DCIT CENTRAL CIRCLE-01, DELHI vs. DL HEERA BHAI JEWELLERY ARCADE PVT. LTD. , DELHI

“1.) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in confirming the framing of Assessment Order by the AO dated 29-12-2019 for the Assessment year 2017.18 u/s 143(3) of the Act on the assessee and not under the provisions of Section 153C consequent to search action on 22-12-2016 at the residential premises of Sri. Kapil Kumar and Sri. Ashwini Singla and in the case of Mohit Goel on 23-12-2016 wherein the said Assessment year is not covered within immediately 6 preceding Assessment years (2011-12, 2012-13, 2013-14, 2014-15, 2015-16 and 2016-17) as the date of search is 22-12-2016/23- 12-2016 which falls in F.Y. 2016-17 relevant to A.Υ. 2017-182. 2). Whether on facts and circumstances of the case and in law, if the answer to Question No. 1 is YES, is there any necessity for recording satisfaction u/s 153C of the Income Tax Act relating to framing of assessment for A.Y. 2017-18 in view of amended provision Section 153C of the Act as applicable w.e.f. 01/04/2017 which clearly mandates that the assessment is required to be framed u/s 143 (3) of the Act only ?. 3). Whether in the facts and circumstances of the case and in law, the assessee is right in blowing hot and cold by challenging the order passed u/s 143(3) of the Act by the AO before the CIT (A) by taking a stand that it should have been passed u/s 153C of the Act and contrary ground before the ITAT that the order could not have been passed u/s 153C of the Act which is a contradictory stand before two authorities which is not permitted in law ? 4). Whether on the facts and circumstances of the case and in law, whether the Judgment of the Hon'ble High Court of Delhi in the case of M/s. RRJ Securities reported in 380 ITR 612 dated 30-10-2015 is applicable to the present case especially in view of the amendment carried out in the Act to the Section 153C of the Act which is applicable w.e.f. A.Y. 2017-18 as the search in this case has taken place in financial year relevant to A.Y. 2017-18. ? 5). Whether in the facts of the case and in law, since the search has been taken place on 22-12-2016/23-12-2016 on the parties wherein material pertaining to assessee has been found which falls in the Assessment Year 2017-18 and the same does not fall within the block of

six Assessment years ie. AY 2011-12, 2012-13, 2013-14, 2014-15, 2015- 16 and 2016-17 as per Section 153A read with section 153C of the Act, therefore the Judgement rendered by the Hon'ble Delhi High Court in the case of Kabul Chawla reported in 38- ITR 573 is applicable to the facts of the present case or not (for A.Y. 2017-18)? 6). Whether merely wrong mentioning of the Section '153C' in the First page of the Assessment Order will vitiate the entire Assessment Order? or being a last fact-finding Authority, the Tribunal is bound to read the entire Assessment Order and come to the just conclusion when the correct section which is Section 143(3) of the Act has clearly been mentioned in the assessment order by the AO ? 7). Without prejudice to the above, on facts and circumstances of the case, whether the Ld. CIT(A) justified in sustaining the additions of Rs. 4,67,50,000/- cash deposited in Kotak Mahindra Bank of Ringing Bells Pvt. Ltd. on 23/11/2016 on the basis of material evidence and statement of searched person and also the admission of the partners of the Assessee. ? 8). Whether on facts and circumstances of the case, the Ld. CIT(A) justified in sustaining the proportionate addition of Rs. 21,63,486/- out of total addition of Rs. 1,52,00,000/- made by Ld. AO in the hands of Assessee on account of commission paid to Mohit Goel u/s 69C read with Section 115 BBE of the Act?. 9). Whether on the facts and circumstances of the case, that the Ld.CIT(A) has erred in law and on facts in sustaining the addition of Rs. 6,65,670/- on account of disallowance of labour charges?. 10). Whether on facts and circumstances of the case, the Ld. CIT(A) justified in sustaining addition of Rs. 1,16,62,097/- on account of unexplained trade creditors and purchaser.? 11). In the facts and circumstances of the case and considering the principle of natural justice, whether the Assessee should have been given an opportunity of cross examining the witnesses by following the recent binding Judgement dated 12-02-2020 of the Hon'ble Supreme Court of India in the case of I.C.D.S. Ltd. Vs. CIT reported in (2020)273 Taxmann 12/194 DTR 18/316 CTR 679 (SC) ?

