SRI RAMAPPA CHANDRU @ R.CHANDRU ,BANGALORE vs. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-2(4), BANGALORE

3. Without prejudice to the above, the learned CIT[A] is not justified in confirming the addition of Rs. 1,20,60,000/- being the aggregate cash deposits in the bank account of the appellant, which was not an incriminating seized material at all but one obtained from the bank in the post search proceedings out of the earlier withdrawals made from the very same bank account by rejecting the explanation on most unsustainable grounds, which is purely out of suspicion and surmise and consequently, the addition made requires to be deleted. 3.1 The learned CIT [A] failed to appreciate the fact that the income reported by the appellant on estimate basis itself was Rs. 2,04,96,539/-, which was far greater than the extent of deposits of Rs. 1,20,60,000/- drawn from the very same bank account and the source by way of such withdrawals was to make the deposits fully substantiated and self-manifest which was not disputed at all and consequently, the addition made requires to be deleted.

5. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs. Assessment Year 2010-11:-

1. 1. The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case.

2. Without prejudice to the above, in the absence of seizure of any incriminating materials during the course of search relevant for the year under appeal and there being, no assessment proceedings pending by way of issuance of notice u/s.143[2] or 148 of the Act, at the time of search to abate, the invocation of jurisdiction u/s.153A of the Act, is bad in law and the consequential assessment u/s.153A read with 143[3] is also bad in law and requires to be annulled having regard to the ratio of the following decisions made in view of the fact the Hon'ble Supreme Court stayed the operation of the order of the Hon'ble Delhi High Court in the case of SMT. DAYAWANTI & ORS reported in 390 ITR 496 (Del) by its order dated 07/10/2017 :

1) IBC KNOWLEDGE PARK LIMITED reported in 385 ITR 346 [Kar]; 2) DIPAK JASHVANTLAL PANCHAL reported in 397 ITR 153 (Guj) 3) SAUMYA CONSTRUCTIONS PVT. LTD. reported in 387 ITR 529 (Guj) 4) DESAI CONSTRUCTION P. LTD., reported in 387 ITR 552 [Guj] 5) CONTINENTAL WAREHOUSING CORPN. [NHAVA SHEVA] LTD., reported in 374 ITR 654 (Bom) 6) CIT V. SINHGAD TECHNICAL EDUCATION SOCIETY reported in 378 ITR 84 (Bom] affirmed by the Hon'ble Supreme Court in 297 CTR 441 (SC) 7) CIT V. KABUL CHAWLA reported in 380 ITR 573 (Del) 8) MEETA GUTGUTIA PROP. M/s. FERNS "N" PETALS reported in 395 ITR 526 (Del) 9) Ms. LATHA JAIN reported in 384 ITR 543 (Del) 2.1 Without prejudice to the above, the impugned search proceedings in the case of the appellant are bad in law and are ultra-vires the provisions of Section 132[1][a], [b] and [c] of the Act, which have not been contradicted by the authorities below despite having contended before them and therefore deemed to have been accepted by the doctrine of non-traverse and therefore the impugned order is bad in law and patently illegal and requires to be cancelled as void-ab-initio having regard to the parity of the ratio of the Hon'ble Supreme Court in the case of AJITH JAIN reported in 260 ITR 80 and the Hon'ble Karnataka High Court in the case of C. RAMAIAH REDDY reported in 339 ITR 210.

3. Without prejudice to the above, the learned CIT[A] is not justified in confirming the addition of Rs. 68,99,500/- being the aggregate cash deposits in the bank account of the appellant, which was not an incriminating seized material at all but one obtained from the bank in the post search proceedings out of the earlier withdrawals made from the very same bank account by rejecting the explanation on most unsustainable grounds, which is purely out of suspicion and surmise and consequently, the addition made requires to be deleted. 3.1 The learned CIT[A] failed to appreciate the fact that the income reported by the appellant on estimate basis itself was Rs. 4,37,45,474/-, which was far greater than the extent of deposits of Rs. 68,99,500/- drawn from the very same bank account and the source by way of such withdrawals was to make the deposits fully substantiated and self-manifest which was not disputed at all and consequently, the addition made requires to be deleted.

4. Without prejudice to the right to seek waiver with the Hon'ble CCIT/DG, the appellant denies himself liable to be charged to interest u/s. 234B and 234C of the Act, which under the facts and in the circumstances of the appellant's case deserves to be cancelled.

4.1 The learned A.O. failed to appreciate that the income of the appellant by way of contract as well as from operating the wine stores was subject to TDS/TCS and in view of that, there was no obligation for the appellant to file an estimate of advance-tax consequently there was no justification to charge interest u/s.234B of the Act, having regard to the parity ratio of the decision of the Hon'ble Supreme Court in the case of PETER MORRIS reported in 389 ITR 501 [SC].

5. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs. Assessment Year 2011-12:-

1. 1. The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case.

2. Without prejudice to the above, in the absence of seizure of any incriminating materials during the course of search relevant for the year under appeal and there being, no assessment proceedings pending by way of issuance of notice u/s.143[2] or 148 of the Act, are pending at the time of search to abate, the invocation of jurisdiction u/s.153A of the Act, is bad in law and the consequential assessment u/s.153A read with 143[3] is also bad in law and requires to be annulled having regard to the ratio of the following decisions made in view of the fact the Hon'ble Supreme Court stayed the operation of the order of the Hon'ble Delhi High Court in the case of SMT. DAYAWANTI & ORS reported in 390 ITR 496 (Del) by its order dated 07/10/2017 : 1) IBC KNOWLEDGE PARK LIMITED reported in 385 ITR 346 [Kar]; 2) DIPAK JASHVANTLAL PANCHAL reported in 397 ITR 153 (Guj) 3) SAUMYA CONSTRUCTIONS PVT. LTD. reported in 387 ITR 529 (Guj) 4) DESAI CONSTRUCTION P. LTD., reported in 387 ITR 552 [Guj] 5) CONTINENTAL WAREHOUSING CORPN. [NHAVA SHEVA] LTD., reported in 374 ITR 654 (Bom) 6) CIT V. SINHGAD TECHNICAL EDUCATION SOCIETY reported in 378 ITR 84 (Bom] affirmed by the Hon'ble Supreme Court in 297 CTR 441 (SC) 7) CIT V. KABUL CHAWLA reported in 380 ITR 573 (Del) 8) MEETA GUTGUTIA PROP. M/s. FERNS "N" PETALS reported in 395 ITR 526 (Del) 9) Ms. LATHA JAIN reported in 384 ITR 543 (Del)

