. In this connection, we find that there are plethora of judgment by various competent court that in case of any unaccounted business receipt found in the hand of the assessee then only the amount of profit element in such business receipt should be brought to tax as the tax is not liable on gross income. Indeed the tax is liable on the net profit after providing the adjustment of business expenditure incurred to earn such business receipt. The courts have taken various basis to tax the profit embedded in the gross receipt such as estimation of profit in absence of detail of expenditure, peak credit theory and telescoping.

Now coming to the present case, admittedly, the commercial activities of the assessee were commenced in the year under consideration i.e. July 2013. Post commencement of the activities of the assessee, there is a possibility for the assessee to have generated the unaccounted income which was possible to utilize for unaccounted expenses as appearing on page 33 of the seized document in different compartments. Undeniably, both the receipts and the expenses have been incorporated on the same seized document. Therefore, we are of the view that the seized document has to be read as a whole not in isolation in this regard we also

In view of the above, we find that the net results of the receipts and expenses should only be considered for the purpose of the additions. As such the individual receipts and the expenses cannot be subject matter of the addition independently. There is also no ambiguity to the fact that whatever amount of the unaccounted expenses have been incurred have been sourced out of unaccounted receipts recorded in the same seized document.

At this juncture, it is equally important to deal with the situation that what would be the position if the receipts have been utilized by the assessee for the capital expenditures or the revenue expenses have been incurred out of the capital receipts. In either of the case, the transactions were not recorded in the books of accounts. As regards the receipts, the additions cannot be made under the provisions of section 68 of the Act. It is for the reason that the provisions of section 68 of the Act are applicable with respect to the transactions recorded in the books of accounts. As regards the expenses in the given facts and circumstances, the provisions of section 69C of the Act cannot be applicable as the source of the expenses is emanating from the same seized document. In other words, one of the precondition for attracting the provisions of section 69C of the Act is that the assessee failed to justify the source of the expenses. However in the given case, the source of the expenses is not in dispute. Accordingly, we are of the view that only option available work out the income from the unrecorded transactions in the given facts and circumstances is to apply the concept of telescoping. It is for the reason

As we have adjudicated the issue raised by the assessee after applying the concept of telescoping, we refrain ourselves from adjudicating the other questions recorded hereinabove for the purpose of the decision. Thus the ground of appeal of the assessee is partly allowed.

Coming to ITA No. 136/Ahd/2019 and appeal by the assessee for A.Y. 2013- 14. In this appeal, the assessee has raised the following grounds:

The first issue raised by the assessee is that learned CIT(A) erred in holding the reopening under section 147 of the Act as valid.

At the outset, the learned AR for the assessee at the time of hearing submitted before us that the he has been instructed by the appellant not to press this ground of appeal. Hence, the ground of appeal raised by the assessee is dismissed as being not pressed.

The next issue raised by the assessee in ground Nos. 2 & 3 of its appeal is that learned CIT(A) erred in confirming the addition made by the AO for Rs. 1 crores on account of unexplained investment made in the land.

At the outset we note that the issue raised by the assessee has been decided along with the appeal bearing No. ITA No. 135/Ahd/2019 for AY 2012-13. The appeal was allowed in favourof the assessee. For, the detailed discussion, please refer the paragraph Nos. 24 to 28 of this order. Hence the ground of appeal of the assessee is allowed.

In the result appeal of the assessee partly allowed.

Coming to next assessee’s appeal in ITA No. 137/Ahd/2019 for the Asstt.Year 2014-15, the following grounds are raised. “1.0 On the facts and in the circumstances of your appellant's case and in law, the Ld. CIT (A) has erred in confirming the addition of Rs.59,45,153/-as unexplained expenditure u/s 69C of the Act. (Para 21.4 on page 105 of the Ld. CIT(A)'s order). 2.0 On the facts and in the circumstances of your appellant's case and in law, the Ld. CIT (A) has erred in confirming the addition of Rs.50,14,8007- as unaccounted cash receipts (Para 22.1 on page 106 of the Ld. CIT(A)'s order). 3.0 On the facts and in the circumstances of your appellant's case and in law, the Ld. CIT (A) has erred in confirming the addition of Rs. 16,83,500/- as share application money received but not accounted in books. (Para 23.5 on page 109 of the Ld. CIT(A)'s order). 4.0 On the facts and in the circumstances of your appellant's case and in law, the Ld. CIT (A) has erred in confirming the addition of Rs.53,06,500/- as unexplained receipts and unaccounted expenses. (Para 24.2 on page 110 of the Ld. CIT(A)'s order). 5.0 On the facts and in the circumstances of your appellant's case and in law, the Ld. CIT (A) has erred in confirming the addition of Rs. 2,05,11,300/- as undisclosed and unexplained income. (Para 25.6 on page 113 of the Ld. CIT(A)'s order). 6.0 On the facts and in the circumstances of your appellant's case and in law, the Ld. CIT (A) has erred in confirming the disallowance of Rs.1,50,000/- u/s 40(a)(ia) of the Act. (Para 27 on page 115 of the Ld. CIT(A)'s order). 7.0 On the facts and in the circumstances of your appellant's case and in law, the Ld. CIT (A) has erred in confirming the addition due to disallowance of depreciation of Rs.7,00,000/-. (Para 28.1 on page 116 of the Ld. CIT(A)'s order).”

At the outset we note that the issues raised by the assessee in ground Nos. 1 to 5 of its appeal have already been decided along with ground No. 3 of assessee’s appeal in ITA No. 135/Ahd/2019 for A.Y. 2012-13, where we allowed the appeal of

The next issue raised by the assessee in ground no. 6 of its appeal is that the learned CIT (A) erred in confirming the addition of Rs. 1.5 Lacs under section 40(a)(ia) of the Act.

At the outset we note that the learned AR before us submitted that he was directed by the appellant not to press this ground of appeal. Accordingly, this ground of appeal of the assessee is dismissed being not pressed.

The next issue raised by the assessee in ground no. 7 of its appeal is that the learned CIT (A) erred in confirming the disallowance of the depreciation for Rs.7 Lacs on account of excess value of the building.

There was the addition in the block of assets under the head building which was held in the year under consideration for less than 6 months. The value of such addition stands at Rs.13,53,95,335/- only. However, the AO based on the seized document bearing No. 55 of Annexure A-1 found that the assessee has received cash of Rs. 1.40 crores from the contractors. The impugned seized document was handwritten by Ms. Dhruvi Pandya, the chief accountant of the company. On confrontation, she admitted in the statement furnished on oath under section 131 of the Act that the contractor has raised the bills at the higher value and the payment was accordingly made to the contractor at the higher value which was received back in cash by the assessee. Based on the statement, the AO held that the assessee is not eligible for depreciation on the higher value of the construction expenses added in the value of the building which was of worked out at Rs. 7 Lacs. Thus the AO treated the same as excessive depreciation claimed by the assessee and disallowed the same.

Aggrieved assessee preferred an appeal to the learned CIT (A) who confirmed the addition made by the AO by observing as under:

Being aggrieved by the order of the learned CIT-A, the assessee is in appeal before us.

The learned AR before us contended that the name of the assessee was not appearing in the so-called seized document. Likewise, there was no date mentioned in the seized document so as to indicate the particular year to which it pertains. Accordingly, the learned AR contended that there cannot be any disallowance of the depreciation. On the other hand, the learned DR vehemently supported the order of the authorities below.

We have heard the rival contentions of the parties and perused the materials available on record. The seized document bearing page No. 55 is placed on page 138 of the paper book. On perusal of the seized document, we note that no name either of the assessee or the contractor is appearing therein. Likewise, there is no date mentioned on such seized paper. In simple words, such seized document contains certain figures with the remark cash back only. Thus, to our understanding,

Admittedly, the information gathered during the search proceedings can be vital piece of input/material but the same cannot substitute the evidence. It was expected by the revenue to carry out necessary investigation based on the seized document and the statement obtained during the search proceedings to find out the truth after conducting the enquiries from the contractors. But no enquiry from the 3rd party has been conducted by the revenue. Accordingly, we are not inclined to uphold the finding of the authorities below. Thus we set aside the finding of the learned CIT(A) with the direction to the AO to allow the claim of the assessee for the depreciation amounting to Rs.7 Lacs. Hence the ground of appeal of the assessee is allowed.

The last issue raised by the assessee is general and connected with above grounds. Therefore, the same does not require any separate adjudication. Hence, the same is being dismissed as infructuous.

In the result, the appeal of the assessee is partly allowed.

Coming to ITA No. 194/Ahd/2019 an appeal by Revenue for A.Y. 2014-15

The Revenue has raised the following grounds of appeal: “1. On the facts and in the circumstances of the case and in law, the !d. CIT(A) has erred in deleting the addition of Rs.1,35,00,000/-on account of unexplained investment u/s 69B of the I. T. Act, when the seized document itself proves that the assessee had made investment of Rs.1,35,00,000/- (altogether Rs.5,68,00,000/- for different years) in the purchase of land for A.Y.2014-15. 2. On the facts and in the circumstances of the case and in law, the Id CIT(A) has erred in deleting the entire addition of Rs.1,62,44,073/- on account of unsecured loan, which also includes unsecured loan of Rs.58,00,000/- [claimed to be received from Shri Shashikant R. Patel (Rs.50,00,000/-) and ShnDeshraj Singh (Rs.8,00,000/-)] for which the assessee as well as the lenders miserably failed to prove their creditworthiness. 3. It is, therefore, prayed that the order the Ld. CIT(A)-12, Ahmedabad may be set aside and that of the AO may be restored to the above extent.”

