THE DCIT CENTRAL CIRCLE-1 , RAJKOT vs. SHRI SHAMJIBHAI SADHABHAI KANGAD, GANDHIDHAM-KUTCH

(2) The assessee has also raised additional grounds of appeal in two assessment years (AYs) 2013-14, and 2014-15, which reads as follows: "On the facts and in the circumstances of the case, and in law, the Id. CIT(A), erred in rejecting ground of appeal related to issuance of notice u/s 153A of the Income-tax Act, 1961 [hereinafter referred as to the "Act"] during the pendency of earlier assessment proceeding, initiated u/s 147 of the Act. Therefore, two parallel proceeding initiated by the assessing officer was procedurally invalid and illegal which vitiates the entire assessment."

(B). Grounds of appeals, raised by Assessee and Revenue. Ground No.1 - The Learned Commissioner of Income-tax (Appeals)-11, [CIT(A)], erred on facts as also in law in rejecting assessees plea that no addition could have been made in the order passed u/s 153A of the Act, in absence of there being incriminating material found from the assessee. The order passed making addition without there being any incriminating materials may kindly be deleted. Ground No.2 - The learned CIT(A)erred on facts as also in law in not appreciating the fact that the seized data/documents were found from the premises of third party, therefore addition on the basis of the said document cannot be made in the hands of the assessee u/s 153A of the Act. The assessing officer may kindly be directed to delete the addition on this ground.

( This ground covers, IT(SS) No.15/RJT/2022 for A.Y. 2015-16, IT(SS) No.16/RJT/2022 for A.Y. 2016-17, IT(SS) No.17/RJT/2022 for A.Y. 2017-18, IT(SS) No.18/RJT/2022 for A.Y. 2018-19, IT(SS) No.19/RJT/2022 for A.Y. Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 5 2019-20, IT(SS) No.20/RJT/2022 for A.Y. 2020-21, and for A.Y. 2021-22.)

Ground No.3 - The Id. CIT(A) erred on facts as also in law in confirming the addition made of Rs.3,20,19,238/- by estimating profit at the arbitrary rate of 20% on the alleged unaccounted receipt of Rs.16,00,96,192/-on the basis of dumb data/documents stated to have been recovered from the premises of third party. The addition retained is totally unjustified and uncalled for and the same may kindly be deleted”.

(This ground covers, IT(SS) No.15/RJT/2022 for A.Y. 2015-16, IT(SS) No.16/RJT/2022 for A.Y. 2016-17, IT(SS) No.17/RJT/2022 for A.Y. 2017-18, IT(SS) No.18/RJT/2022 for A.Y. 2018-19, IT(SS) No.19/RJT/2022 for A.Y. 2019-20, IT(SS) No.20/RJT/2022 for A.Y. 2020-21, and for A.Y. 2021-22.)

Ground No.4 -Assessee`s appeal - The Id. CIT(A) erred on facts as also in law in not deleting on merit addition made of Rs. 3,40,40,206/-, as alleged unexplained money u/s. 69A of the Act on the alleged ground of unaccounted cash generated by the assessee. The addition retained is totally unjustified and uncalled for and may kindly be directed to delete the addition made. Ground No. 4- Revenue's cross grounds on the same issue in appeal: (a)On the facts and in the circumstances and in law, the Id. CIT(A), failed to appreciate the facts on the case and wrongly allowed unexplained money to be set off from current year profit. (b)On the facts and in the circumstances and in law, the Id.CIT(A), fails to appreciate the facts of the case, that the credit of debit balances of loan accounts was not allowable considering that no details whatsoever with respect to the balances have been provided by the assessee during the assessment proceedings. (c) On the facts and in the circumstances and in law, the Id. CIT(A) has erred in granting relief of Rs. 3,40,40,206/- stating that the debit balances of the loan proceeds should have been allowed to set off against the addition made for the credit balances of loan proceeds for all the year involved, and for remaining balances also the source to the extent of amount of corresponding unaccounted business receipts for the respective years has been treated as explained and the balance amounts, if any, only shall be allowed to be treated as unexplained income u/s.69A of the Act.

Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 6 Ground No.5. In Revenue`s appeal in IT(SS) No.15/RJT/2023 for A.Y. 2019-20,(with reference to Shri Hetab Shamjibhai Kangad) reads as follows: “On the facts and on the circumstances of the case and in law, learned Commissioner(Appeals) has erred in holding that the investment of Rs.1,24,90,000/- has already concluded in the case of Shri Shamjibhai S. kangad, father of the assessee, without appreciating the fact that the addition in the case of father was made out of seized data for the period from 01.04.2010 to 31.03.2017, but the addition in the case of the assessee, was made for assessment year 2019–20, relevant for financial year 2018-19. (This issue covers ground Nos.1 to 4 in IT(SS) No.15/RJT/2023 for A.Y. 2019- 20)

Ground No.6- In Revenue`s appeals: (a) On facts and on the circumstances of the case and in law, the learned Commissioner (Appeals) erred in ignoring that there were parallel books of accounts maintained by the assessee in tally software, which was found and impounded during the course of search, on which the assessing officer has relied upon. (b) Ld. CIT(A), failed to apricate the facts of the case and in law, that one of the key person of the group concerns Shri Mihir Kangad in his statement recorded u/s.132(4) and has agreed unaccounted transaction have become happened and admitted that the transactions in the tally files, though complex but made on the instructions of members of Neelkanth group and correlation between the transaction recorded in tally file with independently verifiable third- party evidences proves that the entries recorded in the evidences seized are, true, correct and independently verifiable. (c) Assessing officer on the facts and in the circumstances of the case and in law, has duly investigated and applied his mind on the report of the DDIT, Investigation wing and after satisfying himself made the assessment on the basis of cogent material and relevant evidence on record.

(The above grounds of appeals cover, in Revenue`s appeal in IT(ss) A No. 21/RJT/2022 for AY 2014-15, IT(ss) No. 22/RJT/2022 for AY 2016-17, IT(ss) No. 23/RJT/2022 for AY 2017-18 and AY 2021-22)

s, one by one, as follows.

