DL HEERA BHAI JEWELLERY ARCADE PVT. LTD. ,DELHI vs. ACIT CENTRAL CIRCLE-1, NEW DELHI

In addition to the questions proposed by the Ld. Members, in course of hearing before me, the Ld. Counsel appearing for the assessee as well as Ld. Standing Counsel appearing for the Revenue have proposed their own sets of question. Questions proposed from assessee’s side are as under:-

Having gone through the orders of the Departmental Authorities, materials on record, the respective orders of Ld. Members as well as questions proposed, I am of the view that only two core issues arise for consideration. Whereas, all other issues/questions proposed are ancillary and incidental to these two issues. The core issues arising for consideration are as under:-

Before I proceed to decide the core issues as well as the ancillary issues arising therefrom, it is necessary to briefly deal with relevant facts. The assessee, a resident corporate entity, is stated to be engaged in the business of gold bullion/jwellery. For the Assessment Year under dispute, the assessee filed its return of income on 07/11/2017 declaring total income of Rs.34,63,730/-. A search and seizure operation u/s 132 of the Act was carried out on 22/12/2016 at the residential premises of Sh. Kapil Kumar and Sh. Ashwini Singhla, partners of M/s JMK Export. Consequently, a search and seizure operation was also carried out in the residential premises of Sh. Mohit Goel, erstwhile Director of M/s Ringing Bells Private Limited. (“RBPL”) on 23/12/2016. Simultaneously, survey action u/s 133A of the Act was conducted at the business premises of some other entities such as, M/s JMK Exports, M/s. Harrison Diamonds Pvt. Ltd., M/s JMK Jewels Pvt. Ltd. and M/s RBPL.

As stated by the Assessing Officer, in course of search and survey operations, large number of incriminating materials including E-mail and SMS conversations amongst parties were found. In course of search and seizure operation conducted in case of Sh. Mohit Goel, statement u/s 132(4) of the Act was recorded wherein he stated that cash deposits amounting to Rs.32,81,90,000/- made in the bank accounts of RBPL post demonetization, was given to him by Sh. Rajesh Chawala, one of the Directors of M/s D. L. Heera Bhai Jewellery Arcade Pvt. Ltd., the assessee company, for depositing in the bank accounts and thereafter transferring funds to specified bank accounts on commission basis. Based on such statement of Sh. Mohit Goel and other incriminating materials allegedly found in course of search and survey operations, the Assessing Officer, on 24/09/2018 in course of assessment proceedings of Sh. Mohit Goel, recorded a satisfaction note for initiation of proceedings u/s 153C of the Act in case of the assessee for Assessment Years 2011-12 to assessment year 2016-17. Whereas, for the impugned Assessment Year the Assessing Officer issued a notice u/s 143(2) of the Act requiring the assessee to furnish certain information regarding the alleged cash deposits of Rs.32,81,90,000/- in the bank accounts of M/s RBPL and commission paid of Rs.1,52,,00,000/- to Sh. Mohit Goel for depositing the cash.

In response to the query raised, the assessee furnished detailed submissions completely denying the allegation of cash deposits made into the bank accounts of M/s RBPL through Mohit Goel. However, the Assessing Officer was not convinced with the submissions of the assessee. Heavily relying upon the statement recorded u/s 132(4) of the Act from Sh. Mohit Goel and some CCTV footages obtained from the Kotak Mahindra Bank, 62/63, Noida, wherein, some close associate/relatives of Sh. Rajesh Chawala purportedly were seen carrying bags full of old currency, the Assessing Officer ultimately held that cash amounting to Rs.32,81,90,000/- deposited in various bank accounts of M/s RBPL post demonetization was actually given by the assessee. He also held that for depositing cash in the bank accounts of M/s RBPL through Mohit Goel, the assessee had paid commission of Rs.1.52 crores to Sh. Mohit Goel. So, ultimately, he held that the cash deposits of Rs.32,81,19,000/- and commission paid of Rs.1,52,00,000/- have to be treated as assessee’s income u/s 69A of the Act and, accordingly, added back to the income of the assessee. Besides the aforesaid additions, the Assessing Officer made couple of other additions amounting to Rs.6,65,670/- representing labour expenses and Rs.1,16,62,097/- representing unexplained liability on account of sundry creditors and unexplained purchases.