3. The authorities below failed to appreciate that the appellant filed the return originally on 30/09/2011 estimating the income from contract at 8% and no proceedings were initiated by issuance of notice u/s.143[2] of the Act, to make an assessment u/s.143[3] of the Act or u/s.148 of the Act, to make an assessment and finality was reached in the matter of assessment to consider an) such proceedings being pending at the time of search to abate and therefore, the notice u/s.153A of the Act, in the absence of seizure of any incriminating materials relating to the assessment year under appeal by the invocation of jurisdiction u/s.153A of the Act, is bad in law and consequential assessment made requires to be annulled having regard to the ratio of the decision of the Hon'ble Supreme Court in the case of CIT V. SINHGAD TECHNICAL EDUCATION SOCIETY reported in 297 CTR 441 (SC)

4. Without prejudice to the above, the learned CIT[A] is not justified in sustaining the estimation of income from contract receipts at 10% as against 8% reported by the appellant on estimate under the facts and in the circumstances of the appellant's case in the absence of any incriminating seized material relevant for the assessment year under appeal to warrant a conclusion that the appellant has not made a full disclosure of income as the assessment records by way of return of income and orders for the assessment years 2009-10 and 2010-11, which were relied upon by the learned CIT[A] to estimate the income at 10% as against the estimate of 8% were neither found or seized during the search or even if they were to be considered as seized during search, they do not constitute incriminating seized material as they were already with the department.

5.1 Without prejudice to the above, the learned CIT[A] is not justified in estimating the income from contract receipt at 10% in as much as the appellant brought to his notice that in the same Commissionerate income from contracts was estimated at 8%.

5.2 The addition made is purely on suspicion and surmise, assumptions and presumptions and contrary to evidence on record and consequently, the same requires to be deleted.

6. Without prejudice to the above, the impugned search proceedings in the case of the appellant are bad in law and are ultra-vires the provisions of Section 132[1][a], [b] and [c] of the Act, which have not been contradicted by the authorities below despite having contended before them and therefore deemed to have been accepted by the doctrine of non-traverse and therefore the impugned order is bad in law and patently illegal and requires to be cancelled as void-ab-initio having regard to the parity of the ratio of the Hon'ble Supreme Court in the case of AJITH JAIN reported in 260 ITR 80 and the Hon'ble Karnataka High Court in the case of C. RAMAIAH REDDY reported in 339 ITR 210.

7. Without prejudice to the right to seek waiver with the Hon'ble CCIT/DG, the appellant denies himself liable to be charged to interest u/s. 234B and 234C of the Act, which under the facts and in the circumstances of the appellant's case deserves to be cancelled. 7.1 The learned A.O. failed to appreciate that the income of the appellant by way of contract as well as from operating the wine stores was subject to TDS/TCS and in view of that, there was no obligation for the appellant to file an estimate of advance-tax consequently there was no justification to charge interest u/s.234B of the Act, having regard to the parity ratio of the decision of the Hon'ble Supreme Court in the case of PETER MORRIS reported in 389 ITR 501 [SC].

8. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs. Assessment Year 2012-13:-

1. 1. The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case.

2. Without prejudice to the above, in the absence of seizure of any incriminating materials during the course of search relevant for the year under appeal and there being, no assessment proceedings pending by way of issuance of notice u/s.143[2] or 148 of the Act, are pending at the time of search to abate, the invocation of jurisdiction u/s.153A of the Act, is bad in law and the consequential assessment u/s.153A read with 143[3] is also bad in law and requires to be annulled having regard to the ratio of the following decisions made in view of the fact the Hon'ble Supreme Court stayed the operation of the order of the Hon'ble Delhi High Court in the case of SMT. DAYAWANTI & ORS reported in 390 ITR 496 (Del) by its order dated 07/10/2017 : 1) IBC KNOWLEDGE PARK LIMITED reported in 385 ITR 346 [Kar]; 2) DIPAK JASHVANTLAL PANCHAL reported in 397 ITR 153 (Guj) 3) SAUMYA CONSTRUCTIONS PVT. LTD. reported in 387 ITR 529 (Guj) 4) DESAI CONSTRUCTION P. LTD., reported in 387 ITR 552 [Guj] 5) CONTINENTAL WAREHOUSING CORPN. [NHAVA SHEVA] LTD., reported in 374 ITR 654 (Bom) 6) CIT V. SINHGAD TECHNICAL EDUCATION SOCIETY reported in 378 ITR 84 (Bom] affirmed by the Hon'ble Supreme Court in 297 CTR 441 (SC) 7) CIT V. KABUL CHAWLA reported in 380 ITR 573 (Del) 8) MEETA GUTGUTIA PROP. M/s. FERNS "N" PETALS reported in 395 ITR 526 (Del) 9) Ms. LATHA JAIN reported in 384 ITR 543 (Del)

