A,C.I.T. CENTRAL CIR.- 2(1), NAGPUR vs. SHRI ATUL B. WALKE, NAGPUR

Ms. M,G. Bhangdiya Ms Darshan Construction (JV) (AAHFDOSSAN 3. MJs DaRshhoble & RM. Bhangdiya (JV) (AAPFMO62ZB) 4 business of the Bhangdiya group primarily is executing The nature of the works mainly for Government departments iike civil contracts: The group Development Corporation and has been engaged in Ms Vidarbha Irrigation pertaining to the irrigation projects in the state executing various contracts the course of search operations incriminating of Maharashtra, During and seized from the residential premises of Shri documents were found of Annexure-B seized from his Item no_ 1 to 65 Mitesh Bhangdiya. L'4'.A, Nus10S [0 110/Nag/2016 #stt, Yrs;2006-07 to 2011-12 357 the diaries containing ledgers, daily cash books ad bank residence are A statement of Shri Mitesh books maintained by the Bhangdiya group: on 20,07,2011. In hls sworn statement Bhangdiya was recorded on oath Shri Mitesh Bhangdiya was recorded during the course of search action; entries borne out from the seized diaries marked as 8 confronted with the of these diaries; Shri Mitesh to B-65 and to explain the contents 1 recorded has submitted that the entries in the Bhangdiya in his statement the pusiness receipts and business diaries an the ledger pertain to Officer in the assessment order has recorded a expenditure. The Assessing 1 to 65 of annexure-B; it is apparent that finding that as per the item no, withdrawn from the bank accounts of the subcontractors were the amounts credited to the daily cash balance of Bhangdiya group which was confirmed his statement dated 14/09/2011, The by Shri Mitesh G. Bhangdiya in Officer has reproduced the statement of Shri Mitesh Bhangdiya Assessing 14/09/2011 in para 6 of the assessment order, The Assessing recorded on order has also recorded a finding that the seized Officer in the assessment B-1 to B-65 contain entries of all expenses Incurred by documents being in cash from F.Y. 2006-07 onwards and expenses the Bhangdiya group the bank accounts from F,Y. 2009-10 onwards; Thus, the incurred through Officer found that te actual expenses incurred do not match Assessing been incurred in the books. The Assessing with those shown to have concluded that the books of account of Shri M.G Bhangdiya Officer thus income-tax purpose do not reflect the true business affairs maintained for reliable: The Assessing Officer has also referred to the and are not at all Walke; the assessee, recorded on 19/07/2011 statement of Shri Atul B has repraduced the the course pf survey. The Assessing Officer during Shri Atul B Walke in the assessment order; The Assessing statement of the basis of the statement of Shri Atul B. Walke; concluded that Officer , on were being handled by Shri M.G, the bank accounts of the assessee NAGpuf 38 LTA Nus-]OS {0 110/Nag/z016 Asstl- Yrs:2006-07 to 2011.12 The Assessing Officer has given 3 summary Of all the Bhangdiya group; bank accounts maintained by the assessee in the tabular form to show that the cheques deposited by the Bhangdiya group in the bank accounts of the assessee were subsequently withdrawn in cash which were found credited cash book seized, On this basis the Assessing Officer made the to daily protective addition in the hands of the assessee in each of the assessment no contract work vear halding that there were no expenses incurred ad the assessee who, according to the Assessing Officer; was executed by name lender to the Bhangdiya group The assessee came in is merely a before the CIT(A) challenging the notice issued UJs 153C as well as appeal bank on protective basis; The the addition for cash withdrawals from CIT(A) deleted the said addition in all the years- Aj R. made an application before u5 under 3.1 At the outset; learned Rule 27 of the I.T.A,T. Rules in each of the assessment year challenging notices issued ufs 153C of the Act a5 there was no the validity of the to the assessee found in the course of incriminating material belonging search_ It was stated that the assessments in the case of the assessee framed u/s 153C read with section 143(3) of the Act; The assessee were before the CIT(A} raised ground No. 1 ad challenged the validity of the The CIT(A) has dismissed the ground notices issued u/s 153C of the Act challenging the validity of the notices issued u/s 153C ad decided all the appeals of the assessee on merit due to which protective addition made in the hands of the assessee stand deleted. Under these facts; the assessee did not file any appeal or the Cross Objections taking the ground as regards to the validity of the notice U/s 153C of the Act: It was contended that there is no incriminating material found and seized for the assessment year 2007-08 to 2011-12 belonging to the assessee in the course of the search premises of Shri M,G Bhangdiya, It was submitted that in the case at the #AGF F7'.A, Nos105 t0 1}(/Nar/20}6 Asstt Yrs:ZUQ6-(J7 to 2WI1-12 354 of the assessee no satisfaction of the Assessing Officer Qf the person searched is recorded before issue of notice U/s 153C, In absence of non recording pf the satisfaction by the Assessing Officer of the person searched, the consequent assessment framed is bad in law ad the notice issued u/s 153C is bad in law. Reliance wa5 placed in this regard on the decision of ITAT Nagpur Bench in the case of Mansi Commodities Ltd. in I.TANoS. 