ACIT, CENTRAL CIRCLE, KOTA vs. BANAS MINERALS PRIVATE LIMITED, JHALAWAR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la vk;dj vihy la-@ITA. Nos. 239 & 240/JP/2024 vk;dj vihy la vk;dj vihy la fu/kZkj.k o"kZ@Assessment Years : 2013-14 & 2018-19 fu/kZkj.k o"kZ@ fu/kZkj.k o"kZ@ fu/kZkj.k o"kZ@ cuke cuke cuke cuke ACIT, Banas Minerals Private Ltd Central Circle, F 51 Phase III, RICCO Vs. Kota Industrial Area, Jhalawar LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AADCB 0164 G vihykFkhZ@Appellant izR;FkhZ@Respondent vk;dj vihy la vk;dj vihy la-@ITA. Nos. 269/JP/2024 vk;dj vihy la vk;dj vihy la fu/kZkj.k o"kZ@Assessment Years : 2018-19 fu/kZkj.k o"kZ@ fu/kZkj.k o"kZ@ fu/kZkj.k o"kZ@ cuke cuke cuke cuke ACIT, Banas Builders And Central Circle, Developers LLP, Vs. Kota F-49, Phase-III, RIICO Industrial Aread, Jhalawar LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAQFB6080P vihykFkhZ@Appellant izR;FkhZ@Respondent vk;dj vihy la-@C.O. Nos. 4 & 5/JP/2024 (Arising out of ITA Nos. 239 & 240/JP/2024) fu/kZkj.k o"kZ@Assessment Years : 2013-14 & 2018-19 cuke Banas Minerals Private Ltd ACIT, Vs. F 51 Phase III, RICCO Central Circle, Kota Industrial Area, Jhalawar LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AADCB 0164 G vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. Rajendra Jain (Adv.) (V.C) jktLo dh vksj ls@ Revenue by : Smt. Alka Gautam, CIT-DR (V.H) lquokbZ dh rkjh[k@ Date of Hearing : 14/10/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 03/12/2024 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM

2 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar The present bunch of five appeals relates to the two different

assessee named above. Since these were of the same group

assessee with the consent of the parties same were clubbed

together for hearing are disposed off with this common order.

named Banas Minerals Private Limited in ITA no. 239/JPR/2024

filed by the revenue and against that appeal so filed by the

revenue and the cross objection of the assessee no. 4/JP/2024.

That dispute relates to the assessment year 2013-14. Both the

appeal of the revenue and that of the cross objection of the

assessee arise because of an order passed by the Commissioner

of Income Tax, Udaipur-2 [ for short CIT(A) ] passed as per

provision of section 250 of the Income tax Act [ for short Act ] on

22.12.2023. That order of the ld. CIT(A) arise because the

assessee challenged the order of the assessment passed u/s.

153A r.w.s. 143(3) of the Act dated 08.07.2019 passed by the

Deputy/Assistant Commissioner of Income Tax, Central Circle,

Kota [ for short AO].

for A. Y. 2013-14 on the following grounds:

3 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

“1. Whether on facts in circumstances of the case, the CIT(A) is justified in deleting the addition of Rs. 5,05,81,050/- made on account of unexplained investment u/s 69B of the Act without appreciating the fact that addition was determined on the basis of unexplained and unaccounted transactions recorded in the excel sheet with name "BMPL", Jhalawar maintained in the laptop of Shri Devendra Singh Shekhawat who was accountant and person of confidence of the company and maintaining all records of actual transactions of immovable properties purchased by M/s Banas Minerals Pvt. Ltd under directions of the directors of the company.

CO ] which is numbered as CO/4/JPR/2024 and the grounds of the

said CO reads as under :

“1. That on the facts & in the circumstances of the case the ld. CIT(A) erred in upholding the validity of order passed by the ld. AO.

4 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

computer of third party search without brought on record any evidence of genuineness of such digital data.

the assessee deals with the same assessment year and of the

same assessee we considered it for disposal together with the

consent of the parties.

by the revenue is delayed by 11 days. The ld. DR in support of the

delay submitted that in fact the appeal is not delayed if the same is

counted from the service of the notice. The revenue has filed an

application stating the reasons for delay and prayed for

condonation of delay. The content of the application so filed reads

as under :-

5 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

Subject:- Application for condonation of delay for filing of appeal u/s 254 of the Act in the case of M/s Banas Minerals Private Ltd. (PAN – AADCB0164G) for the A.Y 2013-14 (appeal No. ITA 239/JP/2024)-reg.- Kindly refer to the above mentioned subject.

(2) The [Principal Commissioner or] Commissioner may, if he objects to any order passed by a [Deputy Commissioner (Appeals] [before the 1ª day of October, 1998] [or as the case may be, a commissioner (Appeals)] under [section 154 or] section 250 direct the [Assessing Officer to appeal to the Appellate Tribunal Against the order.

(3) Every appeal under section (1) or sub-section shall be filed within sixty days of the date on which the order sought to be appealed against is communicated to the assessee or to the [Principal Commissioner or] Commissioner as the case may be.

4.1 Further, it is submitted that in this case, the Ld. CIT(Appeals)-2, Udaipur has forwarded the batch of appellate orders for the Month of December, 2023 in which the order of above said assessee is included vide letter no. 474 dated 02.01.2024 which was received in the office of Pr. Commissioner of Income Tax (Central), Rajasthan, Jaipur on

6 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

11.01.2024 (copy enclosed). Further, in regular practice followed till now, time limit of 60 days is considered from date on which order of CIT(A) is received in the office of PCIT(Central), Jaipur. Thus, as per regular practice, the limitation of 60 days for filing of appeal in the ITAT in the case of above said assessee is calculated from 11.01.2024 and therefore, limitation expired on 10.03.2024. 4.2 It is further submitted that in regular practice followed till now, limitation of 60 days is counted from date of receipt of order of CIT(A) in the office of Pr. CIT(Central). Due to this reason, in this case, time limit for filing appeal before Hon'ble ITAT is considered from 11.01.2024 i.e. date of receipt of CIT(A) order in the office of PCIT(Central), Jaipur and and due to this reason, delay occurred in filing of the appeal. This is a bonafide mistake which resulted in delay in filing of appeal. 4.3 Therefore, it is respectfully requested that delay in the filing of the appeal may be condoned and appeal may be treated as filied within prescribe time limit. 5. In this connection, it is respectfully submitted that the Pr. Commissioner of Income Tax (Central), Rajasthan, Jaipur has granted permission to file application for condonation of delay in filing of appeal vide letter no. 1534 dated 12/03/2024 (copy enclosed). Vide this letter, the undersigned is authorized to file appeal and application for condonation of delay before the Hon’ble ITAT as per authorization already issued vide office letter No. 1336 dated 28.02.2024.”

the assessee fairly not objected to revenue’s application for

condonation of delay and submitted that the bench take

appropriate decision in the matter.

perused the materials available on record. The prayer by the

revenue for condonation of delay of 11 days has merits.

Even otherwise if the time limit is counted from the date of

7 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar receipt of the order the appeal is filed in time. Therefore, we

concur with the submission of the revenue and delay of 11

days in filing the appeal by the revenue is condoned in view

of the decision of Hon’ble Supreme Court in the case of

Collector, land Acquisition vs. Mst. Katiji and Others, 167

ITR 471 (SC).

days in filling the cross objection by the assessee. To this

effect the ld. AR of the assessee drawn our attention the

application for condonation of delay filed by the assessee.

The application of the assessee contend that the form no. 36

of the appeal filed by the revenue was serviced in post

delayed and thereafter the same was sent to director and

thereby filling that cross objection has delayed which is bond

fide and it may be considered in the interest of the justice.

and submitted that the bench may decide the prayer of the

assessee in accordance with the law.

perused the materials available on record. The prayer by the

8 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar assessee for condonation of delay of 12 days has merits as

assessee was prevented with sufficient cause while filling the

cross objection.

ITA No. 239/JP/2024 and CO/4/JPR/2024 for A.Y 2013-14

search & seizure operation under section 132(1) of the Income-tax

Act, 1961 (hereinafter "the Act") was carried out on 15.11.2017 at

the various premises of Banas Group, Jhalawar to which the

assessee belongs. A number of persons / premises covered u/s

132 of the 1.T. Act, 1961. Cash, jewellery and other documents

found and seized from some persons residence and business

premise. The case of the assessee was also covered under search

proceeding. The search action was carried out on the assessee on

15.11.2017 at its business premises F-49 and F-51, Phase-III,

RIICO Industrial Area, Jhalawar, Rajasthan. Consequent to search

action, the case of the assessee was centralized to Central Circle-

Kota by the Principal Commissioner of Income-tax, Kota vide order

No. Pr.CIT/TTO(Tech.)/KTA/S. 127/2017-18/3319 dated

20.12.2017. The assessee Company is engaged mining of stone

and stone articles. Consequent to the search notice u/s 153A of

9 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar the Act was issued to the assessee on 19.06.2018 which was duly

served.

In response to notice issued u/s 153A, the assessee

company furnished his return of income on 03.07.2018, declaring

total income of Rs. 2,52,04,150/-. Earlier the assessee company

had filed his return of income u/s 139 of the Act on 30.09.2013 at

the total income of Rs. 2,52,04,150/-. Assessment order u/s 143(3)

of 1.T. Act, 1961 was passed on 19.01.2016 at assessed income

of Rs. 2,54,75,220/-. There is difference between ITR filed under

section 153A and 139 of the 1.T. Act, 1961. The assessment order

under section 153A is hereby passed after considering assessed

income under section 143(3) of the Act. Assessee has also revised

its return of income on dated 22.02.2019 declaring total income of

Rs. 2,54,75,220/-.

Notice u/s 143(2) of Act was issued on 11.09.2018 which

was duly served. Further, notice under sub section (1) of Section

142 of the Act was issued on 30.11.2018 along with questionnaire /

Annexure-A requiring certain details / information, which was

served upon the assessee through Income Tax Inspector. In

response to that, assessee furnished the desired details /

10 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar information / documents / which were examined with respect to

claims made in the return of income.

Investment in immovable properties:

During the search and seizure action carried in the Banas

Group of Jhalawar on 15.11.2017, at the residence of Shri

Devendra Singh Shekhawat, accountant of the group a laptop was

found whose data have been cloned in a hard disc and annexed as

exhibit-4 of annexure AS of party no. A-3. During forensic

examination of the hard disc seized from residence of Shri

Devendra Singh Shekhawat, two excel sheet have been retrieved

vide path- Devendra laptop- present data user file-excel- land

03.02.2013 BMPL, Jhalawar-sheet-1 & 2. The data so extracted

was tabulated in Table 1 & 2 in the assessment order. In table -1 a

list showing the amount of investment made in the land by

assessee was tabulated. Table-2 shows a list showing name,

category, Khasara No., area, location and registered or agreement

regarding land investment made by the Banas Minerals P. Ltd.(the

assessee).

