M/S. KESAR MARBLE AND GRANITES LTD.,,BANGALORE vs. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(3) , BANGALORE

5. We have heard the rival submissions and perused the materials available on record. As per explanation inserted to section 132 of the Act by Finance Act, 2017 with retrospective effect from 1.4.1962, the assessee cannot question the legality of the search before this Tribunal. This view if also fortified by the decision of Hon’ble Karnataka High Court in the case of Pratibha Jewellery House Vs. CIT 88 taxmann.com 94 (Karn.). Accordingly, this ground of assessee is dismissed in all appeals.

6. Next common ground in all these appeals in ITA Nos.373 to 376/Bang/2024 is with regard to framing of assessment u/s 153C of the Act as the condition precedent to issue notice u/s 153C of the Act is not satisfied. 6.1 According to the ld. A.R., there was search action conducted in the premises of the assessee on the strength of warrant of authorization issued in the name of Coffee Day Group. The seizure ITA Nos.373 to 376 & 382/Bang/2024 M/s. Kesar Marble & Granites Ltd., Bangalore Page 3 of 23 of document at the premises of the assessee was resulted in issue of notice u/s 153C of the Act and that cannot be reason to issue notice u/s 153C of the Act since the search in the case of assessee itself, assessment should be framed u/s 153A of the Act.

of the assessee in all appeals is dismissed.

8. The assessee filed one common additional ground in 374 & 375/Bang/2024 for the assessment years 2014-15 to 2016-17 respectively which is as follows: “The ld. CIT(A) ought to have appreciated that the addition of Rs.22,00,000/- made towards payment of salary and Rs.35,00,000/- towards purchase of granite block from Sri Santosh was not based on any incriminating material found during the course of search and only based on similar expenditure incurred for the AY 2017-18 and AY 2018-19 and the income offered in the statement recorded u/s 132(4) of the Act and thus, the same ought to have been deleted under the facts and in the circumstances of the appellant’s case.”

8.1 The assessee filed petition for admission of this common additional ground.

(i) In the case of PCIT Vs Best infrastructure (India) Pvt Ltd (ITA No. 13/2017) the question of law framed before Delhi High Court is as under: “Did the ITAT fall into error in holding that the additions made under Section 68 of the Income Tax Act, 1961, on account of the statements made by the assessee’s Directors in the course of search under Section 132 of the Act were not justified ?”

In the case, the learned CIT-(A) held that evidence does not mean only documentary evidence and the statement under section 132(4) of the Act is an important evidence collected as a result of search and seizure operation and thus, the addition of share capital was based on evidence gathered during the search. However, the Tribunal held that no incriminating material for each of the assessment year other than the year of search, to justify the assumption of jurisdiction under section 153A of the Act. The Hon’ble High Court, after considering the arguments of both parties on the issue whether statement under section 132(4) of the Act constitute incriminating material, held as under:

“38. Fifthly, statements recorded under Section 132(4) of the Act do not by themselves constitute incriminating material as has been explained by this Court in Commissioner of Income Tax Vs. Harjeev Aggarwal (supra). Lastly, as already pointed out hereinbefore, the facts in the present case are different from the facts in Smt. Dayawanti Gupta Vs. CIT (supra) where the admission by the Assessees themselves on critical aspects, of failure to maintained accounts and admission that the seized documents reflected transactions of unaccounted sales and purchases, is non-existent in the present case. In the said case, there was a factual finding to the to 376 & 382/Bang/2024 M/s. Kesar Marble & Granites Ltd., Bangalore Page 5 of 23 effect that the assessee were habitual offenders, indulging in clandestine operations whereas there is nothing in the present case, whatsoever, to suggest that any statement made by Mr. Anu Aggarwal or Mr. Harjeet Singh contained any such admission.

“19 In view of the settled legal position, the first and foremost issue to be addressed is whether a statement recorded under Section 132(4) of the Act would by itself be sufficient to assess the income, as disclosed by the Assessee in its statement, under the Provisions of Chapter XIV –B of the Act.