The first issue raised by the Revenue is that the learned CIT(A) erred in deleting the addition of Rs. 1.35 crore made on account of unexplained investment in land.

At the outset we note that the issue raised by the Revenue in ground number 1 of its appeal has already been adjudicated along with issue raised by the assessee in ground 2 in ITA No. 135/Ahd/2019 for A.Y. 2012-13 where we have decided the issue against the Revenue vide paragraph Nos. 24 to 28 of this order. For, the detailed discussion, please refer the above paragraph. Hence, the ground of appeal of the Revenue is dismissed.

The second issue raised by the Revenue is that the learned CIT (A) erred in deleting the addition made by the AO for Rs. 1,62,44,073/- representing the unexplained cash credit under section 68 of the Act on account of lack of creditworthiness of the parties.

The AO found the assessee in the year under consideration has taken loan from 13 parties amounting to Rs. 1,62,44,073/-. However the assessee during the assessment proceedings failed to file the necessary documentary evidence to justify the impugned loans on the parameters specified under section 68 of the Act,

Aggrieved assessee preferred an appeal to the learned CIT (A).

The assessee before the learned CIT (A) submitted that all the loans are received through the banking channel. Likewise, all the parties who have given loan to the assessee are the income tax assessee and filing their regular income tax return. The assessee in support of its contention filed the bank statement, PAN, income tax return and the confirmation from all the parties.

The assessee also submitted that it has repaid the loan in the later years through the banking channel. Thus the assessee submitted that there cannot be any addition of the impugned loan under the provisions of section 68 of the Act.The learned CIT (A) called for the remand report from the AO who have admitted the identity of the lending parties and genuineness of the transaction. However the AO was of the view that the income shown by the lending parties are not sufficient enough to advance the loan to the assessee. Thus, the AO had a doubt on the creditworthiness on the parties which isone of the test to get through the conditions as specified under section 68 of the Act. Thus the AO in his remand report requested the learned CIT (A) confirmed the addition as made in the assessment framed under section 143(3) of the Act.However the learned CIT (A) after considering the submission of the assessee and the remand report of the AO deleted the addition made by the AO by observing as under: “26.2 From the perusal of the Remand Report dtd.09/03/2018 read with the Remand Report dtd.11/07/2018 it is seen that AO has examined the details submitted by the appellant vide the letters dated 16/02/2018 and 09/03/2018 the AO has accepted the identity of 13 depositors/lenders but has doubted the nature of transactions and worthiness (on account of low income as per the respective returns of income) in respect of some, the remand reports are already reproduced in this order earlier. In this regard it is submitted by the appellant vide dated 01/08/2018 that since these monies were received (and-subsequently repaid) through account payee cheques/bank transfers and were duly recorded in the books of account and the lenders confirmed the transactions, it is clear that the appellant-Company has discharged its onus regarding the said deposits. 26.3 I have examined the submission of the appellant vide dated 01/08/2018 and gone through the supporting evidences furnished earlier and I am of the considered view that the appellant has discharged its onus of proving identities, the sources of the loans and the genuineness of the transactions in accordance with the provisions of section 68, and

Being aggrieved by the order of the learned CIT (A), the Revenue is in appeal before us.

Both the learned DR and the learned AR before us vehemently supported the order of the authorities below as favourable to them.

We have heard the rival contentions of both the parties and perused the materials available on record. The provision of section 68 of the Act fastens the liability on the assessee to provide the identity of the lenders, establish the genuineness of the transactions and creditworthiness of the parties. These liabilities on the assessee were imposed to justify the cash credit entries under section 68 of the Act by the Hon’ble Calcutta High Court in the case of CIT Vs. Precision finance (p) Ltd reported in 208 ITR 465 wherein it was held as under: “It was for the assessee to prove the identity of the creditors, their creditworthiness and the genuineness of the transactions. On the facts of this case, the Tribunal did not take into account all these ingredients which had to be satisfied by the assessee. Mere furnishing of the particulars was not enough. The enquiry of the ITO revealed that either the assessee was not traceable or there was no such file and, accordingly, the first ingredient as to the identity of the creditors had not been established. If the identity of the creditors had not been established, consequently, the question of establishment of the genuineness of the transactions or the creditworthiness of the creditors did not and could not arise. The Tribunal did not apply its mind to the facts of this particular case and proceeded on the footing that since the transactions were through the bank account, it was to be presumed that the transactions were genuine. It was not for the ITO to find out by making investigation from the bank accounts unless the assessee proved the identity of the creditors and their creditworthiness. Mere payment by account payee cheque was not sacrosanct nor could it make a non-genuine transaction genuine.”

The assessee has discharged its onus by furnishing the necessary details such as a copy of PAN, bank details, and ITR etc. in support of identity of the parties, genuineness of transaction and creditworthiness of the parties. Admittedly the AO has accepted the identity and genuineness of transaction but doubted the credit worthiness of the parties. However the learned CIT(A) held that the assessee has

Now coming to the third condition, i.e. creditworthiness of the parties, regarding this we note that the assessee has refunded the amount through banking channel to all the parties.The repayment of the loan amount by the assessee was duly accepted by the Revenue. In this regard, we find support and guidance from the judgment of Hon’ble Gujarat High Court in the case of the CIT Vs. Rohini builders reported in 256 ITR 360 wherein it was held as under: “The genuineness of the transaction is proved by the fact that the payment to the assessee as well as repayment of the loan by the assessee to the depositors is made by account payee cheques and the interest is also paid by the assessee to the creditors by account payee cheques.”

Thus there remains no doubt that the transaction of the advance received by the assessee from the parties was genuine. In our considered view, once the assessee is able to prove that the money received by it was returned in the subsequent assessment year in the account of the party, then there remains no doubt that the advances received by the assessee were unexplained cash credit.

Similarly, we also note that the assessee in respect of all the parties out of the parties as discussed above has furnished the sufficient documentary pieces of evidence including the details of the income of the parties. Therefore in our considered view, the assessee has discharged its onus imposed under section 68 of the Act.

In view of the above, we do not find any infirmity in the order of Ld. CIT (A). Hence the ground of appeal of the revenue is dismissed.

The issue raised by the assessee in ground 3 and 4 of its appeal are general in nature hence the same is dismissed being infructuous.

In the result appeal filed by the Revenue is dismissed

Coming to ITA No. 195/Ahd/2019 an appeal by the Revenue for A.Y. 2015-16

Sole ground raised in this appeal reads as under: “1. On the facts and in the circumstances of the case and in law, the ld.CIT(A) has erred in deleting the addition of Rs.1,35,00,000/- on account of unexplained investment u/s.69B of the I.T.Act, when the seized document itself proves that the assessee had made investment of Rs.1,35,00,000/- (altogether Rs.5,68,00,000/- for different years) in the purchase of land for A.Y.2015-16.

At the outset, the ld.counsel for the assessee submitted that effective tax effect involved in this appeal is below Rs.50 Lacs, and therefore, the appeal of the Revenue is not maintainable in view of recent CBDT Circular restricted the filing of the appeal by the Revenue before the Tribunal, where the tax effect is below Rs.50 Lacs. Therefore, the ld.counsel for the assessee contended that this appeal of the Revenue requires to be dismissed at the threshold. To which, the ld.DR disputed the same, but left the issue to the Bench to decide the same in accordance with law.

Admittedly,the tax effect in appeal of the Revenue is below Rs.50 Lacs, and therefore, keeping in view the above CBDT circular and provisions of section 268A of the Income Tax Act, we are of the view that the present appeal of the Revenue deserve to be dismissed at the threshold. It is accordingly dismissed.

However, it is observed that in case on re-verification at the end of the AO it can be demonstrated that the tax effect on the disputed addition is more, or Revenue’s case falls within the ambit of exceptions provided in the Circular, then the Department will be at liberty to approach the Tribunal for recall of this order. Such application should be filed within the time period prescribed under the Act.

In the result, appeal of the Revenue is dismissed due to low tax effect.

Now we take following appeals in the case of Shri Parvinchandra Patel:

The issues raised by the Revenue in IT(SS)A Nos. 69/AHD/2019, 71/AHD/2019, 72/AHD/2019 and 73/AHD/2019 for the assessment years 2009-10, 2011-12, 2012-13 and 2013-14 are inter-related and common to each other. Therefore, for the sake of brevity and convenience, we have clubbed all these appeals of the Revenue together for the purpose of adjudication. The facts of the case as appearing in IT(SS)A No. 69/AHD/2019 have been adopted for the decision which are given hereunder:

The Revenue in IT(SS)A No. 69/AHD/2019 for the assessment year 2009-10 has raised the following grounds of appeal: “1. On the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in deleting the addition of Rs.13,111/- on account of disallowance of deduction under Chapter VI-A, by not appreciating the fact involved in this case and holding that no incriminating material was found during search for A.Y,2009-10 and hence the proceeding for A.Y.2009-10 remained unabated.

The preliminary issue that has to be decided in all these appeals whether there can be any addition with respect to the unabated assessment years without having found any incriminating materials in the course of search proceedings under section 132 of the Act.