Being aggrieved with the decision of Ld. First Appellate Authority, both assessee and Revenue came in appeal before the Tribunal. While deciding the appeal, Ld. Accountant Member held that since the date of recording of satisfaction u/s 153C of the Act has to be construed as the date of search for initiation of proceeding and the date of recording satisfaction is 24/09/2018, the Assessing Officer gets jurisdiction to initiate proceeding u/s 153C of the Act for a block of six assessment years prior to the assessment year in which the satisfaction was recorded. Thus, he held that the Assessing Officer was required to initiate proceedings u/s 153C of the Act from assessment years 2012-13 till assessment year 2017- 18, which is the impugned assessment year. Whereas, the Assessing Officer has recorded satisfaction u/s 153C of the Act for Asst. Years 2011-12 to 2016-17. No satisfaction for initiation of proceedings u/s 153C of the Act has been recorded for the impugned assessment year. Thus, following the decisions of the Hon’ble Jurisdiction High Court in cases of RRJ Securities 380 ITR 612, Index Securities Pvt. Ltd. 86 Taxmann.com 84, and Vinita Chaurasia, 394 ITR 758, he held that the assessment order is bad in law, hence, deserves to be quashed.

Having held so he proceeded to decide the appeal on merits as well. While dealing with the merits of the issue Ld. Accountant Member observed that the addition made by the Assessing Officer and part of it sustained by Ld. CIT was entirely on the basis of CCTV footages of Kotak Mahindra Bank on 23/11/2016. Whereas, he observed that cash was found to have been deposited in various other bank accounts and there is no evidence or any adverse finding as to who deposited cash in the other bank accounts. He observed, even if the CCTV footage shows two close relatives and driver of the assessee entered the bank with bags in their hands, however, there is no evidence to show that the bag contained demonetized currency. He further observed that neither the persons carrying the bags nor the Branch Manager were examined. He observed, the SMS messages of Smt. Dharna Goel relied upon by the Assessing Officer is neither sufficient nor conclusive proof that the assessee is owner of the cash found deposited in bank accounts of M/s RBPL. Thus, ultimately he held that simply relying upon the statement recorded from Shri Mohit Goel addition could not be made as he had no locus standi to give such statement in respect of M/s RBPL as he was no longer a Director nor a person of interest of RBPL. He held that in terms of section 132(4A) and 292C of the Act, presumption was required to be drawn against RBPL in whose name the bank accounts exist and also against Shri Mohit Goel who was found in CCTV footage at Kotak Mahindra Bank. Thus, ultimately, he held that on the basis of such inconclusive evidences the addition made cannot be sustained. Accordingly, he deleted the addition made on account of demonetized cash deposits and commission paid thereon.

Apparently, Ld. Judicial Member did not agree with the views expressed by Ld. Accountant Member.

Firstly, he held that the Assessing Officer has passed the assessment order u/s 143(3) of the Act and not u/s 143(3) r.w.s 153C of the Act. He further held that in view of amendment made to section 153C of the Act by Finance Act, 2017 w.e.f 01/04/2017, the block period has to be reckoned from the date of search on 23/12/2016 and the block of six immediately preceding assessment years would be Assessment Years 2011-12 to 2016-17. Therefore, for the impugned assessment year assessment has to be made u/s 143(3) of the Act. He observed that the Assessing Officer has wrongly mentioned section 143(3) r.w.s 153C of the Act by way of typographical error in Column-11 of the assessment order. Thus, he held that the assessment order has been validly passed.

In so far as merits of the issue is concerned, Ld. Judicial Member held that Sh, Mohit Goel, who was a key decision maker in RBPL has clearly stated in his statement recorded u/s 132(4) of the Act that the cash deposits made in the bank accounts of M/s RBPL were received by him from Sh. Rajesh Chawla of the assessee company. He observed that the assessee has not furnished any material to rebut the finding of the Assessing Officer. However, he agreed with the assessee that the Assessing Officer has committed error in not providing the copy of the CCTV footage of the assessee along with certificate issued u/s 65B of the Indian Evidence Act. He also agreed with the assessee that the Assessing Officer should have provided opportunities of cross examination to the assessee before making the disputed addition. Accordingly, he restored the issues relating to the said additions to the First Appellate Authority with a direction to provide opportunities of cross examination of witnesses and also to provide CCTV footage along with certificate issued u/s 65B of the Indian Evidence Act. As regards couple of other additions, Ld. Judicial Member held that in absence of any documentary evidences, addition of Rs.6,65,670/- has to be sustained. Whereas, in respect of addition of Rs.1,16,62,097/- he restored back the issue to Ld. First Appellate Authority.