45. Since in the instant case addition of Rs.11,85,00,000/- was made on the basis of statements recorded u/s 132(4) and post-search enquiry and no incriminating material was found/seized during the course of search, therefore, following the to 376 & 382/Bang/2024 M/s. Kesar Marble & Granites Ltd., Bangalore Page 6 of 23 decisions cited (supra), we hold that no addition could have been made u/s 153A since the assessment was not abated in the instant case. In view of the above, we hold that the ld. CIT(A) was not justified in upholding the action of the Assessing Officer in assuming jurisdiction u/s 153A of the I.T. Act. Accordingly, the addition made by the Assessing Officer and upheld by the ld. CIT(A) in the 153A assessment proceedings being void ab-initio are deleted.

(iv) In the case of M/s. Brahmaputra Finlease (P) Ltd. Vs DCIT (ITA No. 3332/Del/2017 dated 29.12.2017) Delhi Tribunal held as under:

“4.19 We find that in the case of best infrastructure (India) private limited (supra), despite the admission of accommodation entry in statements under section 132(4) of the Act, the court held that the statement do not constitute as incriminating material. In the instant case, neither is there any statement of any accommodation entry operator claiming that any entry was not provided nor any director has admitted that assessee obtained accommodation entry. Thus, the case of the assessee is on better footing then the case of Best Infrastructure (I) P. Ltd (supra). In such facts and circumstances, respectfully following the decision of the Hon’ble Delhi High Court in the case of best infrastructure (India) private limited (supra), we do not have any hesitation to hold that the statement under section 132(4) of Sh. Sampat Sharma cannot be treated as incriminating material found during the course of search.” [Emphasis in bold and underline supplied] (v) In the case of PCIT Vs Suman Agrwal (ITA NO. 167 OF 2022) Honourable Delhi High court held as under: 8. We have perused the statement dated 3rd August, 2015 and the contents of the letter dated 31st July, 2015, both authored by Sh. Madho Gopal Agarwal. There is no reference to M/s KGN Industries Limited in either of the said documents. No other material found during search pertaining to M/s KGN Industries Ltd. has been placed on record. The Revenue has not placed on record any incriminating material which was found as a result of the search conducted on the assesee herein. It is also the contention of the assessee that there was no surrender by her unlike Sh. Madho Gopal Agarwal and she, therefore, specifically disputed that any notice under section 153A of the Act could have been initiated against her. The said facts are not disputed by the counsel for the Revenue.

9. On the date of search, admittedly, the assessment with respect to the AY under consideration 2011-12 admittedly stood completed. Since no assessment was pending for the relevant AY 2011-12 on the date of search and no incriminating material was found during the course of search, the issue is covered in favour of the assessee by the judgment of this Court in the case of Kabul Chawla (supra) and Pr. CIT v. Meeta Gutgutia [2017] 82 taxmann.com 287/248 Taxman 384/395 ITR 526/295 CTR 466. to 376 & 382/Bang/2024 M/s. Kesar Marble & Granites Ltd., Bangalore Page 7 of 23 [Emphasis in bold and underline supplied] (vi) Honourable Delhi High Court in the case of Pr. CIT v. Anand Kumar Jain [2021] 432 ITR 384 held as under: “This statement certainly has the evidentiary value and relevance as contemplated under the explanation to section 132(4) of the Act. However, this statement cannot, on a standalone basis, without reference to any other material discovered during search and seizure operations, empower the AO to frame the block assessment.”