The facts of the case are that there was the search and seizure operation under the provisions of section 132 of the Act at the premises of the assessee dated 13th November 2014. Accordingly, the proceedings for the assessment under the provisions of section 153A of the Act were initiated for the assessment years as discussed above. The assessment was framed by the AO after making certain additions in different assessment years as detailed below:

The AO has made the additions of the above amount in different assessment years under the search proceedings to the total income of the assessee.

Aggrieved assessee preferred an appeal to the learned CIT (A).

The assessee before the learned CIT (A), inter-alia, contended that there was no incriminating document found during the search proceedings qua the additions made by the AO on account of disallowances of agricultural income, deduction under chapter VI-A of the Act and credit entry in bank account in the different assessment years. All the above items of addition made by the AO were duly disclosed in the original return of income filed under section 139 of the Act. As per the assessee, in

With regard to the addition of Rs. 2,77,000/- in A.Y. 2011-12 on account of unexplained investment which was based on seized paper being page 2-50 of annexure BS-2, page 1-65 of annexure BS-3 and page 1 of annexure BS-4, the assessee submitted that same is payment towards purposed purchase of agricultural land which was made out of cash available in hand from bank withdrawal on different dates.

The learned CIT (A) after considering the submission of the assessee observed that there are plethora of judgments of various tribunals, Hon’ble High courts including the Hon’ble Gujarat High court in case of Pr. CIT vs. Saumya Construction Pvt. Ltd. reported in 81 taxmann.com 292 and Hon’ble Apex court in case of CIT vs. Singhad Technical Education Society reported in 84 taxmann.com 290 wherein it has been laid down that in case of elapsed/unabated AYs there cannot any addition in the absence incriminating material found and available on record. In the present case all the assessment years i.e. 2009-10 to 2013-14 have been elapsed/unabated. Therefore no addition can be made in the absence of incriminating material in all these assessment years. Accordingly,the learned CIT (A) held that the AO has made the addition in the present search proceedings of regular items of agricultural income, credit entry in bank statements and deduction claimed under chapter VI-A which were duly disclosed in the income tax return. Therefore addition on account of above regular items cannot be sustained as per the law laid down by the Hon’ble courts and directed to delete the addition made in different assessment years.

With regard to addition of Rs. 2,77,000/- made in A.Y. 2011-12 on account of unexplained investment, the learned CIT(A) held that though this addition was based on seized documents, however, the assessee has submitted cash flow

Similarly, the learned CIT (A) also deleted the addition of Rs. 3,58,51,000/- made under section 50C of the Act by holding that the information received from the office of registrar about the stamp value of land, which is higher than the sale consideration, cannot be termed as incriminating material for unabated assessment years under the proceeding of section 153A of the Act. It is for the reason that no such document or material was found during search proceeding that the assessee has received sale consideration over and above what has been in shown in sale deed. Thus such addition of regular item under section 50C cannot be made in proceeding under section 153A of the Act without having found incriminating materials during search proceedings. Thus the learned CIT(A) deleted the addition made by the AO on this technical ground.

Being aggrieved by the order of the learned CIT-A, the Revenue is in appeal before us.

Both the learned DR and the AR before us vehemently supported the order of the authorities below as favourable to them.

We have heard the rival contentions of both the parties and perused the materials available on record including the case laws cited by the learned AR for the assessee. As a result of search conducted under section 132 of the Act for the respective years under consideration, the assessment has to be framed under section 153A of the Act for the 6 assessment years and relevant assessment year in which such search was conducted. The 2nd proviso to section 153A of the Act speaks/deals for the unabated and abated assessment years. As per the 2nd proviso to section 153A of the Act, the assessment/reassessment, if any, relating to the

On the contrary, the assessment years which have been completed as on the date of search, there cannot be any addition/disallowance to the total income of the assessee until and unless found some document of incriminating nature during the course of search proceedings.

The word incriminating document has nowhere been defined under the income tax Act but the same has been evolved by the Hon’ble courts while rendering judgments. In this connection we draw support and guidance from the judgment of Hon’ble Gujarat High Court in the case of Pr. CIT vs. Saumaya Construction (P.) Ltd. (supra), the relevant observation is extracted here under: “Under section 153A of the Act, an assessment has to be made in relation to the search or requisition, namely, in relation to material disclosed during the search or requisition. If in relation to any assessment year, no incriminating material is found, no addition or disallowance can be made in relation to that assessment year in exercise of powers under section 153A of the Act and the earlier assessment shall have to be reiterated.”

In view of the above, there remains no doubt that there cannot be any addition of the regular item with respect to the unabated/completed assessment years until and unless such documents of incriminating nature are found in the course of search proceedings.

Admittedly, all the cases before us are completed/unabated assessment years. The assessee for all the years have filed the return of income under section 139(1)/139(4) of the Act and the time limit for issuing notice under section 143(2) of the Act have already been expired. Thus, the returns filed by the assessee for all the years have reached to finality and therefore the same can be disturbed if there was some document of incriminating nature found during the search proceedings with respect to the year under consideration. However, we find that the AO has not made any reference to such documents/incriminating materials found in the course of

At this stage, we are also inclined to point out the fact that the assessee was maintaining several bank accounts but the addition was made for the amount deposited in three bank accounts only. A question may arise whether there is any document in relation to transaction carried out in these banks seized during the search proceedings which is being incriminating in nature. To our understanding, as there were not mentioned any document discovered in connection with transaction in the bank accounts during the search proceedings, the same cannot be said as incriminating document. Furthermore, there was no allegation of the AO that these bank accounts were not disclosed in the income tax return. Moreover, the learned CIT-A in his order has also observed as under:

The above finding of the learned CIT (A) has not been controverted by the learned DR appearing on behalf of the Revenue at the time of hearing. Thus in view of the above we can hold that there was no incriminating document found/seized during the search proceedings and therefore the concluded/unabated assessment years cannot be disturbed.

Coming to the addition made by the AO of Rs. 2,77,000/- for the assessment year 2011-12, in this connection we note that the investment shown by the assessee is of negligible amount considering the income declared by the assessee in different assessment years. In other words the assessee was the man of means and capable of making the investments. The assessee in support of his contention has also filed the cash flow statement i.e. showing the source of money invested in the impugned property. It was submitted by the assessee that the investment was made out of the drawing from the bank and this contention of the assessee was not controverted by the learned DR appearing for the Revenue at the time of hearing. In view of the above and after considering the facts in totality, we do not find any reason to interfere in the finding of the learned CIT-A and thus we uphold the same. Thus the grounds of appeal of the revenue are dismissed.

Before parting, it is also important to highlight that there was an addition of Rs. 3,58,51,000/- under section 50C of the Act which was made in A.Y. 2012-13. The assessee disclosed that he has sold property for a consideration of Rs. 1,47,00,000/- whereas the AO base on AIR information found that stamp value of such property was of Rs. 5,05,51,000/-. Thus the AO made addition of Rs. 3,58,51,000/- being difference in sale consideration and stamp value under section 50C of the Act. In this regard we are of the view that had this addition been made under normal assessment/ reassessment proceedings, then the addition may have sustained subject to other conditions laid down under the provision of section 50C of the Act. However, the proceedings before us are special proceeding under section 153A and assessment is also unabated/completed. Therefore, addition can only be restricted to the extent of incriminating material found during search as discussed above. As there was no material found in search suggesting that the assessee has

In the result, all the four appeals of the Revenue are dismissed.

Coming to ITA No. IT(SS) No. 41/AHD/2019 and 42/AHD/2019 an appeal by the Assessee for A.Y. 2012-13 and 2013-14

The only issue raised by the assessee in both the AYs is that the learned CIT (A) erred in making the protective addition of Rs. 1 croreand 1.98 crores on account of unexplained investment.

At the outset, we note that the addition of Rs. 1 crores and 1.98 crores on account of unexplained investment was made on substantive basis in the hands of M/s Neotech Education Foundation and protective basis in the hands of directors. The assessee is one of the director in M/s Neotech Education Foundation. It was alleged by the Revenue that there was the cash payment against the purchase of land by M/s Neotech Education Foundation which was not recorded in the books of accounts. In this regard, we find that once the addition on substantive basis to the tune of Rs.3,97,37,485/ representing the investment in cash by the another director namely Shri Pravin C Patel has been made by us in the AY 2014-15, there cannot be any other addition either in the hands of M/s Neotech Education Foundation or other directors on substantive/protective basis. In other words, the payment of ₹ 1 and 1.98 crores represents the application of the income added in the hands of Shri Pravin Patel. As such, the investment of Rs. 1 crores and 1.98 crores has been made out of the addition made in the hands of Shri Pravin Patel for Rs.3,97,37,485/. Thus if any addition is sustained in the hands of any other party, that would lead to the double addition which is not desirable under the provisions of law.

In the result both the appeals of the assessee are allowed.

Coming to ITA number IT(SS) No. 43/Ahd/2019, an appeal by the Assessee for A.Y. 2014-15.

The assessee has raised the following grounds of appeal: 1.0 On the facts and in the circumstances of your appellant's case and in law, the Id. C1T (A) has erred in treating agriculture income to the extent of Rs.4,00,000/- as income from unexplained other sources. (Para 18.2 on page 146/147 of the appellate order).

The first issue raised by the assessee is that the learned CIT(A) erred in treating the agriculture income of Rs. 4Lacs as income from other sources out of the total agricultural income declared by the assessee at Rs. 4,48,600/-.