Before me, Ld. Counsel appearing for the assessee submitted that assessment order passed u/s 143(3) r.w.s 153C of the Act is invalid as the Assessing Officer has not recorded any satisfaction note for assumption of jurisdiction u/s 153C of the Act for the impugned assessment year. He submitted, in terms of first proviso to section 153C(1) of the Act, in case of a person other than the searched person, the date of search has to be reckoned to be the date on which the Assessing Officer receives the books of accounts or documents or assets seized and records his satisfaction note for assumption jurisdiction u/s 153C of the Act. He submitted in the facts of the present case, the Assessing Officer has recorded satisfaction on 24/09/2018, which falls in financial year 2018-19 relevant to assessment year 2019-20. Therefore, he has to initiate proceedings u/s 153C of the Act for six immediately preceding assessment years, commencing from assessment year 2012-13 to assessment year 2017-18.

Whereas, he submitted, the Assessing Officer has recorded satisfaction note for Asst. Years 2011-12 to 2016-17. He submitted, for the impugned assessment year, the Assessing Officer has not recorded any satisfaction note in terms of section 153C of the Act. Thus, he submitted, the assessment order passed u/s 143(3) r.w.s 153C of the Act is invalid. He submitted Ld. First Appellate Authority has clearly recorded a finding of fact that the assessment order has been passed u/s 143(3) r.w.s 153C of the Act. He submitted, in absence of grounds raised by the Revenue challenging the finding of Ld. Commissioner (Appeals) that the assessment order has been passed u/s 143(3) r.w. 153C of the Act, Ld. Judicial Member could not have gone beyond the grounds raised by the Revenue. In support he relied upon the following decisions:-

Per contra, Ld. Standing Counsel appearing for the Revenue strongly contested the submissions of the assessee. He submitted, undoubtedly the assessment order has been passed u/s 143(3) of the Act and not u/s 143(3) r.w.s 153C of the Act. Drawing my attention to section 153C of the Act, he submitted that the said provision does not override section 143(3) of the Act. Thus, he submitted, because of section 153C of the Act, the Assessing Officer does not lose his jurisdiction u/s 143(3) of the Act. He submitted, on the date of search on 23/12/2016 the assessee had not filed its return of income for A.Y.2017-18. He submitted, since incriminating materials pertaining to assessee was found during search and on the date of search assessee had not filed the return of income for the year under consideration, the Assessing Officer validly issued notice u/s 143(2) of the Act and completed the assessment u/s 143(3) of the Act. Thus, he submitted the assessment having been made u/s 143(3) of the Act is valid. In support of his contention learned counsel relied upon a number of judicial precedents furnished before me by way of a separate compilation.

I have carefully considered rival submissions and perused the materials on record. I have applied my mind to the decisions relied upon by both the parties. So far as factual aspect of the issue is concerned, there is no dispute that a search and seizure operation u/s 132 of the Act was carried out in case of Sh. Mohit Goel on 23/12/2016. It is the allegation of the Department that in course of such search and seizure operation certain incriminating materials belonging to the assessee were found. It is a fact on record that based on such incriminating material found and seized in course of search and seizure operation in case of Sh. Mohit Goel., the Assessing Officer recorded satisfaction in terms of section 153C(1) of the Act on 24/09/2018 in course of assessment proceeding of Sh. Mohit Goel.

Undisputedly, based on such satisfaction note, the Assessing Officer initiated assessment proceedings u/s 153C of the Act in case of the present assessee for Asst. Years 2011-12 to 2016-17. Whereas, the Assessing Officer neither recorded any satisfaction note for the impugned assessment year nor issued any notice u/s 153C of the Act. Though, of course, in the body of the assessment order he has clearly mentioned that assessment order has been passed u/s 143(3) r.w.s 153C of the Act. In terms of the first proviso to section 153C(1) of the Act, in case of a person other than the searched person the date of search has to be reckoned from the date on which the Assessing Officer of other person receives the seized material. In the facts of the present case, undisputedly, the Assessing Officer in case of searched person as well as the other person, i.e., the assessee happens to be same. In case of searched person the Assessing Officer has recorded the satisfaction note on 24/09/2018, which falls in the assessment year 2019-20. Therefore, in terms with the first proviso to section 153C(1) of the Act, the Assessing Officer has to initiate proceedings u/s 153C of the Act for a block of six assessment years immediately preceding the assessment year wherein the search and seizure operation had taken place. However, for the purpose of section 153C of the Act, date of search has to be taken as the date of satisfaction note.