3. The authorities below failed to appreciate that the appellant filed the return originally on 28/09/2012 estimating the income from contract at 8% and no proceedings were initiated by issuance of notice u/s.143[2] of the Act, to make an assessment u/s.143[3] of the Act or u/s.148 of the Act, to make an assessment and finality was reached in the matter of assessment to consider an) such proceedings being pending at the time of search to abate and therefore, the notice u/s.153A of the Act, in the absence of seizure of any incriminating materials relating to the assessment year under appeal by the invocation of jurisdiction u/s.153A of the Act, is bad in law and consequential assessment made requires to be annulled having regard to the ratio of the decision of the Hon'ble Supreme Court in the case of CIT V. SINHGAD TECHNICAL EDUCATION SOCIETY reported in 297 CTR 441 (SC)

4. Without prejudice to the above, the learned CIT[A] is not justified in sustaining the estimation of income from contract receipts at 10% as against 8% reported by the appellant on estimate under the facts and in the circumstances of the appellant's case in the absence of any incriminating seized material relevant for the assessment year under appeal to warrant a conclusion that the appellant has not made a full disclosure of income as the assessment records by way of return of income and orders for the assessment years 2009-10 and 2010-11, which were relied upon by the learned CIT[A] to estimate the income at 10% as against the estimate of 8% were neither found or seized during the search or even if they were to be considered as seized during search, they do not constitute incriminating seized material as they were already with the department.

4.1 Without prejudice to the above, the learned CIT[A] is not justified in sustaining an addition of Rs. 3,60,000/- being the aggregate of cash deposits in the bank account of the appellant, which was not an incriminating seized material at all but one obtained from the bank in the post search proceedings out of the earlier withdrawals made from the very same bank account by rejecting the explanation on most unsustainable grounds, which is purely out of suspicion and surmise and consequently, the addition made requires to be deleted on merits.

4.2 The learned CIT[A] failed to appreciate the fact that the income reported by the appellant on estimate basis is itself is Rs.5,91,46,190/- , which is far greater than the extent of amounts drawn of Rs.10,31,63,000/- to make the impugned extent of deposits of Rs.3,60,000/- drawn from the very same bank account and the source by way of such withdrawals is to make the deposits fully substantiated and self-manifest which is not disputed at all and consequently, the addition made requires to be deleted on merits. 5.1 Without prejudice to the above, the learned CIT[A] is not justified in estimating the income from contract receipt at 10% in as much as the appellant brought to his notice that in the same Commissionarate income from contracts was estimated at 8%.

5.2 The addition made is purely on suspicion and surmise, assumptions and presumptions and contrary to evidence on record and consequently, the same requires to be deleted.

7. The learned CIT[A] is not justified in directing the learned A.O. to assess a sum of Rs.3,00,00,000/- as additional income offered on the basis of a statement given during the course of search for non- maintenance of books of accounts and withdrawal of cash for incurring the expenditure and NOT ON THE GROUND OF ANY SUPPRESSION OF INCOME, which he had initially erroneously offered in the return, which was withdrawn in time before receipt of the order by filing a revised return and the learned A.O. on his own has also not made any addition at all, in the exercise of his appellate powers, which apart from not being justified on merits technically in effect an enhancement of income by CIT[A] which is not in conformity with the procedure for making the enhancement accordingly, the direction to assess such income not assessed by the A.O. requires to be deleted.

7.1 Without prejudice to the above, the income so directed to be assessed by the learned CIT[A] requires to be telescoped with such income similarly directed to be assessed by him in the subsequent years in addition to the additions made by the learned A.O. and sustained by the learned CIT[A] which were telescoped by him during the previous year relevant to the assessment year under appeal.

8. Without prejudice to the right to seek waiver with the Hon’ble CCIT/DG, the appellant denies himself liable to be charged to interest u/s. 234B and 234C of the Act, which under the facts and in the circumstances of the appellant's case deserves to be cancelled. Assessment Year 2013-14:- 1. The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case.

2. Without prejudice to the above, in the absence of seizure of any incriminating materials during the course of search relevant for the year under appeal and there being, no assessment proceedings pending by way of issuance of notice u/s.143[2] or 148 of the Act, are pending at the time of search to abate, the invocation of jurisdiction u/s.153A of the Act, is bad in law and the consequential assessment u/s.153A read with 143[3] is also bad in law and requires to be annulled having regard to the ratio of the following decisions made in view of the fact the Hon'ble Supreme Court stayed the operation of the order of the Hon'ble Delhi High Court in the case of SMT. DAYAWANTI & ORS reported in 390 ITR 496 (Del) by its order dated 07/10/2017 : 1) IBC KNOWLEDGE PARK LIMITED reported in 385 ITR 346 [Kar]; 2) DIPAK JASHVANTLAL PANCHAL reported in 397 ITR 153 (Guj) 3) SAUMYA CONSTRUCTIONS PVT. LTD. reported in 387 ITR 529 (Guj) 4) DESAI CONSTRUCTION P. LTD., reported in 387 ITR 552 [Guj] 5) CONTINENTAL WAREHOUSING CORPN. [NHAVA SHEVA] LTD., reported in 374 ITR 654 (Bom) 6) CIT V. SINHGAD TECHNICAL EDUCATION SOCIETY reported in 378 ITR 84 (Bom] affirmed by the Hon'ble Supreme Court in 297 CTR 441 (SC) 7) CIT V. KABUL CHAWLA reported in 380 ITR 573 (Del) 8) MEETA GUTGUTIA PROP. M/s. FERNS "N" PETALS reported in 395 ITR 526 (Del) 9) Ms. LATHA JAIN reported in 384 ITR 543 (Del) 3. The authorities below failed to appreciate that the appellant filed the return originally on 27/09/2013 estimating the income from contract at 8% and no proceedings were initiated by issuance of notice u/s.143[2] of the Act, to make an assessment u/s.143[3] of the Act or u/s.148 of the Act, to make an assessment and finality was reached in the matter of assessment to consider an) such proceedings being pending at the time of search to abate and therefore, the notice u/s.153A of the Act, in the absence of seizure of any incriminating materials relating to the assessment year under appeal by the invocation of jurisdiction u/s.153A of the Act, is bad in law and consequential assessment made requires to be annulled having regard to the ratio of the decision of the Hon'ble Supreme Court in the case of CIT V. SINHGAD TECHNICAL EDUCATION SOCIETY reported in 297 CTR 441 (SC) 4. Without prejudice to the above, the learned CIT[A] is not justified in sustaining the estimation of income from contract receipts at 10% as against 8% reported by the appellant on estimate under the facts and in the circumstances of the appellant's case in the absence of any incriminating seized material relevant for the assessment year under appeal to warrant a conclusion that the appellant has not made a full disclosure of income as the assessment records by way of return of income and orders for the assessment years 2009-10 and 2010-11, which were relied upon by the learned CIT[A] to estimate the income at 10% as against the estimate of 8% were neither found or seized during the search or even if they were to be considered as seized during search, they do not constitute incriminating seized material as they were already with the department.