The assessee in the year under consideration has declared agriculture income of Rs. 4,48,600/- only. The assessee in support of such income has filed the extract of 7/12 form. However, the AO was not satisfied with the 7/12 form filed by the assessee to justify the agriculture income. As per the AO, the assessee was expected to furnish the details of the crop produced, sold and the expenses incurred in connection with the production of the crop. But the assessee failed to furnish the

Aggrieved assessee preferred an appeal to the learned CIT-A.

The assessee before the learned CIT (A) submitted that he along with wife has in his possession substantial agricultural land of 32 vigha where the cash crop such as cotton and tuvar was produced during the year which was sold in the open market. The assessee also furnished the details/information of the crop cultivated in different assessment years in different pieces of land. The assessee in support of his contention has also filed the certificate from the head of ‘Dena’ Gram Panchayat of Vadodra District where such land is situated which evidences that the cash crop was cultivated. In the light of the above details, the assessee contended that the agricultural income declared by him cannot be treated as income from other sources in the absence of the details of sales bills and the expenses. Accordingly the assessee, prayed that the agriculture income was the genuine income.

The AO in the remand report submitted that the assessee failed to furnish the details of the exact quantity of crops produced and sold along with the rate at which such crop was sold. Therefore, the agriculture income declared by the assessee cannot be treated as genuine.

The learned CIT (A) found that land on which agricultural activity claimed to be carried out are not fertile land. Further, the assessee in the assessment year 2009-10 has declared agriculture income of Rs.84,460/- only whereas the assessee has declared an income of Rs. 4,48,600/- in the year under consideration which has increased manifolds. But the assessee failed to justify the increase in the amount of agriculture income. Accordingly, the learned the CIT (A) allowed the part of the amount for Rs. 48,600/- as agriculture income and treated the balance amount of Rs. 4 Lacs as income from other sources.

Being aggrieved by the order of the learned CIT(A), the assessee is in appeal before us.

The learned AR before us submitted that the assessee in possession of the agricultural land which is capable of generating the agricultural produce. Likewise, an agricultural land was purchased in the year under consideration for the value of Rs.1 crores. Even if 0.5% of the value of such investment is taken as the return on such investment, an income of Rs.50,000 is worked out and if it is multiplied with 16 vigha it comes out to Rs. 8 Lacs per annum. However the assessee has declared an income of negligible value at Rs. 4,48,600 which is very much viable.

On the contrary the learned DR before us contended that in the absence of necessary evidences about the details of the production, sales and expenditures, it cannot be presumed that the assessee has earned agriculture income merely on the basis of possession of land in his hand.

Both the learned AR and the DR before us vehemently supported the order of the authorities below to the extent favourable to them.

We have heard the rival contentions of both the parties and perused the materials available on record. Admittedly, if the assessee is showing the agricultural income, then it is the onus upon him to produce the necessary evidences to justify such income. Indeed, the assessee has furnished the certificate from the Gram Panchayat. But to our considered view such certificate cannot replace the primary documents such as the details for the cultivation of the crop, details of the sales and the expenses incurred for the production of the crop. Such certificate is secondary piece of evidence.

However, the assessee failed to bring any primary evidence. Nevertheless, this fact is also not in dispute that the assessee is in possession of agricultural land along with his wife aggregating to 32 Vigha. Accordingly, the fact of possession of land and the Gram Panchayat certificate cannot be brushed aside in view of the fact that part of the agriculture income has been admitted by the learned CIT-A. Considering the size of the agricultural land and interest of justice and fair play we are of the view that justice will be served to the revenue and the assessee if 50% of the total agriculture income is treated as income from the agricultural activity and

The second issue raised by the assessee is that learned CIT-A erred in treating the sum of Rs. 26,63,386/- as unexplained cash credit out of the total amount of Rs. 2,94,98,782/- credited in different bank accounts.There were appearing credit entries of Rs. 4,00,84,234/- in the different bank account of the assessee. But the assessee, failed to justify the source of such credit entries and therefore the AO treated the same as unexplained cash credit by adding to the total income of the assessee. However, the AO subsequently in the order under section 154 of the Act reduced the addition to Rs. 2,94,98.782/- only.

The assessee carried the matter to the learned CIT (A).

The assessee before the learned CIT (A) made detailed submission about the source of credit entries in the bank accounts. The learned CIT (A) also called for the remand report from the AO on the details submitted by the assessee. The learned CIT (A) after considering the remand report founds that the assessee failed to discharge the onus cast under section 68 of the Act for an amount of Rs. 26,63,386/- credited in different bank accounts from different party detailed as under: 1. Rs. 8,386/- in RBS Bank bearing account number 1555195 2. Loan amount of Rs. 24,75,000/- received from one Shri Arunishbhai P. Patel in HDFC Bank account. 3. Loan amount of Rs. 90,000/- each from Shri Razak Mohammad bhai and Shri Kalubhai Mohammad bhai credited in HDF bank account.

Thus the learned CIT (A) was pleased to confirm the addition of ₹ 26,63,386/- only. The ground of appeal of the assessee was partly allowed.

Being aggrieved by the order of the learned CIT (A), the assessee is in appeal before us.

The learned AR before us submitted that an amount of Rs. 8386.00 was representing the transfer from RBS Bank. The learned AR for the receipt of Rs. 24.75 Lacs from Shri Arunishbhai P. Patel in HDFC Bank account submitted that he has made best effort to collect necessary document from the party but failed. Thus the Revenue should exercise power conferred under the Act to verify the genuineness impugned transaction by collecting necessary details from the bank directly.

The ld. AR for the receipt of Rs. 1.8 Lacs from Shri Razak Mohammad bhai and Shri Kalubhai Mohammad bhai credited in HDFC bank account submitted that the amount was received against some transaction. But the assessee is unable to trace the party as of now.

On the contrary the learned DR before us vehemently supported the order of the authorities below.

We have heard the rival contentions of both the parties and perused the materials available on record. It is the trite law that the primary onus lies upon the assessee to justify his stand. Thus, it was the duty of the assessee to explain the source of credit entries appearing the bank account to the tune of Rs.26,63,386/- only.

As regards addition of Rs.8,386/-, we note that the assessee has submitted that it represents the transfer from the other bank maintained by him. Admittedly, the internal transfer of the fund does not represent the income. But it has to be proved based on the documentary evidence. However, we note that the AO in his remand report has submitted that he is not able to arrive at the clear conclusion after seeing the bank statement that amount represents the internal transfer of fund. The comment of the AO in the remand report, which has been relied upon by the learned CIT-A, does not appear to be based on cogent reasons. No plausible reason has been furnished by the AO in the remand report. Accordingly in the absence of specific finding of the AO in the remand report, we are not inclined to uphold the addition of Rs.8,386/- to the total income of the assessee.

Regarding the addition of Rs. 24.75 Lacs, we note that the assessee failed to provide the details of the party including the address. Indeed, the primary onus lies upon the assessee to produce the necessary evidences in support of cash credit. The assessee was afforded enough opportunities to bring the necessary details on record during the assessment and remand proceedings.

The request of the assessee to collect the necessary details from the bank is not acceptable for the reason that the assessee should have been known about the party such as name and address. On the letter written by the assessee to the bank, it is revealed that the assessee was not aware of anything about the credit entry reflecting in his bank statement. The relevant contents of the letter written (PB No.217) to the bank reads as under: “To, The Manager, The Royal Bank of Scotland pic Brady House, 14, Veer Nariman Road, Fort, Mumbai - 400023

Thus, in view of the above we hold that the assessee failed to discharge the onus imposed upon him under the provisions of section 68 of the Act. Hence, we are not inclined to interfere in the order of learned CIT-A.

As regards to the addition of Rs.180,000/-, we again note that the assessee has not furnished the necessary details in support of the bank entry of Rs.1.80 Lacs. It was the onus of the assessee to furnish the identity, creditworthiness and genuineness of the transaction. But we note that the assessee failed to do so. Accordingly we do not find any reason to deviate from the finding of the authorities below. Hence the ground of appeal of the assessee is partly allowed.

The issue raised by the assessee in ground No. 3 is that the learned CIT(A) erred in confirming the addition made by the AO for Rs.3,97,37,485/- as unexplained loans/investments in M/s Neotech Education foundation.

As a result of search and survey operation under section 132 and 133A of the Act at the premises of Sigma Group dated 13th November 2014 in which assessee was also covered and at the premises of M/s Neothech Education Foundation a document bearing page No. 35 of Annexure A-3 was seized. This document was containing the amount of cash and bank under the head ‘sources of funds’ as on 28 February 2014 in the name of PRP and PPP. As per the AO ‘PRP’ stands for Shri Parvin Chandra R Patel and ‘PPP’ stands for Shri PreetParvin Chandra Patel. On the seized document, there was the breakup of bank amount of Rs.14 Lacs and 79 Lacs shown in the name of PRP and PPP respectively. Such breakup of the bank account was containing the details of cheque Nos. along with the dates and amount which was exactly matching with the bank account of the assessee. The bank entries were

Aggrieved assessee preferred an appeal to the learned CIT (A).

The assessee before the learned CIT (A) submitted that there was no corroborative evidence found during the course of search suggesting that the assessee has made cash payment to M/s Neotech Education Foundation. As such, the assessee has only made the payment through the banking channel which was duly recorded. Had there been any payment in cash, there would have been the entry in the books of accounts of M/s Neotech Education Foundation. Thus, the addition has been made by the AO based on surmises and conjecture by holding that the loans/investments was extended/made in the Neotech Education Foundation.