146 to 148/Nag/2014 in which the Tribunal vide order dated 19/12/2016 held that satisfaction for issuance of notice U/s 153C is to be recorded by the Assessing Officer Qf the person searched and in the absence thereof the notice issued UJs 153C Is bad in law and consequent assessment framed is bad in law. 4 Learned D. R,, on the other hand, vehemently relied on the order of the CIT(A) and contended that the assessee has taken ground No I about the validity of the issuance of notice U/s 153C before the CIT(A) but the assessee did not press this ground before the CIT(A) Even no submissions were made for which ur attention was drawn towards page No. 22 para 12 of the order of CIT(A} Even otherwise on merit the assessee pntended that the diary seized during the course of search contains the me of the assessee from whom the cash has been received noted In the diary. Therefore; it cannot be said that incriminating material belonging ta the assessee was not found, 5_ We have heard the rival submissions, carefully considered the same along with the orders of the tax authorities belaw , Coming to the adjudication,and admission of ground taken by the assessee about the validity Of the notice issued u/s 153C and consequently cancellation of the assessment framed thereupon; we have gone through Rule 27 of the ITAT Rules: We noted that the said Rule read as under: Jepur 360 1,7'.^ Nos-[05 i0 110/Nag/2016 Assti: Yrs:2006-07 ro 2O11-12 he may not have appealed, may "The respondent; though against an any of the grounds support the order appealed decided against him. it is apparent that even if the assessee has 5 1 On the basis of this Rule; the order of CIT(A} he may support the not filed the appeal against ground which has been decided conclusion of the CIT(A) by taking ay the facts before US, it is apparent that the assessee has against him. From validity of the notice issued U/s 153C the ground regarding the taken also validity of consequent assessment framed before the CIT(A) and noted that CIT(A) under para 12 of its order dismissed the thereupon: We a5 the assessee neither filed any submission said ground of the assessee during the appellate proceedings. Whatever may nor pressed this ground ground taken by the assessee the fact remains that the be the reason, also the validity of the Of the notice u/s 153C and about the validity stands dismissed by the CIT(A): consequent assessment framed thereupon complied with the condition as Therefore; in our opinion, the assessee Rule 27 of the ITAT Rules and the assessee can always stipulated under The Tribunal has ground in view of Rule 27 before the Tribunal: raise this taken under Rule 27. We accordingly the power to adjudicate the ground admit the said ground. the submissions made by both the parties on merit 5.2 Now coming to through the provisions of section 153C and on this ground, We have gone the amendment made by the Finance Act, noted that this section prior to 2015 with effect from 01/06/2015 states as under: contained in sectiun 139,_ section "Notwithstanding anything section 15f ard section ]53, 147, Section 148, section 149, Officrr ~hsfied thaf DnV mjney; where ::c Assessing article or thing; or books of bullion; jewellery or Other valuabl: 048 ele4t: 4 [ Nos.]05 to 110/1 'Nag/2016 99 Asstt: Yrs:Z((}6-07 t0 2011-12 Or dtocuments; seized Oi "yuisutiowed belongs Or account other {/120} the pcrson referred to If} belong to 2 persin 1534, titen] tlie brJoks (f c(QiWl 0/ Jocuments Or section assets Seized or requisilioned shali DJe {a Ijed Dver to the Assessing Officer having jurisdiction Over such other person: Derf #:034lci Ly Fin::lie Act. 2015 with This section Ias Slbseguently effect from 0!