Since the value of the investment recorded in the excel sheet

prima facie appears to be substantially varying from the value of

investment recorded in the Books of accounts of the assessee

11 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar company, a show cause notice requiring the assessee company to

explain its positions vis a vis the above seized documents was

issued to the assessee company. In response to the show cause

notice, the assessee company denied to have made any

undisclosed investment in land as alleged.

12.1 The assessee has submitted property wise details and the

actual investment made by the assessee and also filed the

supporting documents such as purchased documents source of

that investment is already reflected in the books of accounts.

Thereby the assessee submitted that there is no undisclosed

investment as alleged. The assessee also submitted that they are

not aware of the circumstances and intent under which Shri

Devendra Singh Shekhawat might have prepared the same at his

residence. The assessee stated that “at no stage of search the

same was confronted either with Shri Devendra Singh Shekhawat

or any other person”. [ page 8 last para of the Assessment order ].

The said table is not signed by any one. The same was not found

with possession of any of the group companies or its directors.

The assessee has made his efforts to comprehend the said table.

The assessee also submitted that table -1 contains many

properties belonging to the state Government and how the lands

12 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar which are owned by the Government can be considered as land

belonging to the assessee. In Table -2, on Sr no 16 name of Shri

Rajendra Paliwal has been mentioned whereas said land belongs

to State Government at Gram Rooppura. Like-wise, at S.No. 11 in

Table-2, against name of Ganga Bai two khasra numbers have

been mentioned as 525 & 549 in village-Runji whereas there is no

such khasra no. 525 in gram Runji and even in respect of Khasra

549, the share of Ganga bati own seeing the record is 18 biswa but

in the table the area mentioned is 1.07 bigha. Moreso, in Table- 1.

at S.No.13 Khasra No.510 is mentioned, the area of which is 2

bigha 10 biswa and the value shown is Rs.64,30,000/-

@Rs.25,72,000/- per bigha whereas at S.No.14 for khasra No. 517

& 518 having 6 bigha 18 biswa in the same village the value shown

is Rs.3,51,600/-, which comes to about Rs.50000/- per bigha

though both the lands are adjoining in the same village. In Table-1

at S.No. 20, the value of 1 bigha 8 biswa land in Khasra No. 533,

the value has been mentioned as Rs.59,60,000/-, which is valued

@Rs.42,00,000/- per bighaapprox which is too high. It is stated

that in the said area the rate of land as mentioned in the valuation

as in the year 2013 is not prevalent even today. The different

purpose of Table-1 and 2 is also anonymity to the assessee and

13 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

has no relation with actual investments of the assessee group. The

basis on which valuation as on 29.01.2013 has been taken it also

unknown.

Therefore, the sole basis of the same is only dummy

document found from possession of the third party. The computer

pen drives said to be found from possession of Shri Devendra

Singh Shekhawat cannot be said to be reliable for the following

reasons as noted by the ld. AO:

(1) Shri Devendra Singh Shekhawat himself stated that he has prepared many documents in the computer pen drives directly and has not copied the data anywhere. It is highly improbable that such huge transactions are kept only in a pendrives and that too is in possession of Shri Devendra Singh Shekhawat and the assessee group has no control on such pendrives, which said to contain the data of assessee. Thus, according to Shri Devendra Singh Shekhawat if the pendrives get corrupt there is no source to recapture the data and if the same is edited by him, the assessee has no control on such data. It is against all probabilities that any person whose important financial transactions are recorded will loose his control on the same. (ii) Neither Shri Devendra Singh Shekhawat nor any director of the assessee-comapany were cross examined in the search with reference to the impugned documents, the ownership of which is denied by the assessee group. There is no corroborative evidence in this regard and that too without an opportunity to cross-examine such party. (iii) No loose papers, etc. in respect of noting in such Excel sheets were found from the possession of the assessee-company or its directors or key personnels, which may prove that such alleged transactions belong to the assessee. (iv) In view of the totality of the facts stated here-in-above in respect of Table-1 & 2, on the basis of the computer pendrives said to be found from Shri Devendra Singh Shekhawat, no discriminatory loose papers supporting such Excel sheets, even Shri Devendra Singh Shekhawat retracted his original statement in respect of other documents, no opportunity of cross-examine to Shri Devendra Singh Shekhawat afforded to the assessee, it cannot be held that the same belong

14 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

corroborative evidence in support of the same is the assessee. No other brought on record by the search team.

(v) Further, during the course of search, when directors of assessee- company was Confronted with other seized material, they clearly stated that the concerned seized materials are not related to the assessee and also they were found from bed room of Shri Devendra Singh Shekhawat.

(vi) That the print-out from the computer pendrives found is not the books of account maintained in the regular course of business. It cannot be relied upon especially against a third person i.e. assessee in the absence of any corroborative evidence. There is no corroborative evidence that the assessee has made any unexplained investment. No other evidence of unaccounted investments in land is found in search. In support of the above contention, reliance is placed upon the decision of Tribunal, Calcutta Bench, in the case of T.S. Venkatesan vs. Asstt. CIT (2000) 69 TTJ (Cal) 66: (2000) 74 ITD 298 (Cal).

(vii) It is submitted that the uncorroborated notings in the Excel sheets should not be acted upon to derive any inference against the assessee.

(viii) The notings in the Excel sheets lacked corroboration of the notings although it appears that the department is attempting in this direction.

(ix) The said computer pendrives were never shown to the assessee or its directors. Only it is said that the same are taken from pendrives found from residence of Shri Devendra Singh Shekhawat.

(x) No data confirming to the notings in the Excel sheets could be found from the seized computer hard disks. It is clearly established that the Excel sheets were not prepared by the assessee.

(xi) In terms of section 60 of the Indian Evidence Act, computerized information is within the realm of hearsay evidence and lacks source of information. Therefore, the same by itself are not relevant at all. It is stated in the absence of any such corroboration, the evidence remained a hearsay evidence, carrying no evidentiary value, in the absence of any corroboration.

(xii) The notings in the Excel sheets only forms the basis of your proposed addition without any other documentary evidence. When asked, the director of the assessee- company denied being aware of all data. The entire exercise is based on suspicion.

(xiii) That the notings in the Excel sheets remains uncorroborated till end as the same are not a speaking document. No supporting evidence by way of on money receipt and other evidences are found. It is, therefore, submitted that the same is a dumb document and therefore, not to form

15 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

the basis of any addition in the hands of the assessee. With regard to evidentiary value of such notings, the assessee place reliance on the following decisions:

a) DCIT Central vs.C. Krishna Yadav 2011, 12 Taxman.com 4 Hyd. b) Asst. CIT vs. Satyapal Wassan [2007] 295 ITR (AT) 352 (Jabalpur)

c) ACII vs. DrKamla Prasad Singh 3 ITR Trib 533 Patna, d) CIT vs. Khazan Singh & Brothers 2007,304 ITR 243 (P & H) e) CIT vs. Girish Chaudhary [2007] 163 Taxman 608, Delhi e) Bansal Strips (P.) Ltd. vs. Asstt. CIT [2006] 99 ITD 177 Delhi g) CIT vs. Mauli Kumar K. Shah [2008] 307 ITR 137 (Guj.)

(xiv) It is not known that the data in Excel sheets exclusively pertains pertain the assessee because as stated here-in-before there are name of other entities also in the impugned tables and Shri Devendra Singh Shekhawat in his statements at the time of search on 15.11.2017 while answering to question no. 16 clearly stated that he at his residence has papers/documents relating to various firms, companies, etc. Moreover, in reply to question no. 17, he has even named few such companies as Karoli Stone Suppliers, Malik Stone Industries, Agrawal Industries, Siddhi Vinayak Stone Industries and mentioned that perhaps there may be few more bills and documents with him.

(xv) As regards the presumption w/s 132(4A), it is submitted that a loose sheet is not a book/document so as to raise the presumption. Moreover, the same were not in possession of the assessee or its directors. This can supplement but cannot supplant evidence. Nothing is found by the survey-team to support their suspicion.

It is further respectfully submitted that no quasi-judicial order can be based on suspicion, surmises or conjecture, is supported by the following judgements of the Hon'ble Supreme Court: (i) Dhirajpal Girdhari Lal v. CIT [1954] 26 ITR 726 (SC); (ii) Dhakeshwari Cotton Mills Ltd. v. CIT [1954] 26 ITR 775 (SC): (iii) Lalchand BhagatAmbica Ram v. CIT [1959] 37 ITR 288 (SC); (iv) Umacharan Shaw & Bros. v. CIT [1959] 37 ITR 271 (SC): It is submitted that on account of the aforesaid reasons and explanations, the values mentioned in the Table No. 1, cannot be taken as actual investment by the assessee- Company to compute any undisclosed investment. We also furnish herewith the details of land owned by the assessee- company. From the copy of the purchase deeds submitted, it may please be appreciated that these lands were purchased at their prevailing market rates at the time of purchase at an aggregate cost of Rs.81,81,946/-. Therefore, it cannot be alleged that the assessee has paid any on account money for purchase of these lands"

16 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar 12.2 The submission so made by the assessee considered by the

AO but observed that examination of the seized documents and

from the submission of the Assessee Company has been duly

considered. From examination of the seized documents and from

the submissions and documentary evidences submitted by the

assessee Company, it is seen that all the properties mentioned in

the seized document do not belong to the Assessee Company.

However, it is also a matter of record that most of the properties

are owned by the assessee M/s Banas Minerals Pvt Ltd. It is also

seen that some of the properties referred to in the documents are

not owned by the assessee Company but have been taken on

lease by the assessee from the respective land owners. From the

evidences brought on record by the assessee, it is seen that some

of the properties mentioned in the documents are neither owned by

the assessee nor taken on lease for its businesses but are

Government land. However, there are properties owned by the

assessee whose value recorded in the documents is differing from

the investment recorded in the Books of accounts. The value

mentioned in the seized document appears to be the actual value

of învestment made in the property indicating that assessee has

made out of Books payments over and above the payments

17 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

recorded in the registered documents. Since these payments have

not been recorded in the Books of accounts and no explanation of

the source thereof has been furnished, the unrecorded investment

in these properties has been made out of undisclosed income of

the assessee company, after taking into consideration submissions

of the assessee company. He has given finding on Immovable

properties mentioned at serial no. 1, 2, 3, 4, 5, 6, 7, 12, 13, 14, 15,

17, 18, 19, 20 & 23 in the excel sheet. He also made observation

on the property listed at 8, 9, 10, 11, 16, 21, 22, 24 & 25 and

accordingly he has derived a figure of undisclosed investment for

three years and the same is tabulated here in below :

Assessment Undisclosed investment as Year per above table 2012-13 Rs. 22,93,570/- 2013-14 Rs. 5,05,81,050/- 2014-15 Rs. 1,48,84,030/- Total Rs. 6,77,58,650/-

Since the amount for the year under consideration is Rs.