4.1 Without prejudice to the above, the learned CIT[A] is not justified in sustaining an addition of Rs. 5,94,000/- being the aggregate of cash deposits in the bank account of the appellant, which was not an incriminating seized material at all but one obtained from the bank in the post search proceedings out of the earlier withdrawals made from the very same bank account by rejecting the explanation on most unsustainable grounds, which is purely out of suspicion and surmise and consequently, the addition made requires to be deleted on merits.

4.2 The learned CIT[A] failed to appreciate the fact that the income reported by the appellant on estimate basis is itself is Rs. 1,54,93,230/-, which is far greater than the extent of amounts drawn of Rs. 43,85,000/- to make the impugned extent of deposits of Rs. 5,94,000/- drawn from the very same bank account and the source by way of such withdrawals is to make the deposits fully substantiated and self-manifest which is not disputed at all and consequently, the addition made requires to be deleted on merits.

5.1 Without prejudice to the above, the learned CIT[A] is not justified in estimating the income from contract receipt at 10% in as much as the appellant brought to his notice that in the same Commissionarate income from contracts was estimated at 8%.

5.2 The addition made is purely on suspicion and surmise, assumptions and presumptions and contrary to evidence on record and consequently, the same requires to be deleted.

6. The learned CIT[A] is not justified in sustaining an addition of a sum of Rs.54,00,000/- made by the learned A.O. in respect of the payment made to one Sri N.P.Mahesh, on 07/09/2012 as unexplained investment despite the fact there were enough resources with the appellant to make the payment, on an irrelevant and slender ground that the agreement pursuant to which payment was made got cancelled and the said person returned the money and the non- production of the cancellation agreement has nothing to do with the of funds to make the payment and thus, the addition confirmed by CIT[A] is on irrelevant ground and requires to be deleted on merits he held the same requires to be telescoped by the additions confirmed by him in the order.

7. The learned CIT[A] is not justified in directing the learned A.O. to assess a sum of Rs.1,80,00,000/- as additional income offered on the basis of a statement given during the course of search for non- maintenance of books of accounts and withdrawal of cash for incurring the expenditure and NOT ON THE GROUND OF ANY SUPPRESSION OF INCOME, which he had initially erroneously offered in the return, which was withdrawn in time before receipt of the order by filing a revised return and the learned A.O. on his own has also not made any addition at all, in the exercise of his appellate powers, which apart from not being justified on merits technically in effect an enhancement of income by CIT[A] which is not in conformity with the procedure for making the enhancement accordingly, the direction to assess such income not assessed by the A.O. requires to be deleted.

7.1 Without prejudice to the above, the income so directed to be assessed by the learned CIT[A] requires to be telescoped with such income similarly directed to be assessed by him in the subsequent years in addition to the additions made by the learned A.O. and sustained by the learned CIT[A] which were telescoped by him during the previous year relevant to the assessment year under appeal.

8. Without prejudice to the above, the impugned search proceedings in the case of the appellant are bad in law and are ultra-vires the provisions of Section 132[1][a], [b] and [c] of the Act, which have not been contradicted by the authorities below despite having contended before them and therefore deemed to have been accepted by the doctrine of non-traverse and therefore the impugned order is bad in law and patently illegal and requires to be cancelled as void-ab-initio having regard to the parity of the ratio of the Hon'ble Supreme Court in the case of AJITH JAIN reported in 260 ITR 80 and the Hon'ble Karnataka High Court in the case of C. RAMAIAH REDDY reported in 339 ITR 210.

9.1 The learned A.O. failed to appreciate that the income of the appellant by way of contract as well as from operating the wine stores was subject to TDS/TCS and in view of that, there was no obligation for the appellant to file an estimate of advance-tax consequently there was no justification to charge interest u/s.234B of the Act, having regard to the parity ratio of the decision of the Hon'ble Supreme Court in the case of PETER MORRIS reported in 389 ITR 501 [SC].

Assessment Year 2014-15:-

1. 1. The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case.

2. Without prejudice to the above, in the absence of seizure of any incriminating materials during the course of search relevant for the year under appeal and there being, no assessment proceedings pending by way of issuance of notice u/s.143[2] or 148 of the Act, are pending at the time of search to abate, the invocation of jurisdiction u/s.153A of the Act, is bad in law and the consequential assessment u/s.153A read with 143[3] is also bad in law and requires to be annulled having regard to the ratio of the following decisions made in view of the fact the Hon'ble Supreme Court stayed the operation of the order of the Hon'ble Delhi High Court in the case of SMT. DAYAWANTI & ORS reported in 390 ITR 496 (Del) by its order dated 07/10/2017 : 1) IBC KNOWLEDGE PARK LIMITED reported in 385 ITR 346 [Kar]; 2) DIPAK JASHVANTLAL PANCHAL reported in 397 ITR 153 (Guj) 3) SAUMYA CONSTRUCTIONS PVT. LTD. reported in 387 ITR 529 (Guj) 4) DESAI CONSTRUCTION P. LTD., reported in 387 ITR 552 [Guj] 5) CONTINENTAL WAREHOUSING CORPN. [NHAVA SHEVA] LTD., reported in 374 ITR 654 (Bom) 6) CIT V. SINHGAD TECHNICAL EDUCATION SOCIETY reported in 378 ITR 84 (Bom] affirmed by the Hon'ble Supreme Court in 297 CTR 441 (SC) 7) CIT V. KABUL CHAWLA reported in 380 ITR 573 (Del) 8) MEETA GUTGUTIA PROP. M/s. FERNS "N" PETALS reported in 395 ITR 526 (Del) 9) Ms. LATHA JAIN reported in 384 ITR 543 (Del)