/06/20)15. "T xc: 7linlu; dvl t;i Mider: '153C Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that (2) Any money; bullion; jewellery ar other valuable article or thing, seized r requisitioned, belongs to; or (b) Any baoks Of account Or documents; seized Or requisitioned, pertains or pertain to, or any information contained therein, relates to, a person other than the person referred to in section 1534 then; the books of account or documents or assets, seized Or requisitioned shall be handled over to the Assessing Officer having jurisdiction over such other person. pvr The Finance: Bill, 2U05 in Ils meincia;i ~l:_ ~i1"' ju.-poc? fcr which this amendmt:": w: ;{17i:} "Sectiun 153C of lhe Acl relates to iSsessmnert Uf incomne Qf any ouver person: The existing provisions cotained in sub- Of the sid se1lon} 1530 provie that Seclion (1} rolwitlistanding an/hing conraink" "} Serhu 133 S'tion section 1-8 setion 149 ~riu) 151 sli7 scCrion 153, 147, where thz Assessing Officzr is Salishzd thaal any ina)ney; bullion, jeivellery or other valuable article Or ting Or books of accOunt Or docunierts sezed 01 rejusitioned belng to any tXan tne person nferred 1n {'7 sect)n 1534, person, Otllei then} the !uoks pf aCcuunt ( jrimey 0: nsen Seid Or requisitioned shall {:' {anded OVi 10} Uic Assensyn7 Clficer having jurisdiction Ovjt such Qthew {jllou": 67 % tal Assessing Officer shall proceed against Rach such ONiu Knson and isSue 3 6 I,T.A Nus.1OS to 110/Nag/2016 Asstt Yrs;2006-07t0 2011-12 10 sud Jthrr person notice ai ds5055 Or reassess income of such other person in accordance with the provisions of section 153A, Disputes have arisen; as to the interpretation of the words "belongs to in respect of a document 25 for instance when a given document seized from & persan is a copy of the original dorument Accordingly; it i5 proposed to amend the aforesaid section to provide that notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer i5 satisfied that anv money, bullior; jewellery &r other valuable article or thing belongs to, Or any books af account Or documents seized Or requisitioned pertain to; Or any information contained therein, relates to; any person; other than the person referred to in section 1534 then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction Over such other person and thal Assessing Officer shali proceed against each such other person and issue Such other person notice and asse55 Or reassess income Of such Qther person in accordance with the provisions of section 153A. 3 Rae 'Pur Subsequently , the CBDT has brought out Circular No_ 19 of 2015 dated 27/11/2015 by which explainatory note to the provision of Finance Act; 2015 were discussed; The explainatory note in the circuiar relating to the amended provision of sectlon 153C read as under: '

Assessment of income of & person other than the person in whose case search has been Initiated or books of account; other documents Or assets have been requisitioned. 39.1 Section 153C Of the Income-tax Act relates to assessment of income of any person other than the person in whose case search has been conducted Or requisition has been made. The provisions contained in sub-section (1) of the section 153C, before amendment made by the Act; provided that notwithstanding anything cantained in section 139, section 147, section 148, section 149, section 151 &nd section 153 Of the Income-tax Act; whera the Assessing Officer is LT.ANos.105 to 110/Nag/2016 Asstt Yrs.2006-07 to 2011-12 alixticd that any money, bullion, jewellery Or othei valuable # a ticle Or 'thing or books of account or documents seized or to any person; eliver ti7em? Ui? person requisitioned belong in seclion 153A pf tze Lr}comw? [BX Act, then the referred to Or documents Or assets seizedd Or books of account to the Assessing Officer requisitioned shall be handed over having jurisdiction over Such other person and that Assessing Officer shall proceed against each Such other person and issue notice and asse55 Or reassess income Of sch Olher person in accordance with the provisions Of section 1534. 39.2 Disputes have arisen as lo the interpretation of the Words to in respect of 3 document 25 for Instance When & Gelon docmenteseized fron} Ofcn % 3 CODY %f the Original given Accordingly, section 153C has been amended so 35 docrovide tatrtgithstanding anything contained in Section; to provide 147, section 148, section 149, section 151 ad 139, section the Incame-tax Act; where the Assessing section 153 Of Officer is Satisfied that any money, bullion Jewellery or other valuable article or thing belongs to, or any books of account or seized Or requisitioned pertain to; Or any documents relates t0; any person, other information contained therein, than the person referred to in section 153A of the Income-tax Act; then the bOOkS Of account Or docunents Or assets seized Officer requisitioned shall be handed over to the Asstssing person and that Assessing "aving jurisdiction over such ther Officer shall proceed against