In the facts of the present appeal, undisputedly, the date of recording of satisfaction u/s 153C is 24/09/2018. Therefore, the block of six immediately preceding assessment years would be assessment years 2012-13 to 2017-18. Therefore, considering the fact that the assessments are based on incriminating material found as a result of search, the Assessing Officer should have initiated proceedings u/s 153C of the Act for the impugned assessment year as well. However, the Assessing Officer has failed to do so. Thus, in my view, the Assessing Officer has acted in complete violation of the statutory mandate contained u/s 153C of the Act.

In case of RRJ Securities (supra), the Hon’ble Jurisdictional High Court, in no uncertain terms, has held that for assumption of jurisdiction u/s 153C of the Act the date of recording of satisfaction note is relevant for counting the block of six immediately preceding assessment years. There are number of other decisions, relied upon by Ld. Accountant Member holding identical view. In fact, as on date, the issue is no more res-integra in view of the decision of Hon’ble Supreme Court in case of CIT vs. Jasjit Singh, S.L.P No.6644 of 2016 judgment dated 26/09/2023, wherein, the Hon’ble Supreme Court agreeing with the view expressed by Hon’ble Delhi High Court in the case of SSP Aviation Ltd. vs. Deputy Commissioner of Income Tax, reported in [(2012) 346 ITR 177] held as under:-

So far as the contention of Ld. Standing Counsel appearing for the Revenue that assessment order has been passed u/s 143(3) of the Act and the Assessing Officer retains his jurisdiction to make assessment u/s 143(3) of the Act despite the provisions of section 153C, I am not convinced. If the argument advanced by the Revenue is accepted, the provisions of section 153C would become redundant. In the facts of the present appeal, it is the case of the Revenue that assessment for impugned assessment year is based on incriminating material found as a result of search and seizure operation carried out in case of Sh, Mohit Goel. It is also a fact that assessment for the impugned assessment year has abated. Considered from that perspective, the Assessing Officer has to assume jurisdiction u/s 153C of the Act for block of six preceding assessment year prior to assessment year 2019-20, wherein, the satisfaction u/s 153C was recorded. Any other interpretation would lead to a chaotic situation. In view of the aforesaid, I agree with the decision of Ld. Accountant Member on the validity of the assessment order.

Having held so it is not necessary to deal with the issues on merits as they have been reduced to mere academic interest. However, considering the fact that both the Ld. Members have proposed point of difference on merits as well and both the parties have made submissions on merits, for the sake of completeness, I deem it appropriate to deal with them. As discussed earlier, in course of search and seizure operation carried out in case of Sh. Mohit Goel, erstwhile Director of RBPL, a statement u/s 132(4) of the Act was recorded. In course of recording of such statement, when the Assessing Officer called upon him to explain the source of cash deposits made in various bank accounts of RBPL post demonetization, he stated that the amount of Rs.32,81,90,000/- was given to him by Sh. Rajesh Chawal, Director of the assessee company. He further stated that for depositing the cash in the bank accounts of RBPL, he received commission of Rs.1,52,00,000/- from Sh. Rajesh Chawla. Apart from the statement of Sh. Mohit Goel, the only other piece of evidence on which the Assessing Officer has heavily relied upon is the CCTV footage of 23.11.2016 obtained from Kotak Mahindra Bank, Noida, which revealed that three persons closely associated with Sh. Rajesh Chawla carried bag containing old currency notes for depositing in the account of RBPL.

