DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE AJMER vs. MUKESH KUMAR SOMANI , KISHANGARH

assessment year 2019-20 which in turn arises from the order passed by the ACIT, Central Circle, Ajmer passed under Section 143(3) r.w.s. 153A/153B of the Income tax Act, 1961 (in short 'the Act') dated 30.09.2021. Since the issues involved are common in both the appeals of the revenue and cross objections of the assessee are also on similar issues, we have heard together both the parties in the matter and are being disposed off by this consolidated order.

Shri Alok Malpani in & Co. No. 23/JPR/2022 may be taken as a lead case for discussions as the issues involved in the lead case are common and inextricably interlinked or in fact interwoven and the facts and circumstances of other cases are exactly identical. The ld. DR did not raise any specific objection against taking the lead case of Shri Alok Malpani as a lead case. Therefore, for the purpose of the present discussions, the case of Shri Alok Malpani is taken as a lead case.

3. In for A.Y 2019-20, the revenue has taken following grounds of appeal, which is reproduced here in below:

The Ld. CIT(A) erred in law and on facts in granting relief by holding that peak credit theory was applicable even through the assessee failed to explain the source & destination of the amounts, and identities and creditworthiness of persons involved.

2. Ground 5. The Appellant craves leave or reserves right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal.

3. Ground 1."The Ld. CIT(A) has erred in law and on facts in granting relief to the assessee".

4. Ground 2. "Whether on facts, and in the circumstances of the case and in law, the ld. CIT(A) is justified in deleting the addition of Rs.26,23,34,627/- made u/s 69 r.w.s.115BBE of the I.T. Act, 1961 merely relying upon the contention of assessee and ignoring the finding arrived at by the AO that no evidence was furnished by the assessee."

5. Ground 3. "(i) Whether on the facts, circumstances of the case and law, the ld. CIT(A) is justified in deleting the addition of Rs. 26,23,34,627/- made u/s 69 r.w.s.115BBE of the IT. Act, 1961 by relying the contention of assessee that the 4 & 336/JP/2022 & CO Nos. 23 & 25/JP/2022 DCIT vs. Alok Malpani unexplained investment was opening capital of assessee and by ignoring the finding of AO that it was the fresh capital (found first time in tally data) introduced during the year". (ii) "In grating relief, the Ld. CIT(A) has accepted the opening balance which has been conveniently specified by the taxpayer at a convenient figure, without any satisfactory or judicial basis."

4. In CO No. 23/JP/2022 for A.Y 2019-20, the assessee has taken following grounds of appeal, which is reproduced here in below:

“1. On the facts and in the circumstances of the case the approval given by the Addl. CIT u/s 153D of the Act is in a routine and mechanical manner, without any application of mind, without appreciating the facts and without following the mandate of the section 153D, which makes the order passed u/s 153A nonest, void ab initio, bad in law. Therefore, the assessment order passed by the ld. AO on the basis of such approval deserves to be quashed. LD CIT(A) has erred in giving finding on this issue. LD CIT(A) has erred in not accepting this issue 2. On the facts and in the circumstances of the case the ld. AO has grossly erred in charging interest of u/s 234B and u/s 234C. LD CIT(A) has erred in not giving finding on this issue.

3. On the facts and in the circumstances of the case the ld. AO has erred in initiating penalty proceedings u/s 271AAB of the Act. LD CIT(A) has erred in not giving finding on this issue. The appellant craves leave to add, amend or withdraw any of the grounds of the appeal during the course of appellate proceedings. All the grounds of appeal are independent and without prejudice to each other.”

6. The fact related to the amount added pursuant of the search and the contention of the AO and submission of the assessee in the assessment proceeding is required to be briefly extracted so as to understand the nature of addition disputed. During the course of assessment proceeding seized in 8 pen Drives inventorized as Exhibit-1 to 8 of Annexure- PD found from the residential premises of Shri Alok Malpani at Kishangarh Pride as

per which the P&L account, capital account and Balance Sheet of various concerns related to the assessee were found. These P & L Accounts, depicting opening stock, Gross profit and Net Profit of these concerns. The Balance Sheet depicts opening asset of these concerns the details off are tabulated below:

2 SG 2018-19 0 13347596 9300000 111351741 3 Shakti Eng 2018-19 0 -21989350 46868725 9275400 4 Shakti 2018-19 15755500 -326355 -434155 6578023 Rewari 5 SM 2018-19 15569791 56476190 29992943 321756089 101727513 524669253 The assessee was asked to explain the transaction mentioned in the tally data of these concern and to verify the same from the regular books of accounts of the concerns. In response to that the assessee submitted that the opening balance of capital account in tally was in fact a manipulated figure and not a capital. It includes many figures like creditors and other liabilities. No cash was found during the search which may establish that we are not having so much capital. This figure was put into tally for the prepared a consolidated sheet of all the divisions from which it appears that there is a negative cash balance on dated 07.06.2018 of Rs. 1,67,70,585/- and which has been divided equally between Alok Malpani & Mukesh Kumar Somani. We have prepared a sheet showing profit earned in all the divisions of Rs. 10,17,27,513/- which has been divided equally between Alok Malpani & Mukesh Kumar Somani. Thus, the total income of each partner of these businesses tune to Rs. 5,92,49,049/- and we already have declared business income of Rs. 5,09,35,160/- and the balance income remains of Rs. 83,13,889/- which have been adjusted in next year. The ld. AO not found satisfactory with the reply of the assessee. The ld. AO on perusal of the data of the tally as tabulated noted that that the capital of Rs. 52,46,69,253/- was introduced first time in the year under consideration.

Since, the assessee has owned up the Net Profit figure shown in the above table and declared the same in the income tax return and paid due taxes thereon, then the onus is upon the assessee to explain the source of capital introduction of Rs. 52,46,69,253/- also. But the assessee failed to give any satisfactory explanation with regard to the sources of this capital introduction. The assessee simultaneously failed to provide the details of the said creditors on account of which the said entries were said to be 52,46,69,253/- is held as the unexplained investment u/s. 69 r.w.s. 115BBE of the I. T. Act, 1961. Since, all the transactions mentioned in the said concerns mentioned in the table are admitted to be the joint venture of the assessee and Shri Mukesh Somani and the Net Profit reflecting from these concerns were jointly own by these two, therefore, the half amount of Rs. 52,46,69,253/- i.e. 26,23,34,627/- is being added in the total income of the assessee.

“4.2 (iv) I have carefully considered the rival submissions furnished during the appellate proceedings and case laws relied upon by the appellant. It is observed that the AO has made an addition of Rs. 26,23,34,627/- in the hands of the appellant, being the capital introduced for the first time in the year under consideration, though the appellant has contended it to be opening capital brought forward from earlier years. The AO has made the impugned addition u/s 69 of the Act on the basis of Tally data found and seized in the 8 pen drives found during the course of search from the residential premises of the appellant. I find that the appellant has owned up the net profit figure shown in the table based

10 & 336/JP/2022 & CO Nos. 23 & 25/JP/2022 DCIT vs. Alok Malpani on the aforesaid Tally data and declared the same in his Income Tax Return and has paid due taxes thereon. The fact remains that the AO has accepted the opening stock, gross profit and net profit figures on the basis of the aforesaid Tally data, however, he did not accept the opening capital reflected in the aforesaid table and did not accept the contention of the appellant that the figures are opening capital brought forward from previous years. The present AO in the appellate proceedings, vide order sheet entry dt. 22.04.2022 has admitted that the addition of the opening capital made by his predecessor AO includes the profit earned during the year and the actual addition made by the AO is of closing balance and that the correct capital should be at Rs 23,05,32,408/- instead of Rs. 26,23,34,627/-. On perusal of the capital account and admission made by the AO in the course of appellate proceedings, I find that the capital account represents the closing balance of the partner's capital at the yearend amounting to Rs. 52,46,69,253/- as it includes profit of Rs. 10,18,70,320/- earned during the year as well. However, the fact also remains that the amount of Rs.23,05,32,408/- is not the fresh capital introduced during the year but is an opening capital brought forward from the previous years as depicted in the tally data. Moreover the fact also remains that the AO has not made any inquiries during the course of assessment proceedings to ascertain whether it was fresh capital introduced during the year under consideration or the opening capital balance. Even during the course of appellate proceedings, the AO could not rebut the contention of the appellant that it is the opening capital brought forward from the previous years. Further it is also observed that the AO has not formed his opinion on the basis of any material or information that the appellant had in fact made investments in some form or the other such as immovable and movable assets which were not recorded in the books of the appellant, the source and nature of which the appellant had failed to explain to the satisfaction of the Assessing Officer.