each such other person and issue notice and assess Or rea5sess IcOine Of such other person in accordance With the provisions of section 153A. 39,3 Applicability: This amendment has taken effect frorn the lst day of June; 2015. In view of this; it is apparent that the amended section 153C are not 5.3 applicable with effect from 01/06/2015 and not prior retrospective and are In the case of the assessee; search a5 well as notice U/s 153C has to that; to 01/06/2015. Since in the case of the assessee action been issued prior the notice dated 16/07/2013 in u/s 153C has been taken by issuing out on 19/07/2011 therefore, the consequence of the search carried As per the provision of amended provision of section 153C wiil not apply: 363 i.T.A. Nos,105 to 110/Nag/2016 Asstt Yrs:2006-07 to 2011-12 12 153C, was in existence during the impugned period, the section as condition precedent for issuing notice ufs 153C and assessing Or reassessing the income of 'such other person' is that the money, bullion; jewellery or other valuable article or thing; books of account or document seized or requisitioned which belong to such person where documerits in recovered during search proceedings did not belong to the question assessee, though there was a reference to the assessee therein; issue of notice to the assessee u/s 153C, in our opinion; cannot be held to be valid: Hon'ble Delhi High Court In the case of Pepsi Foods Pvt: Ltd. vs ACIT 52 Taxman.com 220 (Del); we noted has also categorically held that before & notice u/s 153C can be Issued, the Assessing Officer is required to arrive at conclusive satisfaction that the document belongs 3 person other than the searched person Unless until it is established that the documents seized did not belong to the searched person, the provision of section 153C idid not get attracted: This is not disputed that the notice in the case of the assessee ujs 153C has been issued in consequence of search & seizure #Gpu action taken ufs 132 in the Bhangdiya Group from whom prerises diaries marked B-1 to B-65 were found and seized. These diaries belong to the not to the assessee; Even though the name of the Bhangdiva Group is mentioned in the diary that does not mean that the diary assessee to the assessee: It may be said that the diary contalns the belong information regarding the assessee In our opinion; even the amended provision supports the case of the assessee The Legislation has amended section 153C with effect from 01/06/2015 ad widened the scope u/s 153C by substituting in place of word 'belongs or belong' to word "pertain Or pertain to or any information contained therein'. Now under the amended provision, even if the material seized does rot belong to the assessee but it contzins the Information relaling to the assessee, ihe proceedings initiated us 153C will be valid. But this amendled provisicn; a5 is apparent; is I.T.A. Nos,1(]5 [o I1Q/NAg/ZO16 Asstt. Yrs:2006-{7 tQ 2011-12 13 apilicalxe {1cni 0;/O2}!". Learned DR_ befare US even though vehemently relied on the arder 0f the Assessing Officer but could not adduce any cogent material or evidence which may prove that the diaries found and seized during the course of search in Bhangdiya Group belong to the assessee, Since during the course of search in Bhangdiya Group no material relating to the addition made belonging to the assessee was found therefore; the notice issued u/s 153C, in our opirion, cannot be regarded to be valid one Same_viewhas_been_taken by Hon'ble Bombay High Court in the case of Bharti Vidyapeeth in ITA No: 923 of 2012 vide its order dated 11/09/2014. This fact also finds support as the Revenue has made the addition in the hands of the assessee in each of the assessment vear only on protective basis which proves that the Revenue was also not satisfied with the incriminating material In fact belong to the assessee, On this basis "iwe set aside the order of CIT(A) and hold that the notice issued u/s 153C is Eot valid and in consequence thereupon, the assessment made is annulled. Thus; the ground taken by the assessee under Rule 27 is allowed. 