ACIT, CC-14, NEW DELHI vs. PRAMADITYA, RAJASTHAN

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : H : DELHI

BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER

ITA No.1861/Del/2021 Assessment Year: 2017-18 ACIT, Vs Pramaditya, CC-14, 67, Mahaveer Nagar, 2nd Maharani Farm, New Delhi. Durgapur, Jaipur, Rajasthan – 302018. PAN: AJPPP2281E CO No.29/Del/2022 ITA No.1861/Del/2021 Assessment Year: 2017-18 Pramaditya, Vs. ACIT, 67, Mahaveer Nagar, CC-14, 2nd Maharani Farm, New Delhi. Durgapur, Jaipur, Rajasthan – 302018. PAN: AJPPP2281E

(Appellant) (Respondent) Assessee by : Shri Hiren Mehta, CA Revenue by : Ms Sapna Bhatia, CIT, DR

ITA No.1861/Del/2021 CO No.29/Del/2022

Date of Hearing : 11.05.2023 Date of Pronouncement : 27.06.2023

ORDER PER M. BALAGANESH, AM: The appeal in ITA No.1861/Del/2019 by the Revenue and the Cross Objection in CO No.29/Del/2022 by the assessee for AY 2017-18, arise out of the order of the Commissioner of Income Tax (Appeals)-27, New Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] in Appeal No.313/19-20/1434, dated 30.06.2021 against the order of assessment passed u/s 143(3) of the Income- tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 31.12.2019 by the Assessing Officer, Central Circle-14, New Delhi (hereinafter referred to as ‘ld. AO’). 2. The assessee has raised the following grounds in his cross objections :- “1. That on the facts and circumstances of the case and in law the Ld. CIT (A) has erred in not adjudicating the ground of the cross objector challenging the validity of the assessment order which has been passed under wrong section of I.T. Act. 2. That on the facts and circumstances of the case and in law the Ld. CIT (A) was not justified in adjudicating the ground no. 2 of the appeal memo filed before CIT(A) which is as under:- 2. That the order passed by the AO for A.Y. 2017-18 is void-ab-initio and a nullity since the same has been passed u/s 143(3) of the I.T. Act whereas the same was required to be passed u/s 153C of the I.T. Act, in view of the following:- 2.1 That pursuant to search action on 16.12.2016 in the case of Soni Group, the A.0. of the searched person handed over certain documents to the A.O. of the croos-objector on 26.03.2019;

ITA No.1861/Del/2021 CO No.29/Del/2022 2.2 That as per the first proviso of section 153C the block period for carrying out assessment u/s 153C will comprise of six years i.e. A.Y. 2013- 14 to A.Y. 2018-19 and u/s 143(3) for A.Y. 2019-20; 2.3 That the amendment in sub-section (1) of Section 153C shall apply w.e.f. 01.04.2017 and will be applicable to searches conducted on or after 01.04.2017. 3. That the cross objector craves leave to add, alter, amend, modify any of the grounds at the time of hearing.”

2.1. The revenue has raised the following grounds of appeal before us:- i. That the Ld. CIT(A) has erred on facts and in law that in deleting the addition of Rs. 1,30,00,000/- treated as unexplained money u/s 69A of the Act. ii. That the Ld. CIT(A) has erred on facts in law that in denying the statements given on by Sh. P.L. soni and Sh. Vikram soni wherein both of them clearly admitted the cash taken by the assessee and gold was supplied in lieu of the cash iii. The Ld. Cit(A) has erred on facts and in law that in denying the evidences in the form of Whatsapp chats clearly noticed from the seized mobile phone of Sh. Vikram Soni wherein it is clearly mentioned that cash of Rs. 1,30,00,000/- was received from the seized mobile phone of Sh. Vikram Soni. The Ld. CIT(A) has erred on facts and in deleting the addition merely on the basis of retraction letter of Sh. P.L. Soni and Sh. Vikram Soni over looking the clinching evidences found in the form of WhatsApp chats from the seized mobile phone of Sh. Vikram Soni. (a) The order of the Ld. Cit(A) is erroneous and not tenable in law and on pacts. (b) The appellant craves leave to add, alter or amend any of the grounds of appeal before or during the course of the hearing of the appeal