5,05,81,050/- the same was considered as investment u/s. 69B of

the Act.

preferred an appeal before the ld. CIT(A). Apropos to the grounds

18 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

so raised the relevant finding of the ld. CIT(A) is reiterated here in

below:

“4.6 I have considered assessment order, arguments as well as the submissions made by the appellant in this regard and also perused the relevant documents and records in the case for the assessment year. In this case an excel sheet on the computer drive of Shri Devendra Singh Shekhawat accountant of the company was found. The addition made by the AO is on the basis of this excel sheet. The AO noted that all the properties mentioned in the seized document do not belong to the Company. However, most of the properties are owned by M/s Banas Minerals Pvt. Ltd. It is also seen that some of the properties referred to in the documents are not owned by the Company but have been taken on lease by the assessee from the respective land owners. From the evidences brought on record by the assessee, it is seen that some of the properties mentioned in the documents are neither owned by the appellant nor taken on lease for its business but are Government land. However, there are properties owned by the assessee whose value recorded in the documents is differing from the investment recorded in the books of accounts. The value mentioned in the seized documents appears to be the actual value of investment made in the property indicating that the company has made out of Books payments over and above the payments recorded in the registered documents. Since these payments have not been recorded in the Books of accounts and no explanation of the source thereof has been furnished, the unrecorded investment in these properties has been made out of undisclosed income of the assessee company. Thus the sole evidence used by the AO for addition made in the hands of the appellant is the excel sheet. Now issue here is whether the excel sheet is proving in clear and unambiguous terms that the appellant company made a payment in cash for purchase of these lands. The AO himself noted that all the properties mentioned in the seized document do not belong to the Company. Further, the AO also noted that some of the properties referred to in the documents are not owned by the Company but have been taken on lease by the company from the respective land owners. It is also noted by the AO that some of the properties mentioned in the documents are neither owned by the appellant nor taken on lease for its business but are Govemment land. From perusal of the assessment itself it is evident that the excel sheet contains details of properties which are not owned by the appellant company. Therefore, it is evident that the details are not belonging to the appellant exclusively as land belonging to other persons and even government land is also included in this excel sheet. The inference drawn by the AO that the appellant or its employee prepared this sheet for recording actual value of properties sis not found to be justified.

19 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

Now it needs to be examined whether this sheet contains details of actual value of the properties. This sheet contains details of government land where recorded and actual value cannot differ. Therefore, this inference is not found to be sustainable. Further, the inferences drawn by the AO is not not supported by any corroborative evidence or admission by any party or witness. Mr. Devendra Singh Shekhawat from whose possession, this excel sheet was recovered was not confronted during the search with regard to contents of this excel sheet. However, during the remand proceedings he has not stated anything with regard to these transactions. The AO stated in the order that value mentioned in the seized documents appears to be the actual value of investment made in the property. The inference drawn by the AO is indicating suspicion and not conclusion. There is no corroborative material in support of the conclusion drawn by the AO. The inference drawn by the AO is therefore, not found to be sustainable.

Argument of the appellants are being discussed as under-

There remains no evidence as to the allegation of unaccounted cash payment for purchase of land. There is no witness of such cash payment. There is no evidence that the cash has actually changed hands. Moreover, how, when and to whom the alleged cash money was transferred also remain unanswered

It is true that other than the excel sheet, there is no evidence for undisclosed investment as discussed by the AO in the assessment order. The excel sheet do show value which is more than the registered agreement but because of inclusion of lands not connected to the appellant it cannot be said with certainty that this sheet only provides detail of unaccounted transactions. The argument of the appellant is found to be acceptable in this regard.

It is submitted that the value shown in the registered purchase deeds are duly entered in books of account for various years, which needs to be treated as correct in absence of any contrary tangible evidence. There is no corroborative evidence to support that contentions of Shri Asad Anwar Khan are unjustified. Hence, there is no reason to disbelieve the statement of Shri Asad Anwar Khan and also a duly registered conveyance deeds.

There is contrary evidence found during search where value of land mentioned is higher to the value shown in the books account. However, the excel sheet in itself does not prove that actual payment made by the appellant are what is shown in the seized document as no evidence found during search which corroborate the notings of this document Further, as discussed earlier, the excel sheet is not prepared for the appellant exclusively and also there is government land in the list

20 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

of lands in the excel sheet. Therefore, the argument of the appellant is partly acceptable. It is stated that the addition cannot be sustained in the absence of material which would conclusively show that amount revealed from seized documents are transferred from one side to another. There is no statement or examination of the seller of the premises to substantiate the contention tion of of the the)d, Id. AO AO that that extra extra cash c has actually changed hands.

This argument of the appellant is found to be acceptable as no such evidence regarding transfer of amount is found to be recorded by the AO in the assessment order. The addition is made because as per AO it appears that the actual value is recorded in the excel sheet.

It is further stated that Shri Devendra Singh Shekhawat also averred that any transaction related to sale and purchase of land related to company are not provided to him so he is unable to tell anything about the details entered in the excel sheets.

This argument of the appellant is not found to be acceptable as the excel sheet was found from the possession of Shri Devendra Singh Shekhawat. It was his duty to explain the true nature of the document but he has avoided explaining the true nature of the excel sheet. Details of land related to company are found in the excel sheet found from the possession of Mr. Shekhavat, hence, it cannot be accepted that such details are not provided to him.

It is argued that the only document that is said to be found with reference to the alleged undisclosed investment is merely dumb excel sheed on the computer drive of Shri Devendra Singh Shekhawat without any suthentication, leeferely gives details in cryptic or puzzling form, which nobody can understand except the li mhor of it, who is not known. It is also not known under what circumstances and with what intent the same has been prepared by him. It is further stated that for jottings relied on in electronic data were not regularly kept during course of business, such documents have no evidentiary value against the assessee.

This argument of the appellant is found to be partly acceptable as there can be more than one inference drawn from the excel sheet. One inference is that it is actual value of land. This inference is drawn by the AO also. Another inference can be that it is projected value of land after certain period of time. So, more than one interpretation was possible. In these circumstances, where more than one interpretation is possible then corroborative evidences needs to be brought on record so that we can draw a certain conclusion that the inference drawn is correct or not. It is not correct that it is dumb document as the entries made are clear on the sheet. However, interpretation of the entries can be more than one. The person from whose possession this document was found has not

21 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

explained true nature of these entries. The argument of the appellant that this sheet is not having evidentiary value is not found to be acceptable as it is part of seized records during search. Therefore, this excel sheet is having evidentiary value. However, this evidence could have been used against the appellant if any corroborative evidence supporting this was there on record like statement of seller, statement of any person who was involved in the cash transaction or any other paper where similar transactions are recorded which could fortify the contention of the AO In the absence of corroborative material the addition made by the AO is not found to be sustainable.

It is argued that suspicion though a ground for scrutiny of evidence cannot be made the foundation of a decision. Conjecture is not a substitute for legal stand. Suspicion however strong, cannot take the place of proof.

This argument of the appellant is found to be acceptable on the facts of the case. It is true that suspicion however strong, cannot take the place of proof. To support such documents which create suspicion, further corroborative material is required. It is argued that the legal presumption u/s 132(4A) is only against the person in whose possession documents are found. The appellant- assessee never admitted that it has paid any alleged 'on money' for the investment in the lands. No such duplicate or parallel noting was found in the course of search in the case of the appellant-assessee or any of its directors and even at the residence of Shri Devendra Singh Shekhawat nothing was found to corroborate the said excel sheets. It is submitted that in the absence of any indication of nature and purpose of the excel sheet, without any corroboration, it is difficult on the part of the appellant- assessee to explain the same

This argument of the appellant is found to be partly acceptable. This document is found from the possession of accountant of the company. The accountant has not explained the true nature of these entries. Therefore, the failure to provide explanation is on the part of the appellant. However, it is true that no corroborative evidence is found to be discussed by the AD where similar entries were noticed. It is also true that the appellant never admitted transaction of "own money".

It is argued that even the id. AO himself while making the addition at page no. 13 of the assessment order for the AY 2012-13 has stated that "the value mentioned in the seized document appears to be the actual value of investment made in the property. This itself shows that he himself was not sure but has made addition.

It was duty of the person from whose possession the seized document is found to explain true nature of the entries made in the excel sheet. In the absence of any explanation, the AO was justified in drawing

22 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

possible inferences. Since, there was no corroborative evidence, the AO drawn a conclusion on the basis of inference The inference drawn by the AO is only one of the inferences which can be drawn from the seized document. Land not belonging to others and land belonging to government is also recorded on the excel sheet which shows that the inference drawn by the AO is not completely acceptable. The inference drawn by the AO in the absence of corroborative evidence only gives a suspicion but it cannot be said to be conclusive evidence. The appellant argued that excel sheet found from computer hard disc of employee of the assessee, who confessed to have working for his other clients also and nothing else was found. The evidence found from possession of its employee where transactions belonging to the appellant are found to be recorded can be used against the appellant. It does not make any material difference if the employee also works for other clients also. The employee is working for the company. Therefore, these arguments of the appellant are not found to be acceptable. Considering the facts of the case, arguments of the appellant and decisions relied upon by the appellant, the addition made by the AO of Rs. 5,05,81,050/- on the basis of the seized excel sheet is not found to be sustainable in the absence of corroborative material on record. Since, the addition made by the AO is deleted, other issues raised by the appellant do not require adjudication. This ground of appeal is treated as partly allowed.”

assessee, the revenue has challenged the finding of the ld. CIT(A)

by filling an appeal whereas the assessee has filed the cross

objection objecting the finding of the ld. CIT(A) holding the validity

of the notice issued u/s. 153A of the Act.

lower authority as favorable to them.