The assessee alternatively also submitted that if alleged investment presumed to be made in cash by him in Neotech Education Foundation. Then setoff of income already shown by way of brokerage income in cash along with the other assessee who are forming the part of the group amounting to Rs.3,21,46,600/- in different assessment years should be provided. As such cash income was available with the assessee for investment.

The assessee without prejudice to the above further contended that he has already shown surplus of cash in the regular books of accounts along with the group in different assessment years amounting to Rs. 81,05,565/- only. As per the assessee, such cash amount was available with him for making the impugned investments and therefore, the same should be adjusted with the alleged amount of cash invested in Neothech Education foundation.

The assessee also submitted that there was protective addition of Rs. 2.98 crore made in its hand on account of on money paid by the M/s Neotech Education Foundation for purchase of land. The payment for alleged on money was made to the vendor of the land before the date as mentioned on page 35 of Annexure A-3 i.e. 28th February 2014. Then, it should be treated that such amount has been paid by him to M/s Neotech Education foundation out of the alleged cash investment/loan of Rs. 3,97,37,485/- only. Therefore, the protective addition of Rs. 1.98 core and 1 crore in A.Y. 2012-13 and 2013-14 respectively should be deleted.

The learned CIT (A) after considering the submission of the assessee deleted the addition to the extent of Rs. 14 Lacs made through banking channel whereas he confirmed the addition of Rs. 3,97,37,485/- for the alleged payment made in cash by observing as under: “21.4 At para 4 of the assessment order for A.Y.2014-15 and at para 3 of the assessment order for A.Y.2015-16, the AO mentions that "Assessee has disclosed Rs.49,00,000/- as undisclosed income for A.Y.2014-15 and 2015/16. Assessee has filed return of income u/s 153A by offering income of Rs.39,00,000/- (which is a typographical error and the amount in the return is Rs.30,00,000/-) in A.Y.2014-15 and Rs.10,00,000/- (which is a typographical error and the amount in the return is Rs.19,00,000/-) in A.Y.2015-16. Hence penalty proceedings u/s 271(l)(c) are initiated in respect of unaccounted income for which disclosure is made". However, the AO has not allowed any set off of any unaccounted/undisclosed expenses on account of the additional income of Rs.30 Lacs and Rs.19 Lacs which becomes available with the appellant. 21.5 In this regard, it is reiterated that I have held in the case of M/s. Neotech Education Foundation that it is not possible to hold the "brokerage income" shown in the returns u/s 139(4) and u/s 153A by some of the Directors and their family members as "disclosure of (unaccounted) income". Reasons are at para 12.10.3 before of this order. However, in view of the submission of the appellant at para 21.3 above, it cannot be denied that the income of the appellant including the "brokerage income" of Rs.30 Lacs in A.Y.2014-15 and of Rs.19 Lacs in A.Y.2015-16 which is in cash are definitely available to the appellant and some of the unaccounted expenses/loans must be telescoped/set off as apparently the appellant has not shown any appropriation of the "brokerage income" (which has been claimed as disclosure of

Being aggrieved by the order of the learned CIT (A), both the assessee and the Revenue are in appeal before us. The assessee is in appeal against the confirmation of the addition of Rs.3,97,37,485/- whereas Revenue is appeal against the direction of learned CIT (A) to allow the credit of Rs. 30 Lacs as declared by the assessee in return of income as brokerage income.

The learned AR before us filed a paper book running from pages 1 to 227 and contended that the document bearing page No. 35 is not an authentic piece of evidence. Hence, the same is not reliable. The addition made on such page is based on surmises and conjecture without having corroborative material. Likewise, such page No. 35 was not confronted during the search to the assessee while recording the statement. Thus the addition has been made hypothetically.

Without prejudice to the above, the benefit of telescoping of cash income by way of brokerage declared by the group of the assessee for Rs. 3,21,41,600/- crores and the amount of cash available in the hands of the assessee should be provided. The learned AR without prejudice to the above also contended that there was the surplus of cash in hand available with him amounting to Rs.81,00,065/- which should

On the contrary the learned DR before us vehemently supported the order of the authorities below.

We have heard the rival contentions of both the parties and perused the materials available on record including the seized documents based on which the addition was made by the authorities below. The 1st question that arises for adjudication whether the document bearing No. 35 of Annexure A-3 for the purpose of the addition is a dumb document. Admittedly, there was not only the amount of cash but also the transaction of banks were recorded in the seized document i.e. containing the date and the cheque numbers of the bank account maintained by the assessee. The bank entries were duly matching with the bank account of the assessee. These bank entries were representing the payment made by the assessee to M/s Neotech Education Foundation which were classified as unsecured loan by M/s Neotech Education Foundation in its books of accounts. It was not also contended by the assessee that the bank entries are the dumb documents. Thus, to the extent of bank entries, there is no iota of doubt on the genuineness of such transactions which were recorded in the same seized document where amount of cash without any details was mentioned at ₹ 3,97,37,485/ only. It is the trite law that seized documents should be read as a whole and not in piecemeal to reach to the logical end. In holding so we draw support and guidance from the order of the coordinate bench of Pune ITAT in case of Dhanvarsha Builders & Developer (P.) Ltd. reported in 102 ITD 375, the relevant portion of the order is extracted herein: “So far as the argument of the assessee that the impugned papers not only showed the receipts but also the expenditure and, therefore, the documentshould be read as a whole and deduction for the expenditure incurred should be given to the assessee while computing undisclosed income was concerned, the seizeddocumentshould be read as a whole if it has to be relied upon. It cannot be read only to the extent it is advantageous to the revenue and not read when it becomes disadvantageous to the revenue. It is an accepted principle of interpretation of documents that they should be read as a whole, as persons of common prudence will read them. They cannot be read in bits and parts to suit the convenience of one party or the other.

Indeed, the presumption as provided above is rebuttable and the onus lies upon the assessee to rebut such presumption based on the cogent reasons as discussed above. However, we note that the assessee has not brought any plausible reason before us against the finding of the learned CIT (A) insofar the presumption of the contents are concerned. Accordingly we conclude that such document is an important piece of evidence which can be used for computing taxable income of the assessee. Accordingly, we conclude that the amount of cash invested in M/s Neotech Education Foundation of Rs.3,97,37,485/ represents the unaccounted income of the assessee.

However, we note that the assessee along with the group has already disclosed income in the income tax returns for the different assessment years in cash by way of brokerage income aggregating to Rs.3,21,41,600/- crores which is undisputed fact. The relevant of such disclosure stands as under:

It is the settled law that the Revenue cannot mix the hot and cold for making the addition to the total income of the assessee which would certain lead to the double addition. As such the Revenue on the one hand cannot treat the cash investments as income of the assessee without adjusting the cash income declared by the assessee in the income tax return. It should be presumed that the cash income disclosed by the assessee is utilized for making investment in Neotech Education Foundation in the absence of any contrary evidence. It is also not in dispute that the assessee along with family members have earned cash income and declared the same as brokerage and there is no finding that such cash income has been utilized for any other purpose. In other words, the cash income disclosed by the assessee was available for the impugned investment in cash. Thus to our considered view, the adjustments to the extent of the cash income declared by the assessee along with the group should be made against such cash investments.

Before parting, we also note that there was the surplus of cash available with the assessee in different assessment years and nothing was brought on record by the revenue suggesting that this cash available in the books of accounts has been utilized for any other purpose. Thus in the absence of any contrary information about the cash available with the assessee in the books of accounts, it could be inferred that such amount in cash has also been utilized for the purpose of making the investment in cash M/s Neotech Education Foundation. Thus, to our understanding the regular cash available with the assessee for Rs. 81,00,065/-, as submitted before us by the assessee, should also be adjusted against the addition of the impugned investment in cash of Rs.3,97,37,485/subject to verification. In this connection, it is also important to note that the assessee is not into any business activity and not maintaining any books of accounts. So, it can be assumed in the absence of any contrary information, such cash in hand was available with the assessee for the investment. The learned DR at the time of hearing has also not brought anything contrary to the arguments advanced by the learned AR appearing on behalf of the assessee.

At is juncture, it is equally pertinent to note that there was addition of ₹ 2.98 crores (being 1.98 crore and 1 crore in A.Y. 2012-13 and 2013-14) on substantive basis in the hands of M/s Neotech Education Foundation and protective basis in the hands of assessee in respective assessment year i.e. 2012-13 and 2013-14. It was alleged by the Revenue that there was the cash payment against the purchase of land acquired by M/s Neotech Education Foundation which was not recorded the books of accounts in the respective assessment years. In this regard, we hold that once the addition on substantive basis to the tune of Rs.3,97,37,485/ representing the investment in cash by the assessee has been made by us, there cannot be any other addition either in the hands of M/s Neotech Education Foundation or other directors on substantive/protective basis. In other words, the payment of Rs.2.98 crores represents the application of the income added in the hands of the assessee. As such, the investment of Rs.2.98 crores has been made out of the addition made in the hands of the assessee for Rs.3,97,37,485/. Thus if any addition is sustained in

However, before we part with the matter, we are inclined to deal with one procedural issue as well. The payment of Rs. 2.98 crores for the acquisition of the land was made in the assessment years 2012-13 and 2013-14 whereas the income of Rs.3,97,37,485/ crores has been added in the hands of the assessee in the assessment year 2014-15. Thus a question arises how to establish the link between the income added in the hands of the assessee viz a viz the cash payment made by M/s Neotech Education Foundation as these transactions pertain to different assessment years. In this regard, we note that the seized document bearing page No. 35 contains the position of investment made by the assessee in cash as on 28 February 2014 and it does not establish the fact that this cash income was generated by the assessee in the year under consideration. Thus, in the absence of necessary information, we can safely presume that this income was earned by the assessee over the period of time which was invested inM/s Neotech Education Foundation over the period. We are presuming so for the reason that there is no other information available on record except that the cash income of Rs.3,97,37,485/ was invested in M/s Neotech Education Foundation.