(v) Further, it is also observed that the AO cannot partly accept the books of accounts reflecting the opening stock, gross profit & net profit declared by the appellant in the Tally Account found during the course of search and reject the opening capital reflected in the same Tally Account. I find that the AO has made the addition on account of opening balance of the capital account which is contrary to the provisions of law. It is observed that the AO could not bring any evidence contrary to statements /capital balance brought forward from earlier years. Even if the AO was of the opinion that the opening capital was bogus, it had to be taxed in the previous years and not in the year under consideration. In this regard, reliance is placed on the following judgments:-

11 & 336/JP/2022 & CO Nos. 23 & 25/JP/2022 DCIT vs. Alok Malpani 1. Commissioner of Income-Tax vs 5.M.5. Investment Corporation Pvt.Ltd. reported in (1994) 207 ITR 364 (Raj), wherein the Hon'ble jurisdictional Rajasthan High Court held as under “6. We have considered the matter. In accordance with Section 132(4A), if any document is found in the course of a search, then by legal fiction, a presumption has to be drawn that such document belongs to the person from whose possession or control it was found and the contents of such documents are true. In accordance with the provisions of Section 132(4A), we are of the opinion that a presumption has to be drawn that the seized documents belongs to the assessee and is a true document".

In no case, AO can be allowed to consider a part of a particular document as a true being favorable to revenue and other part to the very document as false since that is favorable to assessee. Duality of the approach of AO is not fair.

5. RAMANLAL P. CHORDIA VE. ASSISTANT COMMISSIONER OF INCOME TAX, reported in (2001) 20 CCH 0047 Pune Trib; (2004) 87 TTJ 0713 Held: It is noted that both these diaries are considered by the Department as true, genuine and correct documents under s. 132(4A) and if that be so, the diary No. 27 gives, on one hand, the ledger accounts of the borrowers and in the same accounts, the amounts taken from the lenders are mentioned. When the Department considers the diary as genuine, there is no reason for the Department to doubt these entries in the diaries regarding the lenders. The principle of law is that under s. 132(4A) the document found in search is genuine vis-a-vis the entire contents thereof and the Revenue is not justified in holding a view that only a part of the content, 1.e., the name of the borrower, is correct and not the name of the 12 & 336/JP/2022 & CO Nos. 23 & 25/JP/2022 DCIT vs. Alok Malpani lender. Hence, in this case, on the facts, the entire diary has to be considered as genuine, true and correct document and if that is so, the fact that the initials of the lenders are mentioned in the accounts of the borrowers, they are to be considered as genuine-Chander Mohan Mehta us Asstt. CIT (1999) 65 TTJ (Pune) 327: (1999) 71 ITD 245 (Pune) and T.S Kumarasamu vs Asstt. CIT (1998) 65 ITD 188 (Mad) relied on. (Para 12)

(vi) Thus, as per provisions of section 292C and 132(4A) of the Income Tax Act, 1961, the contents of such books of account and other documents seized during the course of search are true and the contents of the seized documents are itself confirmation and prove the contention of the appellant. If the ld. AO was not satisfied about the correctness and truthfulness of such documents, then he was supposed to make the inquiries to disprove the same. The Id. AO cannot shift his task on the appellant and cannot make the addition by brushing aside the established and accepted provisions of the law.

(vii) Further, the presumption of section 292C of the Income Tax Act, 1961 that the information as available in the seized records are correct unless otherwise proved to be wrong, is squarely applicable in the appellant's case. The provisions of section 292C of the Income Tax Act, 1961 lays down a binding deeming fiction

13 & 336/JP/2022 & CO Nos. 23 & 25/JP/2022 DCIT vs. Alok Malpani that the books of account, other documents, money, bullion, jewellery and valuable article or thing found in the possession/control of the person would be deemed to belong to the person in whose possession/control it is found and seized and the contents of the books of account or other documents are true. As held in the judicial rulings, the sole exception to this rule is that if it is alleged that the contents are not true or does not belong to that person, then the person alleging so is obliged to establish it. In the instant case, the ld. AO himself is accepting that the opening stock, gross profit and net profit as depicted in the tally data found as per pen drive seized during the course of search to be true and therefore accepting part entries to be true while considering the other entries as per the same tally data to be not correct, is not justifiable. Under such circumstances, the opening balance as per the aforesaid capital account contained in the said tally data cannot be brushed aside against all the accepted principals of law.