23 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar 16. The ld. DR representing the revenue in support of the

contention so raised supported the finding recorded in the order of

the assessment. She vehemently argued that in the search

statement of Shri Aasad Anwar was confronted with this aspect of

the matter so the contention of the assessee that they were not

confronted to this issue was incorrect and the same was brought to

the notice of director of the company. He has submitted answer -7

to that aspect of the matter so the contention that they were not

aware on this issue is not correct. Question no 9 relating the land in

question was asked. Question no. 12 director stated that the

account works for him and he has identified Mr. Devendra in whose

possession these excel working was found. Vide question no. 15

even mobile data was also confronted. Thus, it is clear that all

question related to the issue were confronted to the assessee. So

the statement of the Mr. Devendra and Mr Aasad to be read

together. Even the statement of Mr. Devendra was very much clear

explaning each and every transaction and verbal denial is no

denial.

the revenue is concerned has supported the finding recorded in the

order of the ld. CIT(A). In support of that order and to support his

24 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

cross objections ld. AR of the assessee has filed a detailed written

submission which was made before the ld. CIT(A) and the same is

reproduced herein below:-

A.Y 2013-14

With reference to the captioned subject and on behalf of the appellant- assessee, we crave leave to submit herewith as under for favour of your kind and sympathetic consideration please:

(A) STATEMENT OF FACTS:

(B) OUR SUBMISSIONS: The grounds of defense are as follows: Ground No.1 pertains to addition of Rs.5,05,81,050/- u/s 69 as unexplained investment in land and taxing the same u/s 115BBE of the Act. 01. It is stated that during the search and seizure action carried at the residence of Shri Devendra Singh Shekhawat, Accountant of the Banas

25 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

group on 15.11.2017 by issuance of independent warrant of authorization, laptop, pendrives, etc. were found. During examination of the computer hard disc seized from residence of Shri Devendra Singh Shekhawat, two excel sheets have been retrieved as tabulated in the impugned assessment order as Table-l & 2 at page no. 2 & 3 of the impugned assessment order containing the khasara-wise details of lands. Simultaneously, another search & seizure operations were carried on at the Banas Group of Jhalawar on the same date in pursuance of the separate warrants of authorization, to which the assessee-company also belongs.

26 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

excel sheets as Tables-1 & 2. The appellant-assessee was not aware of the circumstances and intent under which the Shri Devendra Singh Shekhawat might have prepared the same at his residence. Though the details given in the seized documents itself do not put any liability upon the assessee to explain the seized paper because it was not recovered from the possession of the assessee but still to understand and co- operative with the Department, the assessee from available details as well as information taken from official web-site of the Revenue Department, Government of Rajasthan submitted a complete details of such land before the ld. AO alongwith copies of relevant purchase deeds.

Moreover, at S.No.11 in Table-2, against name of Ganga Bai two khasra numbers have been mentioned as 525 & 549 in village-Runji whereas there is no such khasra no. 525 in Gram Runji and even in respect of Khasra 549, the share of Ganga bai, on going through the government record is 18 biswa but in the table the area mentioned is 1.07 bigha. All such facts were produced before the ld. AO.

27 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

28 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

29 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

not found with the possession of any of the group entities or its directors in search operations but at the residence of employee Shri Devendra Singh Shekhawat, who does work of his many other clients also as explained by him while answering to question no. 16 on 15.11.2017 and question no. 38 in his statements dated 16.11.2017.

30 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

whom separate search warrant was issued and not from the present assessee. It cannot be relied upon, especially against the assessee in the absence of any corroborative evidence found. No other corroborative evidence in support of the same is brought on record by the search team and thereafter by the ld. AO.

It is, therefore, submitted that on account of the aforesaid reasons and explanations, the values mentioned in the impugned excel sheets cannot be taken as actual investment by the assessee-company to compute any undisclosed investment, especially when there is no such indication or corroboration. Thus, it cannot be alleged that the assessee has paid any ‘on money’ for purchase of these lands.

31 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

is submitted that such unauthenticated and dumb excel sheet is not enough evidence to prove the exchange of cash during the deal and fasten the liability on the shoulder of the assessee. Such allegation made has to be supported by actual cash passing hands, which is not present in the instant case.

32 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

33 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

assessee, cannot result in justified addition. Presumptions regarding correctness of contents of books of account cannot be raised against another party. The search party and ld. AO did not bring on record any corroborative material to prove that such payment was in fact made outside the books. The alleged excel sheet is not corroborated from the search material in case of appellant and appellant’s own group concerns. The ld. AO while using the same should have allowed the appellant to cross-examine the person from whose possession the same was found in order to use this as evidence, which has not been done. Therefore, the ld. AO is not justified in resting his case on the mere dumb and unauthenticated excel sheet. In this regard, reference is made to the judgement of the Hon'ble Supreme Court in the case of Central Bureau of Investigation vs. V.C. Shukla (1988) 8 SSC 410 and Chuharmal Vs. Commissioner of Income Tax (1988) 172 250 I 38 Taxman 190 (SC).

34 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

excel sheet containing details of other persons also was found from the residence of the employee without any authentication of the assessee. Likewise, there was a search operation u/s 132 of the Act on the same date at the premises of the assessee and group entities. But, no such document demonstrating the investment in the nature as specified u/s 69B of the Act was found from the premises of the assessee, its director or other group entities. Similarly, there was no other corroborative document found from possession of Shri Devendra Singh Shekhawat except the excel sheet said to be found from his computer. Thus, in the absence of any corroborative document, no adverse inference can be drawn against the assessee.

In Gautam Laljibhai Gajjar vs. ITO (1991) 37 ITD 514 (Ahd-Trib.), it is held that it must be factually established by the Revenue that the real investment made was more than what was stated in the invoices. However, in the present case, the ld. AO did not bring on record any material and tangible evidence to prove that the appellant-assessee has actually made any unaccounted investment in the immovable property.

35 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

36 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

conducted on a person other than the assessee (i.e. search conducted in the residential premises of Shri Devendra Singh Shekhawat, in respect of whom an independent search warrant was issued). Therefore, the assessment ought to have been completed u/s 153C of the Act.

37 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

assessee, because the assessment proceedings which commence u/s 153A of the Act would become "pending proceedings" and the same would abate on the date on which the proceedings is initiated u/s 153C of the I.T.Act, inasmuch as the proceedings initiated u/s 153C of the I.T.Act is later than the proceedings u/s 153A of the I.T.Act. In an assessment order to be passed u/s 153C r.w.s. 143(3) of the I.T.Act, not only the material found in the search of the assessee and any other information pertaining to the assessee can be used in framing the assessment, but more importantly, the material found in the search of another person can also be used in framing the assessment. Thus, there would be only one assessment order, which should be u/s 153C r.w.s 143(3) of the I.T.Act and not two assessment orders as apprehended by the learned Standing Counsel.

Now, the question arises whether the incriminating material found and seized in the search of Sri.V.Shambamoorthy can be used in an assessment of the assessee in a proceedings u/s 153A of the I.T.Act without invoking the provisions of section 153C of the I.T.Act. The answer to the above question would be `no'. The reason being that as per the provisions of section 153C of the I.T.Act. it is imperative that in order to use the material found and seized in a search of an another person other than the person who is subjected to assessment, such material cannot be used without invoking the provisions of section 153C of the I.T.Act. The proceedings u/s 153C of the I.T.Act ought to have been initiated in the case of the assessee when satisfaction was arrived at in the assessment proceedings of Sri.V.Shambamoorthy that material found and seized in the search of Sri.V.Shambamoorthy did not pertain to him, but instead pertains to the assessee.

38 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

then provision of section 153C of the Act would be applicable and have to be adhered to.

It is, therefore, humbly & respectfully submitted that in the event the ld. AO wanted to take cognizance of the said seized material, he ought to have invoked the provisions section 153C of the Act after recording his

39 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

satisfaction even if the AO is the same. This is the jurisdictional pre- condition laid down by the Legislature.

Therefore, taking into account the aforesaid factual and legal matrix, it is humbly prayed to kindly allow this ground of appeal also. Prayer

Under these facts, circumstances and provisions of law, it is prayed that the appeal may kindly be allowed.

reliance was placed on the following evidence / records / decisions:

S. No. Particulars Page No. The Hon'ble ITAT, Delhi Bench in the case of Bijendra Singh Lohia v/s JCIT(OSD) 01 1 - 14 in ITA No. 1528 & 1529/De1/2022 dt. 16/04/2024. The Hon'ble ITAT, Ahmedabad Bench in the case of Real Marketing Pvt Ltd v/s 02 15 - 66 ACIT in ITA No. 128 to 133/Ahd/2021 dt. 19/05/2023. The Hon'ble ITAT, Delhi Bench in the case of Rukneek Bawa v/s ACIT in ITA No. 03 67 - 74 3083/Del/2012 dt. 23/10/2023.

40 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

Copy of decision of Hon'ble Delhi High Court in the case of PCIT v/s Anand Kumar Jain(HUF) & Satish Dev Jain ITA No. 23, 26 to 31 of 2021 dt. 04 75 - 85 12/02/2021. The Hon'ble ITAT, Delhi Bench in the case of Atul Kumar Gupta & Rajiv Gupta v/s ACIT in ITA No. 1931 & 1164/De1/2020 and 205, 206 & 1395/De1/2021 dt. 05 86 - 115 17/02/2023. 4 / The Hon'ble ITAT, Jaipur Bench in the case of Virendra Singh Ratnawat v/s ACIT 06 in ITA No. 179 to 181/Jp/2022 dt. 01/01/2024. 116 - 139 The Hon'ble ITAT, Kolkata Bench in the case of Atul Tantia v/s DCIT in ITA No. 07 140 - 151 492/Kol/2021 dt. 28/03/2023. The Hon'ble ITAT, Delhi Bench in the case of Feather Infotech Pvt Ltd v/s DCIT in 08 152 - 161 ITA No. 977 & 891/Del/2022 dt. 13/02/2024. The Hon'ble ITAT, Ahmedabad Bench in the case of Rajesh Sajjanraj Bafna & Mihi 09 162 - 174 r P. Panchal v/s DCIT in ITA No. 110 & 112/Ahd/2018 dt. 30/03/2022. The Hon'ble, Jodhpur Bench in the case of SDPL Land & Builders Pvt Ltd v/s 10 175 - 189 ACIT/DCIT in ITA No. 375/Jodh/2023 dt. 15/04/2024. 11 Copy of rejoinder and written submission before CIT(A). 190 - 214 12 Copy of punchnama and affidavit of Devendra Singh Shekhawat. 215 - 219

• Case laws relied upon:

S. No. Particulars Page No. The Hon'ble ITAT, Amritsar Bench in the case of 01 - 14 1 Nandini Sharma v/s ACIT/DCIT in ITA No. The Hon'ble, Jodhpur Bench in the case of Lovish 02 - 33 15 Singhal v/s ITO in in ITA No. 143/Jodh/2018 dt. The Hon'ble ITAT, Delhi Bench in the case of DCIT 03 - 40 34 v/s Tapesh Tyagi in ITA No. 1344/De1/2021 dt. 04 The written submission before the Ld CIT(A). - 52 41 Particulars Page No. .Sl. 01 Copy of decision of Hon'ble ITAT, Pune Bench in the case of DCIT v/s Sandeep - 226 220 Bipinchandra Jhaveri in ITA No. 1185/Pun/2023 dt. 14/08/2024. 02 Copy of decision of Hon'ble ITAT, Ranchi Bench in the case of ACIT v/s Krishna - 237 227 Murari Choudhary in ITA No. 83/Ran/2019 dt. 26/02/2024. 03 Copy of decision of Hon'ble ITAT, "B" Bench, Ahmedabad in the case of JCIT - 245 238 v/s Sangani Industries Pvt. Ltd. in ITA No. 63/Ahd/2021 dt. 14/02/2024. 04 Copy of decision of Hon'ble ITAT, Amritsar Bench in the case of Ishtiaq Ahmad - 260 246 Dar v/s ACIT in ITA No. 275 & 276/Asr/2023 dt. 29/05/2024. 05 Copy of decision of Hon'ble ITAT, Amritsar Bench, Amritsar in the case of Sh. - 267 261 Nasir Ahmad Dar v/s DCIT in ITA No. 263/Asr/2023 Dt. 29/05/2024.