In view of the above and after considering the facts in totality, we direct the AO to allow the adjustments for Rs. 3,21,41,600/- and Rs. 81,00,065 lacs against the addition made by him for the investment in cash in M/s Neotech Education Foundation for Rs.3,97,37,485/ only. The adjustment of Rs. 81,00,065/- is subject to verification. Effectively, if the availability of cash for Rs.81,00,065/- is found based on the documentary evidence, there cannot be addition of any income in the hands of the assessee. Hence the ground of appeal of the assessee is partly allowed in terms of the above.

In the result, the appeal of the assessee party allowed.

Coming to ITA number IT(SS) No. 74/Ahd/2019, an appeal by the Revenue for A.Y. 2014-15.

The ld.counsel for the assessee, at the outset submitted that total tax effect involved in disputed aggregate additionis below Rs.50 Lacs, and therefore, the appeal of the Revenue is not maintainable in terms of recent CBDT Circular which has prohibited the Department not to file the appeal before the Tribunal, where the tax effect is below Rs.50 Lacs. Therefore, appeal of the Revenue is liable to be dismissed at the threshold as not maintainable. However, the ld.DR did not dispute the same, but left the issue to the Bench to pass appropriate order in accordance with law.

We find that admittedly total tax effect in appeal of the Revenue is below Rs.50 Lacs, and therefore, keeping in view the above CBDT circular and provisions of section 268A of the Income Tax Act, we are of the view that the present appeal of the Revenue deserve to be dismissed at the threshold. It is accordingly dismissed.

However, it is observed that in case on re-verification at the end of the AO it can be demonstrated that the tax effect on the disputed addition is more, or Revenue’s case falls within the ambit of exceptions provided in the Circular, then the Department will be at liberty to approach the Tribunal for recall of this order. Such application should be filed within the time period prescribed in the Act

In the result, the appeal of the Revenue is dismissed due to low tax effect.

Coming to ITA No. 299/Ahd/2019, an appeal by the assessee for A.Y. 2015-16.

The assessee has raised the following grounds of appeal: “1.0 On the facts and in the circumstances of your appellant's case and in law, the Id. CIT (A) has erred in treating agriculture income to the extent of Rs.4,50,000/- as income from unexplained other sources. (Para 22.1 on page 156/157 of the appellate order). 2.0 (a) On the facts and in the circumstances of your appellant's case and in law, the Id. CIT (A) has erred in confirming addition as unexplained credits to the extent of Rs.33,50,000/- in various banks on the ground that for various deposits alleged as received from parties onus u/s 68 has not been discharged by the appellant. (Para 22.5 on page 158/159 of the appellate order). (b) On the facts and in the circumstances of your appellant's case and in law, the Id. CIT (A) has erred in confirming addition u/s 68 of the Act as unexplained credits to the extent of Rs.33,50,000/- in various banks, since appellant submits that bank statements/pass books are not books of accounts as envisaged under the provisions of section 68 of the Act. (Para 22.5 on page 158/159 of the appellate order). 3.0 On the facts and in the circumstances of your appellant's case and in law, the Id. CIT (A) has erred in confirming addition as investment from undisclosed sources to the extent of Rs.46,00,000/- in purchase of agricultural land. (Para 22.7 and 22.9 on page 159/160/161 of the appellate order). 4.0 On the facts and in the circumstances of your appellant's case and in law, the Id. CIT (A) has erred in confirming addition as unexplained investments/payments of Rs.5,11,000/- from undisclosed sources (Para 22.8 on page 160 of the appellate order).”

The first issue raised by the assessee is that the learned CIT(A) erred in confirming the disallowances of agricultural to the extent of Rs. 4.5 Lacs.

At the outset we note that the issues raised by the Assessee in its ground of appeal for the AY 2015-16 are identical to the issues raised by the assessee in IT(SS) No. 43/AHD/2019 for the assessment year 2014-15. Therefore, the findings given in IT(SS) No. 43/AHD/2019 shall also be applicable for the year under consideration i.e. AY 2015-16. The appeal of the assessee for the assessment year 2014-15 has been decided by us vide paragraph No. 144 to 145 of this order partly in favour of the assessee. The learned AR and the DR also agreed that whatever will be the findings for the assessment year 2014-15 shall also be applied for the year under consideration i.e. AY 2015-16. Hence, the grounds of appeal filed by the assessee is partly allowed.

The second issue raised by the assessee is that learned the CIT (A) erred in treating the sum of Rs.33.50 lacs as unexplained cash credit out of the total amount of Rs.13,92,28,464/ credited in different bank accounts.

The assessee carried the matter to the learned CIT (A).

Thus the learned CIT (A) was pleased to confirm the addition of Rs.33.50 Lacs. The ground of appeal of the assessee was partly allowed.

Being aggrieved by the order of the learned CIT (A), both the assessee and Revenue are in appeal before us. The assessee is in appeal for confirmation of Rs. 33.5 Lacs whereas the Revenue is in appeal for the deletion of Rs. 4.3 crore. The relevant grounds of the Revenue’s appeal read as under:

The learned DR at the time of hearing submitted before us submitted that ground of appeal is for Rs. 4.3 crores but at the time of filling of appeal it was inadvertently written as Rs. 2,89,30,469.00

The learned AR before us contended that the assessee has furnished all the details of the parties from whom the amount was received such as PAN, confirmation and bank statement. Thus, the assessee has discharged the onus by furnishing the necessary details. Accordingly, no addition is warranted.

On the contrary the learned DR before us submitted that the assessee failed to file the copies of the income tax return of the parties who have given loan to the assessee. Both the learned AR and the DR vehemently supported the order of the authorities below to the extent favourable to them.

We have heard the rival contentions of both the parties and perused the materials available on record. It is the trite law that the primary onus lies upon the assessee to justify his stand. Thus, it was the duty of the assessee to explain the source of credit entries appearing in the bank account to the tune of ₹ 33.50 Lacs. But we find that the assessee has failed to do so in respect of the party namely Shri SachinAshokbhai Patel. Accordingly, we confirm the addition of ₹ 6,50,000 representing the amount received from Shri SachinAshokbhai Patel.

With respect to the remaining parties, we note that the assessee has furnished the confirmation along with the PAN and in some of the cases bank statement. Thus we hold that the assessee has discharged the primary onus imposed under section 68 of the Act. Considering the profile of the assessee, the value of loan is not of significant amount which would create doubt on the genuineness of such loan. Had there been any doubt about the genuineness of the loan, the Revenue should have verified the same by issuing notice under section 133(6) of the Act. But we note that the authorities below have not exercised such powers. Accordingly, we are not impressed with the finding of the authorities below to the extent of the loan shown by the assessee for Rs. 27 Lacs. Accordingly, we set

With respect to the issue raised by the revenue, we find that the AO in his remand report has not pointed out any defect with respect to the onus imposed upon the assessee under the provisions of section 68 of the Act. Accordingly we are of the view that, once the assessee has discharged the onus by furnishing the necessary details then the onus is shifted upon the revenue to reject the submission of the assessee based on the cogent reasons. But we note that the AO failed to exercise the powers conferred under the provisions of section 133(6)/131 of the Act by issuing notices upon the loan parties for taking the confirmation. The learned DR at the time of hearing has also not brought anything on record contrary to the finding of the learned CIT-A. Hence, we do not find any reason to interfere in the finding of the learned CIT-A. Hence the ground of appeal of the Revenue is hereby dismissed.

The third issue raised by the assessee is that the learned CIT(A) erred in confirming the order of the AO by sustaining the addition of Rs.46 Lacs out of the total addition of Rs. 50 Lacs made by the AO.

As per seized document bearing page No. 11 and 12 of annexure A1, the assessee along with his wife purchased a piece of land for a sum of Rs. 1 crores. The share of the assessee was 50% in such investment of land. But the assessee has not made any satisfactory explanation about the source of investment. Thus, the AO made the addition of Rs.50 Lacs as unexplained investment under section 69C of the Act to the total income of the assessee.

Aggrieved assessee preferred an appeal to the learned CIT(A).

The assessee furnished the details of the payment for Rs.37.5 Lacs in connection with the purchase of land.The learned CIT (A) called for the remand report from the AO who submitted that there were cash withdrawals from the bank but there was no clarity that the same has been utilized for the purpose of making

The assessee in his rejoinder submitted that he has paid along with the co- owner the token money of Rs.8 Lacs and reaming amount through postdated cheques and till a total of Rs. 37.5 Lacs only in cleared. The balance amount of Rs. 62.25 Lacs is still payable. To this effect, assessee has furnished the confirmation from the vendor of the land in the form of the affidavit. However, the learned CIT (A) confirmed the addition of Rs.46 Lacs by observing as under:

Being aggrieved by the order of the learned CIT-A, the assessee is in appeal before us.