4. Without prejudice to the above, the learned CIT[A] is not justified in sustaining the estimation of income from contract receipts at 10% as against 8% reported by the appellant on estimate under the facts and in the circumstances of the appellant's case in the absence of any incriminating seized material relevant for the assessment year under appeal to warrant a conclusion that the appellant has not made a full disclosure of income as the assessment records by way of return of income and orders for the assessment years 2009-10 and 2010-11, which were relied upon by the learned CIT[A] to estimate the income at 10% as against the estimate of 8% were neither found or seized during the search or even if they were to be considered as seized during search, they do not constitute incriminating seized material as they were already with the department.

4.1 Without prejudice to the above, the learned CIT[A] is not justified in sustaining an addition of Rs. 2,80,000/- being the aggregate of cash deposits in the bank account of the appellant, which was not an incriminating seized material at all but one obtained from the bank in the post search proceedings out of the earlier withdrawals made from the very same bank account by rejecting the explanation on most unsustainable grounds, which is purely out of suspicion and surmise and consequently, the addition made requires to be deleted on merits.

4.2 The learned CIT[A] failed to appreciate the fact that the income reported by the appellant on estimate basis is itself is Rs. 2,42,49,060/-, which is far greater than the extent of amounts drawn of Rs. 1,93,00,000/- to make the impugned extent of deposits of Rs. 2,80,000/- drawn from the very same bank account and the source by way of such withdrawals is to make the deposits fully substantiated and self-manifest which is not disputed at all and consequently, the addition made requires to be deleted on merits.

5.1 Without prejudice to the above, the learned CIT[A] is not justified in estimating the income from contract receipt at 10% in as much as the appellant brought to his notice that in the same Commissionarate income from contracts was estimated at 8%.

5.2 The addition made is purely on suspicion and surmise, assumptions and presumptions and contrary to evidence on record and consequently, the same requires to be deleted.

6. The learned CIT[A] is not justified in directing the learned A.O. to assess a sum of Rs.1,70,00,000/- as additional income offered on the basis of a statement given during the course of search for non- maintenance of books of accounts and withdrawal of cash for incurring the expenditure and NOT ON THE GROUND OF ANY SUPPRESSION OF INCOME, which he had initially erroneously offered in the return, which was withdrawn in time before receipt of the order by filing a revised return and the learned A.O. on his own has also not made any addition at all, in the exercise of his appellate powers, which apart from not being justified on merits technically in effect an enhancement of income by CIT[A] which is not in conformity with the procedure for making the enhancement accordingly, the direction to assess such income not assessed by the A.O. requires to be deleted. 7.1 Without prejudice to the above, the income so directed to be assessed by the learned CIT[A] requires to be telescoped with such income similarly directed to be assessed by him in the subsequent years in addition to the additions made by the learned A.O. and sustained by the learned CIT[A] which were telescoped by him during the previous year relevant to the assessment year under appeal.

9. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs.

Assessment Year 2015-16:- 1. The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case.

2.1 The learned CIT[A] is not justified in estimating the income from contract receipt at 10% in as much as the appellant brought to his notice that in the same Commissionarate income from contracts was estimated at 8%.

2.2 The addition made is purely on suspicion and surmise, assumptions and presumptions and contrary to evidence on record and consequently, the same requires to be deleted.

3. The learned CIT[A] is not justified in sustaining the additions of Rs.4,27,410/- and Rs.7,76,756/- being the cash and foreign currency found and seized during the course of search under the facts and in the circumstances of the appellant's case.

3.1 Without prejudice to the above, the learned CIT[A] failed to appreciate that the income reported of Rs. 1,93,99,290/- from contract business as well as from wine stores for the previous year relevant to the assessment year under appeal and taking into account such income earned by the appellant not only for the previous year but for earlier years also and its accumulation, there is no justification for making the impugned addition and consequently, the addition made requires to be deleted on merits.

4. The learned A.O. is not justified in sustaining a sum of Rs. 25,00,000/- made by the A.O. as unexplained income u/s.69 of the Act, under the facts and in the circumstances of the appellant's case.

4.1 Without prejudice to the above, the learned CIT[A] failed to appreciate that the income reported of Rs. 1,93,99,290/- from contract business as well as from wine stores for the previous year relevant to the assessment year under appeal and taking into account such income earned by the appellant not only for the previous year but for earlier years also and its accumulation, there is no justification for making the impugned addition and consequently, the addition made requires to be deleted on merits.

5.1 The learned A.O. failed to appreciate that the income of the appellant by way of contract as well as from operating the wine stores was subject to TDS/TCS and in view of that, there was no obligation for the appellant to file an estimate of advance-tax consequently there was no justification to charge interest u/s.234B of the Act, having regard to the parity ratio of the decision of the Hon'ble Supreme Court in the case of PETER MORRIS reported in 389 ITR 501 [SC].

6. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs.”