The Assessing Officer has observed that the three individuals who entered the bank branch, as revealed from the CCTV footage, are Sh. Akshay Chawala (Nephew of Rajesh Chawla), Sh. Anmol Chawala (Son of Rajesh Chawla) and Shri Manpreet Singh, Driver of Rajesh Chawal. He has observed that after reaching the bank these three persons met Sh. Anmol Goel, Director of RBPL, who was waiting in a separate room. Thereafter, all the four persons entered the bank and after few minutes Sh. Anmol Chawla along with Sh. Akshay Chawla were seen leaving the bank branch. However, Sh. Manpreet Singh, the Driver of Sh. Rajesh Chawla stayed behind till later in the day and was seen leaving the bank branch with empty bags. The Assessing Officer has also referred to SMS conversion between Sh. Rajesh Chawla and Smt. Dharna Goel and some other persons to draw inference that Shri Rajesh Chawla delivered cash of Rs.32,81,90,000/- to Sh. Mohit Goel for depositing in bank accounts of RBPL. He has also referred to the deposit slips through which the demonetized cash was deposited in the bank account of RBPL.

Thus, as could be seen from the aforesaid facts, the edifice of the entire assessment order concerning the addition of Rs.32,81,90,000/- was founded on the statement recorded from Sh. Mohit Goel on the date of search and CCTV Footage of 23/11/2016 obtained from the Kotak Mahindra Bank, Noida Branch. It is a fact on record that out of the cash deposits of Rs.32,81,90,000/- in various bank accounts of RBPL, an amount of Rs.26,15,20,000/- was deposited in Kotak Mahindra Bank and the balance amounts were deposited in three other banks, viz; State Bank of India, Sector-63, Noida, Union Bank of India, Sector-66, Noida and Punjab National Bank, Sector-63, Noida. However, absolutely no enquiry was made by the Assessing Officer with the concerned banks to ascertain the source of cash deposits. The only enquiry conducted by the Assessing Officer was with Kotak Mahindra Bank, Noida Branch and as a result of such enquiry, the Assessing Officer received CCTV footages and number of deposit slips. In the CCTV footage of 23/11/2016, as discussed earlier, some close relatives/associates of Shri Rajesh Chawla were found in the bank along with one of the Directors of M/s RBPL, Sh. Anmol Goel. However, it is not understood how the Assessing Officer could, with absolute certainty, conclude that the close relatives/associates of Sh. Rajesh Chawla were carrying demonetized cash. It is also relevant to observe, on 23/11/2016 cash deposit was only of Rs.4,67,50,000/-. In so far as cash deposits made in Kotak Mahindra Bank on other dates, the Assessing Officer has absolutely no evidence to establish that any close associate or relative of Sh. Rajesh Chawla went to the bank for depositing the cash. In fact, the deposit slips indicating deposit of cash in the bank account of M/s RBPL clearly reveal that they bear signatures of either Sh. Sumit Kumar or Sh. Anmol Goel. None of the close relatives/associates of Sh. Rajesh Chawla were found to have signed the deposit slips recovered from the concerned bank.

Surprisingly enough, the Assessing Officer has chosen not to examine Sh. Sumit Kumar, who had signed most of the deposit slips, or employees of the concerned bank to ascertain the identity of the person who carried cash and deposited in the bank account. Thus, in my view, the CCTV footage obtained from the bank only leads to a presumption and does not contain any conclusive evidence to establish that the close relatives and associates of Sh. Rajesh Chawla were carrying demonetized cash for depositing in the bank account of M/s RBPL. It is fairly well settled, presumption howsoever strong cannot be substitute for evidence. No addition can be made purely on the basis of presumption and suspicion unless there are evidences on record to justify the addition. In the facts of the present appeal, the Assessing Officer has not brought any conclusive evidence to establish beyond reasonable doubt that it is the assessee who has given demonetized cash for depositing in the bank accounts of M/s RBPL.

It is also relevant to observe, the Assessing Officer has placed strong reliance upon the statement recorded u/s 132(4) of the Act from Sh. Mohit Goel, erstwhile Director of M/s RBPL. It is established on record that on the date of search i.e., 23/12/2016, when statement u/s 132(4) of the Act was recorded from Sh. Mohit Goel, neither he was Director of M/s RBPL nor was in any way involved in the functioning of M/s RBPL. In fact, materials on record clearly reveal that Sh. Mohit Goel was not associated in any capacity with M/s RBPL on the date of search on 26/12/2016. In the statement recorded u/s 132(4) Sh. Mohit Goel has very clearly stated that he resigned from the directorship of the company on 28/07/2016 and is in no way concerned with the company. He has further stated that he had sold all his shares in the company by May, 2016 and has no control over the company. In fact, as on the date of search the shareholding pattern of M/s RBPL as per the details submitted to Kotak Mohindra Bank is as under:-