[Emphasis in bold and underline supplied] (vii) Honourable Mumbai Bench of ITAT in the case of Arihant Universal Realty (P.) Ltd. v. DCIT( dated 05.04.2022 ) held as under: 6.1 We find it would be necessary to address the preliminary issue of whether the addition could be framed u/s 153A of the Act in respect of a concluded proceeding without the existence of any incriminating materials found in the course of search. The scheme of the act provides for abatement of pending proceedings as on the date of search. It is not in dispute that the assessment for the Asst Year 2009-10 was originally completed u/s 143(1) of the Act and hence it falls under concluded proceeding, as on the date of search. We hold that the legislature does not differentiate whether the assessments originally were framed u/s 143(1) or 143(3) or 147 of the Act. Hence unless there is any incriminating material found during the course of search relatable to such concluded year, the statute does not confer any power on the ld AO to disturb the findings given thereon and income determined thereon, as finality had already been reached thereon, and such proceeding was not pending on the date of search to get itself abated. It is not in dispute that both the ld AO and the ld CITA had admittedly not made any reference to any seized material found during the course of search in their orders relatable to the completed assessment year with regard to the items that were subject matter of disallowances/addition. In this regard, we hold that the disallowances/additions that were made by the ld. AO in section 153A assessment were already forming part of the regular books of accounts and were duly recorded in the regular books of the assessee and cannot be construed as incriminating in nature. Every assessee would be having its regular books of accounts (where books are maintained) and would be filing his regular returns of income and assessments framed accordingly. If such person is subjected to search and the very same regular books of accounts were found at the time of search and if the ld AO tries to take a different view on the already recorded transactions in the said regular books of accounts in the search assessment u/s 153A of the Act which is contrary to the view taken by him in the original scrutiny assessments u/s 143(3) or intimation u/s 143(1) of the Act, then it would only result in giving another innings to the ld AO to review his own earlier decision on the very same set of facts and figures. This would make the entire scheme of the Act meaningless and the ld AO would be conferred with unfettered powers to review the earlier decisions taken either by him or by his to 376 & 382/Bang/2024 M/s. Kesar Marble & Granites Ltd., Bangalore Page 8 of 23 predecessor on the very same issue , which in our considered opinion, cannot be the intention of the statute. That's why the legislature had duly drawn a distinction between the completed and abated assessments.

[Emphasis in bold and underline supplied]

Held that it is not possible to say that this is a case of no evidence at all inasmuch as evidence in the form of the statement made by the assessee himself and other corroborative material are there on record.”

(ii) Judgement of Hon’ble High Court of Kerala in the case of CIT, Kozhikode Vs. O. Abdul Razak reported in (2013) 350 ITR 71 (Kerala) where held as follows: “IT: As self-serving retraction, without anything more cannot dispel statement made under oath under section 132(4)”.

(iii) Judgement of Hon’ble High Court of Jharkhand in the case of Mahabir Prasad Rungta Vs. CIT, Ranchi reported in (2014) 266 CTR 175 (Kharkhan) (9.1.2014) wherein held as under: “IT: Where assessee has not adduced any rebuttal evidence to show that entries made in diary/loose sheets recovered during search are not income in hands of assessee, addition is to be upheld.”