ITA No.1861/Del/2021 CO No.29/Del/2022 operation u/s 132 of the Act was carried out on 16.12.2016 at different business and residential premises of Purushottam Lal Soni Group of cases. Various incriminating papers / documents, related to the assessee herein, were found and seized during the course of search operation in the aforesaid group. Accordingly, the case of the assessee was centralized with ACIT, Central Circle 14, New Delhi vide order of Centralisation dated 29.10.2018 and subsequently an order u/s 127 of the Act was also passed by the competent authority. Pursuant to the search action , the AO of the searched person (i.e Purushottam Lal Soni Group) handed over certain seized papers / documents which according to him, pertained to the assessee herein before us. The AO of the searched person and the assessee are the same. It is not in dispute that the date of handing over of the seized material pertaining to the assessee was 26.03.2019. On the same date, satisfaction was recorded by the AO of the assessee. Notice u/s 153C of the Act was issued for A.Ys. 2011-12 to 2016-17 and notice u/s 143(2) of the Act for the A.Y. 2017-18 on the premise to frame the assessment for the A.Y. 2017-18 u/s 143(3) of the Act.

3.1. We find that the short point involved in the cross objections filed by the assessee is with regard to the assessment years for which notices could be issued u/s 153C of the Act in the case of the assessee herein. It is trite law that the ld. AO can reopen the assessment for previous assessment years preceding the assessment year for previous six assessment years preceding the assessment year in which the search and seizure operation had taken place. On the contrary, in respect of the person other than the searched person (i.e section 153C assessee), the date of search would be substituted by the date of recording of satisfaction of the AO of the other person. In the instant case, the date of handing over of seized material by the AO of the searched person to the AO of

ITA No.1861/Del/2021 CO No.29/Del/2022 the assessee was 26.03.2019 and the satisfaction was recorded in terms of section 153C of the Act by the AO of the searched person and the AO of the assessee on 26.03.2019, since the AO of the searched person and AO of the assessee are one and the same. Accordingly, in the case of the assessee, the date of search would be reckoned from Asst Year 2019-20, in which event, the preceding six assessment years would be Asst Years 2013-14 to 2018-19. Hence for the A.Y. 2017-18, the ld. AO could have initiated proceedings only u/s 153C of the Act. Instead , the ld. AO issued notice u/s 143(2) of the Act for the A.Y. 2017-18 and framed a regular assessment u/s 143(3) of the Act on 31.12.2019. We find that the provisions of section 153C of the Act had been amended by Finance Act 2017 by providing for assessment of the same assessment years both for the searched person as well as the person other than the searched person. We find that this amendment in section 153C of the Act by the Finance Act 2017 had been held to be prospective in operation by the Hon’ble Jurisdictional High Court in the case of PCIT vs Sarwar Agency P Ltd reported in 185 taxmann.com 269 (Del HC). Moreover, we find that the CBDT vide its Circular No. 2/2018 dated 15.02.2018 had also clarified that the said amendment in section 153C of the Act would apply only in respect of searches conducted u/s 132 of the Act or requisitions made u/s 132A of the Act on or after 01.04.2017.

3.2. We find that this issue is settled by the decision of Hon’ble Jurisdictional High Court in the case of CIT vs RRJ Securities Ltd reported in 380 ITR 612 (Del). The relevant operative portion of the said judgement is reproduced hereinbelow:- 24. As discussed hereinbefore, in terms of proviso to Section 153C of the Act, a reference to the date of the search under the second proviso to Section 153A of the Act has to be construed as the date of handing over of assets/documents belonging to the Assessee (being the person other than the one searched) to the AO having jurisdiction to assess the said Assessee. Further proceedings, by virtue of Section 153C(1) of the Act, would 5

ITA No.1861/Del/2021 CO No.29/Del/2022 have to be in accordance with Section 153A of the Act and the reference to the date of search would have to be construed as the reference to the date of recording of satisfaction. It would follow that the six assessment years for which assessments/reassessments could be made under Section 153C of the Act would also have to be construed with reference to the date of handing over of assets/documents to the AO of the Assessee. In this case, it would be the date of the recording of satisfaction under Section 153C of the Act, i.e., 8th September, 2010. In this view, the assessments made in respect of assessment years 2003-04 and 2004-05 would be beyond the period of six assessment years as reckoned with reference to the date of recording of satisfaction by the AO of the searched person. It is contended by the Revenue that the relevant six assessment years would be the assessment years prior to the assessment year relevant to the previous year in which the search was conducted. If this interpretation as canvassed by the Revenue is accepted, it would mean that whereas in case of a person searched, assessments in relation to six previous years preceding the year in which the search takes place can be reopened but in case of any other person, who is not searched but his assets are seized from the searched person, the period for which the assessments could be reopened would be much beyond the period of six years. This is so because the date of handing over of assets/documents of a person, other than the searched person, to the AO would be subsequent to the date of the search. This, in our view, would be contrary to the scheme of Section 153C(1) of the Act, which construes the date of receipt of assets and documents by the AO of the Assessee (other than one searched) as the date of the search on the Assessee. The rationale appears to be that whereas in the case of a searched person the AO of the searched person assumes possession of seized assets/documents on search of the Assessee; the seized assets/documents belonging to a person other than a searched person come into possession of the AO of that person only after the AO of the searched person is satisfied that the assets/documents do not belong to the searched person. Thus, the date on which the AO of the person other than the one searched assumes the possession of the seized assets would be the relevant date for applying the provisions of Section 153A of the Act. We, therefore, accept the contention that in any view of the matter, assessment for AY 2003-04 and AY 2004-05 were outside the scope of Section 153C of the Act and the AO had no jurisdiction to make an assessment of the Assessee's income for that year.