41 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar 06 Copy of decision of Hon'ble Gujarat High Court in the case of The PCIT v/s - 270 268 Kaushik Nanubhai Majithia in R/Tax Appeal No. 20 of 2024 Dt. 06/03/2024. Copy of decision of Hon'ble High Court of Judicature for Rajasthan at Jodhpur in 07 - 284 the case of Micro Marbles Pvt. Ltd. v/s ITO in D.B. Civil Writ Petition No. 271 13719/2021 dt. 04/01/2023.

submission so filed vehemently argued that the so far his cross

objection is concerned his case is covered by the decision of the

apex court in the case Abhisar Buildwell Private Limited. As

regards the appeal of the revenue he submitted that the alleged

data of excel sheet were never confrontated to the director of the

company Mr. Aasard. Even the cross examination was asked

which was also not provided. The ld. CIT(A) has discussed all the

issue and he relied upon that order of the ld. CIT(A).

this case is based on the incriminating document found at premises

of the accountant of the assessee company Shri Devendra

Shekhawat in that excel sheet the details of property appearing in

the name of the company and the value of the actual purchase was

mentioned. Details were relates to 25 portion of the land appearing

in the books of the assessee for those assets rather are in the

name of assessee company and this aspect of the matter has not

42 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar been considered by ld. CIT(A). Therefore, the difference in the

value of land price disclosed in the excel sheet with that of the book

being added for an amount of Rs. 5,05,81,050/- in the hands of the

assessee is required to be sustained. The ld. AO even in the

remand proceedings confirmed the statement of the assessee

which accountant Shri Devendra Shekhawat. Subsequently,

retracted at the remand proceedings, therefore, his statement is to

be read with incriminating documents found is required to be

sustained based on the material found in the case of the assessee.

The ld. DR also stated that the finding of ld. CIT(A) is clearly

incorrect while holding that no corroborative evidences were found

and therefore, the order of ld. AO be sustained.

placed on record. First we take up the appeal of the revenue

wherein effectively there were three grounds of appeal raised but

all three relates to the only one addition of Rs. 5,05,81,050/- made

on account of unexplained investment u/s 69B of the Act without

appreciating the fact that addition was determined on the basis of

unexplained and unaccounted transactions recorded in the excel

sheet with name "BMPL", Jhalawar maintained in the laptop of Shri

Devendra Singh Shekhawat who was accountant and person of

43 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar confidence of the company and maintaining all records of actual

transactions of immovable properties purchased by M/s Banas

Minerals Pvt. Ltd under directions of the directors of the company.

It was also the contention of the revenue that CIT(A) was not

justified in deleting the addition of Rs. 50581050/- on account of

unexplained investment u/s 69B of the Act without appreciating the

fact that addition was only of difference in value of the properties

owned by the assessee; and there is no role of other properties

mentioned in the excel sheet and without appreciating the fact that

the accountant of the assessee company accepted by Shri

Devendra Singh Shekhawat during search proceedings that the

data in the laptop extracted into excel sheet pertains to M/s Banas

Minerals Pvt. Ltd. and that he never denied this fact till the

statement was recorded during remand report proceedings.

operation an excel sheet on the computer drive of Shri Devendra

Singh Shekhawat accountant of the company was found based on

that excel sheet ld. AO tabulated the transaction in those sheet as

Table -1 and Table-2, the disputed addition of Rs. 5,05,81,050/- the

same was considered as investment u/s. 69B of the Act. The AO

noted that all the properties mentioned in the seized document do

44 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar not belong to the Company but are taken on lease from the

respective land owners. From the evidences brought on record by

the assessee, it is seen that some of the properties mentioned in

the documents are neither owned by the assessee-appellant nor

taken on lease for its business but are Government land. However,

there are properties owned by the assessee whose value recorded

in the excel sheet is differing from the investment recorded in the

books of accounts. It is the contention of the revenue that the value

mentioned in the seized documents appears to be the actual value

of investment made in the property indicating that the company has

made out of Books payments over and above the payments

recorded in the registered documents. Since these payments of the

difference amount have not been recorded in the Books of

accounts and no explanation of the source thereof has been

furnished, same was considered as unrecorded investment in

these properties and the same was considered as per provision of

section 69 of the Act.

The sole and only evidence made basis by the AO for making

the addition made in the hands of the assessee-appellant is the

excel sheet. Now issue here is whether the excel sheet is proving

in clear and unambiguous terms that the appellant company made

45 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar a payment in cash for purchase of these lands. The AO himself

noted that all the properties mentioned in the seized document do

not belong to the Company. Further, the AO also noted that some

of the properties referred to in the documents are not owned by the

Company but have been taken on lease by the company from the

respective land owners. It is also noted by the AO that some of the

properties mentioned in the documents are neither owned by the

appellant nor taken on lease for its business but are Govemment

land. From perusal of the assessment order itself it is evident that

the excel sheet contains details of properties which are not owned

by the appellant company. Therefore, it is evident that the details

are not belonging to the appellant exclusively as land belonging to

other persons and even government land is also included in this

excel sheet. The inference drawn by the AO that the appellant or its

employee prepared this sheet for recording actual value of

properties is not found to be justified. Not only that no corroborative

evidence justifying the amount recorded in that excel sheet is in

fact incurred by the assessee out of books. The inferences drawn

by the AO is not not supported by any corroborative evidence or

admission by any party or witness. Mr. Devendra Singh Shekhawat

from whose possession, this excel sheet was recovered was not

46 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar confronted during the search with regard to contents of this excel

sheet that this properties are acquired by the assessee by paying

the amount mentioned against each one. The ld. CIT(A) has also

called for the remand report and during the remand proceedings he

has not stated anything with regard to these transactions. The AO

stated in the order that value mentioned in the seized documents

appears to be the actual value of investment made in the property.

The inference drawn by the AO is indicating suspicion and not

conclusion and is not supported by any corroborative material in

support of the conclusion drawn by the AO. We note that there

remains no evidence as to the allegation of unaccounted cash

payment for purchase of land. There is no witness of such cash

payment. There is no evidence that the cash has actually changed

hands. Moreover, how, when and to whom the alleged cash money

was transferred also remain unanswered. It is true that other than

the excel sheet, there is no evidence for undisclosed investment as

discussed by the AO in the assessment order. The excel sheet do

show value which is more than the registered agreement but

because of inclusion of lands not connected to the appellant it

cannot be said with certainty that this sheet only provides detail of

unaccounted transactions. These contentions of the assessee-

47 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar appellant have been accepted only after hearing the ld. AO in the

remand proceedings. The value shown in the registered purchase

deeds are duly entered in the books of account for various years,

which needs to be treated as correct in absence of any contrary

tangible evidence. There is no corroborative evidence to support

that contentions of Shri Asad Anwar Khan are unjustified. Hence,

there is no reason to disbelieve the statement of Shri Asad Anwar

Khan and also a duly registered conveyance deeds placed on

record. The revenue conducted the search and in that no contrary

evidence found during search where value of land mentioned is

higher to the value shown in the books account and the flow of

money for the value alleged to have been recorded in that excel

sheet. However, the excel sheet in itself does not prove that actual

payment made by the appellant are what is shown in the seized

document as no evidence found during search which corroborate

the notings of this document Further, as discussed earlier, the

excel sheet is not prepared for the appellant exclusively and also

there is government land in the list of lands in the excel sheet and

why the value mentioned in that is also not considered as

investment of the assessee. Before arriving at such conclusion no

statement or examination of the seller of the property were

48 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

examined, to substantiate the contention extra money in fact has

been flown. The addition is made because as per AO it appears

that the actual value is recorded in the excel sheet. We also take

note of the fact that Shri Devendra Singh Shekhawat also averred

that any transaction related to sale and purchase of land related to

company are not provided to him so he is unable to tell anything

about the details entered in the excel sheets. Even before us the ld.

DR merely relying on the statement recorded and the value found

disclosed in the excel sheet were considered to be the basis for

making the addition. As the disputed amount of addition was made

by taking resort of provision of section 69B of the Act, we would like

to reiterate the same for the applicability of the provision in the

facts of the case of the assesse:

Amount of investments, etc., not fully disclosed in books of account.

69B. Where in any financial year the assessee has made investments or is found to be the owner of any bullion, jewellery or other valuable article, and the Assessing Officer finds that the amount expended on making such investments or in acquiring such bullion, jewellery or other valuable article exceeds the amount recorded in this behalf in the books of account maintained by the assessee for any source of income, and the assessee offers no explanation about such excess amount or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the excess amount may be deemed to be the income of the assessee for such financial year.