(iv) Judgement of Hon’ble Supreme Court of India in the case of Roshanlal Sanchiti Vs. PCIT reported in (2023) 150 taxmann.com 228 (SC), wherein held that “SLP dismissed against order of High Court that retraction of statement recorded u/s 132(4) of the Act has to be made within reasonable time or immediately after statement of to 376 & 382/Bang/2024 M/s. Kesar Marble & Granites Ltd., Bangalore Page 9 of 23 assessee is recorded and hence where retraction of statement recorded u/s 132(4) and later confirmed in statement recorded u/s 131 had been made by assessee after almost 8 months same was to be disregarded.” (v) Judgement of Hon’ble Delhi High Court in the case of CIT Vs. Chetan Das Lachman Das wherein held as follows: “13. Coming to the order of the Tribunal, we are of the view that the reasons given by it to distinguish the judgment of the Supreme Court cited (supra) are not sound. Firstly, there was seized material in the present case to show that the assessee has been indulging in off-record transactions. The observation of the Tribunal that no evidence was found to show that the actual turnover of the assessee was more than the declared turnover is hair splitting. The Tribunal lost sight of the fact that all was not well with the books of account maintained by the assessee and it has been keeping away its income from the books. That should have been sufficient for the Tribunal to examine the estimate made by the Assessing Officer, having regard to the principles laid down in the judgment of the Supreme Court (supra). The Tribunal also failed to note the difference between Section 158BB appearing in the Chapter-XIVB and the assessment made by virtue of the provisions of Section 153A of the Act. Secondly, the Tribunal expects the purchasers from the assessee to come forward and declare that they have paid more than what was appearing in the sale bills issued to them and has commented upon the lack of any inquiry from the purchasers on this line. Suffice to say that this throws an impossible burden on the Assessing Officer, having regard to the observations of the Supreme Court that the assessee cannot be permitted to take advantage of his own illegal acts, that it was his duty to place all facts truthfully before the assessing authority, that if he fails to do his duty She cannot be allowed to say that assessing authority failed to establish suppression of income, that the facts are within his personal knowledge and therefore it was the burden of the assessee to prove that there was no suppression. Thirdly, the Tribunal has stated that there was no corroborative material to substantiate the contents of the loose papers found during the search. We are not impressed by this reason at all. The papers are not denied or disputed by the assessee. The CIT (Appeals) has found that the partners of the assessee firm had admitted to the practice of suppressing the profits. The papers themselves show two different rates, one higher and the other lower and on comparison with the sale bills it has been found that the sale bills show the lower rate and these findings have not been denied by the assessee. The Tribunal, therefore, erred in looking for some other corroboration to substantiate the contents of the loose papers, overlooking that the loose papers needed no further corroboration and the sale bills compared with the seized papers themselves corroborated the suppression of income. Fourthly, the Tribunal has relied on the observations of the CIT (Appeals) that no serious consideration can be given to the loose papers and has held that this shows that there is "nothing more in Revenue s kitty apart from those said loose papers pertaining to November, 2005 (financial year 2005-06) to support suppression of sales receipts on the part of the assessee firm". The Tribunal, to 376 & 382/Bang/2024 M/s. Kesar Marble & Granites Ltd., Bangalore Page 10 of 23 with respect, has misread the observations of the CIT (Appeals) and has relied on a single observation without reading the order of the CIT (Appeals) as a whole. Moreover, in such cases, it is expected of the Tribunal to also independently examine the decision of the CIT (Appeals) which is impugned before it. In such cases it would be more appropriate to find out or ascertain whether there is any positive material which is in support of the assessee’s case or anything upon which the assessee can rely in order to discharge the burden placed upon him in the light of the judgment of the Supreme Court in H M Esufali H. M. Abdulali (supra). Mere negative findings should not be made use of to throw out the case of the department. Lastly, the reliance placed by the Tribunal on the judgment of this Court in CIT v. Anand Kumar Deepak Kumar, (2007) 294 ITR 497 does not seem appropriate. There it was held that there was no presumption that unaccounted sales in the pre-search period would continue in the post search period also. This judgment has no application to the present case because the search took place on 13.12.2005 which falls in the year relevant to the assessment year 2006-07. The assessments under Section 153A of the Act have been completed up to and including the assessment year 2006-07. Even if there can be no presumption that after 13.12.2005 there could have been unaccounted sale of Hing or compound Hing, it is hardly material since only a period of 31/2 months were left aft e date of search till the end of the previous year i.e. 31.3.2006.”

12.1 Further, the ld. AO cannot solely rely on the statement recorded u/s 132(4) of the Act as recently held by Hon’ble Delhi High Court in the case of PCIT Vs. Pavitra Realcon Pvt. Ltd. reported in dated 29.5.2024, wherein held as under: “17. We have heard the learned counsels appearing on behalf of the parties and perused the record.

20. However, it is an undisputed fact that the statement recorded under Section 132(4) of the Act has better evidentiary value but it is also a settled position of law that addition cannot be sustained merely on the basis of the statement. There has to be some material corroborating the content of the statements.