6 Now coming to the ground taken by the Revenue We have heard the rival submissions, carefully considered the same along with the orders of the tax authorities below. We noted that the Assessing Officer has made the addition in each of the assessment year in the case of the assessee on protective basis in respect of the cash being shown as receipt in the diary seized during the course of search In Bhangdiya Group- When the matter went before the CIT(A); the CIT(A) deleted the said addition in all the assessment years by observing as under: "9.1 Before adjudicating the issue in hand it would be relevant to briefly discuss the background of additions made in the case of Shri Mitesh G. Bhangdiya & Group concerns 0n the basis of seized evidences 35 per Annexure-B-I to 8-65. The Ld AO has made the total addition of Rs.182.52 Crs in the 266 LT. Nos105 to T1O/Nag/2016 Asstt Yrs:2()u6-07ta ZWI1-12 concerns of Bhangdiya group in various hands Of various assessment years falling within the block period On prorata for want of proper correlation between the amounts basis credited to the seized diaries and the withdrawals made from the bank accounts of the sub-contractors Out of the total addition of Rs.182.52 crores, an addition Of Rs.54.40 Crs. has On account of entries of withdrawals from_ the been made bank account of sub-contractors recorded in the seized diaries the cheque payments made to the sub- in proportion to contractors by Various entities of the Bhangdiva group: The Of the Bhangdiya group had made the various concerns payments by account Payee cheques tO the sub-contactors- after analyzing the bank accounts Of 21 sub- The Ld AO than 100 sub-contractors has contractors out of total more that the cash withdrawn from the arrived at the conclusion accounts of the subcontractors has been found deposited o the credit side of the seized diaries marked a5 Annexure B-l to B-65 seized from the premises of Shri Mitesh G Bhangdiya Thus, thee Ld. AO had inferred that the Bhangdiya group by modus-operandi had inflated the Such adbetaiture SUc makingctheqeanayment &nd Subsequersby the cash from the bank accounts of the Sub- withdrawing who, according to the AO, are merely name contractors The contention of Shri Mitesh Bhangdiya was that the lenders: cash Withdrawn from the account Of the subcontractors which in the diaries was kept with Late Shri i5 found reflected Gotulalji Bhangdiya , father of Shri Mitesh Bhangdiya bv Such which was being issued to Various sites for sub-contractors 25 per the requirements at the the use of subcontractors that the money kept by sub-contractors was site: Further returned to them or through any of the Intermediaries in the course of handling of cash. The Assessing Officer however; declined to agree with the explanation filed by the appellant and has held that all the Z1 Sub-contractors examined by him are merely name lenders and the amounts paid to them under are bogus payments, therefore, the the head sub-contracts Corresponding receipts by Way of withdrawals from the bank subcontractors is liable to be added the a5 accounts of the handsof various concerns Of unaccounted income in Bhangdiya group in various assessment years 0f the block proportion to the cheque payments made by such period in group concerns: LT.Nos105 to 11Q/Nag/2016 267 5 Asstt Yrs2uQ6-(7to 2011-12 9.2 In the case of Bhangdiya group, the assessments under 153A Of IT Act 1961 have been framed for section assessment years 2006-07 to assessment Year 2012-13. The nature of activity being execution of government contracts was the same during all the assessment years In assessment 2006-07, the nature pf work executed for Vidarbha year 'Irrigation Development Corporation remains the same a5 in for subsequent assessment years. The the case Of assessee Sub contractars who have executed the works are also similar in the various assessment years. 9.3 The A0. has observed that the sub contractors in the case of Bhangdiya group are name lenders and bogus In this regard, it is significant to mention that the sub contractors the appellant have been assessed by the ACIT including Central Circle-2 (1), Nagpur who is also the A,O. Of Bhangdiya Notices under ` section 153C of I.T; Act 1961 were group. 'iSSued to Subcontractors and returns were submitted by such Sub Contractors pursuance to receipt of notice under section 153C Of IT: Act 1961. The assessments have been framed under Section 153C of LT. Act 1961 by the same A.O. wherein income returned in respect of business income Shown the arising to such Sub-contractors out of receipt_received from have been accepted. Thus, the A.O. the Bhangdiya group business receipts in the hands of Sub- having accepted the contractors including the appellant for determining the income in the Cases Of sub-contractors could not have concluded that made by Bhangdiya group to such sub the payments contractors are bogus; 9.4 In view of the huge variance in the income assessed a5 percentage to receipts by the AO and various infirmities a5 emanated from the order of the AO, net profit has been estimated @ 16% of gross receipts in the hands of various concerns of the Bhangdiya group in view of the decision of the ITAT; Nagpur Bench; Nagpur in the case Of the Hon 'ble Bhangdiya group entities in