3.3. The ld. DR vehemently relied on the co-ordinate bench decision of this Tribunal in the case of M/s Opal Buildwell Pvt Ltd vs ACIT in ITA Nos. 1557, 1558 & 2829 /Del/2019 dated 23.03.2023. This decision was rendered for A.Ys. 2009- 10 and 2010-11. In that case, the search u/s 132 of the Act was carried out on Appu Ghar Group on 10.03.2015. In that search, certain materials belonging to Opal Buildwell Pvt Ltd (i.e person other than the searched person) was found. The AO of the searched person handed over the relevant material to the AO of

ITA No.1861/Del/2021 CO No.29/Del/2022 the ‘other person’ (i.e person other than the searched person) on 14.10.2016 (falling in A.Y. 2017-18) after recording satisfaction note in terms of section 153C of the Act on the same date. Notice u/s 153C of the Act was issued to the ‘other person’ on 18.10.2016 for the A.Y.s. 2011-12 to 2016-17 (6 A.Ys immediately preceding A.Y. 2017-18). In that case, the counsel for the assessee argued that notices issued u/s 153C of the Act for the A.Ys. 2009-10 and 2010-11 were beyond the mandate of the law. However, the Tribunal addressed the amendment brought in section 153C of the Act w.e.f. 01.10.2014 held that six assessment years immediately preceding the A.Y. relevant to the previous year in which search is conducted or requisition is made will come into the purview of block assessment years. The Tribunal on combined reading of provisions of section 153A and 153C of the Act held in that case that the date of search on the searched person would be the reckoning date for initiating proceedings u/s 153C of the Act on the other person. In that case, the date of search on Appu Ghar Group was on 10.03.2015 and accordingly Asst Years 2009- 10 and 2010-11 would fall within the preceding six assessment years. Accordingly, the Tribunal held that notice issued u/s 153C of the Act for A.Ys. 2009-10 and 2010-11 to be valid. In our considered opinion, this decision is not in accordance with the amended provisions of section 153A / 153C of the Act with effect from 01.10.2014 and 01.04.2017. We have gone through the provisions of section 153C of the Act as amended from 01.10.2014, wherein it only contemplated for initiation of proceedings u/s 153C of the Act on the ‘other person’ for six assessment years if the seized materials from searched person, have a bearing on the determination of total income. Hence the amendment with effect from 01.10.2014, did not contemplate bringing in parity in provisions between section 153A and 153C of the Act with regard to preceding six assessment years for which notices could be issued. In other words, even

ITA No.1861/Del/2021 CO No.29/Del/2022 after the amendment w.e.f. 01.10.2014, notices u/s 153A of the Act could be issued for different assessment years on the searched person and notices u/s 153C of the Act could be issued on the ‘other person’ for different assessment years. In our considered opinion, the crucial date of reckoning the date of search in the case of the ‘other person’ would be the date on which the seized material was handed over by the AO of the searched person to the AO of the ‘other person’. From this handing over date, 6 preceding assessment years need to be reckoned for issuing notices u/s 153C of the Act. This understanding of ours regarding the amended provisions of section 153C of the Act is further fortified by the decision of Hon’ble Jurisdictional High Court in the case of RRJ Securities Ltd referred to supra. The provisions of section 153C of the Act were amended w.e.f. 01.04.2017 to bring parity in assessment years for which notices u/s 153A and 153C of the Act could be issued on the searched person and ‘other person’. In our considered opinion, the amended provisions of section 153C of the Act w.e.f. 01.04.2017 cannot be made applicable to a case where the date of search and date of handing over of seized material to the AO of the ‘other person’ is prior to 01.04.2017. Thus, in our humble opinion, the amendment made to section 153C of the Act bringing parity in assessment years as contemplated u/s 153A and 153C, since, was introduced w.e.f. 01.04.2017, it will not apply to assessee’s case as the date of search was prior to 01.04.2017. Therefore, in view of the clear statutory provision, the decision in Opal Buildwell (supra) will not come to the rescue of the Revenue.