49 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

As is evident from the above provision of law that the same can be

invoked only if;

(a) It is found that the assessee has made investment or the assessee is found be the owner of any bullion, jewellery or other valuable article,and (b) it is found that the amount expanded on making such investment or in acquiring such bullion, jewellery or other valuable article exceeds the amount recorded in that behalf in the books of account maintained by the assessee, and (c) either the assessee offers no explanation about such excess amount, or the explanation offered by him is not satisfactory. As we note that these cumulative circumstances needs to be

existed, which are failed and the Ld. AO in the assessment order

merely on the presumption and assumption added the amount

without briging any evidence that the actual investment recorded is

less and the value of the property is more. No efforts or records

found to have made basis except the excel sheet wherein the

value of the property of the government land and that of the lease

lands also found to have been record. Thus, considering the

provision of law and the facts of the case it does not attract the

provision of section 69B of the Act and the addition has rightly

been deleted by the ld. CIT(A). To take home this view of the

matter we get support from the decision of the our Hon’ble

Jurisdiction High Court in the case of Smt. Amar Kumari Surana

v. Commissioner of Income-tax [ 89 TAXMAN 544 (RAJ.) ]

wherein the it has been held as under :

50 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

51 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

52 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

at the same time it cannot be ignored that no evidence has been adduced by the assessee before the ITO as to why the plot of land has been sold to the assessee for roughly at half of the rate than the prevalent market rate. 19. In the case of K.P. Varghese (supra)their Lordships of the Supreme Court have observed that even if market value is more than the value/consideration received in respect of the transfer, it would amount to gift under the Gift-tax Act, 1958. The Income-tax Act and the Gift-tax Act are parts of an integrated scheme of taxation and the same amount which is chargeable as gift could not be intended to be charged also as capital gains. 20. In the case of K.P. Varghese (supra), the house property was sold to daughter-in-law and five of her children. Therefore, the case of K.P. Varghese (supra)is covered under the provisions of section 4 and the difference between market value and consideration paid would amount to gift under section 4(1)(a)of Gift-tax Act, but that should be born out from the record that the particular case is of deeming gift. In that case certainly, no capital gain tax can be charged. But in the case on hand, there is no material on record which shows that property has been sold for less consideration and the difference between market value of property and consideration shown in account books can be a case of deemed gift under section 4(1)(a). Neither the assessee is a relation of seller nor of any reason has been advanced before the ITO as to why less consideration has been paid than the prevalent market rate. Not even a single reason has been given as to why the property has been sold to the assessee for roughly half of the prevalent market rate. In absence of that the only inference that can be drawn is that the petitioner has, in fact, concealed the actual consideration paid to seller. 21. It is true that the burden is on the department to establish the fact that the property has been sold for lesser consideration that the market value. It is also to be established that actual consideration is more than the consideration shown in account books/sale deed. In the case of K.P. Varghese (supra)their Lordships have observed that before invoking the powers under sub-section (2) of section 52 of the Act, the burden is on the revenue to prove that the actual consideration was more than that disclosed by the assessee. But their Lordships have further observed that this burden may be discharged by establishing the facts and circumstances, from which reasonable inference can be drawn that the assessee has not correctly declared or disclosed the consideration received or paid by him. As stated above, in the locality of C-scheme the adjoining plots were sold at the rate of Rs. 60 or 75 per sq. yd. and if we take the estimated rate taken by the AAC and the Tribunal, the rate of plot in question comes to Rs. 36 per sq. yd. that is, roughly half of the rate than the prevalent market rate in the area. Admittedly, no reason has been shown by the assessee as to why the plot of land has been sold to her half of rate of market rate. Nor any other reason has been shown to the ITO at the time of assessment. Even, in spite of specific

53 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

query, the assessee failed to point out any mistake/lacuna in ascertaining the value of plot of land by the valuer. In these circumstances, the only reasonable inference that can be drawn is that the assessee has shown less amount in the account books and sale- deed that the actual consideration paid. Considering, the comparable cases and the facts of the case we find no ground to interfere in the addition made under section 69B. In view of the above discussion, we find nothing wrong in the view taken by the Tribunal. Therefore, we answer the question in the affirmative, that is, in favour of the revenue and against the assessee.

Respectfully following the binding precedent and facts as

discussed herein above that there is no evidence for undisclosed

investment as alleged by the ld. AO. The only evidence is the excel

sheet which do show value which is more than the registered

deeds but that sheet also includes the lands taken on lease and

government land also and therefore, it cannot be said with

certainty that the excel sheet only provides unaccounted

investment of the assessee. Thus, the ground of appeals no. 1 to 3

raised by the revenue has no merit and the same are dismissed.

Ground no. 4 raised being general in nature does not require our

adjudication.

wherein the assessee challenges the finding of the ld. CIT(A)

holding the validity of the notice issued to the assessee u/s. 153A

of the Act based on the digital data obtained from the compute of

54 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

the third party search without bringing on record any evidence of

genuineness of the such digital data. The assessee also submit

that considering the finding recorded by the apex court in the case

of Abhishar Buildwell Private Limited the assessment is not

required to be reopened.

So far as these grievance of the assessee is concerned as

we note that the appeal of the assessee has already been allowed

by the CIT(A) and we have also dismissed the appeal of the

revenue thereby confirming the view of the ld. CIT(A). The

assessee has not filed any such submission as to why the finding

of the ld. CIT(A) is incorrect wherein ld. CIT(A) has categorically

while dealing with the issue has held that the notice was rightly

issued based on the seized documents:

This argument of the appellant is found to be partly acceptable as there can be more than one inference drawn from the excel sheet. One inference is that it is actual value of land. This inference is drawn by the AO also. Another inference can be that it is projected value of land after certain period of time. So, more than one interpretation was possible. In these circumstances, where more than one interpretation is possible then corroborative evidences needs to be brought on record so that we can draw a certain conclusion that the inference drawn is correct or not. It is not correct that it is dumb document as the entries made are clear on the sheet. However, interpretation of the entries can be more than one. The person from whose possession this document was found has not explained true nature of these entries. The argument of the appellant that this sheet is not having evidentiary value is not found to be acceptable as it is part of seized records during search. Therefore, this excel sheet is having evidentiary value. However, this evidence could have been used against the appellant if any corroborative evidence supporting this was there on record like statement of seller, statement of any person who was involved in the cash transaction or any other paper where similar

55 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

transactions are recorded which could fortify the contention of the AO In the absence of corroborative material the addition made by the AO is not found to be sustainable.

Considering that finding so recorded by the ld. CIT(A) we do not

find any merits in the arguments of the ld. AR of the assessee that

no proceeding could have been done at the end of the assessee

u/s. 153A of the Act. Based on this observation grounds of cross

objection has not merits and the same are thus treated as

dismissed.

In the result the appeal of the revenue in ITA no. 239/JP/2024

and the cross objection of the assessee in CO/4/JP/2024 also

stands dismissed.

ITA No. 269/JP/2024 for A. Y. 2018-19 - Banas Builders And

Developers LLP

grounds of appeal filed by the revenue are as under;

“1. Whether on facts and in circumstances of the case, the CIT(A) is justified in deleting the addition of Rs. 5,75,00,000/- on account of unaccounted investrnent u/s 69B of the Act without appreciating the facts that addition was determined on the basis of true facts recorded in statement u/s 132(4) of the Act on oath and on the basis of certain information found in the phone of Shri Devendra Shekhawat who was the main accountant and person of confidence maintaining, knowing and arranging the transactions of all the establishments including the assessee LLP of the Group under directions of the partners and the

56 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

partner has never denied it that Shri Shekhawat does not work of the Group.

Developers LLP in ITA no. 269/JP/2024 are exactly similar with that

of the facts and grounds so raised in ITA no. 239/JP/2024.

Therefore, we do not deem it fit to discuss the arguments afresh,

and hold that the decision taken in ITA no. 239/JP/2024, as noticed

above, shall apply mutatis mutandis in the case of the assessee for

the assessment year 2018-19 in ITA no. 269/JP/2024. Thus, the

appeal of the revenue in ITA No. 269/JP/2024 stands dismissed.

ITA No. 240/JP/2024 and Co no. 05/JP/2024

240/JP/2024 wherein the grounds of the revenue reads as under:

57 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

“(i) Whether on facts and in circumstances of the case, the Ld. CIT(A) is justified in its decision of not charging tax as per provision of section 115BBE of the IT Act which was imposed by invoking section 69B of the IT Act on the excess stock of Rs.1,52,83,105/- (treated as unexplained investment u/s 69B of the Act) without appreciating the fact that the assessee failed to substantiate the source of investment in excess stock with supporting documentary evidence and could not prove that the income for investment in excess stock was earned during the current financial year from its business activities. (ii) Whether on facts and in circumstances of the case, the Ld. CIT(A) is justified in its decision of not charging tax as per provision of section 115BBE of the IT Act which was imposed by invoking section 69B of the IT Act on the excess stock of Rs. 1,52,83,105/- (treated as unexplained investment u/s 69B of the Act) without appreciating the fact that the assessee has failed to verify the excess stock(of the period from the date of search action to appellate proceedings) from the documents of excavation (mining of kota stone) submitted to the government authorities, bills/vouchers of purchase and other evidence.

(iii) Whether on facts and in circumstances of the case, the Ld. CIT(A) is justified in its decision of not charging tax as per provision of section 115BBE of the IT Act which was imposed by invoking section 69B of the IT Act on the excess stock of Rs. 1,52,83,105/- (treated as unexplained investment u/s 69B of the Act) without appreciating the fact that the excess stock found during the search proceedings was admitted as undisclosed by the assessee during the post search proceedings and was offered for taxation by the assessee.

(iv) Whether on facts and in circumstances of the case, the Ld. CIT(A) is justified in its decision of not charging tax as per provision of section 115BBE of the IT Act which was imposed by invoking section 69B of the IT Act on the excess stock of Rs.1,52,83,105/- (treated as unexplained investment u/s 69B of the Act) without appreciating the fact that on or before the date of search proceedings, the excess stock was not recorded in the books of accounts of the assessee and it was just an afterthought of the assessee to record the excess stock in the books of accounts after search proceedings on 21.12.2017 as undisclosed excess stock as to colour the nature of that excess stock as business income while the very nature of the stock was undisclosed and unaccounted.

58 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

( v) The appellant craves leave to add, amend or withdraw any of the ground of appeal during the course of appeal proceeding.”

following ground in CO No. 05/JP/2024;

“1. That on the facts & in the circumstances of the case the ld. CIT(A) erred in upholding the application of provision of section 115BBE on labour expenses which was disclosed in the return of income by appellant. 2. That on the facts & in the circumstances of the case the ld. CIT(A) erred in upholding the provision of section 115BBE without analyzing the nature of expenditure and income surrendered in return of income in right perspective and judicious manner. 3. That on the facts & in the circumstances of the case the ld. CIT(A) erred in confirming the action of the ld. AO in changing the head from business expenditure to other sources bogus expenditure by invoking the provision of section 115BBE of the Income Tax Act, 1961. 4. That on the facts & in the circumstances of the case the ld. CIT(A) erred in not analyzing the judicial decisions in right perspective and judicious manner while upholding the provision of section 115BBE of the Act. 5. That on the facts & in the circumstances of the case the ld. CIT(A) erred in not appreciating the explanation of appellant while confirming the application of section 115BBE on labour expenses. 6. That the respondent may kindly be permitted to raise any additional and/or alternative ground at or before the hearing of appeal. The respondent prays for justice & relief.” 7. 28. At the outset of hearing the bench noted that the appeal filed

by the revenue is filed 11 days delayed. Since on the same set of

fact while dealing with the appeal of the revenue in ITA no.