6. First, we shall adjudicate, additional grounds raised by the assessee on technical issue, which are reproduced below for ready reference:

Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 7 (A). Additional grounds of appeal of assessee, on Technical issue, raised by the assessee, before the Tribunal. (1). The assessee has raised additional grounds of appeal in three assessment years (AYs) 2012-13, 2013-14 and 2014-15, which reads as follows: “On the facts and in the circumstances of the case, and in law, the Id. CIT(A), erred in rejecting assessees` plea that notice u/s 153A of the Act could not be issued under fourth proviso of said section in absence of any "asset" representing the alleged undisclosed income.”

(2) The assessee has also raised additional grounds of appeal in two assessment years (AYs) 2013-14, and 2014-15, which reads as follows: "On the facts and in the circumstances of the case, and in law, the Id. CIT(A), erred in rejecting ground of appeal related to issuance of notice u/s 153A of the Income-tax Act, 1961 [hereinafter referred as to the "Act"] during the pendency of earlier assessment proceeding, initiated u/s 147 of the Act. Therefore, two parallel proceeding initiated by the assessing officer was procedurally invalid and illegal which vitiates the entire assessment."

7. Learned Counsel for the assessee, submitted that above legal grounds on technical issue, have been raised by the assessee, before the Tribunal. These above legal grounds were also raised before the learned CIT (A), by the assessee. The ld. Counsel stated that the facts, relating to above two additional grounds, are in the assessment order, and since these are purely legal issues and facts pertaining to these legal issues are already on record, therefore, in the interest of justice, these legal grounds may be admitted by the Tribunal for adjudication.

8. On the other hand, learned CIT-DR for the Revenue, opposed the prayer of the assessee to admit these legal grounds and stated that since the assessee has not raised these legal grounds before the authorities below, therefore, at this stage, these legal grounds should not be admitted.

36. The Learned Counsel submits before us that these additional grounds of appeal

may be admitted, as it is being purely a legal issue and all facts are already on record. On the other hand, Learned DR for the Revenue pleaded that assessee did not raise these legal issues during the appellate proceedings, before the ld CIT(A), therefore, at this stage the assessee can not raise additional ground on legal issue. We note that the facts relating to additional grounds on legal issues were there before the ld.CIT(A). Hence, we find that it is purely a legal issue and all facts are already on record which goes to the root of the matter and no further inquiry is required for deciding the same as all facts are already on record. Therefore, in the light of ratio laid down by the Hon'ble Supreme Court in the case of National Thermal Power Company Ltd., vs. CIT (1998) 229 ITR 382 (SC), we admit the additional grounds, on legal issues, raised by the assessee.

10. The relevant material facts, as culled out from the material on record, are as follows. The assessee before us, (Shri Shamjibhai Sadhabhai Kangad) is an individual and is engaged in various business concerns in the capacity of proprietor, partner, director, and member with other family members of Kangad Family. All the member of the family are collectively engaged in the business, like Salt Manufacturing, Civil Construction, Water Supply, Transportation, Coke Manufacturing etc. The group is popular by the name of “Neelkanth Group”. Main business concerns of the group include Neelkanth Salt Supply, Neelkanth Enterprise, Neelkanth Chem Industries, Neelkanth Coal Manufacturing Pvt Ltd, Neelkanth Impex, Ahir Salt and Allied Products Pvt Ltd, Patel Construction Company, One Chemical Company, Ayush Procon Private Limited, Kandla Packaging Private Limited, Green Trading Enterprise, Omkar Salt Works, Shri Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 9 Pingleshwar Salt Industries etc. On 10.11.2020, a search & seizure operation was initiated by the income tax department and search were carried out at 41 premises (including 21 lockers) and a survey action u/s 133A of the Act. All the major persons and business concerns of the Neelkanth Group were covered under this search and seizure operation. During the search proceedings, various incriminating documents, containing unaccounted transactions, pertaining to the assessee and his business concerns were recovered. For the assessment year under consideration, the assessee has filed an Income-tax return (ITR) on 29-11-2014, declaring income of Rs. 25,05,7,070/-. Consequent to the search dated 10/11/2020, notice under section 153A of the Act has been issued. In response, to the notice, the assessee has submitted before the assessing officer to treat the original income tax, return (ITR), as if, filed against notice u/s 153A of the Act. Subsequently, notice u/s 143(2) of the Act, has been issued and necessary details have been called for vide notices u/s 142(1) of the Act from time to time.

Tejabhai S. Kangad Jashumatiben T. Kangad Mihir T. Kangad

Shamjibhai S. Kangad Ratanben S. Kangad Hetab S. Kangad Raj S. Kangad Apart from the above, various members of extended family such as in-laws of Shamjibhai S. Kangad and in-laws of other family members and close friends & relatives are also having joint venture / partnership with Neelkanth Group in various business verticals and consequently, all such persons are also part and parcel of Neelkanth Group family. Name of some extended family members are as under: (i) Shri Shamjibhai Tejabhai Ahir & his family; (ii) Shri Devjibhai Bhimjibhai Dangar & his family; (iii) Shri Dayal Rajan Pillai and his family; Though, all of the above family members are engaged in the business activities either individually or through their HUF or in partnerships /shareholding with other family members or outsider friends or relatives, at the end of day we are Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 12 part and parcel of "Neelkanth Group" headed by Shri Shamjibhai Tejabhai Ahir. Shri Shamjibhai Ahir is a group leader and family head used to take all the strategic decisions for majority of the businesses for and on behalf of family member or associated concern.

13. The assessee submitted before the assessing officer that aggregate turnover of the various business verticals operating under the banner of Neelkanth Group is around Rs. 500 to 700 crores per annum and net taxable profit/income declared is around Rs. 15 to 20 crores per annum. Thus, the group as a whole is consistent and high taxpayer in the region. A chart showing year-wise turnover, GP / NP declared, returned income, secured & unsecured loans received by various concerns of Neelkanth Group was submitted before the assessing officer. It was submitted that various business activities carried out by the Neelkanth Group is mainly with the aid of term loans and working capital credits as well as unsecured loans sanctioned by various banks, financial institutions and private players. The Neelkanth Group, as a whole is having net exposure of debt to the extent of around 125 to 150 crores in addition to the deposits of the directors, shareholders and relatives in the companies. A chart showing year-wise exposure of debt was submitted before the assessing officer. It was submitted that properties & assets mortgaged for taking finance from the bank are all accounted for in the books of account of relevant group concern or in the books of account of family members / director of Neelkanth Group. Therefore, there is no case of any unaccounted or undisclosed asset held by any of the members of Neelkanth Group. Search and seizure action u/s. 132(1) of the Act was carried out at the residential premises of family members and business premises of Neelkanth Group on 10th November 2020. During the course of search at assessee`s premises, not a single incriminating document or data evidencing any source of unaccounted income or unaccounted investment or asset etc, was found. As regard the cash and gold seized during the course of search, assessee had already furnished detailed Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 13 clarification along with supporting evidence. Therefore, assessee stated that there is no case of any undisclosed income or source of such income. It was submitted that majority of salt sale by Neelkanth Group is out of India and to listed/multi- national companies in India. All such sales are made through banking channel and duly accounted for in the audited financial statements of group concerns and the same is verifiable from the financial statements and books of account produced during the assessment proceeding. Therefore, there is no any instances of unaccounted sales made by the assessee.