3.4. From the aforesaid discussions and respectfully following the decision of Hon’ble Jurisdictional High Court in RRJ Securities supra, it could be safely concluded that the regular assessment framed by the ld. AO for the A.Y. 2017-18 u/s 143(3) of the Act dated 31.12.2019 does not get support from the provisions

ITA No.1861/Del/2021 CO No.29/Del/2022 of section 153C of the Act and had to be quashed as void abinitio. The relevant section under which the assessment should have been framed for the A.Y. 2017- 18 would be u/s 153C of the Act. Hence the grounds raised by the assessee in his cross objections are allowed. ITA No. 1861/Del/2021 – A.Y. 2017-18 – Revenue Appeal 4. The only effective issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in deleting the addition made in the sum of Rs 1,30,00,000/- by the ld. AO towards unexplained money u/s 69A of the Act in the facts and circumstances of the instant case. 4.1. The brief facts of this issue are that the during the search and seizure operation conducted u/s 132 of the Act on Shri Purushottam Lal Soni on 16.12.2016, incriminating documents in the form of whatsapp chat relating to the assessee was found and seized, wherein some amounts and quanitites were mentioned in the name of the assessee herein in the chat messages of seized phone from the premises of Shri Vikram Soni (Son of Shri Purushottam Lal Soni). The ld. AO observed that on perusal of the details of the chat messages, it was found that assessee had some receipts / payments from / to Shri Purushottam Lal Soni. These chat messages were confronted to Shri Purushottam Lal Soni and a statement was recorded from him during search proceedings, wherein he stated that after 08.11.2016 (i.e. date of announcement of demonetization) , various parties had approached him with demonetized cash for purchase of gold and that he had supplied gold to those parties in lieu of cash received by charging average commission of 12% on the price of the gold. Whatsapp messages sent by Shri Vikram Soni was also confronted to Shri Purushottam Lal Soni and explanation was sought for the same. Explanations were indeed given by Shri Purushottam Lal Soni impleading the assessee herein before us. The ld.

ITA No.1861/Del/2021 CO No.29/Del/2022 AO had reproduced in his assessment order vide page 4 , the crucial reply given in response to Question No. 33 by Shri Purushottam Lal Soni . For the sake of convenience, the said question and reply given by Shri Purushottam Lal Soni is reproduced below:- “Q.33. Kindly consider entries at S.No. 5,6,7, and 11 in you response to Q.32 . Please describe in detail when, why and how did you receive cash from DCP Paramaditya. Ans. Mr. Paramaditya is currently posted as DCP security in PMO. His number, +918826340686 is saved in my mobile as IPS DCP Paramadiyat Ji. I had met him 6-7 months back, when he was posted as DCP Central. After demonetization, one day he called me that he would be sending old currency notes, and that he wanted gold bullion for that cash, and that he would be sending one Mr Rajiv ji (whose name I saved as Parmadiya Ji Staff Rajiv Ji in my mobile) with the cash. On 26.11.2016, Mr. Rajiv came in the morning, and gave Vikram, my son, a cash amount of Rs 65 Lakh. Later in the evening, he came again and gave another Rs 65 Lakh to Vikram. Then Vikram gave him 4 kg gold bullion.”

4.2. This statement was confronted with Shri Vikram Soni who also confirmed the same in his statement before the search party. Later the statements of both Shri Purushottam Lal Soni and Shri Vikram Soni was enclosed along with the show cause notice issued to the assessee directing him to explain the source of demonetized cash of Rs 1.65 crores. In response thereto, the assessee vide reply letter dated 05.12.2019 categorically denied having any such transaction of purchase of gold bullion in lieu of demonetized cash. The assessee’s authorized representative further filed a detailed reply letter dated 17.12.2019 before the ld. AO , wherein it was clearly mentioned that the statements given by Shri Purushottam Lal Soni and Shri Vikram Soni were subsequently retracted by them in December 2016 itself vis a vis transactions of supply of gold in lieu of demonetized cash to Shri Paramaditya. Copy of letter filed on 30.12.2016 through speed post before the ADIT (Inv.) , Unit 7(2), New Delhi retracting the statement given at the search proceedings by Shri Purushottam Lal Soni and Shri Vikram Soni was also enclosed along with this reply letter dated 17.12.2019. The 10