239/JP/2024 herein above, we have condoned the delay and the

facts mentioned therein and in this appeal being same therefore,

we do not intend to repeat the arguments and fact and based on

59 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar the discussion so recorded at para 8 above we condone the delay

of filling the present appeal by the revenue.

assessee also delayed by 12 days since we have condoned the

delay in CO no. 4 vide para 11 above since the reasons and

arguments being similar we do not intend to repeat arguments and

contention raised. Based this observation we condone the delay in

filling the cross objection no. 5 by the assessee.

search & seizure operation under section 132(1) of the Income Tax

Act, 1961 was carried out on 15.11.2017 at the various premises of

Banas Group, Jalawar to which the assessee belongs. A number of

persons/ premises covered u/s 132 of the IT. Act, 1961. Cash,

Jewellery and other documents found and seized from some

persons residence and business premise. The case of the

assessee was also covered under search proceedings. The search

action was carried out on the assessee on 15.11.2017 at its

business premises F-49 and F-51, Phase-III, RIICO Industrial Area,

Jhalawar, Rajasthan. Consequent to search action, the case of the

assessee was centralized to Central Circle-Kota by the Principal

Commissioner of Income-tax, Kota vide his order No. Pr.CIT/ITO

60 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar (Tech.)/ KTA/S. 127/2017-18/3319 dated 20.12.2017. The

assessee Company is engaged mining of Kota stone. Assessee

company had filed his return of incense u/s 139 of the Act on

25.10.2018 at the total income of Rs. 3,50,12,160 and agricultural

income of Rs. 5,33,083/-.

The case of the assessee was manually selected for scrutiny

as per provisions of section 153B(1)(b) and manual selection

guidelines & instructions issued by the CBDT. Notice u/s 143(2) of

Act was issued on 29.01.2019 which was duly served. Further,

notice under sub section (1) of Section 142 of the Act was issued

on 29.01.2019 along with questionnaire / Annexure-A requiring

certain details / information, which was served upon the assessee

through Income Tax Inspector. In response to that, assessee

furnished the desired details information documents/ which were

examined with respect to claims made in the return of income. The

case of the assessee was also selected for scrutiny for AY 2018-19

under CASS. Notice u/s 143(2) was issued on 22.09.2019. Since

the proceeding u/s 143(3) r.ws 1538(1)(b) was pending, the

assessment proceeding initiated based on CASS was abated vide

order dated 18.11.2019. The reasons of selection in CASS are also

covered during the assessment proceeding.

61 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar In this case the assessee Company has included excess

stock of Rs. 1,52,83,105 in its stock which was found excessive

and offered for taxation during post search proceedings. Ld. AO

noted that the assessee Company has paid taxes at normal rate

whereas excess stock is covered under section 69B of the Act

because this excessive stock is not recorded in the books of

accounts. Assessee Company has entered undisclosed excessive

stock of Rs. 1,52,83,105/- in books of accounts on dated

21.12.2017. This income is not directly offered for taxation but

included in stock. Assessee Company has filed reply regarding

taxability under section 115BBE of the Act which is not found in

order. This unexplained income is liable to tax under section

115BBE(1) of the Act. This income is detected due to search action

on the assessee. So, Assessee is liable for penalty proceedings u/s

271AAB(IA) of the Act on such undisclosed income of Rs.

1,52,83,105/- because above undisclosed income has not been

recorded on or before the date of search in the books of account or

other documents maintained in the normal course relating to such

previous year.

Assessing Officer, assessee preferred an appeal before the ld.

62 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

CIT(A). Apropos to the grounds so raised the relevant finding of the

ld. CIT(A) is reiterated here in below:

“4.6. I have considered assessment order, arguments as well as the submissions made by the appellant in this regard and also perused the relevant documents and records in the case for the assessment year.

The AO noted in this case that during the course of assessment proceedings, it is noticed that the assessee company had included excess stock of Rs.1,52,83,105/- in its stock which was found excessive and offered for taxation during the post search proceedings. The assessee company has paid taxes at normal rate whereas excess stock is covered under section 69B of the Act because this excessive stock is not recorded in the books of accounts. Assessee Company has entered undisclosed excessive stock of Rs. 1,52,83,105/- in books of accounts on dated 21.12.2017. This income is not directly offered for taxation but included in stock in the books of accounts.

Only issue in this ground of appeal is with regard to addition made by the AO u/s 69B. The appellant argued in this regard that the AO has accepted the income as declared by the assessee on account of excess stock. However, he added the said income separately u/s 69B of the Act and charged the tax by applying provisions of section 115BBE of the Act.

It is argued that the assessee is engaged in mining of Kota stone. In the return of income, the same has been offered to tax by the appellant- assessee under the head "business income" and the return of income so filed has been accepted by the Id. AO without making any adjustment/ variation either in the quantum or nature of income so offered by the assessee. The assessee, being a company, has offered the same to tax applying the rate of taxation as applicable to the domestic company.

The assessee company has shown regular business income as per above NP for the year under consideration along with unexplained income found during the course of survey on account of stock and the same was offered Income From Business or Profession. In support of the claim, the assessee has relied upon decision of Hon'ble High Court of Rajasthan in the case of Pr. CIT, Alwar Vs. Bajargan Traders (D.B

63 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

Appeal No.258/2017 dated 12.09.2017) wherein the Hon'ble High Court has confirmed the view of the Tribunal which is reproduced as under-

"Having said that, the next issue that arises for consideration is whether the amount surrendered by way of investment in the unrecorded stock of rice has to be brought to tax under the head "business income" or "income from other sources". In the present case, the assessee is dealing in sale of foodgrains, rice and oil seeds, and the excess stock which has been found during the course of survey is stock of rice. Therefore, the investment in procurement of such stock of rice is clearly identifiable and related to the regular business stock of the assessee. The decision of the Co-ordinate Bench in case of Shri Ramnarayan Birla (supra) supports the case of the assessee in this regard. Therefore, the investment in the excess stock has to be brought to tax under the head "business income" and not under the head income from other sources"

Applying the proposition of law laid down in the judicial pronouncements as discussed above, I am of the opinion that the AO has not dealt with the matter properly regarding taxing the surrender made on account of excess stock u/s 69B of the Act. Further, there appears no adverse point which could lead to tax on surrender income u/s 115BBE of the Act, 1961 in the assessment order u/s 143(3) passed by the AO. Therefore, the addition made by the AO is not found to be sustainable. The excess stock found is to be treated as income from business of the assessee as held by the Hon'ble Jurisdictional High Court.

Another issue in this ground is initiation of the penalty u/s 271AAB(1A) of the Income Tax Act, 1961.

No prejudice is caused only because of initiation of penalty proceedings u/s 271AAB (1A) of the Income Tax Act, 1961. The issue raised by the appellant is premature. Hence, this issue raised in appeal is treated as dismissed.

This ground of appeal is treated as partly allowed.”

the ld. CIT(A) preferred the appeal in ITA no. 240/JP/2024 raising

64 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

four separate ground challenging finding of ld. CIT(A) on the

applicability of the section 69B of the Act and thereby charging of

tax as per provision of section 115BBE of the Act. The ld. DR

representing revenue in support of the grounds so raised submitted

that the in the search excess stock has been worked out and the

assessee has not disputed the same therefore, said income of

excess stock was made as per provision of section 69B of the Act

the charging of tax at special rate is mandatory as per provision of

section 115BBE of the Act. The ld. DR stated that in the search

proceeding conducted on 21.12.2017 undisclosed excess stock as

to colour the nature of that excess stock as business income while

the very nature of the stock was undisclosed and unaccounted

investment and therefore, the same is very much covered with the

provision of section 69B of the Act.

CIT(A) to the extent it favours to the case of the assessee. The ld.

AR of the assessee also relied upon the following written

submission filed before the ld. CIT(A) :

With reference to the captioned subject and on behalf of the appellant- assessee, we crave leave to submit herewith as under for favour of your kind and sympathetic consideration please: STATEMENT OF FACTS:

65 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

OUR SUBMISSIONS: The grounds of defense are as follows: Ground No.1 pertains to application of section 115BBE on the excess stock found and declared in the ITR.

66 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

record that it had already surrendered such income on account of excess stock found and it is not the investment, therefore, the provisions of section 115BBE of the Act are not applicable on the said income.

67 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

the assessee had no other income other than income from business. Now, when the business activity of the assessee has been accepted and no other source of income is found, then there was no justification for disallowing the salary paid to Partners at Rs.4.50 Lacs. Therefore, the disallowance of Rs.4.50 Lacs granted by the A.O and confirmed by the Tribunal is erroneous and deserves to be quashed and set aside. Our view is buttressed by the principle rendered by the Calcutta High Court in the case of Md. Serajuddin & Bros.v.CIT [2012] 24 taxmann.com 46 (Cal.).”

68 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

sections 68, 69, 69A, 69B, 69C or 69D are not attracted to levy tax u/s 115BBE. 11. Like-wise, in case of DCIT vs. Ram Narayan Birla in ITA No. 482/JPR/2015 dated 30 September 2019 also on the surrendered stock during search, seizure and survey action, it was held that the Revenue had not pointed out that the excess stock had any nexus with any other receipts found. Hence, the surrendered excess stock considered at par with the other business stock.

(i) Fashion World vs. ACIT (ITA No. 1634/Ahd/2006) (ii) DCIT vs. Ramnarayan Birla (482/JP/2015 dated 30.09.2016)

69 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

surrounding circumstances and material available on record like assessee’s business of generating stock by self-mining, regularly and consistent showing of business income, registered with VAT/GST authorities showing business receipts, object clause of the Company’s Articles & MOA etc., then no adverse inference u/s 115BBE may be possible. This is further fortified from various judicial pronouncements including jurisdictional Tribunal and High Court as cited above.

Therefore, this ground of appeal may kindly be allowed.

Ground No.2 relates to application of section 115BBE on the excess stock found and declared in the ITR.

70 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

expenditure and if according to ld. AO it is bogus then provisions of section 69C are not applicable.

71 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

unaccounted business receipts of the assessee and as already submitted, supra the assessee had no other source of income except business which would have generated income for the purpose of such expenses. It is submitted that, therefore, the income as declared should be accepted as business income and the same should not be treated as deemed income u/s 69C of the Act and, thus, the provisions of section 115BBE would not apply in the case of the assessee. Reliance is placed on numerous judicial precedents in support of the contention that provisions of section 115BBE would not be attracted in cases where no new source of income has been discovered during the course of search.

72 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

“Income from undisclosed sources—Addition under ss. 69 and 69A— Vis-a-vis income from business—Assessee is engaged in the business of real estate—Thus, the impugned income from property transaction is in the nature of business income—Hence, provisions of s. 69 or s. 69A are not applicable—Even otherwise, the provisions of s. 69 or s. 69A are applicable in case of unrecorded transaction or investment, whose nature and source is not explained—In the present case, assessee has duly explained the nature and source of the transaction and duly declared the same in its return of income—Therefore, there is no question of any income from undisclosed source—Accordingly, the AO is directed to treat the said income as income from business”. (Paras 5 & 6).

73 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

record that the said income was utilized by the assessee elsewhere and not in payment of labour charges.