3. The grounds raised by the revenue in its appeals are as under. “Assessment Year 2009-10:-

1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was right in restricting the addition made by the Assessing Officer on the estimation @ 9% as against assessed @ 12% of Gross receipts in the hands of assessee? 2. Whether on the facts and in the circumstances of the case, the Ld. CIT (A) was right in deleting the addition of Rs.75,38,567/- made by the Assessing Officer on account of profit on the contract receipts of various persons in the hands of the assessee in spite of the fact that the assessee only managed all the contracts/transactions of the said persons? 3. Any other grounds that may arise at the time of hearing. Assessment Year 2010-11:-

1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was right in restricting the addition made by the Assessing Officer on the estimation @ 10.5% as against assessed @ 12% of Gross receipts in the hands of assessee? 2. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was right in deleting the addition of Rs.7,83,73,237/- made by the Assessing Officer on account of profit on the contract receipts of various persons in the hands of the assessee in spite of the fact that the assessee only managed all the contracts/transactions of the said persons? 3. Any other grounds that may arise at the time of hearing. Assessment Year 2011-12:-

1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was right in restricting the addition made by the Assessing Officer on the estimation @ 10% as against assessed @ 12% of Gross receipts in the hands of assessee?

2. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was right in deleting the addition of Rs. 10,91,63,775/- made by the Assessing Officer on account of profit on the contract receipts of various persons in the hands of the assessee in spite of the fact that the assessee only managed all the contracts/transactions of the said persons?

3. Any other grounds that may arise at the time of hearing. Assessment Year 2012-13:-

1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was right in restricting the addition made by the Assessing Officer on the estimation @ 10% as against assessed @ 12% of Gross receipts in the hands of assessee?

2. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was right in deleting the addition of Rs.8,52,45,730/- made by the Assessing Officer on account of profit on the contract receipts of various persons in the hands of the assessee in spite of the fact that the assessee only managed all the contracts/ transactions of the said persons?

3. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was right in directing the Assessing Officer to telescope the addition made by the Assessing Officer on account of cash deposits of Rs 3,60,000/-with the addition sustained by estimating the income @10% of gross receipt?

4. Any other grounds that may arise at the time of hearing. Assessment Year 2013-14:-

1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was right in restricting the addition made by the Assessing Officer on the estimation @ 10% as against assessed @ 12% of Gross receipts in the hands of assessee?

2. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was right in deleting the addition of Rs.6,57,71,890/- made by the Assessing Officer on account of profit on the contract receipts of various persons in the hands of the assessee in spite of the fact that the assessee only managed all the contracts/transactions of the said persons? 3. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was right in directing the Assessing Officer to telescope the addition made by the Assessing Officer on account of cash deposits of Rs 5,94,000 /and unexplained investment of Rs 54,00,000/- with the addition sustained by estimating the income @10% of gross receipt?

4. Any other grounds that may arise at the time of hearing. Assessment Year 2014-15:-

2. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was right in deleting the addition of Rs.8,52,45,730/- made by the Assessing Officer on account of profit on the contract receipts of various persons in the hands of the assessee in spite of the fact that the assessee only managed all the contracts/transactions of the said persons?

3. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was right in directing the Assessing Officer to telescope the addition made by the Assessing Officer on account of cash deposits of Rs 3,60,000/-with the addition sustained by estimating the income @10% of gross receipt?

4. Any other grounds that may arise at the time of hearing. Assessment Year 2015-16:- 1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was right while restricting the addition made by the Assessing Officer on the estimation @ 10% as against assessed @ 12% of Gross receipts in the hands of assessee?

2. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was right in directing the Assessing Officer to telescope the addition on account of cash of Rs 4,27,410/-, foreign currency of Rs 7,76,756/- and unexplained investment u/s 69 of Rs 25,00,000/-, with the addition sustained by estimating the income @ 10% of gross receipt? 3. Any other grounds that may arise at the time of hearing. 4. In these appeals, several grounds are raised by both sides in each year but only limited issues are involved and hence, we note down the issues involved in these appeals and decide these appeals by deciding each of these issues.

5. The Issues involved in these appeals are as under:- Issue Raised by A. Y. Ground No. Issue No. No seizure of any incriminating material during the course of 2 in search for the relevant year and AY 2009 – 10 to because of this reason that no 2009– 10 2010 – 11 & incriminating material was found 1 Assessee to Ground No. 2 to 4 in the course of search for the 2014– 15 in A. Y. 2011 – 12 relevant year, the assessment to 14 - 15 order framed by the AO u/s. 153A r.w.s. 143(3) is bad in law and should be annulled. Cash deposits in the bank Assessee G. No. 3 account of the assessee to the 2009-10 in AY 2009 – 10 & extent of Rs. 1,20,60,000/- in to 10 - 11 Assessment Year 2009-10, Rs. 2010-11 by 5 in 12 – 13 & 13- 68,99,500/- in Assessment Year assessee 14 & 4.1 & 4.2 in Assessee & 2010-11, Rs. 3,60,000/- in only, 2011 – 14-15. By 2 Revenue Assessment Year 2012-13, Rs. 12 by none Revenue as per G. both 5,94,000/- in Assessment Year &in No. 3 in A. Y. 2012 2013-14 and Rs. 2,80,000/- in remaining – 13 to 14 – 15 Assessment Year 2014-15. CIT years by against (A) confirmed in all years but both telescoping allowed telescoping in AY 2012 allowed by CIT (A). – 13 & 2013 – 14. Profit Percentage was declared by assessee on estimate at 9% in AY 2009 – 10, 10.5% in AY 2009– 10 2010 – 11 and 8% in remaining to Revenue by years. The AO estimated it 2010– 11 Ground No. 1 & @12% in all years& CIT (A) Assessee & by only Assessee by accepted the percentage 3 Revenue Revenue & Ground No. 5.1 but declared by the assessee in first both 2011 – 12 Ground No. 2 in 2 years and in remaining years, to 15 – 16 2015 - 16 he estimated it @ 10%. The by both assessee is in appeal for A. Y. 2011 – 12 to 15 – 16 and revenue is in appeal for all years. 2011– 12 2012– 13 Ground No. 6 2013– 14 Ground No. 6 Validity of search and 2014– 15 Ground No. 8 4 Assessee consequently validity of Ground No. 7 assessment order u/s 153A.