Thus, when Sh. Mohit Goel had nothing to do with the company as he had resigned from the directorship and sold all his shares in RBPL much prior to the search and seizure operation conducted on 23/12/2016 and even prior to the declaration of demonetization, it is not understood how and why Assessing Officer so heavily relied upon the statement recorded u/s 132(4) of the Act from Sh. Mohit Goel. Though, it may be a fact that Sh. Anmol Goel, one of the directors has also stated in his statement recorded u/s 132(4) of the Act that cash to the tune of Rs.30 Crores was received from Sh. Rajesh Chawla was deposited in the bank accounts of M/s RBPL post demonetize, however, the statement recorded cannot be taken on its face value as there is every possibility that to explain the source of unaccounted cash deposited in the bank accounts, Sh. Anmol Goel might have taken the name of Sh. Rajesh Chawla to save his own skin. In any case of the matter, Sh. Anmol Goel, being the Director of M/s. RBPL, is an interested person, hence, without any other corroborative evidence his statement cannot be relied upon.

In any case of the matter, cash was found deposited in the bank accounts of M/s RBPL. Deposit slips also bear signature of either the directors or persons connected to M/s RBPL. Therefore, in terms with section 132(4A) r.w.s 292C of the Act, the presumption has to be drawn against the person from whose possession/custody the money was found/seized. Though, the presumption postulated u/s 132(4A) r.w.s 292C of the Act is a rebuttable presumption, however, the initial burden is entirely on the person from whose possession the money was found to establish through proper evidence that either it does not belong to him or it is from explainable source.

It is interesting to note, despite such statutory mandate given to the Assessing Officer, no such presumption was drawn against M/s RBPL or its director. In fact, in assessment proceedings of M/s RBPL, in spite of complete non-cooperation from the side of RBPL, the Assessing Officer has virtually given a clean chit by adding the cash deposits in bank accounts on protective basis while completing assessment u/s 144 of the Act. This is something which does not appeal to common sense. It is relevant to observe, in course of proceedings before the First Appellate Authority, the entire evidence available on record was again examined and remand report was called from the Assessing Officer. After examining the evidences and the remand report of the Assessing Officer, Ld. First Appellate Authority has recorded the following factual findings.

The aforesaid finding of facts recorded by Ld. First Appellate Authority clearly establishes that the Assessing Officer has not made detailed enquiry and has not brought enough material on record to conclusively prove that demonetized cash deposited in the banks account of M/s RBPL came from the assessee company. Except Kotak Mahindra Bank, Noida Branch, the Assessing Officer has not conducted any enquiry worth its name in respect of cash deposited in other bank accounts.

On the contrary, the finding of facts recorded by Ld. First Appellate Authority clearly reveal various missing links in the enquiry conducted by the Assessing Officer with regard to the cash deposited in the bank accounts of M/s RBPL. Thus, in my view, based on such half backed enquiry the assessee cannot be hauled up for the cash deposited in the bank accounts of M/s RBPL by ignoring the statutory mandate of Section 132(4A) r.w.s 292C of the Act. The Assessing Officer should have directed his energy in conducting enquiry with M/s RBPL and with people closely associated with it to ascertain the source of cash deposits in the bank accounts of M/s RBPL. Instead of doing that the Assessing Officer has simply relied upon the statement recorded u/s 132(4) of the Act from Sh. Mohit Goel, who was no way connected with M/s RBPL and is a person of questionable integrity, considering the fact that he was involved in fraud and absconded for a considerable period before being arrested by law enforcement agency.