ITA No.61/(DEL)/2021 (AY-2017-18) (Revenue) 1). Whether on facts and circumstances of the case, the Ld. CIT(A) is justified in deleting addition of Rs. 28,14,40,000/- out of total addition of Rs. 32,81,90,000/- made by AO u/s 69 of the IT Act ?. 2). Whether on the facts and circumstances of the case, the Ld. CIT(A) is justified in deleting addition of Rs. 1,30,36,514/- out of total addition of Rs. 1,52,00,000/- made by the AO on account of unexplained expenses?. 3). Whether on facts and circumstances of the case, the Ld. CIT(A) is justified in not giving due weight age to the statement recorded u/s. 132 (4) of the Act on 26/12/2016 from Shri. Anmol Goel, Director of RBPL and also statement of Rajesh Goel recorded u/s. 131(1) (a) of the Act ?. 4). Whether on facts and circumstances of the case, the Ld. CIT(A) is justified in not considering the CCTV footage and WhatsAap Messages extracted from Mrs. Dharna Goel, though these evidences are corroborative and supportive to the statement of Mohit Goel and Anmol Goel?. 5). Whether on facts and circumstances of the case, the Ld. CIT(A) is justified in observing that the AO has not brought on record any evidence to show how the Assessee benefited from cash deposited in bank account of RBPL, without appreciating that as per the direction of Sri. Rajesh Chawla, the RBPL transferred the amount to the different Bank Accounts including the account of JML Exports? 6). Whether on facts and circumstances of the case, the Ld. CIT(A) is justified in confirming addition of Rs. 4,67,50,000/- and Rs. 21,63,486/- on one hand and deleting the addition of Rs. 28,14,40,000/- and Rs.1,30,36,514/-on the other hand, both of which emanates from similar facts and circumstances and the same statements and the evidences? 7.) In the facts and circumstances of the case and considering the principle of natural justice, the Assessing should have been given an opportunity of cross examining the witnesses by following the recent binding Judgment dated 12-02-2020 of the Hon’ble Supreme Court on India in the case of I.C.D.S. Ltd. Vs. CIT (2020) 273 Taxmann 12/194 DTR 18/316 CTR 679 (SC) ?”

“(i) "Whether on the facts and circumstances of the case, the addition of Rs.32,81,90,000/- being cash deposited in the specified bank accounts of Ringing Bells Private Limited ("RBPL") made u/s 69A r.w.s 115BBE of the Act, ought to be deleted in law and on the basis of the facts on record? (ii) Whether on the facts and circumstances of the case, the order of the CIT(A) should be set aside to his file with the direction to give cross- examination of Mohit Goel and CCTV Footage of Kotak Mahindra bank dated 23.11.2016 along with the certificate u/s 65B (4) of the Indian Evidence Act, 1872? (iii) Whether on the facts and circumstances of the case, the grounds challenging the Ld. CIT(A)'s action in sustaining the proportionate addition of Rs. 21,63,486/- and deleting the balance addition of Rs. 1,30,36,514/- out of the total addition of Rs. 1,52,00,000/- made by Ld. AO in the hands of assessee on account of commission paid to Mohit Goel u/s 69C read with Section 1155 BBE of the Act, require to be remitted to the file of the Id. CIT(A)? (iv) Whether on the facts and circumstances of the case, the Ld. CIT(A) has erred in law and on facts in sustaining the addition of Rs.6,65,670/- on account of disallowance of labour charges? (v) Whether on the facts and circumstances of the case, the Ld. CIT(A) justified in sustaining addition of Rs.1,16,62,097/- on account of unexplained trade creditors and purchases ? 5. Questions proposed by the Revenue are as under:-