Addl. Income Rs. 3 Crores in 2012– 13 Ground No. 7 AY 2012 – 13, 1.8 Crores in AY 5 Assessee 2013– 14 Ground No. 7 2013 – 14 & 1.7 Crores in AY 2014– 15 Ground No. 6 2014 – 15 declared by the assessee and later retracted, AO not added the same but CIT (A) directed the AO to add it.

Addition of Rs. 54 Lakhs made by the AO in respect of the payments made to Shri N.P. 6 Assessee 2013– 14 Ground No. 6 Mahesh on 07.09.2012 as unexplained investment.

Assessee G. No. Addition of Rs. 4,27,410/- and 3, By Revenue as Assessee & Rs. 7,76,756/- being the cash per G. No. 2 7 Revenue 2015– 16 and foreign currency found and against both seized during the course of telescoping search. allowed by CIT (A). Assessee G. No. 4, Addition of Rs. 25 Lacs being Assessee & By Revenue as per the investment by the assessee 8 Revenue 2015– 16 G. No. 2 against for purchase of property as per both telescoping seized material. allowed by CIT (A). AO made additions in these years in respect of alleged income of 6 associates but deleted by CIT (A). Addition AY 2009 – was Rs. 75,38,567/- in 09-10, 9 By Revenue 10 to 2014 - Ground No. 2 Rs. 783,73,237/- in 10 -11, Rs. 15 10,91,63,775/- in 2011 – 12, Rs. 852,45,730/- in 12 – 13, Rs. 657,71,890/- in 2013 – 14 & Rs. 852,45,730/- in 14 – 15. Telescoping granted by CIT (A) 10 Revenue AY 2013-14 Ground No. 3 against addition of Rs. 54 lacs as unexplained Investment.

6. Now we decide all these issues one by one. First issue is regarding validity of the assessment order passed by the AO u/s. 153A r.w.s. 143(3) and this is the contention of the ld. AR of assessee that there was no seizure of any incriminating material during the course of search and therefore, these assessment orders are not valid. In this regard, he has placed reliance on the judgment of Hon'ble Karnataka High Court rendered in the case of CIT Vs. Lancy Constructions as reported in 295 CTR 454 (Karnataka). In that case, as per the question of law raised before the Hon’ble High Court, this was stated that whether accounts in Tally copied and seized at the time of search do not come within the purview of ‘material found during the course of search’ as per the ratio of the decision of the special bench of the Tribunal in case of All Cargo Global Logistics Ltd. Vs. CIT as reported in 18 ITR (Trib) 106. Hence it is seen that in that case, the only document found and seized was accounts maintained by the assessee in Tally software and under these facts, it was held by the CIT(A) and Tribunal in that case that there was no incriminating material found during the course of search and this is the finding of Hon'ble Karnataka High Court that merely on the basis of the books of accounts which had been already submitted by the assessee and accepted by the AO at the time of regular assessment, the revenue cannot get a second opportunity to reopen the concluded assessment. Now we examine the facts of the present case. In Para no. 6 of the assessment order for Assessment Year 2009-10, it is noted by the AO that during the course of search proceedings, some evidence was gathered from assessee’s premises revealing that the assessee had procured various contracts in the names of different persons. The AO has also noted that the evidence revealing the bank transactions by the assessee in the names of other persons was found and on the basis of those evidence, the AO made addition of Rs. 75,38,567/- being 12% of total credits in those accounts in that year. Similarly in Assessment Year 2010-11, the addition was made by the AO of Rs. 7,83,73,236/- on the basis of transactions in those bank accounts. Such addition in Assessment Year 2011-12 is of Rs. 10,91,63,773/- and in Assessment Year 2012-13, such addition is of Rs. 15,24,60,761/- and in Assessment Year 2013-14, such addition made by the AO is of Rs. 6,57,71,888/- and in Assessment Year 2014-15, such addition is of Rs. 7,00,23,255/- and in Assessment Year 2015-16, the assessment order is u/s. 143(3) and not u/s 153A and therefore, this aspect is not relevant for that year. Hence it is seen that in the present case, incriminating material was found in the course of search and the addition was also made by the AO on the basis of such material. Although such addition is deleted by CIT(A) and the revenue is in appeal before us against such deletion but irrespective of this whether such addition made by the AO and deleted by the CIT(A) survives or not, it has to be accepted that some incriminating material was found in the course of search and therefore, this judgment of Hon'ble Karnataka High Court rendered in the case of CIT Vs, Lancy Constructions (supra) is not applicable in the present case.

7. In view of above discussion, we hold that there is no merit in various grounds raised by the assessee on this issue and accordingly those grounds are rejected in all these years.

8. The second issue is regarding addition made by the AO in respect of cash deposit by assessee in its bank account of Rs. 120.60 lakhs in Assessment Year 2009-10 and Rs. 68,99,500/- in Assessment Year 2010-11 and in these two years this addition was upheld by CIT(A) and therefore, only the assessee is in appeal before us. Similar addition was also made by AO in Assessment Year 2012-13 of Rs. 3.60 Lacs, in Assessment Year 2013-14 of Rs. 5.94 lakhs and in Assessment Year 2014-15 of Rs. 2.80 lakhs and although such addition was also confirmed by CIT(A) for which the assessee is also in appeal against such confirming of addition. But CIT(A) has granted the benefit of telescoping and as a result, the addition was ultimately deleted by CIT(A) and therefore, the revenue is also in appeal before us against granting of telescoping.