ITA No 268, 269 & 285/Nag/2012 dated 03/04/2013, A sunvey action was conducted On 7/02/2009 in the Bhangdiya Group Of cases; wherein the 1 similar Situation 35 payments to Sub-contractors was disputed AO. The survey action comprises AY ad doubted by the 2006-07 to AY 2008-09 which are also forming part of the block periods for the Search action conducted on the assessee YADPUR 6+P 263 L.T" . Nos_[05 t0 110/Nap/2016 Asstk Yrs;2006 07to 211-12 On 19.07,2011. The Hon 'ble Itat; Nagpur Bench, group Nagpur after having considered the similar activity of business and deficiencies in Subcontract payments found during the action conducted On 17.02.200g has decided the survey appeals for AY 2006-07 to 2008-09, The Hon ble ITAT, Nagpur Bench, Nagpur after considering the impounded material has directed the AO to adopt the net profit @ 12% &5 against net profit adopted by AO 14%. In view of the above Facts and circumstances and 9.5 in view Of various infirmities and various judicial keeping decisions relied upon by the appellant and to meet ends of justice; to my considered opinion, jt was considered fair and reasonable to adopt the net profit 16% On the gross receipts of R5,579 Crs: ; being the turnover Of the various Bhangdiya group concerns for the block period from AY 2007- 08 to AY 2012-13 in the respective years of the block ad bring the same to the taxation On the guidelines determined by the Hon. ITAT, Nagpur Bench, Nagpur in ITA No;-268, 269 & 285/Na9/2012 vide order dated 07/03/2013 on the similar activities of business under the Similar circumstances in order to cover Up the undisclosed investment of However; Rs; 26 crares in immovable properties and the_undisclosed investment in jewellery to the tune of Rs; 2,37 crores; enhanced net profit @ 16% of total turnover was estimated in the appellate Orders dated 31/12/2015 in the cases of Bhangdiya group 35 against net profit Of 12% estimated by Hon 'ble ITAT, a5 the issue of undisclosed investment in assets was not there before the Hon'ble ITAT in the survey appeals. 10, Thus; I have considered the submissions made by the appellant and evidence on record. It is seen that the appellant [5 a Sub-contractor and executing work for various business entities belonging to Shri Mitesh Bhangdiya group. The assessee has been regularly assessed to income tax much prior to the date of search on Shri Mitesh Bhangdiya group on 19/07/2011. In the case of assessee notice has been issued ufs 153C of IT; Act 1961 after there being search on Shri Mitesh Bhagdiya group 19/07/2011 and assessments have been framed for assessment years 2006-07 to 2010-11 & AY 2012-13 in the month of March , 2014. i.'T.4, Nos.lUS tw 110 /Nag/2016 8l7' 249 Asstt Yrs:2OU6-07 to 2011-12 Hiwis It is Seen from the assessment order that te A0 has 10.1 reproduced the statement recorded Ufs 132(4) cf Shri Mitesh Bhagdiya ad has referred to seized documents inventorized In the case af Shri Mitesh Bhagdiya, the AQ as B-I to 65. has found that the withdrawals made from the bank account matching with the credits appearing in the of assessee are found at the premises Of Shri Mitesh seized documents Bhagdiya. The A.O. has concluded that appellant is only name lender Of Shri Mitesh Bhagdiya. The A.O. accordingly observed that Shri Mitesh Bhangdiya i5 the ultimate beneficiary of the bogus contract payment which laundered through appelant and is disallowed and added in tfve respective assessments framed in Bhangdiya group. The A.0. further observed that the Cash withdrawn from the bank is added a5 income On protective basis as there Was no expenses &s no contract work was really executed, 10.2 The appellant submitted return declaring income from sub-contract work in his regular retum 25 well &s in the return submitted in response to notice issued ujs 153C of IT Act 1961. In the return of income assessee has shown income arising out of receipts being amount received from the various business entities of Shri Mitesh Bhagdiya group: The perusal assessment arder does not indicate any adverse Of the with regard to regular books Of account 0n the observation basis of which income Was declared in the return of appellant It is seen that the profit and Ioss account ad balance sheet with the return f income have not been submitted alng the assessment framed in the case of the discredited in The A.0. in fact has assessed income returned appellant without inviting any adverse observation aS to income declared from sub-contract work 10,3 It is seen that the withdrawals from the bank account are reflected in the books Of account on the basis of which income has been returned. The withdrawals from the bank been considered for the purpose pf