15. Before the assessing officer, it was submitted that certain bills / vouchers etc, stated to have been seized from the same pen-drive of Shri Naran B Maheshwari and in loose paper file from the residential premises of Shri Vijay Nagda are also misinterpreted and entries of such vouchers / bills in Tally Data are not correct. Further, all such documents are also found from the premises of third party, for which no adverse inference could have been drawn in the ongoing assessment proceeding. It was submitted that for making addition on the basis of any material including document found during the course of search at the premises of the third party, the procedure laid down under section 153C of the Act is required to be followed and if the said procedure has not been followed, proposed additions / Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 15 adjustments cannot legally be made. Meaning thereby, no addition could have been made under section 153A of the Act, in the case of the assessee in respect of incriminating materials found from the course of search at the premise of the third parties. In this connection reliance was placed on the following judicial pronouncement: (i) Hon'ble Delhi ITAT in case of Trilok Chand Chaudhary Vs. ACIT [IT Appeal No. 5870 (Delhi) of 2017] pronounced on 20-08-2019. The Tribunal after considering arguments of the parties held as under: "15. Thus, when during the course of search of an assessee any books, document or money, bullion, jewellery etc. is found which relates to a person other than the person searched, then the Assessing Officer of the person searched shall hand over such books of account, documents, or valuables to the Assessing Officer of such other person and thereafter, the Assessing Officer of such other person can proceed against such other person. However, in the case under appeal before us, admittedly, Section 153C is not invoked in the case of the assessee and the assessment is framed under section 153A. We, respectfully following the above decisions of Hon'ble Jurisdictional High Court, hold that during the course of assessment under section 153A, the incriminating material, if any, found during the course of search of the assessee only can be utilized and not the material found in the search of any other person." 5.9 The facts of the case of Vinod Kumar Gupta (supra) are distinguishable with the facts of the instant case. In the case of Vinod Kumar Gupta (supra) material found from Sh. S.K. Gupta was used in assessment proceeding under section 153A of the Act in the case of Sh. Vinod Kumar Gupta. But in that case warrant in fact was issued in the name of Sh. SK Gupta, Gaurav Gupta, Sh. Vinod Kumar Gupta, Ms. Veena Gupta, Sh. Vikas Gupta, and Ms. Madhu Gupta. The Panchnama drawn was also signed by both the assessee (Sh. Vinod Kumar Gupta) and SK Gupta. The statements of both Sh. S.K. Gupta and Sh. Vinod Gupta were recorded on the same date. The Hon'ble High Court held that as search and seizure was conducted through one authorization, there was no requirement of issuing separate notice under section 153C of the Act and following separate procedure under section 153C of the Act. But in the instant case, separate search warrant has been issued in the case of the assessee as well in the case of Sh. Ashok Chowdhary and the Assessing Officer has used the material found in the course of search at the premise of Sh. Ashok Chowdhary, which is not permitted in view of the express provision of the law. 5.10.The addition made by the Assessing Officer in violation of the procedure provided in the Act is bad in law and void-ab-initio and cannot be sustained. Accordingly, the addition of Rs. 3.3 crore, made protectively on the basis of the documents found from the premises of the third party, by the Assessing Officer and upheld by the Ld. CIT(A) on substantive basis, is deleted. The ground No. 6.2 of the appeal is accordingly allowed."

Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 20

Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 21

It is necessary to mention here that the profit percentage after the rearrangement of the entries in the seized data on basis of accounting principles is 5.56%. However, keeping in view of the discussion made above the profit is being estimated at 20%.

Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 24 The assessing officer noticed that loose cash flow sheets from 01-08-2020 to 09- 11-2020 have been seized from the premise of Shri Vijay Nagda and the opening cash as per the oldest loose cash flow sheet seized from the premise of Shri Vijay Nagda is Rs. 3,40,40,206/-. The assessing officer was of the view that this indicates that during the period from 01-04-2017 to 31-07-2020, cash of Rs. 3,40,40,206/- has been generated. Hence, the same was also added by the assessing officer as unexplained money within the meaning of section 69A r.w.s. 115BBE of the Act.

About the above technical ground/ legal ground, the assessee submitted before the learned CIT(A) that in order to initiate proceedings u/s 153A for a period beyond six years, there should be undisclosed income and it should be represented in the form of assets based on tangible materials, in excess of Rs. 50 lacs. On this basis, assessee had claimed that since no tangible evidences and assessee's investment in tangible asset has been found, the proceedings for the assessment years (AYs), 2012-13, 2013-14 and 2014-15, initiated u/s 153A of the Act, is bad in law, and therefore, assessment order may be quashed.

Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 26 However, the learned CIT (A) rejected the above arguments of the assessee and noted that on perusal of the satisfactions recorded by the assessing officer before issuing notice u/s 153A for assessment years (AYs) 2011-12 to 2014-15, it was observed that the assessing officer has relied upon the following documents and data, which as per the assessing officer reflects the assessee's unaccounted income represented by the asset within the meaning of Explanation- 2 to fourth proviso to section 153A of the Act:

However, during the appellate proceedings, the assessee had furnished clarification on each of the above seized documents by stating that either the noting in the seized documents or data are not in the nature of "asset" as defined under Explanation -2 or such property has not been purchased by the assessee. The assessee submitted the revenue records of properties, as referred to by the Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 27 assessing officer, which shows that the property had not purchased or held by the assessee or his family members but some third persons. The assessee argued that none of the seized documents and data relied upon by the assessing officer can be treated as tangible evidence which is a pre-requisite for invoking extended period of limitation under fourth proviso to section 153A of the Act. The assessee relied on the speech of Hon'ble Finance Minister, while introducing Finance Bill, 2017 and memorandum to Finance Bill, 2017 which put much weightage on "tangible evidence" for initiating assessment proceeding under fourth proviso to section 153A of the Act.

Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 29 The above paper is on page no. 218 of seized document, inventoried as Annexure A-17. The learned Counsel for the assessee submitted before the Bench that the property mentioned in the above document, ( that is, immovable property, situated at plot no. 55, sector 02, had never been purchased by the assessee and the assessee was not owner of the said property, at any point of time in the past, and in the present. No, any agreement of property is available with the Department ( revenue authorities), to say that property is in the name of the assessee. Moreover, no addition has been made by the assessing officer in the assessment order, in respect of the property mentioned in the satisfaction note, referred above. Hence, no “asset”, which is more than Rs.50,00,000/- was found by the revenue authorities, during the search proceedings, as per fourth proviso to section 153A of the Act. Moreover, no name of the assessee is mentioned in the said seized document. Hence, the satisfaction note, under section 153A is itself defective.

Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 30 32. The learned Counsel for the assessee, further stated that for the assessment year 2012-13, the assessing officer has used the same seized document and property, that is, immovable property situated at plot no.55, sector 02. However, this property has never been purchased by the assessee, and no addition has been made by the assessing officer in the assessment order, based on the above property. Therefore, ld. Counsel contended that since the satisfaction note under section 153A are defective, therefore based on the defective satisfaction notes, the subsequent assessment proceedings are also defective, hence, assessment order passed by the assessing officer, under section 153A, for assessment year for assessment years (AYs) 2012-13, 2013-14 and 2014-15, may be quashed.

Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 39 At the cost of repetition, we state that during the appellate proceedings, the assessee had furnished clarification on each of the above seized documents by stating that either the noting in the seized documents or data are not in the nature of "asset" as defined under Explanation -2 or such property has not been purchased by the assessee. The assessee submitted the revenue records of properties, as referred to by the assessing officer, which shows that the property had not purchased or held by the assessee or his family members but it is held third persons. The assessee argued that none of the seized documents and data relied upon by the assessing officer can be treated as tangible evidence which is a pre-requisite for invoking extended period of limitation under fourth proviso to section 153A of the Act. The assessee also relied on the speech of Hon'ble Finance Minister, while introducing Finance Bill, 2017 and memorandum to Finance Bill, 2017 which put much weightage on "tangible evidence" for Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 40 initiating assessment proceeding under fourth proviso to section 153A of the Act. Therefore, we find that the satisfaction note prepared by the Assessing Officer under the fourth proviso to section 153A(1) must record that, pursuant to the search, incriminating material/books/documents were found which reveal that the assessee has undisclosed income represented in the form of an “asset” of Rs.50 lakh or more (in case of searches conducted on or after 01.04.2017). The material must be relatable to the assessee and there must be a direct nexus with the assessee. We note that these conditions are not satisfied, hence the “satisfaction note” is defective, and not in accordance with the provisions of law.

Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 41

We note that above second technical/ legal issue raised by the assessee, pertains to assessment years (AYs) 2013-14, and 2014-15, and since we have already quashed the assessment orders for assessment years, (AYs) 2012-13, 2013-14 and 2014-15, therefore, second technical/ legal issue raised by the assessee, becomes academic and infructuous.

(This ground covers, IT(SS) No.15/RJT/2022 for A.Y. 2015-16, IT(SS) No.16/RJT/2022 for A.Y. 2016-17, IT(SS) No.17/RJT/2022 for A.Y. 2017-18, IT(SS) No.18/RJT/2022 for A.Y. 2018-19, IT(SS) No.19/RJT/2022 for A.Y. Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 42 2019-20, IT(SS) No.20/RJT/2022 for A.Y. 2020-21, and for A.Y. 2021-22.)

14. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. We find merit in the submissions of ld DR for the revenue and noted that various issues raised by the assessee and revenue, were adjudicated by the Tribunal, in assessee`s own case inT(SS)A No. 6 and 7/RJT/2022, vide order dated 12.06.2024, the findings of the Tribunal, are reproduced below: “52. We completely agree with the Ld.CIT(A) that the data was very revealing/speaking, apparently genuine and duly corroborated, and the addition in the impugned year was not based on any extrapolation of data.

53. Addressing first the contention of the Ld.Counsel with regard to the data being a mere entry uncorroborated with any other material IT(SS)A No.6 & 7/RJT/2022 evidence, it is pertinent to first take note of the fact which has not been disputed before us, that the data in the pendrive pertained to the assessee. The Ld.CIT(A) has rightly noted that the linkage of the pendrive and other material, found with the accountant and cashier of the group with the assessee, was established since the assessee was part/ connected to the group and these persons looked after financial affairs of the assessee. Also we have rejected assessees contention of having no connection with the adverse material since it was found at third party premises while dealing with ground no 2 & 3 of the assessee above at para-25 to 31 of our order.

Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 43 "11. As far as the genuineness of this tally data is concerned, it is seen that the persons, companies, firms and parties recorded in the tally file do exist and have business or personal relations with Neelkanth group and, therefore, has live nexus with Neelkanth group. Names of such persons exist in phone books of Neelkanth group persons. The vehicle numbers mentioned in the narrations are owned by / related to assessee group, the events such as marriages and birthdays exist on recorded dates, the transactions are also identified to have actually taken place when compared with independently verifiable third-party evidences such as Revenue Records, RTO Records, Bank Statements, Insurance Company Records, Counterparties' Bills etc. The transactions are duly supported by corresponding vouchers. Also, evidences of signed approval of such transactions by Neelkanth ,group persons are found. The correlation between the transactions recorded in tally file with independently verifiable third-party evidences proves that the entries recorded in the seized tally data are true, correct and independently verifiable. 11.1 Without prejudice to the above factual confirmations regarding the authenticity of the seized tally data, the statement of Shri Mihir Kangad is also relevant to understand the reliability of the data. The transactions in "for IT(SS)A No.6 & 7/RJT/2022 CA Students from 01.04.2010 - 31.03.2017" were confronted to Sh. Mihir Kangad (key person of the Neelkanth Group). Sh. Mihir Kangad admitted that the transactions in the tally files are genuine and have been made on instruction of members of the Neelkanth Group. The relevant excerpts from the statements of Shri Mihir Kangad are as under …..