(viii) It is observed that the addition was made by ld. AO under section 69 of Income Tax Act, 1961. From perusal of the provisions of this section it reveals that the addition in this section can only be made if the assessee is found to have made investments which are not recorded in the books of accounts, which is not found correct in the case of appellant, thus no addition can be made under section 69. Otherwise, also for making the addition under this section, the initial onus is on the AO to prove that the investments belong to the appellant. In the instant case of the appellant, it is observed that the AO has made the addition on account of Opening balance which cannot be considered as any investment by itself. The AO has not brought on record any investments out of the aforesaid capital which has not been disclosed by the appellant. In other words, the first onus is of the AO to show that the ownership of the investments is of the assessee, if any such investment is found by the AO, and such onus cannot be discharged by guess, presumption, assumptions. Further, the words used in s. 69 are "may be deemed to be the income". It casts a discretion with the AO to treat the alleged investment as unexplained or explained. It goes without saying that such discretion has to be exercised judiciously. If the AO ignores the preponderance of probabilities then it could not be said that such discretion was exercised judiciously. For invoking s. 69, the AO has to establish that the investment belongs to the appellant. In the present case, onus cast on the AO to establish that the investments belonged to the appellant has not been discharged. Therefore, the deeming provisions of s. 69 cannot be invoked in this case. (ix) In this case, the AO has taxed the unexplained opening capital as per provisions of sec. 69 of the Act. In this context, it will be pertinent to discuss the 14 & 336/JP/2022 & CO Nos. 23 & 25/JP/2022 DCIT vs. Alok Malpani provisions of this section. As per this section, the value of unexplained investment made by the assessee in the FY immediately preceding AY can be charged to tax u/s 69 of the Act only if the following conditions are fulfilled:-

(a) Assessee might have made investments in the FY inmediately preceding A.Y b) The investments made are not recorded in the books, if any, maintained by the assessee for any source of income (c) Assessee places no explanation about the nature of source of investments or explanation offered by him is not, in the opinion of the A.O. satisfactory. As regards the fulfillment or satisfaction of these conditions in the case of the appellant, it is observed that the AO has made the addition against the opening capital of the appellant which itself proves that the AO has not found any investment made by the appellant during the year under consideration. Accordingly, the first eligibility criterion of section 69 as mentioned above is not fulfilled.

Secondly, I find that the net profit figures in the same table were offered by the appellant for taxation in his return of income filed for the year under consideration which have been accepted by the AO. The opening balance of the capital account is also part of the said books of accounts which have been accepted by the AO alongwith the figures of opening stock, gross profit and net profit. The impugned figure of 23,05,32,408/- which represents opening capital balance is duly recorded in the books of accounts as well as balance sheet of the appellant as found in the tally data. Therefore, it can be easily inferred that the opening capital balance is duly recorded in the books of accounts and accordingly, the second eligibility criterion of section 69, addition against opening capital balance cannot be made u/s 69 of the Act.

Thirdly, the AO has not formed his opinion on the basis of any material or information that the appellant had in fact made investments in some form or the other such as immovable and movable assets which were not recorded in the books of the appellant, the source and nature of which the appellant had failed to explain to the satisfaction of the Assessing Officer. Accordingly, the third eligibility criterion of section 69 is also not fulfilled by the AO and therefore the addition against opening capital balance cannot be made u/s 69 of the Act.

(x) As regards the addition made by the AO on account of opening capital, the Hon'ble Rajasthan High Court in the case of Commissioner Of Income Tax vs Parmeshwar Bohra 184 CTR Raj 388, 2004 267 ITR 698 Raj on 3 February,

15 & 336/JP/2022 & CO Nos. 23 & 25/JP/2022 DCIT vs. Alok Malpani 2003 has held that it is a case of unexplained investment under Section 69 of the Act and the appropriate previous year for inclusion is the relevant financial year, therefore, the opening capital cannot be added as an unexplained investment under Section 69 of the Act for the asst. yr. 1993-94.

(xi) The Income Tax Appellate Tribunal - Kolkata in the case of D.C.I.T.,Circle- 1(2), Kolkata, vs M/S Paramie Goods Private in (2018) has held as under:

“9. As held by the Hon'ble Delhi High Court in the case of Usha Stud Agricultural Farms Ltd. (supra) as well as by the Hon'ble Rajasthan High Court in the case of Parmeshwar Bohra (supra), the amount received by the assessee in the earlier year and not in the year under consideration and duly credited in the books of account of the assessee for such earlier year cannot be added under section 68 an unexplained cash, credit for the year under consideration. In our opinion, the ratio of the said two judicial pronouncements is squarely applicable to the facts of the present case."