The learned AR for us submitted that the payment has been made to the vendor after withdrawing the cash the bank. There is no information available with the Revenue indicating that the withdrawal of cash has been utilized for any other purpose. Thus, there cannot be any doubt with respect to the payment of Rs.37.50 Lacs which was made after the withdrawal of cash from the bank. The assessee for the balance amount has contended that it is outstanding. To this effect, confirmation from the vendor was also filed which is available on record.

On the contrary, the learned DR before us vehemently supported the order of the authorities below.

We have heard the rival contentions of both the parties and perused the materials available on record. The issue in the present case relates whether assessee has made payment from the unaccounted sources for the purchase of the property along with his wife. As per the assessee, total value of the land stands at Rs.1 crores only. Part of the same has been paid for Rs.37.50 Lacs and the balance amount is still remaining outstanding. Payment for the amount of Rs.37.5 Lacs was made after withdrawing the money from the bank. However, the AO did not believe the contention of the assessee for the reason that there was no evidence available with the assessee suggesting that money after withdrawal from the bank was paid to the vendor. It was also alleged by the revenue that as per sale deed dated 24 September 2014, the entire amount of payment should have been made by the assessee before the registration of sale deed whereas the payment has been made by the assessee post registration. This finding of the authorities below can create a suspicion about the fact that the assessee has made the payment from undisclosed sources to the vendor. But such suspicion however strong it cannot substitute the

The fourth issue raised by the assessee is that the learned CIT (A) erred in confirming the addition made by the AO for Rs. 5.11 Lacs as unexplained investment.

Aggrieved assessee preferred an appeal to the learned CIT (A) who confirmed the order of the AO by observing that the assessee has not denied to have made the payment of Rs.5.11 Lacs for the purchase of the land which is also evident from the seized document bearing page No. 1-2 of annexure BS-1. However, the assessee failed to justify the source of payment i.e. from which bank such amount was transferred.

Being aggrieved by the order of the learned CIT-A, the assessee is in appeal before us.

The learned AR before us submitted that the payment of Rs.5.11 Lacs was paid to the banking channel and therefore no addition is warranted. On the contrary the learned DR before us vehemently supported the order of the authorities below.

We have heard the rival contentions of both the parties and perused the materials available on record. It is the trite law that the primary onus lies upon the assessee to justify his stand. Thus, it was the duty of the assessee to explain the source of amount which was utilised for making token money for purchase of land. We note that the assessee failed to provide the details of bank or cheque from where fund was transferred. Indeed, the primary onus lies upon the assessee to produce the necessary evidences in support of amount paid. The assessee was afforded enough opportunities to bring the necessary details on record during the assessment and remand proceedings.Thus, in view of the above we hold that the assessee failed to discharge the onus imposed upon him under the provisions of section 69B of the Act. Hence, we are not inclined to interfere in the order of learned CIT-A., thus the ground of appeal of the assessee is dismissed

In the result, the appeal of the assessee partly allowed.

Coming to the ITA No. 392/AHD/2019, an appeal by the Revenue for A.Y. 2015-16.

The Revenue has raised the following grounds of appeal: “1. On the facts and in the circumstances of the case and in law, the ld.CIT(A) has erred in deleting the addition of Rs.2,89,30,469/- (wrongly mentioned actual Rs.4.30 crores) as unexplained credit entries in the bank account, when the assessee failed to prove creditworthiness of lender and genuineness of transaction.” 2. On the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in allowing set off of Rs.19,00,000/- of brokerage Income, when the assessee could not substantiate the same with documentary evidence and there is no nexus between the brokerage income and the addition made on account of Loan/investment. 3. It is, therefore, prayed that the order the Ld. CIT(A)-12, Ahmedabad may be set aside and that of the AO maybe restored to the above extent. 4. The appellant craves leave to add, alter, amend and/or withdraw any ground(s) of appeal either before or during the course of hearing of the appeal.”

At the outset we note that the issue raised by the Revenue in ground 1 is adjudicated along with assessee appeal bearing ITA No. 299/Ahd/2019 vide paragraph number 197 to 199 of this order where we decided the issue against the Revenue. For the detailed discussion please refer the aforementioned paragraph. Accordingly, the ground of appeal by the Revenue is hereby dismissed.

The next issue raised by the Revenue is that the learned CIT(A) erred in setting off the brokerage income of Rs. 19 with unexplained investment.

At the outset we note that the issue is connected with addition of Rs. 3,97,37,485/- on account of unexplained investment made in A.Y. 2014-15where the assessee has sought setoff brokerage income of Rs. 3.21 crore in cash offered by the assessee along with other persons of the group in different assessment years. The present amount of Rs. 19 Lacs offered by the assessee is part of such disclosure of 3.21 crores. It is important here to note that we while the adjudicating the issue forthe addition of Rs. 3,97,37,485/- in AY. 2014-15 has allowed the setoff Rs. 3.21 core vide paragraph number 172 to 179 of this order. Thus the issue is covered against the revenue. Hence, the ground of appeal raised by the Revenue is dismissed.

The other issue raised by the revenue is general in nature. Hence the same is dismissed being infructuous. 221. In the result appeal of the Revenue is dismissed.

Coming to ITA No. IT(SS) No. 27/AHD/2019 and 31/AHD/2019 appeals by the Assessee for A.Y. 2012-13 and 2013-14

The only issue raised by the assessee in both the AYs is that the learned CIT (A) erred in making the protective addition of Rs. 1 crore and 1.98 crores on account of unexplained investment.

At the outset we note that the addition of Rs.1 crores and 1.98 crores on account of unexplained investment was made on substantive basis in the hands of M/s Neotech Education Foundation and protective basis in the hands of directors. The assessee is one of the director in M/s Neotech Education Foundation. It was alleged by the Revenue that there was the cash payment against the purchase of land by M/s Neotech Education Foundation which was not recorded in the books of accounts. In this regard, we find that once the addition on substantive basis to the tune of Rs. 3,97,37,485/ representing the investment in cash by the another director namely Shri Pravin C Patel has been made by us in the AY 2014-15, there cannot be any other addition either in the hands of M/s Neotech Education Foundation or other directors on substantive/protective basis. In other words, the payment of ₹ 1 and 1.98 crores represents the application of the income added in the hands of Shri Pravin Patel. As such, the investment of Rs.1 crores and 1.98 crores has been made out of the addition made in the hands of Shri Pravin Patel for Rs.3,97,37,485/. Thus if any addition is sustained in the hands of any other party, that would lead to the double addition which is not desirable under the provisions of law. Thus, we set aside the order of the ld. CIT-A and direct the AO to delete the addition made by him.

In the result both the appeals of the assessee are allowed.

Coming toIT(SS) No. 32/Ahd/2019, an appeal by the assessee for the AY 2013-14

The assessee has raised following grounds of appeal: “1.0 On the facts and in the circumstances of your appellant's case and in law, the Id. CIT (A) has erred in holding that the addition of Rs.1,00,00,000/- be ma.de as unexplained investment in the hands of the appellant on protective basis as one of the directors of Neotech Education Foundation despite the said addition being made by the Ld AO and confirmed by the LdClT(A) on substantive basis in the hands of the said Neotech Education Foundation, by holding thai appellant has joint and several liability along with other Directors. (Para 16,4 on page 72 of the CIT(A)’s order), 2.0 Your appellant craves leave to add to and / or to amend / alter any or all of the ground(s) herein above raised.”

The only issue raised by the assessee is that the learned CIT (A) erred in making the protective addition of Rs. 1 crore on account of unexplained investment.

At the outset we note that the addition of Rs.1 crores on account of unexplained investment was made on substantive basis in the hands of M/s Neotech Education Foundation and protective basis in the hands of directors. The assessee is one of the director in M/s Neotech Education Foundation. It was alleged by the Revenue that there was the cash payment against the purchase of land by M/s Neotech Education Foundation which was not recorded in the books of accounts. In this regard, we find that once the addition on substantive basis to the tune of Rs.3,97,37,485/ representing the investment in cash by the another director namely Shri PravinCPatel has been made by us in the AY 2014-15, there cannot be any other addition either in the hands of M/s Neotech Education Foundation or other directors on substantive/protective basis. In other words, the payment of ₹ 1 crores represents the application of the income added in the hands of Shri Pravin Patel. As such, the investment of Rs.1 crores has been made out of the addition made in the hands of Shri Pravin Patel for Rs.3,97,37,485/. Thus if any addition is sustained in the hands of any other party, that would lead to the double addition which is not desirable under the provisions of law.

In the result appeal of the assessee is allowed.

Coming to IT(SS) No 28/Ahd/2019 an appeal by the assessee for A.Y. 2014-15

The assessee has raised following grounds of appeal: “1.0 On the facts and in the circumstances of your appellant's case and in law, the Id. CIT (A) has erred in treating agriculture income to the extent of Rs. 2,00,000/- as income from unexplained other sources and further erred in holding that this addition shall invite consequences of Sec. 115BBE of the Act. (Para 16,3 on page 74 of the appellate order). 2.0 On the facts and in the circumstances of your appellant's case and in law, the Id. CIT (A) has erred in confirming addition as unexplained credits to the extent of Rs.2,68,063/- in ICICI Bank on the ground that appellant has failed to give the details of redemption of mutual fund. (Para 17.4 on page 74 of the appellate order). 3.0 On the facts and in the circumstances of your appellant's case and in law, the Id. CIT (A) has erred in confirming addition as unexplained credits to the extent of Rs.25,000/- in

The first issue raised by the assessee that the learned CIT-A erred in holding the agricultural income shown by the assessee as income from undisclosed sources to the extent of Rs. 2 Lacs out of the total agricultural income of Rs. 2,48,600/-.