56. It is this data, which is found to be genuine and relating to actual transactions, which reveals clearly share of undisclosed profits of the Neelkanth group from the assessee in the folder "FOR CA STUDENTS". And this entry is corroborated with ledger account revealing profits earned by the assessee and their allocation to different stakeholders contained in a tally file ASM. This is further IT(SS)A No.6 & 7/RJT/2022 corroborated with balance sheets found of the assessee for different years disclosing the said profits clearly.

57. For clarity, reference is made to data relating to F.Y 2012-13 found in the pendrive. The tally file FOR CA STUDENTS reveals share of Neelkanth group in undisclosed profits earned by assessee disclosed in the ledger PROFIT/ LOSS FROM AHIR SALT FOR F.Y 2012-13 to be Rs.11,15,07,378/- (para 6.2 A O's order). File "ASM" discloses the same amount of profit of Rs.11,15,07,378/- allocated to Neelkanth group for the year @ 71/% out of the total undisclosed profits of the assessee for the year of Rs.15,70,52,643/- (para 7.1 A O's order). The balance sheet of the assessee named ASM found during search, disclosing unaccounted assets and liabilities for the year ending 31-03-2013 also reveals same profit of Rs.15,70,52,643/- distributed/transferred during the year by the assessee 58. Thus the digital record is not just a mere uncorroborated entry, as contended by the Ld.Counsel for the assessee, but a speaking data revealing clearly profits earned by the assessee, duly corroborated with corresponding entry in the books of a stakeholder and also in the balance sheet of the assessee relating to the undisclosed business all found during search. It is, we hold, not a case of one instance of entry found but an entire trail of recording of the same entry in other records also pertaining both to the assessee and other parties.

Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 44 59. We are in complete agreement, therefore, with the Ld.CIT(A) that the data cannot be said to be vague, and dismissed as such as not sufficient for drawing any inference there from. On the contrary a logical conclusion has to be derived there from.

61. It is for the assessee to rebut the presumption with cogent evidence. Meaning thereby that the onus is on the assessee to show that the books/documents do not belong to it nor are their contents true. In the present case the presumption is that the digital record found during search belongs to the assessee and its contents revealing undisclosed profits earned by the assessee are true. The Ld.Counsel for the assessee pleading that the speaking digital data found during search needed to be corroborated with material evidence for concluding that they revealed undisclosed income earned by the assessee, is clearly contrary to law. The onus is on the assessee to explain the contents of the data found in its possession. It cannot be and is also not the case of the assessee that the data is a dumb IT(SS)A No.6 & 7/RJT/2022 document. In the absence of any explanation given by the assessee regarding the nature of the contents of the data, there is no question of shifting the onus on the Revenue to unearth further material evidence by way of any undisclosed assets etc. in which the profits were allegedly invested, to substantiate its case.

67. He contended that the Ld.CIT(A) had denied the set off of loss of A.Y 2015-16 amounting to Rs. 9,61,09,539/- since they were not returned, against which the assessee was aggrieved.

Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 46 It is an undisputed fact that the loss of the immediately preceding assessment year and the profits of the impugned assessment year were not returned to tax in the returns filed in IT(SS)A No.6 & 7/RJT/2022 response to the notice under section 153A of the Act. These losses/profits are assessed income of the assessee on the basis of incriminating material found during the search. The provision of law with regard to carry forward and set off of loss as contained in section1 39(3) of the Act is that only loss which are returned within the time allowed as per section 139(1) of the Act are allowed to be carried forward and set off against the income of the succeeding years. There is no dispute with respect to the above provision of law. As far as reliance of the assessee to decisions laying down the proposition that the return filed in response to the notice under section 153A of the Act are to be treated as that filed under section 139(1) of the Act (Kirit Dahyabhai Patel(supra),there is no denial or dispute with regard to the same also. But the said decision is of no help to the assessee, because the assessee has not claimed the loss in the return filed in response to the notice under section 153A of the Act, as noted above before us. Thus since the loss of the preceding year has not been returned to tax in the return filed in response to notice u/s 153A of the Act, the law does not allow benefit of set off of such losses against incomes of succeeding years. Such a proposition as canvassed by the Ld.Counsel for the assessee would result in honest assessees being placed in a disadvantageous position as compared to those who otherwise do not disclose correct incomes but it is discovered during search proceedings. As per the provisions of law it is only losses disclosed in returns filed within prescribed time which are allowed the benefit of being carried forward and set off against incomes of succeeding years. An honest assessee who otherwise discloses losses but not within IT(SS)A No.6 & 7/RJT/2022 prescribed time is therefore denied the benefit of carry forward and set off of the losses. If the proposition canvassed by the Ld.Counsel for the assessee is accepted then losses discovered during search, not otherwise disclosed in returns filed are to be allowed benefit of carry forward and set off. In short an unscrupulous assesses whose undisclosed economic activities are discovered during search will be in a beneficial position with regards to set off and carry forward of losses as opposed to an honest assessee . This surely cannot be the intention of law. The decision of the ITAT Delhi Bench in the case of HBN Dairies (supra) does not help the case of the assessee since in the said case losses claimed to be set off against profits were disclosed in the return filed u/s 153A 0f the Act. As for the other decisions relied upon by the ld.counsel for the assessee, they only lay down the proposition that the claim of set off of losses is to be examined in the year in which the set off is claimed. How these decisions are of any assistance to the assessee's claim in the impugned year, we fail to understand, considering the fact that even as per the provision of law, the assessee is not eligible to claim the set off of losses since the losses were not returned in the return of income filed in response to the notice under section 153A of the Act. We, therefore, are in complete agreement with the ld.CIT(A) that the assessee is not entitled to any set off of loss brought forward from the preceding years and these contentions of the ld.counsel for the assessee is accordingly dismissed.

Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 47 71. Ld.DR on the other hand relied on the findings of the Ld.CIT(A) rejecting this contention of the assessee at para 39.8 (ii) and (iii)and(iv) as under:…

by the assessee is also dismissed.

75. Ground No.4 & 5 and the additional grounds raised by the assessee are dismissed.

Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 48

48.We note that for remaining seven assessment years, viz: 2015-16, 2016-17, 2017-18, 2018-19, 2019-20, 2020-21, 2021-22, the above grounds of appeal raised by the assessee and revenue, are on merit. These grounds raised by the assessee and revenue relate to 20% addition made by the assessing officer on account of unaccounted receipts and addition made by the assessing officer on account of unsecured loan. The issue of 20% addition made by the assessing officer, on account of unaccounted receipts and addition made by the assessing officer on account of unsecured loan are interconnected and mix, because the ld.CIT(A) has given the telescoping benefit against the trading addition sustained @ 20% of gross receipt, therefore, we shall adjudicate these two issues together. In the above summarised grounds, the summarised ground no.6 raised by the revenue, only pertains to arguments on merits, by the revenue.