(xii) In view of the above discussion and judicial precedents, I am of the view that if the AO accepts that the entries relating to opening stock, Gross Profit, and Net Profit reflecting in the tally data seized are genuine, then he should also accept that the figures of capital balance reflected in the same tally data are also genuine and true, if not found otherwise based on some material or inquiries carried out by the AO in this regard. Further, there is no case for making addition on account of opening capital balance in the case of the appellant either under s. 69 or even under s. 68 of the Act. I find that the basic eligible criterions as laid down u/s 69 are not fulfilled in this case and therefore it is observed that the AO was not justified in adding the alleged opening capital by treating it as unexplained. However, I also find that the AO should have made enquiries and ascertained the period of introduction of fresh capital and should have brought the same to tax in the event, it was found unexplained. In this regard, the AO may take necessary action, as per law. In view of the above discussion, the addition of Rs.26,23,34,627/- made by the AO on account of unexplained investment is deleted and the Grounds of appeal no. 1 to 3 are treated as allowed.”

10.1 On the ground raised by the revenue two written submissions were made dated 13.10.2022 and 31.10.2022 the same is reproduced here in below:

“As per Assessment orders in brief:-

Search & Seizure action u/s 132 of the I. T. Act, 1961 was carried out at the Residential and Business Premises of the assessee and his family members of the Group (Saini- Gupta-Jain-Maipani-Somani Group of Ajmer) on 13.02.2020. � During the course of assessment proceedings u/s 153A of the 1. T. Act, 1961, AO observed that during the course of search tally data was found and seized in 8 Pen Drives inventorized as Exhibit-1 to 8 of Annexure-PD found from the residential premises of the Shri Alok Malpani situated at Kishangarh pride as per which the P & L account, capital account and balance sheet of various concerns related to the assessee were found. The balance sheet depicts opening asset of these concerns the details of are tabulated below:-

S.No. Name of the FY Opening stock Gross Profit Net Profit Capital A/c concerns 1 SMP 2018-19 55554476 16000000 16000000 75708000

2 SG 2018-19 0 13347596 9300000 111351741 3 Shakti Eng 2018-19 0 -21989350 46868725 9275400 4 Shakti 2018-19 15755500 -326355 -434155 6578023 Rewari 5 SM 2018-19 15569791 56476190 29992943 321756089 101727513 524669253 Reply furnished by assessee was not found satisfactory by AO. On perusal of the data, it was appeared that the capital of Rs. 52,46,69,253/- was introduced first time in the year under consideration and net profit mentioned in the above table had already declared by the assessee in his return of income. The assessee was asked to explain

17 & 336/JP/2022 & CO Nos. 23 & 25/JP/2022 DCIT vs. Alok Malpani the above transactions but no satisfactory reply was furnished by the assessee, hence the whole amount of capital introduced i.c. Rs. 52,46,69,253/- was treated as unexplained investment u/s 69 r.w.s. 115BBE of the Act. Since all the transactions mentioned in the said concern are admitted by the joint venture of the assessee Shri Alok Malpani and Shri Mukesh Somani, hence 50% of 52,46,69,253/- i.c. Rs. 26,23,34,627/- each was equally added to the total income of the Shri Alok Malpani and Shri Mukesh Somani on account of unexplained investment u/s 69 of the Act. � Ld CIT(A) deleted the addition made by AO. Ld CIT (A) in her finding mentioned that the capital introduced by the assessee was an opening balance of assessee which cannot be added in the current year as it pertains to preceding year/(s) and AO had not made any enquiry to rebut the same. Ld CIT(A) further relied that even closing capital balance includes net profit of the assseee declared in ITR Ld CIT(A) further mentioned that Shri G, D. Shrama, DCIT Central Circle) Ajmer was called for during assessment proceeding who accepted that actual addition should have been of Rs 23,05,32,408/- according instead of 26,23,34,627/-. Ld CIT(A) further relied that since other factors such as opening stock etc had been accepted by AO, then opening capital also should have been accepted by AG as AO cannot partly accept the books of accounts. Ld CITA) further mentioned that provisions of section 69 cannot be applied in this case as unexplained investment being opening capital. In nutshell finding of Ld CIT(A) is mainly based on relying the contention of assessee that the same was opening capital of assessee and by ignoring the finding of AO that it was the fresh capital introduced during the year. It is further to mention that on the identical/similar issue in AY 2020-21 Id CIT(A) had granted relief to assessee but reasons for relief are different. � Order of Ld CIT(A) cannot be accepted in view of findings made in assessment order that the capital of Rs. 52,46,69,253/- was introduced first time in the year under consideration and net profit mentioned in the said table had already declared by the assessee in his return of income. Hence, capital shown in that tally is also his unaccounted money introduced by assessee in the form of capital in the year under consideration. Just writing the same as opening capital by assessee in unaccounted tally doesn't mean that it was accounted opening capital of assessee. As can be understood from the assessment order that it was undoubtedly unaccounted capital of assessee which was introduced first time in books by him in the year under consideration.