“A. Whether on the facts and circumstances of the case and in law, the impugned assessment order for AY 2017-18 passed u/s 143(3) of the Act can be said to be invalid when the provisions of Section 153C does not override the provision of Section 143(3) of the Act? B. Whether on the facts and circumstances of the case and in law, the impugned assessment order for AY 2017-18 has been rightly passed u/s

143(3) of the Act considering the amendment made in Section 153C(1) of the Act vide Finance Act, 2017 which clarifies that the six year period should be counted from the date of search? C. Whether on the facts and circumstances of the case and in law, the impugned assessment order for AY 2017-18 has been rightly passed u/s 143(3) of the Act in view of the fact that the satisfaction note was recorded on 24.09.2018 i.e after the amendment made u/s 153C of the Act as per Finance Act, 2017, hence the search assessments to be made for six years prior to the date of search i.e 23.12.2016? D. Whether on the facts and circumstances of the case and in law, the assessee is justified in taking contrary stand before CIT(A) and ITAT wherein the assessee submitted before the CIT(A) that the impugned assessment order for AY 2017- 18 should have been passed u/s 143(3) and not u/s 153C keeping in view the amendment made in Finance Act, 2017 and subsequently taking a completely opposite stand before Ld. ITAT that the said assessment order is bad in law since it has been passed without fulfilling the requirements of Section 153C of the Act? E. Whether on the facts and circumstances of the case and in law, the impugned assessment order for AY 2017-18 passed u/s 143(3) of the Act can be stated as invalid only for the reason that the heading of the said order also includes the words" r/w Section 153C" which is a curable defect and therefore cannot vitiate the assessment proceedings? F. Whether on the facts and circumstances of the case and in law, the decision of Hon'ble Delhi High Court in case of CIT Vs RRJ Securities Ltd [2016] 380 ITR 612 (Del) is applicable to present case in view of the fact that the Assessing officer was aware of the fact at the time of issuing notice u/s 143(2) of the Act for AY 2017-18 on 28.09.2018 and at the time of recording satisfaction note that the Parliament has made an amendment under Section 153C of the Act vide Finance Act, 2017 applicable w.e.f 01.04.2017, that six years as per Section 153C would be six years prior to the date of search however the decision passed by the Hon'ble Delhi High Court in RRJ Securities Ltd. (Supra) could not have the occasion to deal with the issue as the satisfaction note in case of RRJ Securities was recorded prior to the amendment? G. Whether on the facts and circumstances of the case and in law, the assessment order can be said to be bad in law when the AO has given the opportunity of cross examination of Mr. Mohit Goel?

H. Whether on the facts and circumstances of the case and in law, the matter was rightly remanded to the file of Ld. CIT(A) to decide upon the merits of the case afresh since opportunity to the assessee for the cross examination of Mr. Mohit Goel who could not be located at that time since he was absconding? I. Whether the statement made by Mr. Mohit Goel (erstwhile director of Ringing Bells Pvt. Ltd.) holds the evidentiary value u/s 132(4) of the Act who has the controlling stake in RBPL having shareholding of 40%? J. Whether the statement made by Mr. Anmol Goel (director of Ringing Bells Pvt. Ltd.) holds the evidentiary value u/s 132(4) of the Act who is a director of the company M/s RBPL? K. Whether on the facts and circumstances of the case and in law, the CIT(A) is justified in deleting the addition of Rs. 28,14,40,000/- out of total addition of Rs. 32,81,90,000/- made by AO u/s 69 of the Act? L. Whether on the facts and circumstances of the case and in law, the CIT(A) is justified in deleting the addition of Rs. 1,30,36,514/- out of total addition of Rs. 1,52,00,000/- made by AO on account of unexplained expenses? M. Whether on the facts and circumstances of the case and in law, the CIT(A) is justified in sustaining the addition of Rs. 21,64,486/- out of total addition of Rs. 1,52,00,000/- made by AO in the hands of the assessee on account of commission paid to Mohit Goel u/s 69 read with Section 115BBE of the Act? N. Whether on the facts and circumstances of the case and in law, the CIT(A) is justified in not considering the CCTV footage and what's app messages extracted from Mrs. Dharna Goel though these evidences are corroborative and supportive to the statement of Mohit Goel and Anmol Goel?” 6. 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:-