ITA No.1861/Del/2021 CO No.29/Del/2022 retraction letter is also reproduced in pages 14 & 15 of the assessment order. Further an affidavit dated 21.02.2017 was also filed before the ADIT (Inv.) Unit 7(2), New Delhi by Shri Purushottam Lal Soni confirming the retraction made by them , which was also filed before the ld. AO. The ld. AO reproduced the affidavit in pages 16 & 17 of the assessment order. The relevant operative portion of the affidavit of Shri Purushottam Lal Soni is reproduced below:- 9. That in response to question No. 32 the deponent had given clarification regarding SMS messages received from Vikram Soni (Son) on whatsapp. In response to question No. 33 it was stated that 4kgs gold was given to Paramaditya Ji (the assessee) against 65Lacs and 65Lcas which in all aggregating Rs 130 Lacs. I would like to clarify that this is not true. After the search my son Vikram Soni confided that the cash actually belonged to him which he wanted to convert into gold but wanted to hide this fact from me therefore he purposely included the name of Paramaditya Ji, DCP (the assessee) to disguise his cash. On further enquiry he explained that he used the name of high ranking official since it would have prevented me from asking any further question and he would therefore manage to disguise his own cash and also hide the same from other family members including me. He also clarified that since I had known Paramaditya Ji, therefore he purposely used his name. In this background, I would like to state that I never received any call from Paramaditya ji after 09.11.2016 . I have known him but no cash was ever received from/ through him for conversion into gold and that transaction mentioned in the Whatsapp message actually belongs to my son Sh. Vikram Soni.

4.3. The said reply letter dated 17.12.2019 of the AR of the assessee also stated that Shri Purushottam Lal Soni had given details of quantity of gold sold to various persons after 09.11.2016. Further, the alleged amount of Rs 1.30 crores (Rs 65 Lacs plus Rs 65 Lacs) mentioned in the phone details of Shri Vikram Soni was already included as undisclosed income and offered to tax by Shri Vikram Soni in his return of income for the A.Y. 2017-18, which was filed on 08.01.2018. The attention of the ld.AO was also drawn to the specific offer of Rs 1.30 crores made by Shri Vikram Soni, in the said letter dated 17.12.2019. Further , it was also pointed out by the AR of the assessee in the said letter dated 17.12.2019, that during post search proceedings, statements of Shri Purushottam Lal Soni and Shri Vikram Soni were recorded by the DDIT (Inv.) Unit 7(2), New Delhi on

ITA No.1861/Del/2021 CO No.29/Del/2022 several dates ( 23.05.17, 21.06.17, 08.09.17, 13.09.17, 14.09.17, 21.09.17 , 22.09.17 from Shri Purushottam Lal Soni and on 09.10.17, 10.10.17 and 13.10.17 from Shri Vikram Soni) , not even a single question was asked from them regarding the alleged transactions with Shri Paramaditya. Accordingly, it was submitted that the contents of the affidavit filed by Shri Purushottam Lal Soni was accepted to be true by the investigation wing of the department. Further , it was submitted on behalf of the assessee that the assessee had not entered into any transactions with any person during the period 08.11.2016 to 31.12.2016 with regard to alleged demonetization of cash. Further it was categorically stated that assessee had not given cash of Rs 1.65 crores in demonetized currency to Shri Purushottam Lal Soni and Shri Vikram Soni or any other person. In the letter dated 17.12.2019, a clarification was also sought from the ld. AO as to how the figure of Rs 1.65 crores was arrived by him as belonging to assessee.

4.4. The ld. AO however completely disregarded all the aforesaid contentions and proceeded to add a sum of Rs 1.65 crores towards unexplained investment using unaccounted demonetized cash into gold bullion through Shri Purushottam Lal Soni u/s 69A of the Act and taxed the same at a higher rate prescribed u/s 115BBE of the Act.

ITA No.1861/Del/2021 CO No.29/Del/2022 High Court in the case of Bhagirath Aggarwal vs CIT in ITA 28/2012 dated 22.01.2013 for the proposition that the retraction statement should be supported by strong reasons and cogent evidence. Further she also relied on the decision of Hon’ble Supreme Court in the case of Bannalal Jat Constructions (P) Ltd vs ACIT reported in 106 taxmann.com 128 (SC) for the proposition that the retraction statement made by Shri Purushottam Lal Soni and Shri Vikram Soni is not supported by strong evidence. She relied on the following paragraph in the said decision of Hon’ble Supreme Court :-