9. Regarding such addition in Assessment Years 2009-10 and 2010-11, this is the contention of ld. AR of assessee that such cash deposit in bank was out of earlier cash withdrawal from bank and he has submitted a statement of cash deposit in banks and cash withdrawal from banks during the Assessment Year 2009-10 on pages 69 to 74 of the paper book filed on the date of hearing along with the bank statement on pages 75 to 101 of the same paper book for Assessment Year 2010-11 and a statement is also made available on pages 102 to 106 of the paper book. The ld. AR of assessee pointed out in the course of hearing that in Assessment Year 2009-10, even after considering the entire cash deposit in bank in that year, there is closing cash in hand as on 31.03.2009 of Rs. 3,54,43,500/- because no other cash expenses/cash payment is considered in this statement and as on 31.03.2010, there is cash in hand of Rs. 5,65,00,500/- without considering the opening cash in hand as on 01.04.2009 and after considering the entire cash deposit in bank during this year. He submitted that under these facts, the cash deposit in bank in these two years should be accepted as properly explained and the addition made by the AO and confirmed by the CIT(A) should be deleted. Regarding the remaining years, he submitted that although confirming of addition of in those years is also not proper but in view of this fact that telescoping benefit has been allowed by CIT(A) and no such addition ultimately survives after such telescoping benefit, the assessee has nothing much to say for these years. The ld. DR of revenue supported the assessment order in all these years.

10. We have considered the rival submissions. On this issue for these two years, the decision of CIT(A) is contained in Para no. 9.2 of his order which is reproduced herein below for the sake of ready reference. “9.2 I have considered the submissions and materials on record. The appellant has basically contended that the cash deposits in the bank accounts are made out of earlier cash withdrawals. However, the appellant has not explained as to why there were withdrawals and cash deposits made in the bank account for the assessment year 2009- 10 and 2010-11 of Rs.1,20,00,000/- and Rs.68,99,500/- respectively. U/s.69 of the Act, the appellant is required to give documentary evidence substantiating the same, which has not been done before the A.O. or before me. Hence, I do not interfere in the action of the A.O. and sustain the said additions made for the assessment years 2009- 10 and 2010-11.”

9.3. However for the assessment years 2012-13, 2013-14 and 2014- 15, the cash deposits added by the A.O. is Rs.3,60,000/-, Rs.5,94,000/- and 2,80,000/- respectively. I have already taken a view that the business income of the appellant should be estimated at 10% of the gross receipts for these years. Hence, the income sustained by me would be available for telescoping and therefore, these additions are not required separately. Hence the additions towards cash deposits for the assessment years 2012-13, 2013-14 and 201415 are deleted.

“Conclusions (1) The Tribunal has got powers to look into all aspects of search and a valid search is sine qua non for initiating block assessment.

(2) Materials seized during an invalid search cannot be used in block assessment proceeding but can be used in other assessment proceedings under the Act.

(3) The power to put prohibitory order under s. 132(3) is under law but the reasons for doing so have to be recorded in writing and are justiable.

(4) The period of limitation starts on the date on which the last of authorisations has been executed and not when the authorised officer states that the search is finally concluded. Putting a prohibitory order under s. 132(3) does not elongate the starting point of limitation.

In the light of the aforesaid discussion, as the Tribunal has declined to go into the jurisdictional aspect, the appropriate course would be to set aside the order and remit the entire matter back to the Tribunal for fresh consideration keeping in mind the observations made in this judgment and also consider the jurisdiction aspect which it had declined to consider while passing the impugned order.

Therefore the finding recorded by the Tribunal that action of the IT authorities anterior to search cannot be the subject- matter of the appeal, the legality of the validity of the search proceedings cannot be gone into in the appeal against the order of block assessment, and statute has not provided any right of appeal against such an order cannot be sustained. Accordingly the said findings are set aside. Consequently the entire matter is now remitted back to the Tribunal to consider the appeal afresh, on merits, including the question of the validity and legality of the search, in the light of the law laid down in this decision.”

This issue was decided by CIT (A) as per paras 10.2 and 10.3 of his order and the same are reproduced herein below for the sake of ready reference.

“10.2 I have considered the submissions and materials on record. It is a fact that a document was found in course of search showing an investment of Rs.54,00,000/- made by the appellant with Sri N.P.Mahesh & others in connection with purchase of a property. The appellant has claimed that the aforesaid property deal was cancelled and he had received the amounts paid. No evidence has been furnished in this regard. As rightly held by the A.O. the source for payment of cash has not been properly explained. Hence, the A.O. was justified in making the addition of Rs.54,00,000/-. 10.3 However, the alternate contention of the appellant of telescoping of the aforesaid addition with the income sustained on estimate basis is well-founded. The A.O. is directed to telescope this addition with the income from business estimated at 10% and the additional income offered in the return of income filed for the assessment year 2013-14, Ns hid' has not been accepted by the A.O. while assessing the appellant, which 1 will now advert to. It is directed accordingly.

by the assessee on this issue. Regarding ground raised by revenue in respect of granting of telescoping benefit, we find that telescoping benefit was granted by CIT(A) on this basis that he has already held that the income of assessee should be estimated at 10% as against 8% of income declared by the assessee. On this issue, we have also held that as against 8% declared by the assessee in the present year, income should be estimated at 10.5%. For Assessment Year 2013-14, the gross receipts of the assessee were Rs. 1619.17 lakhs. The extra income @ 2.5% of this much gross receipts amounts to Rs. 40.48 lakhs approx. The CIT(A) has already allowed telescoping benefit in the present year to the extent of Rs. 5.94 Lakhs in Assessment Year 2013-14 while deciding the issue related to cash deposit in bank. Hence the remaining benefit available is only Rs. 34.54 Lakhs but CIT(A) has allowed telescoping benefit of Rs.

54. Lakhs. But this is also important that the assessee has declared extra income in Assessment Year 2013-14 of Rs. 1.8 Crores. Although such income was not added by the AO in the assessment order but the CIT(A) has directed the AO to make the addition. We have confirmed the order of CIT(A) on that issue and therefore, granting of telescoping of Rs.

54. Lakhs against this addition had no infirmity. This issue is decided against the revenue. Issue no. 10 is decided against the revenue.

Order pronounced in the open court on the date mentioned on the caption page.