It is not a fact that the Assessing Officer was not conscious of the credentials of Sh. Mohit Goel as he himself has rejected assessee’s request for cross examination of Sh. Mohit Goel on the reasoning that he was absconding. Another crucial fact which needs mention is, as per CCTV footages of Kotak Mahindra Bank dated 23/11/2016, three closely associated persons of Sh. Rajesh Chawla were found entering the Kotak Mahindra Bank branch carrying bags. Though, the Assessing Officer was very much aware of the identity of the concerned persons, however, he has not examined either Sh. Akshay Chawla (Nephew of Sh. Rajesh Chawla) or Sh. Anmol Chawla (son of Sh. Rajesh Chawla). Of course Sh. Manpreet Singh, Driver of Sh. Rajesh Chawla was examined. Interestingly, in the statement recorded u/s 132(1A) of the Act, when Sh. Manpreet Singh was specifically asked about the cash deposit made in the bank account, he very clearly and categorically stated that they had gone to the bank to deliver 2-3 kg gold bullion to Sh. Anmol Goel, one of the Directors of M/s RBPL and delivered the gold in parking of Kotak Mahindra Bank branch. However, since Sh. Anmol Goel was alone carrying cash, he requested them to accompany him with cash inside the branch. The aforesaid statement recorded from Sh. Manpreet Singh, driver of Sh. Rajesh Chawla, clearly corroborates the initial statement recorded from Sh. Rajesh Chawla regarding the cash deposits.

Surprisingly enough, the Assessing Officer has consciously avoided any reference to the statement recorded from Sh. Manpreet Singh, driver of Sh. Rajesh Chawla, who is a direct witness to the cash deposits on 23/11/2016. This could be possibly for the reason that any reference to the statement recorded from Sh. Manpreet Singh would have diluted the case of the Assessing Officer. Thus, on appreciation of materials on record, I am of the considered opinion that the addition made of Rs.32,81,00,000/- at the hands of the assessee is purely on conjectures and surmises rather than based on cogent evidence. In fact, Ld. First Appellate Authority, on appreciation of facts and materials available on record, has concluded that the addition made is not backed by proper evidence. However, merely because some closely associated persons of Sh. Rajesh Chawla were found to be present in the bank premises on 23.11.2016, he has sustained the addition to the extent of Rs.4,65,50,000/-, being the amount of cash deposit on the said date. When there is no conclusive evidence to establish that the persons of Sh. Rajesh Chawla were carrying cash with them for handing over to Sh. Anmol Goel, no addition of even the amount of Rs.4,65,50,000/- should have been sustained.

Pertinently, Ld. Judicial Member, while dissenting from the view expressed by Ld. Accountant Member qua the disputed addition has restored the issue to First Appellate Authority with a direction to provide opportunity of cross examination to the assessee and also to provide copy of CCTV footage along with certificate issued u/s 65B of the Indian Evidence Act. Thus, to certain extent, Ld. Judicial Member has also accepted the fact that the addition made was not within legal frame work. Be that as it may, the Departmental Authorities had sufficient time to make proper enquiry and investigation on the issue. In fact, from the stage of assessment proceedings itself the assessee has repeatedly requested for cross examination of witnesses whose statements have been relied upon. However, no opportunity of cross examination has been granted. In fact, before the first Appellate Authority the evidences were again examined and remand report was called from the Assessing Officer. Thus, the aforesaid facts reveal that Assessing Officer had got opportunities twice to make necessary enquiry, which he failed to do.

Thus, at this stage, restoring the issue again back to the Departmental Authorities would not be fruitful, as nothing much is going to turn with such restoration. Therefore, upon considering the totality of facts and circumstances of the case, I agree with Ld. Accountant Member that the addition of Rs.32,81,00,000/-, a part of which was sustained by Ld. Commissioner (Appeals), cannot be made. Consequently, the alleged commission payment of Rs.1.52 Cr. is also unsustainable.

In so far as couple of other additions amounting to Rs.6,65,670/- representing labour expenses and Rs.1,16,62,097/- representing alleged unaccounted/unexplained purchases and unexplained liability, I find Ld. Accountant Member has not recorded any specific finding on these issues. Whereas, Ld. Judicial Member has sustained the addition of Rs.6,65,670/- and has restored the addition of Rs.1,16,62,097/- to Ld. First Appellate Authority. In absence of any specific finding recorded by Ld. Accountant Member on these two issues, according to me, there is no difference of opinion on the issues. Therefore, I agree with the view expressed by Ld. Judicial Member. However, as discussed earlier, these issues are purely academic, considering the fact that I have agreed with the view of Ld. Accountant Member that the assessment order passed u/s 143(3) r.w.s 153C of the Act is invalid, hence, deserves to be quashed. Therefore, the matter ends there, as, the Assessing Officer cannot proceed any further.

My decision along with records be sent to the concern bench for passing the confirmatory order in accordance with law.