Accordingly, further appeal before Hon'ble ITAT was filed in both the cases as per order of worthy Pr. Commissioner of Income-tax (Central), Rajasthan, Jaipur on the grounds mentioned in the order of worthy PCIT. Said appeals were filed online as well as offline subsequently. Alongwith the appeals Original Authorizations letters of PCIT (Central), Rajasthan, Jaipur, Form No.36, Orders of CIT(A), Form No.35, Assessment Orders, Grounds filed by the assessee before the CIT(A) were also submitted. Copy of the same were also provided to PCIT (Central), Rajasthan, Jaipur, Sr. DR, ITAT, Jaipur and JCIT, Central-Range, Udaipur.

Copies of 8 Pen Drives inventorized as Exhibit-1 to 8 of Annexure-PD found from the residential premises of the Shri Alok Malpani situated at Kishangarh pride are enclosed.”

10.2 The ld. AO also submitted 2nd written submission dated 31.10.2022 the same is reproduced here in below :

“3. The desired paper book was submitted as per reference no 2 mentioned above to your goodself through proper channel. The same included a brief note (Page 01 to 29) and a pen drive containing copies of relevant exhibits of seized material part of which has been discussed in respective assessment orders (Copies of 8 Pen Drives inventorized as Exhibit-1 to 8 of Annexure-PD found from the residential premises of the Shri Alok Malpani situated at Kishangarh pride, Copies of an Ikrarnama relating to transfer of shares in Paradizo resort & relevant whatsapp chats extracted from the mobile phone of Shri Ashok Jain and Copies of relevant digital data obtained from the Mobile Phone of Shri Omanshu Sharma and relevant Annexure-CF in the case of Shri Omanshu Sharma).”

Based on these information extracted by the revenue the assessee has already disclosed the income that is related to the assessee for the year under consideration. Therefore, the viewpoint of the revenue is bench that the ld. CIT(A) has not called for remand report. Against this contention the ld. AR submitted that the argument of the ld. DR is not correct and he has submitted that in the hearing conducted by the ld. CIT(A) the ld. AO’s presence was very well recorded [ this remark is also appearing at page 13 para 4.2(iii)] and now the plea taken by the ld. DR that the remand report is not called is incorrect to say. As during the appellate proceeding the ld. AO was present and he was heard by the ld. CIT(A). The ld. AR of the assessee submitted that analysis of the data made by the ld. AO itself suggest that the figure derived by the ld. AO is of the opening capital not of income. The ld. CIT(A) with the presence of the ld. AO already submitted his view that the addition made in the case of the assessee is of the opening capital and not the income as related income recorded in this tally data. Income is already offered which is also not disputed by the revenue. As the income is accepted based on the same very data revenue cannot take a different plea on the same very data that the opening capital is also income without bringing anything contrary. Even the ld. AO during the hearing before the ld. CIT(A) accepted the fact that while adding the figure he has not reduced the income already offered in given fair chance to represent his version in this case before ld. CIT(A).