ITA No.1861/Del/2021 CO No.29/Del/2022 action which was in presence of independent witnesses has overriding effect over the subsequent retraction. 6.1. In the instant case before us, the statement given during search on 16/17.12.2016 had been retracted within 15 days from the search by duly stating duress , coercion etc and also clearly explaining the reasons for retraction. This was further confirmed by way of an affidavit dated 21.02.2017 by Shri Purushottam Lal Soni. The assessee herein before us had been categorically stating that he had not done any cash transactions with Shri Purushottam Lal Soni, Shri Vikram Soni or any other person by way of buying gold bullion using demonetized currency. With regard to the aforesaid decision of Hon’ble Supreme Court relied by ld. DR, we have no quarrel to the proposition that retraction statement should be supported by cogent evidence and reasons for the same. In the instant case, the retraction has been given by Shri Purushottam Lal Soni by duly explaining the reasons. Hence in our considered opinion, the said decision relied upon by the ld. DR actually supports the case of the assessee herein in the facts and circumstances of the instant case.

6.2. We find that an affidavit dated 21.02.2017 filed by Shri Purushottam Lal Soni was never refuted by the revenue. This was duly filed before the investigation wing during post search enquiry proceedings itself. We find that various statements were recorded from Shri Purushottam Lal Soni and Shri Vikram Soni by the investigation wing during post search proceedings and no queries were raised on them regarding the affidavit filed. This goes to categorically prove that the contents of the affidavit were accepted to be true by the investigation wing. In this regard, the decision of Hon’ble Supreme Court in the case of Mehta Parikh & Co. vs CIT reported in 30 ITR 181 (SC) would support the case of the assessee. Further the Hon’ble Supreme Court in the case of Senior Bhosale Estate (HUF) vs ACIT in Civil Appeal Nos. 6671-6676 of 2010 14

ITA No.1861/Del/2021 CO No.29/Del/2022 with Civil Appeal Nos. 6677-6690 of 2010 dated 07.11.2019 explained the credibility of an affidavit in the context of condonation of delay had held as under:- The appellant(s) had asserted that they had no knowledge about passing of order dated 29.12.2003, until they were confronted with the auction notices in June 2008 issued by the competent authority. Soon thereafter, the appellant(s) filed appeal(s) accompanied by the subject application(s) on 19.07.2008. Notably, the respondent(s) did not expressly refute the stand taken by the appellant(s) – that they had no knowledge about passing of order dated 29.12.2003 until June, 2008. Unless that fact was to be refuted, the question of disbelieving the stand taken by the appellant(s) on affidavit, cannot arise and for which reason, the High Court should have shown indulgence to the appellant(s) by condoning the delay in filing the concerned appeal(s). This aspect has been glossed over by the High Court.

6.3. The ld. DR vehemently argued that the ld. CIT(A) simply relied on the retraction statement and affidavit of Shri Purushottam Lal Soni vis a vis assessee. In this regard, it is pertinent to note that as already noted above, the affidavit filed by Shri Purushottam Lal Soni had been accepted by the revenue and no queries were raised thereafter while recording statements from Shri Purushottam Lal Soni and Shri Vikram Soni on various dates post search proceedings. Moreover, it is pertinent to note that in the affidavit, Shri Purushottam Lal Soni had also stated that the total quantity of gold at 425 kgs which has been accepted by the revenue. One observation made by the ld. CIT(A) is that in the affidavit , the transactions stated with Mr Vijay Kumar Soni was of 20 kgs instead of 50 kg of Gold stated in the statement recorded on 17.12.2016. However, while framing the final assessment of Mr Soni for A.Y. 2017-18 vide order dated 31.12.2019, figure of unaccounted cash of Rs 6.09 crores (equivalent to 20 kgs of Gold only) was considered. Similarly in the affidavit, the transactions stated with Mr Deepak Jain, Partner of N C Jewellers was of 100 kgs instead of 70 kg of Gold stated in the statement recorded on 17.12.2016. However, while framing 15

ITA No.1861/Del/2021 CO No.29/Del/2022 the final assessment of M/s N C Jewellers for A.Y. 2017-18 vide order dated 31.12.2019, figure of Rs 30 crores (equivalent to 100 kgs of Gold only) was considered. These facts go to conclusively prove that the contents of the affidavit has been accepted by the revenue in part. Hence part of the affirmations made in the very same affidavit has been accepted by the revenue. How can they disbelieve the remaining part of the same affidavit ? Moreover, Shri Purushottam Lal Soni had also stated in affidavit that no call has been received by him from the assessee after 09.11.2016 regarding exchange of gold bullion for cash in demonetized currency. This call could easily be retrieved by the department with the assistance of telecom department given the latest technological advancements for retrieval of data and call records. No effort has been taken by the ld. AO in this regard to disprove the contents of the affidavit of Shri Purushottam Lal Soni.