In the case of Kailashben Manharlal Chokshi v. CIT1, the Gujarat 21. High Court held that the additions could not be made only on the basis of admissions made by the assessee, in the absence of any corroborative material. The relevant paragraph no. 26 of the said decision has been reproduced hereinbelow: - 26. In view of what has been stated hereinabove we are of the view that this explanation seems to be more convincing, has not been considered by the authorities below and additions were made and/or confirmed merely on the basis of statement recorded under section 132(4) of the Act. Despite the fact that the said statement was later on retracted no evidence has been led by the Revenue to 376 & 382/Bang/2024 M/s. Kesar Marble & Granites Ltd., Bangalore Page 12 of 23 authority. We are, therefore, of the view that merely on the basis of admission the assessee could not have been subjected to such additions unless and until, some corroborative evidence is found in support of such admission. We are also of the view that from the statement recorded at such odd hours cannot be considered to be a voluntary state ment, if it is subsequently retracted and necessary evidence is led contrary to such admission. Hence, there is no reason not to disbelieve the retrac tion made by the Assessing Officer and explanation duly supported by the evidence. We are, therefore, of the view that the Tribunal was not justified in making addition of Rs. 6 lakhs on the basis of statement recorded by the Assessing Officer under section 132(4) of the Act. The Tribunal has com mitted an error in ignoring the retraction made by the assessee.

[Emphasis supplied]

[Emphasis supplied]

[Emphasis supplied] 28. So far as the submission made by the learned counsel for the Revenue that the AO acted on a bona fide belief that the date of search has to be taken as the date of initiation of proceedings under Section 153C of the Act is concerned, it is apposite to refer to our decision in the case of CIT v. Ojjus Medicare (P) Ltd.8 This Court, in the said case, reiterated the already settled law that the date of initiation of assessment proceedings under Section 153C would be calculated from the date of handing over of the books of accounts, documents or assets seized to the jurisdictional AO of the non-searched person. The relevant paragraphs of the said decision are extracted herein below: - “K. SUMMARY OF CONCLUSIONS 119. We thus record our conclusions as follows:

A. Prior to the insertion of Sections 153A, 153B and 153C, an assessment in respect of search cases was regulated by Chapter XIVB of the Act, comprising of Sections 158B to 158BI and which embodied the concept of a block assessment. A block assessment in search cases undertaken in terms of the provisions placed in Chapter XIVB was ordained to be undertaken simultaneously and parallelly to a regular assessment. Contrary to the scheme underlying Chapter XIVB, Sections 153A, 153B and 153C contemplate a merger of regular assessments with those that may be triggered by a search. On a search being undertaken in terms of Section 153A, the jurisdictional AO is enabled to initiate an assessment or reassessment, as the case may be, in respect of the six AYs' immediately preceding the AY relevant to the year of search as also in respect of the “relevant assessment year”, an expression to 376 & 382/Bang/2024 M/s. Kesar Marble & Granites Ltd., Bangalore Page 16 of 23 which stands defined by Explanation 1 to Section 153A. Of equal significance is the introduction of the concept of abatement of all pending assessments as a consequence of which curtains come down on regular assessments.