49. We note that in case of above remaining seven assessment years, viz: 2015- 16, 2016-17, 2017-18, 2018-19, 2019-20, 2020-21, 2021-22, wherein the assessing officer made addition at the rate of 20% on account of unaccounted Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 50 receipts and unsecured loan. On appeal by the assessee, before learned CIT(A), the assessee argued, during the appellate proceedings that there should not be both additions in the hands of the assessee, viz: one addition on account of bogus cash credit and another addition on account of suppression of profit. If these two additions came from the same documents, then telescoping benefit should be provided to the assessee, therefore the learned CIT(A) has provided the telescoping benefit to the assessee and partly allowed the appeal of the assessee, observing as follows: “17.3 Another plea of the assessee is that while making addition on account of net unexplained credit as above, the assessing officer only considered accounts having final credit balances, leaving behind the transactions of same nature having debit balances. Therefore, according to the assessee, the assessing officer had to consider the accounts having debit balances too while considering the accounts with credit balances and net balance / result could be treated as amount of addition u/s 69A of the Act. Thus, figures and balances reflected under the grouping of advances should be adjusted from the balance under the grouping of unsecured loans and net balance of loan after adjustment of advances should be considered, which comes to Rs. 16,69,53,125/- (for A.Y.2011- 12 to 2017-18). In this regard I have perused the submission and also gone through the finding in the assessment order so far as addition made u/s 69A of the Act is concerned. Here one thing is clear that both credit and debit balance accounts are unaccounted and not reflected in the regular books of account. Further, the assessee has measurably failed to give any details of these credit/debit balance accounts, therefore, the assessing officer has treated the same as unexplained credits. However, when the assessee himself is admitting the fact that such types of accounts are dummy and represents his own unaccounted fund movement, as categorically stated in reply to question No. 57 of statement recorded u/s. 132(4) of the Act, then reasonable course of action would be to treat the net balance of the intermingled unaccounted funds after allowing set off of accounts having debit balances. Thus, the assessees' plea is acceptable that when funds credits is part of his income, then, funds debited under different heads would also be treated as funds available for further introduction/ infusion being his own unaccounted funds in absence of any other particular utilisation. Not only that, according to the peak theory when credit and debit balance accounts are treated as assessee's own transactions then benefit of netting of is plausible in intermingled transactions. Therefore, assessee's plea of set off of debit balance account is accepted and net balance of loan is treated for making addition u/s.69A of the Act in different years. The summary of net amount of addition sustained u/s.69A of the Act is as under:

Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 51 17.4 Fourthly, it is submitted that while working out the real taxable income, the assessing officer has not given set off of trading addition against the so-called unexplained credits added u/s 69A of the Act. Not giving the telescoping benefit amounts to double addition. Thus, the assessee requested for telescoping benefit against the trading addition sustained @ 20% of gross receipt. And lastly, little refined version of earlier plea is that the assessing officer has not allowed set off of closing balance of funds available in the preceding years towards the current years unexplained credits. When the assessee is taking this plea, it indirectly means that the assessee is acceding to the fact that he had indeed earned profits, as estimated by the assessing officer (supra). This again vindicates the stand of the assessing officer as well of the undersigned, on the issue of unaccounted profits earned by the assessee. Here, assessee buttress his argument with the assessment orders passed by the assessing officer in case of group person Shri Laxman Teja Ahir u/s 153A of the Act, dated 31.03.2022 for A. Ys 2013-14 to 2021-22 wherein the assessing officer himself allowed the benefit of earlier years' surplus funds as set off against alleged unexplained assets/investment in subsequent year. 17.4.1 The above plea taken by the assessee is that, even if the above addition of cash introduced into business and on which addition u/s. 69A has been made by the assessing officer is held to be true, then the assessing officer ought to have appreciated the fact that, the surplus of profits arising during the year and from earlier years should also be considered and due credits of such cash surplus should be given. The plea of the assessee that the cash surplus out of the profits earned should be set off against the addition of unaccounted monies is therefore considered acceptable because, since the estimated profits have been sustained, and if no set off of the surplus cash is given then this would be tantamount to double addition to the extent of surplus profits. Hon. High Court of Punjab and Haryana has in the case of CIT, Jalandhar- ll vs. Aggarwal Engg. Co. (Jal.) 156 TAXMAN 40 has held that once net profit rate was applied on contract receipts of assessee for estimating income from contract work, no further addition was called for in respect of purchases and introduction of cash. Similarly, Hon. High Court of Madras has in the case of CIT vs. K.S.M. Guruswamy Nadar & Sons [1984] 19 Taxman 533 (Mad.) has held that, in addition to the bogus cash credits, there was an addition towards the suppression of profit also. In such a case when there were two additions, it is open to the assessee to prove that the cash credits came from the suppressed profits towards which an addition has already been made, and, therefore, there should be telescoping of one with the other and that there should be only one addition. It was thus clear in the instant case that the view taken by the Tribunal that the additions towards the suppressed book profit should have been telescoped with the additions towards the cash credits, was legally tenable. Respectfully following these decisions, to avoid this duplication, the benefit of cash profit worked out for the years and unabsorbed profit of the earlier is given to the assessee against the addition made u/s 69A of the Act. However, this is restricted to the extent of such surplus available profits only. Further, the excess of profit for AY 2011-12 is also not given set off, as the same does not fall under consideration period of 10 years. Accordingly, the addition made u/s. 69A is reworked out as under: - Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 52 17.5 In nutshell, the addition to the above extent of Rs.2,18,78,795/- (Col. No. 6 of above table) u/s. 69A r.w.s 115BBE i.e., unaccounted money introduced into the business of the assessee is sustained. Based upon such observation, the unaccounted income of the assessee is determined as considering above facts, the assessing officer is directed to tax undisclosed income as per tabular chart herein above on year-to-year basis and the assessee gets consequential relief accordingly.

Considering above facts, the assessing officer is directed to tax undisclosed income as per tabular chart herein above on year-to-year basis and the assessee gets consequential relief accordingly.”

Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 53

Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 54 where the source is not explained. If the source is identifiable (even if estimated) as being from unaccounted business operations, then it logically should be taxed as business income rather than unexplained money. The allowance of telescoping already establishes a link between the estimated business profits and the alleged unexplained loans, accepting that the profits could have been routed as loans. If the initial addition of "unaccounted gross receipts" and estimated profit (as business income) captures the profit element from the entire unaccounted business operations, then treating the remaining 'loans' separately under Section 69A might lead to an inconsistent application of tax principles, especially if these 'loans' are merely a reflection of cash generated from the same undisclosed business activities. The attention was invited to the fact that the CIT(A) did allow a set-off of surplus profits against Section 69A additions to avoid double taxation on that specific portion, his finding did not explicitly reclassify the remaining excess loan balance as business income. Instead, CIT(A) confirmed the addition u/s 69A for the remaining amount, emphasizing the assessee's failure to explain the source of these cash loans. This finding is contrary to the assertion made by Shri Mihir Kangad. The ld. CIT(A) has partly relied upon his statement and partly rejected which is totally unjustified in as much as when the 'loans' represent undisclosed business income, as evidenced by statements within the seized material (Mihir Kangad's statement) and the established principle from judicial pronouncements of allowing estimated business income to explain other unexplained funds to avoid double taxation or mischaracterization of the nature of income, the balance amount of loan is nothing but business income only.

54. On the other hand, the ld. CIT-DR for the revenue submitted that the Assessing Officer as well as Ld. CIT(A) have examined these facts, narrated by the learned Counsel for the assessee (supra) and the additions were sustained as per the provisions of the law. The ld.DR pointed out that the Id. CIT(A), failed to appreciate the facts on the case and wrongly allowed unexplained money to be set off from current year profit and ld.CIT(A) also failed to appreciate the facts of the case, that the credit of debit balances of loan accounts was not allowable considering that no details whatsoever with respect to the balances have been provided by the assessee during the assessment proceedings. Besides, ld.CIT(A) wrongly allowed to set off against the addition made for the credit balances of loan proceeds for all the year involved, and for remaining balances also the source to the extent of amount of corresponding unaccounted business receipts for the respective years has been treated as explained, which is on wrong footing.

55. The ld. CIT-DR for the revenue further submitted that learned Commissioner (Appeals) ignored the fact that there were parallel books of accounts maintained Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 56 by the assessee in tally software, which was found and impounded during the course of search, on which the assessing officer has relied upon. The one of the key person of the group concerns Shri Mihir Kangad in his statement recorded u/s.132(4) of the Act and has agreed unaccounted transaction have become happened and admitted that the transactions in the tally files, though complex but made on the instructions of members of Neelkanth group and correlation between the transaction recorded in tally file with independently verifiable third-party evidences proves that the entries recorded in the evidences seized were true. The assessing officer has duly investigated and applied his mind on the report of the DDIT, Investigation wing and after satisfying himself made the assessment on the basis of cogent material and relevant evidence on record, therefore, on merit, addition made by the assessing officer should be sustained.

F.Y. Receipts 20%profit Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 57 2010-11 2,85,95,931 57,19,186 2011-12 6,27,40,513 1,25,48,103 2012-13 9,58,11,005 1,91,62,201 2013-14 16,14,47,115 3,82,89,423 2014-15 16,00,96,192 3,20,19,238 2015-16 17,15,48,774 3,43,09,755 2016-17 7,71,39,824 1,54,27,965 2017-18 68,12,514 13,62,503 2018-19 30,19,760 6,03,952 2019-20 48,91,67,675 9,78,33,535 2020-21 7,72,02,570 1,54,40,514 Total 1,33,35,81,873 26,67,16,375 The assessing officer himself stated that it is necessary to mention here that the profit percentage after the rearrangement of the entries in the seized data on basis of accounting principles is 5.56%. However, keeping in view of the discussion made above the profit is being estimated at 20%. We find that though the assessing officer worked out profit from seized data at 5.56%, however the assessing officer estimated at the same at the rate of 20% while making addition, which is, 4 times the profit worked out by himself. Therefore, the estimation is very much higher side, even after taking care of procedural lapses, particularly, in the salt manufacturing and trading activities. In such kind of business, various judicial forums have accepted that profit on higher side even after taking care of procedural lapses, particularly in the salt manufacturing and trading activities.

Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 60 Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 61 Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 62 59.Therefore, considering the above actual position, we find that profit estimation on unaccounted receipts at the rate of 20% is very higher side, especially in the salt business, wherein we find that assessing officer has himself worked out net profit at the rate of 5.56% based on the seized material. We note that there must be honest and fair estimate of the proper figure of assessment, for which consideration of local knowledge and repute, besides the previous returns an assessment of the assessee concerned, and all other matters must be taken into account for fair and proper estimate which of course, would fall in the category of guesswork, but a honest guesswork. Based on the factual position narrated above, we are of the view that estimation made by assessing officer is not based on sound reasoning in comparison with the past results as well as comparable cases, as well as based on the seized material. As we have noted earlier, that assessing officer has himself worked out net profit at the rate of 5.56%, hence, based on the above factual position narrated above we are of the view that 10% profit estimation is proper and fair on unaccounted receipts. Therefore, we reduce the profit estimation from 20% to 10% and we direct the assessing officer to sustain the addition in the hands of the assessee at the rate of 10% of unaccounted receipts.

60. Now coming to the telescoping benefit of the remaining unsecured loan. We find that if a portion of the estimated business profit is treated as a part of the loans through telescoping, by ld.CIT(A) himself, on pick and choose basis, which is not acceptable because a document found in the search and seizure proceedings should be read as a whole. The document found by the search team, during the search and seizure proceedings strongly suggests that the nature of these "loans' is inextricably linked to the unaccounted business activity. Therefore, any remaining unexplained portion of these ‘loans' should also be treated as part of Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 63 the business income. As we have noted above that assessee's submission, specifically citing Mihir Kangad's statement, suggests that what appeared as "unsecured loans" in the seized data were, in substance, "introduction of income generated from unaccounted trading activities". If this is the case, then the entire amount of such funds, irrespective of their nomenclature in the seized data, represents unaccounted business receipts income. Therefore, considering these facts the total net amount of loan found credited in the seized data is to be treated as net income earned from business activities (it cannot be treated as unexplained income u/s. 69A) and accordingly, year-wise income is worked out after considering the accumulated surplus available, and after set-off the loan, as follows:

F.Y Gross receipts Unaccounted Net business Net business Net business Balance Total addition of as per seized profit estimated income Income set- off income set- off amount of net business data @ 10% grouped as from current from earlier net business income to be loan in year`s, year`s Income After taxed as normal seized data estimated accumulated setting off tax rate profit surplus profit estimated profit of current year and earlier years 2011-12 Quashed - - - - - - 2012-13 Quashed - - - - - - 2013-14 Quashed - - - - - - 2014-15 16,00,96,192 1,60,09,620 - - 1,60,09,620 2015-16 17,15,48,774 1,71,54,878 4,92,54,922 1,71,54,878 1,60,09,620 1,60,90,424 3,32,45,302 2016-17 7,71,39,824 77,13,983 7,89,62,924 77,13,983 7,12,48, 941 7,89,62,924 2017-18 68,12,514 6,81,252 - 6,81,252 2018-19 30,19,760 3,01,976 - 3,01,976 2019-20 48,91,67,675 4,89,16,768 - 4,89,16,768 2020-21 7,72,02,570 77,20,257 - 77,20,257 Total 98,49,87,309 9,84,98,734 12,82,17,846 2,48,68,861 1,60,09,620 8,73,39,365 18,58,38,099

62. Now we shall take, Revenue`s appeal in IT(SS) No.15/RJT/2023 for A.Y. 2019-20, wherein, the summarised and concise grounds raised by the Revenue is as follows: “Ground No.5. In Revenue`s appeal in IT(SS) No.15/RJT/2023 for A.Y. 2019-20,(with reference to Shri Hetab Shamjibhai Kangad) reads as follows: “On the facts and on the circumstances of the case and in law, learned Commissioner(Appeals) has erred in holding that the investment of Rs.1,24,90,000/- has already concluded in the case of Shri Shamjibhai S. kangad, father of the assessee, without appreciating the fact that the addition in the case of father was made out of seized data for the period from 01.04.2010 to 31.03.2017, but the addition in the case of the assessee, was made for assessment year 2019–20, relevant for financial year 2018-19. (This issue covers ground Nos.1 to 4 in IT(SS) No.15/RJT/2023 for A.Y. 2019- 20)

63. We have heard both the parties. The facts relating to the group have already been narrated by us in above paras of this order, therefore, we do not narrate them for the sake of brevity. The Learned DR for the revenue submitted that Learned CIT appeal has not appreciated the facts of the assessee`s case in a right perspective as the investment of Rs.1,24,90,000/- has already concluded in the case of Shri Shamjibhai S. kangad, father of the assessee. However, without appreciating this fact that the addition in the case of father was made out of seized data for the period from 01.04.2010 to 31.03.2017, but the addition in the case of the assessee, was made for assessment year 2019–20, relevant for financial year 2018-19, therefore, in the light of the above facts, the learned DR for the revenue, contended that original addition made by the assessing officer in the hands of the assessee, should be sustained. On the other hand, learned Counsel for the assessee defended, the order passed by the ld.CIT(A).

Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 65 64. We have heard both the parties. We note that on perusal of the assessment order, it was observed by ld.CIT(A) that during the course of search at the premises of Vijay Nagda, cashier of Neelkanth Group, various noting in the seized material Annexure A/12 was found and seized. As per the assessing officer, noting in these seized documents contains account of project "Shree Courtyard Co-Operative Housing Society and the same also contains amount of cash component introduced as capital by various persons including the assessee. The assessing officer reproduced page no. 132 of seized annexure at page No 4 of the assessment order, as per which, figure of Rs.1,24,90,000/- is mentioned against the name "Shamjibhai". The assessing officer stated that the said investment of Rs. 1,24,90,000/- is made by the assessee out of his unaccounted cash and consequently, addition is made u/s. 69 of the Act. The assessee contended before learned CIT(A) that he and various other persons are members of a Co-Operative Housing Society ("CHS") namely Courtyard Co-Operative Housing Society Ltd., which had developed the tenements by purchasing the lease hold rights in the land bearing plot No. 32 at Sector-1, Gandhidham. The society has carried out construction on land and tenements later on transferred / sold to various persons including members. In the course of construction activities funds were required which were made available by the members/their family. The assessee contended that investment of Rs. 1,24,90,000/- reflected in the seized document is also found recorded in the tally data 'FOR CA STUDENT FROM 1.4.2010-31.3.2017' and addition on account of unaccounted income on the basis of said tally data has already been made in the hands of assessee's father Shri Shamjibhai S. Kangad. On this ground, the assessee submitted that as the entries in the seized tally data are classified as application of the unaccounted income of Shamjibhai Kangad, further addition made in the hands of the assessee is duplication of same income.

Shri Shamjibhai Shadabhai Kangad & Ors. IT(SS)A Nso.11 to 23 /RJT/2022 and Ors. (AYs : 2011-12 to 2018-19 & Ors..) 66 65. The ld.CIT(A) based on the above facts noticed that entry on the loose paper seized containing figure of Rs.1,24,90,000/- reflects the name of "Shamjibhai" and not of the assessee. It was also observed by ld.CIT(A) that the assessee is son of Shri Shamjibhai Kangad and therefore, investment of Rs. 1,24,90,000/- made by Shri Shamjibhai Kangad cannot be ruled out. Moreover, on verification of the assessment order passed in the case of Shri Shamjibhai Kangad, it is seen that the assessing officer had on the basis of entries in seized data had re-casted the income, expenses, investment etc., wherein, aforesaid amount of Rs.1,24,90,000/- in Courtyard Society (Plot No. 32) is considered as application/ investment out of undisclosed business income. Therefore, once the undisclosed income in the hands of Shri Shamjibhai Kangad has already been considered by the assessing officer, which takes care of the above investment of Rs.1,24,90,000/-, addition made in the hands of the assessee was deleted by ld.CIT(A). We have gone through the above findings of the learned CIT (A) and noticed that conclusion reached by the learned CIT(A) is correct. On a careful reading of the Ld.CIT(A) order and the findings thereon, we do not find any valid reason to interfere with the decision and findings of the Ld.CIT(A). Hence we sustain the order of the Ld.CIT(A) and reject the grounds raised by the Revenue.

66. In the result, appeal filed by the Revenue, in IT(SS) No.15/RJT/2023, is dismissed.