having already determining Income at the hands of appeliant a5 shown in the return cannot separately constitute income liable to be assessed in the hands of appellant; The addition made by AO I5 thus unjustified and unsustainable AGPuR L! .4, Nos.1(S to 140/Nag/2016 Assll: Yrs.2006 07 ko 201-12 2te further seen that the A.O. has made observation in 10.4 It i5 effect that in the case of Shri the assessment order to the disallowance has been made for Mitesh Bhagdiya group On account Of sub-contract various expenses daimed to appellant It is settled expenses which Includes payment that the substantive assessment must proposition Of law In the facts an precede framing of protective assessment:_ it is difficult to rationalize how of the case: 'crthdravaaisefrof the bank account can constitute assessable withdrawals basis in the case of the income much less On protective made disallowance of sub-contract appellant The AO: has paid to appellant while determining expenses being amount entities of Shri Mitesh Bhagdiya group: the income af business for income Shown in Such payments are already considered in the hands of the retum and assessed as business recelpt Addition of such amount again an protective the appellant: I do not find any rationale to make such basis defies logic: withdrawals made from bank FLLA TF protective assessment of the the hands of assessee himself The account of assessee in basis therefore; is held to be income assessed on protective and unsustainable on this count a5 well unjustified NagRus appellant a5 well 10.5 The gross receipts in the case of the Of income has a5 returned incorne along with the percentage appellant for various assessment vears been tabulated by the and the same is reproduced herein under: Shri Atul B. Walke Returned income and assessed income Turnover, Assessment year: 2006-07 to 2011-12 [2o08-03 2009-10 2010-11 [Assessment Year [2006-07 2007-08 2500000" 3839927 3275353 GROSS 2779509 [4728047 RECEIPTS 111340 317370 283530 RETURNED 96529 118560 INCOME 4,4505 8.270 [.6696 % OF GROSS 3.4700 2,519 RECEIPTS 2473000 iooodo0 3994335 ADDITION US 205QO0Q 4605000 153C 2011-12 No receipt 159890 No receipt 2536000 1.'1A, Nos.105 to 11O/Nag/2016 H2119 R7/ Asstt; Yrs;2006-Q7to 2011+12 2146529 4927940 2584340 1317370 4277855 2695890 jASSESSED INCOME 104.2306 103,3700 34,319 77,2396 130,6190 No receipt % OF GROSS RECETPTS 10.6 It is seen from the above that the income retured has the case of appellant without inviting any been accepted in and considering the addition made in the adverse inference the income assessed as percentage Of hands of assessee; receipt clearly reflected absurdity in the action of the Id. gross while determining the income in the hands of assessee:_ Tre additormnaderbr9 [a eA.0. thus; is unsustainable for the The also. Therefore; the protective addition made aforesaid reason appellant I5 directed to be deleted in all in the hands Of the the years of the block period given the finding of fact; This is a fact 6.1 We noted that the CIT(A) has that the substantive addition has been made in the hands of the assessee of the income received by the assessee as sub-contractor in each respect The withdrawal made by the assessee from his the assessment year. account in which the deposit of the sub-contract receipts has been bank Such withdrawal, in our opinion, accepted arises out of the said deposit can constitute assessable income in the hands by no stretch of imagination while determining the taxable Qf the assessee: The Assessing Officer of the Bhangdiya Group made the income of the business entities the amount paid to the disallowance of sub-contract expenses being were already considered in Income shown in assessee but these payments and receipt as business receipt in the hands of the assessee the return on protective basis in the hands of the Addition of such amount again to stand: We; therefore; do not find any assessee does have any leg order Qf the CIT(A) which warrants our illegality Or infirmity in the The CIT(A) has rightly deleted the addition in each of the interference: 2t2 1;1'.

Nos,1US to 1105 /Nai/2016 nsstt, Y 'rs;2006-47 to 2011.12 accordingly confirm the order of CIT(A): Thus, the assessment year. We of the assessment year stand by the Revenue in each appeal filed dismissed. In the result; all the appeals of the Revenue stand dismissed. 7 (Order pronounced in the open court on 22/06/2017 Sd}_ P K BANSAL ) Vice President Sd] _ (AMARJIT SINGH) Judicial Member Dated:22/06/2017 #Singh Copy_of_the order forwarded _to The Appellant The Respondent 3 Concerned CIT MAgpua 4 The CIT(A)

D.R (uuas.d klc Sm 33 16 MEMBEA #CAfti Regiqtar;E TRIQUNA NAG+Un Del-Ch+. ~AJFun 2