6.4. With regard to the addition made by the ld. AO in the sum of Rs 165 lacs, whereas the transactions represent only Rs 130 lacs (65 plus 65 lacs), the ld. DR had nothing to comment. From the perusal of the assessment order, we find that the ld. AO had considered the figure of Rs 165 lacs without any basis. Infact the details as to how this figure was arrived at by the ld. AO was even sought by the assessee in the reply to the show cause notice issued by the ld. AO, which remained unanswered by the ld. AO. Hence we hold that the ld. CIT(A) was justified in deleting the addition of Rs.35 lacs (165 -130 lacs).

6.5. We find that the main basis of framing the addition is based on the whatsapp messages found in the mobile of Shri Vikram Soni. These messages when originally confronted by the Search party to Shri Purushottam Lal Soni, he responded vide reply to Question No. 33, that one Mr Rajiv (alleged accomplice

ITA No.1861/Del/2021 CO No.29/Del/2022 of assessee) came to him with cash of Rs 130 lacs in demonetized currency and in return got 4 kgs of gold bullion from him. If Mr Rajiv is directly sent to Shri Purushottam Lal Soni, then where is the need for Shri Vikram Soni to record in whatsapp chat that he has received cash from assessee. This missing link which is crucial remains unanswered on the side of the revenue as neither the order of the ld. AO nor the argument of the ld. DR could address this aspect. In any case, according to revenue, when Mr. Rajiv is the carrier of cash on behalf of the assessee , nothing prevented the ld. AO to record a statement from Shri Rajiv and confirm these facts. In fact as discernible from the records, no material has been brought on record by the AO to unravel the existence and identity of Shri Rajiv, who allegedly acted as a conduit between the assessee and Shri Purushottam Lal Soni to convert the demonetized cash with gold bullion. Though Shri Rajiv happens to be the most vital link in the chain of events, his existence itself is shrouded in mystery as no effort has been made by the departmental authorities to trace and examine him for ascertaining the real facts.

6.6. It is also pertinent to note that in the affidavit dated 21.02.2017 of Shri Purushottam Lal Soni, he had clearly mentioned the modus operandi adopted by his son Shri Vikram Soni for falsely implicating the name of the assessee in order to escape himself from the family rigours of holding unaccounted cash . Pursuant to this, we find that Shri Vikram Soni had offered this sum of Rs 130 lacs as his unaccounted income in respect of 4 kgs of gold bullion for A.Y. 2017- 18 in the original return filed on 08.01.2018 and had paid taxes thereon. The evidences in this regard are already forming part of the records placed before us. In the statement recorded from Shri Purushottam Lal Soni on 16/17.12.2016, he had stated that cash of Rs 130 lacs was received from Shri Rajiv and gold bullion of 4 kgs was handed over to him on behalf of the assessee. If the gold bullion of

ITA No.1861/Del/2021 CO No.29/Del/2022 4 kgs is already handed over to Shri Rajiv, then where is the need for Shri Vikram Soni to offer the value of very same 4 kgs of gold bullion amounting to Rs 130 lacs in his original return of income filed on 08.01.2018.

6.7. We find that one observation made by the ld. CIT(A) is that there is no linkage established by the ld. AO that the alleged transactions relating to the assessee, actually belong to him through any independent corroborative evidences like statement of the assessee or Shri Rajiv (alleged accomplice of the assessee, who had actually done the transactions according to ld. AO) or any trail of the message or phone call from any of them to , either Shri Purushottam Lal Soni or Shri Vikram Soni before or near the date of transactions. In our considered opinion, this is a classic case of assessee being falsely implicated based on the whatsapp chats made between two individuals who are not connected with the assessee in any manner whatsoever, except knowing each other. Either way, the assessee cannot have any control over the chat messages between two independent parties. We find that the ld. CIT(A) had given a categorical finding that the amounts written against the name of the assessee belonged to Shri Vikram Soni , who had been hiding the transactions of cash belonging to him under the name of the assessee by falsely impleading the assessee. In our considered opinion, given the aforesaid observations, this finding given by the ld. CIT(A) does not warrant any interference.