B. Both Sections 153A and 153C embody non-obstante clauses and are in express terms ordained to override Sections 139, 147 to 149, 151 and 153 of the Act. By virtue of the 2017 Amending Act, significant amendments came to be introduced in Section 153A. These included, inter alia, the search assessment block being enlarged to ten AYs' consequent to the addition of the stipulation of “relevant assessment year” and which was defined to mean those years which would fall beyond the six year block period but not later than ten AYs'. The block period for search assessment thus came to be enlarged to stretch up to ten AYs'. The 2017 Amending Act also put in place certain prerequisite conditions which would have to inevitably be shown to be satisfied before the search assessment could stretch to the “relevant assessment year”. The preconditions include the prescription of income having escaped assessment and represented in the form of an asset amounting to or “likely to amount to” INR 50 lakhs or more in the “relevant assessment year” or in aggregate in the “relevant assessment years”. C. Section 153C, on the other hand, pertains to the non-searched entity and in respect of whom any material, books of accounts or documents may have been seized and were found to belong to or pertain to a person other than the searched person. As in the case of Section 153A, Section 153C was also to apply to all searches that may have been undertaken between the period 01 June 2003 to 31 March 2021. In terms of that provision, the AO stands similarly empowered to undertake and initiate an assessment in respect of a non-searched entity for the six AYs' as well as for “the relevant assessment year”. The AYs', which would consequently be thrown open for assessment or reassessment under Section 153C follows lines pari materia with Section 153A. D. The First Proviso to Section 153C introduces a legal fiction on the basis of which the commencement date for computation of the six year or the ten year block is deemed to be the date of receipt of books of accounts by the jurisdictional AO. The identification of the starting block for the purposes of computation of the six and the ten year period is governed by the First Proviso to Section 153C, which significantly shifts the reference point spoken of in Section 153A(1), while defining the point from which the period of the “relevant assessment year” is to be calculated, to the date of receipt of the books of accounts, documents or assets seized by the jurisdictional AO to 376 & 382/Bang/2024 M/s. Kesar Marble & Granites Ltd., Bangalore Page 17 of 23 of the non-searched person. The shift of the relevant date in the case of a non-searched person being regulated by the First Proviso of Section 153C(1) is an issue which is no longer res integra and stands authoritatively settled by virtue of the decisions of this Court in SSP Aviation and RRJ Securities as well as the decision of the Supreme Court in Jasjit Singh. The aforesaid legal position also stood reiterated by the Supreme Court in Vikram Sujitkumar Bhatia. The submission of the respondents, therefore, that the block periods would have to be reckoned with reference to the date of search can neither be countenanced nor accepted. E. The reckoning of the six AYs' would require one to firstly identify the FY in which the search was undertaken and which would lead to the ascertainment of the AY relevant to the previous year of search. The block of six AYs' would consequently be those which immediately precede the AY relevant to the year of search. In the case of a search assessment undertaken in terms of Section 153C, the solitary distinction would be that the previous year of search would stand substituted by the date or the year in which the books of accounts or documents and assets seized are handed over to the jurisdictional AO as opposed to the year of search which constitutes the basis for an assessment under Section 153A. F. While the identification and computation of the six AYs' hinges upon the phrase “immediately preceding the assessment year relevant to the previous year” of search, the ten year period would have to be reckoned from the 31st day of March of the AY relevant to the year of search. This, since undisputedly, Explanation 1 of Section 153A requires us to reckon it “from the end of the assessment year”. This distinction would have to necessarily be acknowledged in light of the statute having consciously adopted the phraseology “immediately preceding” when it be in relation to the six year period and employing the expression “from the end of the assessment year” while speaking of the ten year block.”

[Emphasis supplied] 29. It is thus seen that in order to determine block of six AYs, one must first identify the FY in which the search occurred, leading to the identification of the AY relevant to the previous year of the search. The block of six AYs will then be those immediately preceding the AY relevant to the search year. For a search assessment under Section 153C of the Act, the only difference is that the previous year of the search is replaced by the date or year in which the seized books of accounts, documents, and assets are handed over to the jurisdictional AO, rather than the year of the search, which is the basis for an assessment under Section 153A of the Act. Therefore, the relevant AY in the to 376 & 382/Bang/2024 M/s. Kesar Marble & Granites Ltd., Bangalore Page 18 of 23 present case would come under the block of six AYs immediately preceding the AY in which the satisfaction note was recorded by the AO of the respondent- assessee companies.

[Emphasis supplied] 33. Further, the argument of learned counsel for the Revenue that this mistake is curable under Section 292B of the Act lacks merit as the plain language of the said Section makes it abundantly clear that this provision condones the invalidity which may arise merely by mistake, defect or omission in notice. The said Section reads as under: - 292-B. Return of income, etc., not to be invalid on certain grounds.—No return of income, assessment, notice, summons or other proceeding, furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act.