At the outset we note that the issues raised by the Assessee in its ground of appeal for the year under consideration is identical to the issues raised by the assessee’s husband Shri Pravin Patel in IT(SS) No. 43/AHD/2019 for the assessment year 2014-15. Therefore, the findings given in IT(SS) No. 43/AHD/2019 shall also be applicable in case of the assessee on hand. The appeal of Shri Pravin Patel for the assessment 2014-15 has been decided by us vide paragraph No. 144 to 145 of this order partly in favour of the assessee. The learned AR and the DR also agreed that whatever will be the findings given in case of Shri Pravin Patel shall also be applied for the assessee. Hence, the grounds of appeal filed by the assessee is partly allowed.

The 2nd issue raised by the assessee is that the learned CIT (A) erred in confirming the addition of Rs. 2,68,063/- and Rs. 25,000/- as unexplained cash credit under section 68 of the Act out of the total amount of Rs. 28,29,777/-.

Aggrieved assessee preferred an appeal to the learned CIT (A) who partly confirmed the addition made by the AO during the assessment proceedings. As per the learned CIT (A) there was the credit entry of Rs. 2,68,063/- in the ICICI bank account of the assessee dated 23rd July 2013 which was claimed by the assessee as redemption of the mutual fund. But the assessee failed to produce any documentary evidence justifying that the impugned amount of credit entry of Rs. 2,68,063/- represents the redemption of mutual fund. Likewise, there was the credit entry of Rs.25,000/- in the bank account of the assessee as on 8th March 2014 which was claimed by the assessee account opening fund transfer from RBS bank account no. 574901. However, the assessee failed to produce any documentary evidence in support of his contention. Therefore the learned CIT (A) confirmed the same. Hence the ground of appeal of the assessee was partly allowed by the learned CIT (A).

Being aggrieved by the order of the learned CIT, the assessee is in appeal before us.

The learned AR before us submitted that all the transactions were carried out through the banking channels. Therefore, no addition is warranted.

On the contrary, the learned DR before us vehemently supported the order of the authorities below.

We have heard the rival contentions of both the parties and perused the materials available on record. It is the trite law that the primary onus lies upon the assessee to justify his stand. Thus, it was the duty of the assessee to explain the source of credit entries appearing the bank account to the tune of Rs.2,68,063/- and Rs. 25,000/- only.

As regards to addition of Rs.25,000/-, we note that the assessee has submitted that it represents fund transferred from the RBS bank. Admittedly, the internal transfer of the fund does not represent the income. But it has to be proved based on the documentary evidence. However, we note that the AO in his remand report has submitted that no detail in relation to the amount transferred from RBS

Regarding the addition of Rs.2,68,063/-, we note that the assessee failed to provide the details of mutual fund which have been redeemed. Indeed, the primary onus lies upon the assessee to produce the necessary evidences in support of her claim. The assessee was afforded enough opportunities to bring the necessary details on record during the assessment and remand proceedings.Thus, in view of the above we hold that the assessee failed to discharge the onus imposed upon him under the provisions of section 68 of the Act. Hence, we are not inclined to interfere in the order of learned CIT-A to the extent addition confirmed for Rs. 2,68,063/-. Thus the grounds of appeal of the assessee is partly allowed.

The third issue raised by the assessee is that the learned CIT(A) erred in confirming the addition made by the AO for Rs.1 crore on protective basis ignoring the fact that there was no addition made on substantive basis in the hands of M/s Neotech Education Foundation in the year under consideration.

At the outset the learned AR contended that there was no substantive addition with respect to Rs. 1 crore in the hands of M/s Neotech Education Foundation for the year under consideration.Therefore, the question of making the addition on protective basis in the hands of the assessee does not arise. On the other hand, the learned DR vehemently supported the order of the authorities below.

We have heard the rival contentions of the parties and perused the materials available on record. The question of making protective and substantive assessment

In the result of the assessee is partly allowed.

Coming to ITA No 179/Ahd/2019 an appeal by the assessee for A.Y. 2015-16

The assessee has following grounds of appeal:

The first issue raised by the assessee that the learned CIT-A erred in holding that the agricultural income shown by the assessee as income from undisclosed

At the outset we note that the issues raised by the Assessee in its ground of appeal for the A.Y. 2015-16is identical to the issues raised by the assessee in IT(SS) No. 28/AHD/2019 for the assessment year 2014-15. Therefore, the findings given in IT(SS) No. 28/AHD/2019 shall also be applicable A.Y. 2015-16. The appeal of the assessee for the assessment 2014-15 has been decided by us vide paragraph No. 234 of this order partly in favour of the assessee. The learned AR and the DR also agreed that whatever will be the findings for the assessment year 2014-15 shall also be applied for the year under consideration i.e. AY 2015-16. Hence, the grounds of appeal filed by the assessee is partly allowed.

The second issue raised by the assessee is that the learned CIT(A) erred in confirming the order of the AO by sustaining the addition of ₹ 46 Lacs out of the total addition of Rs.50 Lacs made by the AO.

At the outset, we note that the issues raised by the Assessee in its ground of appeal for year under consideration is identical to the issue raised by the assessee’s husband Shri Pravin Patel in ITA No. 299/AHD/2019 for the assessment year 2015- 16. Therefore, the findings given in ITA No. 299/AHD/2019 shall also be applicable in case of the assessee on hand. The appeal of Shri Pravin Patel for the assessment 2015-16 has been decided by us vide paragraph No. 208 of this order in favour of the assessee. The learned AR and the DR also agreed that whatever will be the findings given in case of Shri Pravin Patel shall also be applied to the assessee. Hence, the ground of appeal filed by the assessee is partly allowed.

In the result appeal of the assessee is partly allowed.

Coming to IT(SS) No. 68/Ahd/2019, an appeal by the Revenue for the A.Y. 2015-16.

The Revenue has raised the following grounds of appeal:

The interconnected issue raised by the revenue is that the learned CIT (A) erred in deleting the addition made by the AO for Rs. 1,24,00,000/- and Rs. 59,50,225/- representing the deposits in the bank namely ICICI and HDFC treating the same as unexplained cash credit.

There were credit entries appearing in the bank account of the assessee namely ICICI bank and HDFC Bank amounting to Rs. 1,37,55,954/- and Rs. 2,17,00,225/- respectively which were not explained by the assessee during the assessment proceedings. Therefore, the AO treated the same as unexplained cash credit under section 68 of the Act and added to the total income of the assessee.

The assessee carried the matter before the learned CIT-A, who deleted the addition made by the AO by observing as under: “18.5 As to the credit entries in the bank statement of ICICI bank, it is seen that a deposit of Rs.1,24,00,000/- in ICICI bank account has been claimed by the appellant to be loan from one Shri PankajIshwarbhai Patel who has been claimed to be an NRI. It is the case of the AO that no loan confirmation was filed by the appellant. It is the case of the appellant that the said loan was received in cheque and has been repaid by the appellant through banking channel. Though it is a settled principle of law that mere transaction in cheque and the claim of return are not sufficient to hold that the assessee has discharged the onus cast u/s.68 of the Act, however, the appellant has submitted the copy of bank statement of Shri PankajIshwarbhai Patel (ICICI Bank S/B A/c 0830175126) which evidences the identity and capacity of the lender. The lender is claimed to be an NRI and therefore not a filer of ITR in India. During the appeal proceedings, the appellant has verbally narrated the reasons of hostile attitude of the lender which is coming in way of obtaining the loan confirmation of the lender and that because of the same bad relationship the loan had to be repaid also. According to me, the furnishing of loan confirmation appears beyond her capacity now and in the circumstances, it would not be fair to hold that the loan was non-genuine merely in absence of loan confirmation and IT return. It was possible for the AO to obtain the response of Shri PankajIshwarbhai Patel and to

Being aggrieved by the order of the learned CIT (A), the Revenue is in appeal before us.

The learned DR before us contended that the assessee failed to discharge the onus imposed under section 68 of the Act. The ld. DR vehemently supported the order of the AO.

On the other hand, the learned AR before us vehemently supported the order of the ld. CIT-A.

We have heard the rival contentions of both the parties and perused the materials available on record. From the preceding discussion, the issues involved in the appeal before us can be categorized in two compartment.

With respect to credit entries appearing in the bank account of the assessee amounting to Rs.59 Lacs, we find that the AO in his remand report has not pointed out any defect with respect to the onus imposed upon the assessee under the provisions of section 68 of the Act. Accordingly we are of the view that, once the assessee has discharged the onus by furnishing the necessary details then the onus is shifted upon the revenue to reject the submission of the assessee based on the cogent reasons. But we note that the AO failed to exercise the powers conferred under the provisions of section 133(6)/131 of the Act by issuing notices upon the loan parties for taking the confirmation. The learned DR at the time of hearing has

In the result appeal filed by the Revenue is dismissed.