6.8. All these facts collectively were addressed elaborately by the ld. CIT(A) while granting relief to the assessee. For the sake of convenience, the final operative portion of the findings recorded by the ld. CIT(A) are reproduced below:-

ITA No.1861/Del/2021 CO No.29/Del/2022 “5.3 In view of the above observations, facts of the case and legal position on the issue, it is observed that the documents in the form of chat messages have not been found from the appellant, but the third party. The statements relied upon by the AO are u/s 131(1A) & 133A recorded during the survey proceedings attached to the search on 16.12.2016, which are not recorded on oath, as compared to the statement u/s 132(4) or affidavits which are always on oath. The evidentiary value of statement recorded u/s 133A is spelled out in the decision of jurisdictional Delhi High Court in the case of CIT Vs. Dhingra Metal Works (2011) 196 taxman 488. Even otherwise, the presumption of evidences u/s 132(4)/292C, that these transactions pertain to the appellant (third party), cannot be drawn in the absence of any corroborative evidences, as had been held by the jurisdictional High Court of Delhi in the cases of PCIT vs Manoj Hora (Supra) & PCIT vs Vinita Chaurasia(Supra). Sh. P L Soni & Sh. Vikram Soni had been party for authoring these chat messages and they have initially interpreted part of these messages in their statements recorded during the survey. Later, within 11 days, part of these statements, specifically w.r.t. transactions of the appellant had been denied by both of them. Subsequently an affidavit had been filed clarifying certain transactions, which had been partly accepted by the department and the part relating to the appellant was not accepted considering it an afterthought, without bringing any adverse material on record for part rejection of this affidavit. The Apex court in the case of Mehta Parikh and Co. v. CIT [1956] 30 ITR 181(Supra) had held that once an affidavit has been filed and the contents of the affidavit have not been disproved by cross-examining the deponent, it would not be open to the Revenue authorities to disregard the averments made in the affidavit and it is a well settled canon of interpretation that a document has to be read as a whole, it is not permissible to accept a part and ignore the rest of the document. Further, the Hon'ble Apex Court in the Civil Appeal Nos. 6677- 6690 of 2010 decided on 07.11.2019 in the case of Senior Bhosale Estate (HUF) vs. ACIT had held that "....unless that fact was to be refuted, the question of disbelieving the stand taken by the appellant(s) on affidavit, cannot arise and for which reason, the High Court should have shown indulgence to the appellant(s) by condoning the delay in filing the concerned appeal(s)". The affidavit filed by Sh. Purshottam Soni has not been refuted by the DDIT(Inv.) in any of the subsequent statements recorded in post search proceedings. These whatsapp chats messages allegedly pertaining to the appellant have not been 19

ITA No.1861/Del/2021 CO No.29/Del/2022 confronted to the appellant and no linkage of these third party whatsapp messages had been established with the appellant. Further, this income had been claimed in the affidavit belonging to Sh. Vikram Soni and Sh. Vikram Soni had shown this income in his original return of income filed on 08.01.2018 disclosing the income of Rs. 1.30 cr. pertaining to these transactions under the head "income from undisclosed sources". Without prejudice to it, the unaccounted income pertaining to the transactions in chat message allegedly belonging to the appellant has already been offered for tax "as undisclosed income" by the originator of message Shri Vikram Soni and due taxes have already been paid on it. Further making addition in the hands of the appellant will lead to double addition of same income. In my opinion, after filing of the affidavit on these transactions to protect the interest of revenue, it would have been more appropriate to initiate proceedings in the case of Mr. Vikram Soni also. In these facts and circumstances of the case, it is held that (i) The excess amount of Rs. 35 lacs (Rs 165 lakhs- Rs 130 Lakhs) had been added by the AO without any basis and is hereby not sustainable. (ii) The amount of Rs. 1.3 cr. reflected in the third party whatsapp messages in the name of appellant actually belongs to one of the party to whatsapp messages, Sh. Vikram Soni and this amount is liable to be taxed in his hands only. Any action with respect to this undisclosed amount of Rs. 1.30 crores has to be taken in the hands of Sh. Vikram Soni. Accordingly, the addition of Rs. 1.65 cr.(actual figures are Rs. 1.30 cr.) made in the hands of the appellant u/s 69A r.w.s. 115BBE without any corroborative evidences is not sustainable and is hereby deleted.”

6.9. In view of the aforesaid observations and respectfully following the various judicial precedents relied upon hereinabove, we do not find any infirmity in the order of the ld. CIT(A). Hence the grounds raised by the revenue are dismissed.

ITA No.1861/Del/2021 CO No.29/Del/2022 7. In the result, the appeal of the revenue is dismissed and cross objection of the assessee is allowed.

Order pronounced in the open court on 27.06.2023

Sd/- Sd/-

(SAKTIJIT DEY) (M. BALAGANESH) VICE-PRESIDENT ACCOUNTANT MEMBER Dated: 27th June, 2023.

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