(i) Whether in the facts and circumstances of the case, the assessment order dated 29/12/2019 passed u/s 143(3) r.w.s 153C of the Income Tax Act, 1961 can be said to be a valid order. (ii) Whether in the facts and circumstances of the case, the Assessing Officer had validly made addition of Rs.32,81,19,000 u/s 69A r.w.s. 115BBE of the Act. 7. 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.

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.

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.

search and seizure operation as contemplated u/s 153C of the Act, the Assessing Officer was justified in initiating proceedings u/s 153C of the Act and passing the assessment order u/s 143(3) r.w.s. 153C of the Act. On merits, Ld. First Appellate Authority held that the only evidences relied upon by the Assessing Officer are the statement recorded from Sh. Mohit Goel and CCTV footage of Kotak Mahindra Bank. He observed, since Sh. Mohit Goel was not a Director of M/s RBPL either at the time of search or at the time of cash deposits, his statement does not have validity. He further held that since CCTV footage of 23/11/2016 obtained from Kotak Mahindra Bank is the only direct evidence to implicate the assessee, the cash deposits made on 23/11/2016 to the extent of Rs.4,67,50,000/- can be added u/s 69A of the Act. Accordingly, out of the total additions made of Rs.32,81,90,000/-, he sustained addition to the extent of Rs.4,67,50,000/-, the amount deposited on 23/11/2016. Consequently, he proportionately reduced the addition made on account of commission expenditure from Rs.1,52,00,000/- to Rs.21,63,486/-. In so far as couple of other additions made by the Assessing Officer, Ld. Commissioner (Appeals) confirmed them.

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.

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.

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.

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:-

(i) CIT v. RRJ Securities Ltd. [2016] 380 ITR 612 (Del. HC) (ii) PCIT v. Sarwar Agency (P.) Ltd. [2017] 397 ITR 400 (Del. HC) (iii) ARN Infrastructure India Ltd. v. ACIT [2017] 394 ITR 569 (Del. HC) (iv) Karina Airlines International Limited v. ACIT ITA No.203/Del/2021 (Del.Trib.) (v) Anil Kumar Gopikishan Agrawal v. ACIT [2019] 418 ITR 25 (Guj. HC) (vi) Canyon Financial Services Ltd. v. ITO [2017] 399 ITR 202 (Del. HC) (vii) PCIT v. Dreamcity Buildwell (P.) Ltd. [2019] 417 ITR 617 (Del. HC) (viii) Shri Vinod Kumar v. DCIT, ITA No.2526/Del/2017 (Del. Trib.) (ix) Shri Sanjay Thakur v. DCIT, ITA No.3559/Del/2015 (Del. Trib.) (x) Mikado Realtors P. Ltd. v. PCIT, ITA No.50/Del/2021 (Del.Trib.) (xi) M/s. BNB Investment & Properties Ltd. v. DCIT, ITA No.504/Del/2015 (Del. Trib.) (xii) M/s Ambawatta Buildwell Pvt. Ltd. v. DCIT, ITA No.2592/Del/2015 (Del. Trib.) (xiii) Pavitra Realcon (P.) Ltd. v. ACIT [2017] 87 taxmann.com 142 (Del. Trib.) (xiv) ACIT v. M/s. N.S. Software, ITA No.3161/Del/2016 (Del. Trib.) (xv) ACIT v. Empire Casting Pvt. Ltd., ITA No.4018/Del/2011 (Del. Trib.) (xvi) Abhay Kumar Shroff v. CIT [2007 ] 290 ITR 114 (Jharkhand HC) (xvii) Fragrance Constructions v. ACIT, ITA No.2311/Del/2013 & Ors. (Del. Trib.) (xviii) CIT v. Kabul Chawla [2016] 380 ITR 573 (Del. HC)

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. 19. 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.