“4.2 (iii) During the course of appellate proceedings, Shri G. D. Sharma, DCIT, Central Circle, Ajmer, the present AO, appeared before me and submitted that the addition of opening capital includes the profit earned during the year and that the actual addition has been made of closing balance and not of opening capital. According to him, the correct capital was at Rs. 23,05,32,408/- instead of Rs. 26,23,34,627/- added by the then AO while passing the assessment order.” that the ld. AO has not attended the proceeding before the ld. CIT(A). We have also not found any contrary contention that the amount disputed is not the opening capital. Both these not disputed fact makes it clear that the ld. AO has verified the figure of the capital confessed that the addition to the extent of the profit is taxed twice and his version on the issue is very well taken into consideration by the ld. CIT(A) while deciding the appeal of the assessee. Even though the bench directed through the ld. DR to have the status report of the cases on 06.10.2022 and hearing was adjourned to 01.11.2022 and thereafter to 15.11.2022 for final hearing to place argument on fact and controvert the submission of the assessee and finding ld. CIT(A) on facts in this group cases. On 11.11.2022 the ld. AO filed the report in the case of Shri Annop Kumar Gupta, Shi Chandra Prakash Saini and Shri Omanshu Sharma. Thus, we have reasoned to believe that there are no refuting facts to be represented by the ld. AO at least on this issue as to whether the balances listed by the ld. AO is really income or the opening capital of the various concerns of the assessee. From the discussion and facts placed before us so far, we are of the considered view that the balances listed by the ld. AO is the capital of the assessee and the income for the year under consideration reflected in that tally data is duly not disputed for the current year from the same set of books found from the PEN drive then what is the reason that the same is not accepted to believe that the opening capital recorded in the same books cannot be considered as income of the current year. The ld. AO believed that investments, stock and other data support the contentions of the opening capital of the assessee. Since the ld. AO is dealing with the search case he has all the options available to tax the said opening capital in the earlier year but not in the year under consideration. Even if the contention of the assessee that the opening balance is not correct or bogus even then evidence cannot be considered partly in favour of the assessee and partly against. The ld. CIT(A) relying on the judgment of the jurisdictional high court in the case of Commissioner of Income Tax Vs. S. M. S. Investment Corporation Private Limited reported at 207 ITR 364 (Raj.) considered the view that if any document is found in the course of search, then by legal fiction, a presumption has to be drawn that such document belongs to the person from whom possession or control it was found and the contents of such documents are true. In accordance with the provision of section 132(4A), a presumption has to be drawn that the seized documents belongs to the assessee and is a true document. Thus, on conjoined reading of provision account and other documents seized during the course of search are true and the contents of the seized documents are itself confirmation and proof of what is evidently clear from the such seized documents. Hence, when in the seized tally data the income and opening capital both reflected. The ld. AO cannot shift the burden to the assessee for opening capital amount when the income has already considered by him as correct from the same record. Thus, the action of the ld. AO to further add the opening capital keeping a side the established and accepted provision of law. Even the provision of section 292C are very much clear that the information as available in the seized records are correct unless otherwise proved to be wrong. Here in this case the revenue did not controvert the contention of the assessee from the same very evidence that the opening capital is in fact the income of the current year. We have also observed that the ld. AO has made the addition u/s. 69 of the Act. On careful perusal of the provision of the act the ld. AO can make the addition if the assessee is found to have made investments which are not recorded in the books of accounts whereas when the assessee has accepted the content making the addition u/s. 69 is also not correct as the ld. AO has not established that the investments in fact really belonged to the assessee and thus even on this CIT(A) has dealt and made in detailed observation while dealing with the appeal of the assessee and we do not find any infirmity in the reasoned finding recorded by the ld. CIT(A) and the revenue has not controverted any of the findings of the ld. CIT(A) even though the bench has also granted proper opportunity to the revenue to place their contentions. Since, there is no refuting submission that the opening capital is in fact is income of the assessee when from the said tally data income for the current year is duly accepted. Thus, we do not find any infirmity in the finding of the ld. CIT(A) that the opening capital reflected in the same tally data cannot be considered as income for the year under consideration. In terms of these observations, we do not find any merit in the ground no. 2 & 3 raised by the revenue and thus, the same is dismissed.

Therefore, the same is premature which does not require adjudication.

Order pronounced in the open court on 08/12/2022.

Sd/- Sd/- ¼jkBksM deys'k t;UrHkkbZ ½ ¼Mk0 ,l- lhrky{eh ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 08/12/2022 *Ganesh Kumar आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- DCIT, Central Circle, Ajmer 1. 2. izR;FkhZ@ The Respondent- Sh. Alok Malpani, Ajmer Sh. Mukesh Kumar Somani, Ajmer vk;djvk;qDr@ The ld CIT 3. vk;dj vk;qDr¼vihy½@The ld CIT(A) 4. 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 6. xkMZQkbZy@ Guard File (ITA No. 334 & 336 /JP/2022 and CO No. 23 & 25/JP/2022) vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेजज. त्महपेजतंत