Therefore, this ground of appeal may also kindly be allowed.”

reliance was placed on the following evidence / records / decisions:

S. No. Particulars Page No. The Hon'ble ITAT, Amritsar Bench in the case of Nandini Sharma v/s 1 - 14 01 ACIT/DCIT in ITA No. 148/Asr/2019 dt. 10/10/2022. The Hon'ble, Jodhpur Bench in the case of Lovish Singhal v/s ITO in in ITA No. 15 - 33 02 143/Jodh/2018 dt. 23/05/2018. The Hon'ble ITAT, Delhi Bench in the case of DCIT v/s Tapesh Tyagi in ITA No. 03 34 - 40 1344/De1/2021 dt. 27/10/2023. 41 - 52 04 The written submission before the Ld CIT(A).

• Case laws relied upon:

S. No. Particulars Page No. The Hon'ble ITAT, Delhi Bench in the case of Bijendra Singh Lohia v/s JCIT(OSD) 01 1 - 14 in ITA No. 1528 & 1529/De1/2022 dt. 16/04/2024. The Hon'ble ITAT, Ahmedabad Bench in the case of Real Marketing Pvt Ltd v/s 02 15 - 66 ACIT in ITA No. 128 to 133/Ahd/2021 dt. 19/05/2023. The Hon'ble ITAT, Delhi Bench in the case of Rukneek Bawa v/s ACIT in ITA No. 03 67 - 74 3083/Del/2012 dt. 23/10/2023. Copy of decision of Hon'ble Delhi High Court in the case of PCIT v/s Anand 04 Kumar Jain(HUF) & Satish Dev Jain ITA No. 23, 26 to 31 of 2021 dt. 75 - 85 12/02/2021. The Hon'ble ITAT, Delhi Bench in the case of Atul Kumar Gupta & Rajiv Gupta v/s 05 ACIT in ITA No. 1931 & 1164/De1/2020 and 205, 206 & 1395/De1/2021 dt. 86 - 115 17/02/2023. /4 The Hon'ble ITAT, Jaipur Bench in the case of Virendra Singh Ratnawat v/s ACIT 06 in ITA No. 179 to 181/Jp/2022 dt. 01/01/2024. 116 - 139 The Hon'ble ITAT, Kolkata Bench in the case of Atul Tantia v/s DCIT in ITA No. 07 140 - 151 492/Kol/2021 dt. 28/03/2023. The Hon'ble ITAT, Delhi Bench in the case of Feather Infotech Pvt Ltd v/s DCIT in 08 152 - 161 ITA No. 977 & 891/Del/2022 dt. 13/02/2024.

74 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

The Hon'ble ITAT, Ahmedabad Bench in the case of Rajesh Sajjanraj Bafna & Mihi 09 162 - 174 r P. Panchal v/s DCIT in ITA No. 110 & 112/Ahd/2018 dt. 30/03/2022. The Hon'ble, Jodhpur Bench in the case of SDPL Land & Builders Pvt Ltd v/s 10 175 - 189 ACIT/DCIT in ITA No. 375/Jodh/2023 dt. 15/04/2024. 11 Copy of rejoinder and written submission before CIT(A). 190 - 214 Copy of punchnama and affidavit of Devendra Singh Shekhawat. 12 215 - 219

submission so filed vehemently argued that the assessee since the

assessee is engaged in the mining of kota stone and the same was

offered as business income only. Even the expenditure incurred

considered as bogus expenditure which will not fall in the provision

of section 69C and r.w.s. 115BBE of the Act.

material placed on record. The bench noted that all the four

grounds raised by the revenue deal with whether the excess stock

amount computed and found at the time of search which the

assessee has offered while filling the return is unexplained

investment u/s. 69B of the Act thereby charging that income as per

provision of section 115BBE of the Act because as on the date of

search the same was not accounted in the books of account. As

the assessee has offered that income therefore, the only dispute is

about the chargeability of rate of tax on the amount of excess

75 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar stock. When the matter carried to ld. CIT(A), the assessee filed

additional evidence which was send to AO for the report in the

remand proceedings and AO submitted remand report dated

23.12.2022 and rejoinder of the assessee dated 31.01.2023. The

main arguments advanced before the ld. CIT(A) that the assessee

is engaged in mining business and excavating stones for sales. It

is not the case where the assessee has purchased stock from the

market bu the same is being excavated from its own mines and it

pertains to self mining. The assessee has explained the reasons

for variation in stock and such discrepancy cannot be said as

unexplained investment and it may at the most, be described as

understatement of the production. Since the search conduction in

between the year the only way of disclosing income, on the part of

the assessee, was through filling of a return which is not under

dispute and accordingly the income is not undisclosed income. In

the business the assessee deals the stock physically taken and

valued at the year end and there is no finding that the stock is not

excavated stock and purchased one thereby unexplained

investment. Thus, when the income is offered by the assessee as

business income while filling the return of income and the same

has been accepted by the ld. AO without comments on the source

76 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

of that income the income offered cannot be considered as

unexplained. The Hon’ble Gujarat High Court in the case of

Principal Commissioner of Income-tax v. Dharti Estate [ 163

taxmann.com 179 (Gujarat) ] held that;

So for the chargeability of section 115BBE we get support from the

above judgment and as regards the income to be considered as

unexplained or not the same is get supported from the decision of

our own Jurisdictional High Court in the case of PCIT Vs. Bajargan

Traders [ DB Appeal No. 258/2017 dated 12.09.2017] wherein the

77 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar Hon’ble High Court held that “Therefore, the investment in

procurement of such stock of rice is clearly identifiable and related

to the regular business stock of the assessee”. Here based on the

fact the stock found is excavated stock and the expenditure for

making the excavation activity is not under question. Considering

the discussion recorded we do not find any infirmity in the finding

so recorded by the ld. CIT(A) and therefore, ground no. 1 to 4

raised by the revenue stands dismissed. Ground no. 5 being

general does not require any adjudication.

assessee. The brief facts related to the disputes is that the during

the course of search, certain incriminating documents, vouchers

were found and seized / impounded vide exhibit 1 to 27 of the

Annexure AS by party no A-5 and Exhibit 1 to 63 of Annexure AS

by party no. 6. The key person Shri Asad anwar Khan has

admitted undisclosed income of Rs. 49,13,738/- & Rs. 74,15,891/-

on account of bogus expenditure in the case of Banas Stone P.

Ltd., and Banas Minerals P. Ltd., respectively for the A. Y. 2018-

74,15,891/- in head other income Audit Report note no 2.17 which

was unearthed during the search proceeding. The ld. AO noted

78 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar that the assessee has paid taxes at normal rate whereas labour

expenses covered u/s. 69C of the Act because this expenses were

not recorded in the books of accounts While filling the ITR the

assessee company has paid tax at normal rate whereas the same

in the opinion of the ld. AO is subjected to tax as per provision of

section 115BBE of the Act. When the matter carried to ld. CIT(A)

he has confirmed the levy of tax at higher rate considering that the

assessee-appellant has accepted out of books expenditure in the

statement recorded u/s. 132(4) of the Act. The source of these

expenses is unaccounted sales. However, in the books of

accounts such unaccounted sales not included.

Before us the ld. AR of the assessee drawn our attention to

the fact that the ld. AO has described expenses payable as bogus

labour expenses whereas the same are not bogus but as payable

in the books of account. For that question no. 37 was asked to Shri

Ashad Anwar Khan by ADIT on 26.12.2017. In reply to this

question no 37 the director Shri Asad Anwar Khan explained the

source of such payment of labour as sales of rough Kota Stone,

which is nothing but unaccounted business receipts. He further

explained that rough kota stone cash sales were utilized for

payment of labour charges as shown as payable in the books of

79 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar

account and thereby though this expenses shown as payable but

the source of such amount paid is cash sales of the assesses

company. The ld. AR of the assessee relying on the decision of

Jaipur bench in the case of Hari Narain Gattani 123 taxmann.com

8 wherein it has been held that it not necessary that tax rate has to

be charged as per provision of section 115BBE of the Act. It has

also been submitted that the ld. AO no wherein the body of

assessment retracted / proved the explanation of the assessee as

not correct. As the ld. AO invoked the provision of section 69C and

that of the ld. CIT(A) has confirmed that we would like to go

through the provision of section 69C of the Act. The section reads

as under :

Unexplained expenditure, etc. 69C. Where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any, offered by him is not, in the opinion of the Assessing Officer, satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee for such financial year : Provided that, notwithstanding anything contained in any other provision of this Act, such unexplained expenditure which is deemed to be the income of the assessee shall not be allowed as a deduction under any head of income.

Here we note that the assessee vide reply to question no 37 the

director Shri Asad Anwar Khan explained the source of such

80 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar payment of labour expenses of Rs. 74,15,891/- as sales of rough

Kota Stone, which is nothing but unaccounted business receipts.

He further explained that rough kota stone cash sales were utilized

for payment of labour charges as shown as payable in the books of

account. Thus, though this expenses shown as payable but the

source of such amount paid is cash sales of the assesses

company which the assessee has reversed and included as other

income of Rs. 74,15,891/- in the audit report under note no. 2.17.

Thus, the assessee has reversed the amount payable on account

labour and offered that income under the other income head. Thus,

the expenditure incurred by the assessee cannot be considered as

unexplained but the same was not paid in the books and in fact the

same was paid by the unaccounted cash sales made by the

assessee. Thus, first in the facts and circumstances of the cash

this is not a cash of unexplained expenditure but recording the

cash sales which was made out of books by the assessee so

invoking the provision of section 69C in this facts and

circumstances is not correct and the assessee has explained the

source of cash sales offered in the income and therefore, invoking

the provision of section 69C in the present set of facts is incorrect.

Based on these discussion ground no. 1 to 5 raised in the cross

81 ITA Nos. 239 to 240 & 269-JP-2024 ACIT vs. Banas Builders and Developers LLP, Jhalawar objection filed is allowed. Ground no. 6 & 7 being general does not

require our adjudication.

In the result the appeal of the revenue in ITA no.

240/JP/2024 stands dismissed and the cross objection no.

5/JP/2024 stands allowed.

Order pronounced in the open court on 03/12/2024.

Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judcial Member ys[kk lnL;@Accountant Member

Tk;iqj@Jaipur fnukad@Dated:- 03/12/2024 *Ganesh Kumar, Sr. PS आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant-ACIT, Central Circle, Kota/ Banas Minerals Private Ltd., Jhalawar 2. izR;FkhZ@ The Respondent- Banas Builders and Developers LLP, Jhalawar 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 5. 6. xkMZ QkbZy@ Guard File { ITA Nos. 239 to 240 & 269/JP/2024 & CO Nos. 4 & 5/JP/2024 } vkns'kkuqlkj@ By order

सहायक पंजीकार@Aेेज. त्महपेजतंत