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.

“9. It is evident on a plain interpretation of Section 153C(1) that the Parliamentary intent to enact the proviso was to cater not merely to the question of abatement but also with regard to the date from which the six year period was to be reckoned, in respect of which the returns were to be filed by the third party (whose premises are not searched and in respect of whom the specific provision under Section 153-C was enacted. The revenue argued that the proviso [to Section 153 (c) (1)] is confined in its application to the question of abatement.

(i) CIT vs. RRJ Securities Ltd. (supra) (ii) PCIT vs. Sarwar Agencies Pvt. Ltd. (supra) (iii) Karina Airlines International Limited vs. ACIT (supra) 24. In any case of the matter, not only the Assessing Officer has mentioned in the body of the assessment order that the order has been passed u/s 143(3) r.w.s 153C of the Act but Ld. First Appellate Authority has also held that the assessment order,

indeed, has been passed u/s 143(3) r.w.s 153C of the Act. Admittedly, the Revenue has not challenged the aforesaid finding of Ld. First Appellate Authority. It is evident, the Assessing Officer has not recorded any satisfaction u/s 153C of the Act for A.Y. 2017- 18. Therefore, in absence of any satisfaction the Assessing Officer could not have proceeded to frame assessment u/s 153C of the Act. In view of the aforesaid, I fully agree with the view expressed by Ld. Accountant Member and hold that the impugned assessment order is invalid. Hence, deserves to be quashed.

decision of Ld. Accountant Member on the validity of the assessment order.

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.

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:-

Mohit Kumar- 40% Anmol Goel- 40% Dipak Gupta (HUF) 20%

any other corroborative evidence his statement cannot be relied upon.

evidences and the remand report of the Assessing Officer, Ld. First Appellate Authority has recorded the following factual findings.

(i) The statement recorded u/s 132(4) of the Act from Sh. Mohit Goel is of limited validity as he was not the Director of M/s RBPL at the time of deposit of cash of Rs.32,81,00,000/- in M/s RBPL Bank Account. (ii) Almost all cash deposit slips of M/s RBPL account of Kotak Mahindra Bank bear signature of Sh. Sumit Kumar. Therefore, Sh. Sumit Kumar was the right person to be questioned to ascertain who had given him the cash for depositing in the bank account. (iii) Sh, Mohit Goel has not stated the date and place where the cash was received from Sh. Rajesh Chawal. He has also not furnished the details as to how cash received by him was deposited by Sh. Sumit Kumar and Sh. Anmol Goel and Sh. Mohit Kumar. (iv) Each cash deposit in Kotak Mahindra Bank Account of RBPL aggregating to Rs.26.15 Crores was accompanied by declaration of M/s RBPL stating that the cash deposited has been received from sale of membership of loyalty card. (v) The CCTV footages of Kotak Mahindra Bank was obtained for entire month of November, 2016. However, except 23/11/2016, the CCTV footages of other days do not show cash being brought and deposited by the assessee or persons closely associated with it.

(vi) SMS conversations of Mrs. Dharma Goel wife of Sh. Mohit Goel are very brief and no reasonable conclusion can be arrived at. Therefore, do not constitute conclusive proof that cash deposited in the bank account of M/s RBPL were given by the assessee. (vii) The Assessing Officer has not brought on record any evidence to show how the assessee has benefited from cash deposit in bank accounts of M/s RBPL. There is no evidence to show that the cash deposited flowed back to the assessee.

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.

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.

Sd/- (SAKTIJIT DEY) VICE PRESIDENT Dated: 26/03/2024 PK/Ps Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals)

ASSISTANT REGISTRAR ITAT NEW DELHI