12.2 Being so, in our opinion, the addition on this count to be made only if there is corresponding seized material and not solely on the to 376 & 382/Bang/2024 M/s. Kesar Marble & Granites Ltd., Bangalore Page 21 of 23 relying of the statement recorded u/s 132(4) of the Act from the assessee. In the present case, this is the additional ground raised by assessee and lower authorities have no occasion to examine the same. Even the ld. D.R. is also not able to establish that these additions are based on any seized material. Hence, in the interest of justice, in our opinion, it is appropriate to remit the issue to the file of ld. AO to examine whether any seized material represent these additions other than the statement recorded u/s 132(4) of the Act. If there is any incriminating material suggesting these additions, then only he shall make additions and if there is no corroborative material, no addition could be made. With these observations, this additional ground raised by assessee in ITA Nos.373 to 375/Bang/2024 for the assessment years 2014-15 to 2016-17 is remitted to the file of ld. AO for fresh consideration.

13. Last ground No.3 in ITA No.382/Bang/2024 for the assessment year 2018-19 is with regard to addition of Rs.1,12,16,600/- being additional income assessed on account of sale of granite. 13.1 The ld. A.R. submitted that the ld. AO made addition of Rs.1,12,16,600/- towards unaccounted sales of granite pertaining to M/s. Kesar Marble and Granites Ltd. This addition has been made by ld. AO on the basis of submission made by Shri Nitin Bagmane, M.D. vide his letter dated 13.11.2019. During the course of assessment proceedings in the case of Shri Nitin Bagmane, show cause notice was issued on 8.11.2019. One of the issues raised in the show cause notice was income admitted by Shri Nitin Bagmane on account of cash sales, wherein the ld. AO based on the seized material arrived at a figure of Rs.2,12,16,600/- (Rs.1,12,53,000/- + Rs.87,63,600/- + Rs.12,00,000/-) as against the figure of Rs.1 Crore admitted by the M.D. However, in response to show cause notice vide letter dated 13.11.2019, he stated that the cash sales on granite of Rs.1,12,16,600/- pertaining to M/s. KMGL. However, no to 376 & 382/Bang/2024 M/s. Kesar Marble & Granites Ltd., Bangalore Page 22 of 23 explanation was given. Hence, the ld. AO made the said addition of Rs.1,12,16,600/-. On appeal, ld. CIT(A) confirmed the same. 13.2 Now the contention of the ld. A.R. is that excessive income has been offered in other assessment years, which is not based on any incriminating material and the excess income offered in other assessment years to be telescoped out of the addition made by ld. AO in the assessment year at Rs.1,12,16,600/- and the addition to be sustained only to the extent of incriminating material found during the course of search otherwise it amounts to double addition.

14. The ld. D.R. fairly conceded that this may be examined at the end of ld. AO.

15. After hearing both the parties, we are of the opinion that the addition in these assessment years should be confined to the incriminating/seized material found during the course of search action and if the assessee already offered additional income in any other assessment years, without any corresponding corroborative material, no addition could be made on this count. Further, also it was brought to our notice that assessee has offered excess additional income in the assessment year 2017-18 more than the seized material found during the course of search action and he drew our attention to page 72 of the CIT(A) order for the assessment year 2018- 19 and submitted that there was seized material to the tune of Rs.2,43,83,000/-. However, additional income admitted by the assessee in assessment year 2017-18 was Rs.2,90,00,000/- and he sought telescoping benefit of excess income offered in assessment year 2017-18 in assessment year 2018-19. In our opinion, this required to be examined at the end of ld. AO. Accordingly, this issue is remitted to the file of ld. AO for fresh consideration to decide accordingly. Ordered accordingly. This ground of appeal of the assessee is partly allowed for statistical purposes.