Income Tax Appellate Tribunal - BangaloreK.G. Krishna, Bangalore vs The Deputy Commissioner Of Income Tax, ... on 24 June, 2022ITA Nos.307 to 312/Bang/2020\n                                                Shri K.G. Krishna, Bangalore\n\n\n            IN THE INCOME TAX APPELLATE TRIBUNAL\n                     "C'' BENCH: BANGALORE\n\n    BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER\n                          AND\n           SMT. BEENA PILLAI, JUDICIAL MEMBER\n\n                    ITA Nos.307 to 312/Bang/2020\n                Assessment Years: 2007-08 TO 2012-13\n\nK.G. Krishna\nNo.1680/55, JayakrishnaNilaya                  Deputy Commissioner of\n5th A Cross, 10th Main road                    Income-tax\n2nd Block, Banashankari 1st Stage          Vs. Central Circle-1(4)\nBangalore 560 060.                             Bangalore\n\nPAN NO : APGPK8490K\n           APPELLANT                                     RESPONDENT\n\n   Appellant by         :   Smt. Suman Lunkar, A.R.\n   Respondent by        :   Shri Pradeep Kumar, CIT(DR) (Written\n                            submissions) &\n                            Smt. Priyadarshini Basaganni, D.R.\n\n             Date of Hearing       :              21.04.2022\n             Date of Pronouncement :              24.06.2022\n\n                                ORDER\n\n     PER CHANDRA POOJARI, ACCOUNTANT MEMBER:These appeals by assessee are directed against the different\n     orders of CIT(A) for the assessment years 2007-08 to 2012-13 dated\n     22.11.2019. The issue in all these appeals are common in nature,\n     hence, these are clubbed together heard together and disposed of\n     by this common order for the sake of convenience.1.1   There was a delay of 34 days in filing the appeals for the\n     assessment year 2007-08 to 2012-13. The assessee explained the\n                                                     ITA Nos.307 to 312/Bang/2020\n                                                      Shri K.G. Krishna, BangalorePage 2 of 89delay by way of petition accompanied with affidavit for filing the\nappeals belatedly.       It was explained that the assessee was totally\noccupied with the post search proceedings due to which the appeal\norders received for assessment years 2007-08 to 2012-13 were\ncompletely lost of sight and the appeals could not be filed in time.\nIt is only when the auditor of the assessee was contemplating to\navail the benefit of scheme "Vivad Se Vishwas, 2020", enquired\nabout the status of the appeals with the assessee, it was learnt that\nappeal orders were already passed and time limit for filing appeal in\nall these assessment years before the Tribunal which has also been\nlapsed. Thereafter, the assessee was advised to file appeals against\nthe first appellate orders by assessee's auditors, consequently\nappeals were filed by delay of 34 days in all these assessment years\nand prayed to condone the delay.1.2      We have heard both the parties on the issue of condonation of\ndelay.     In our opinion, the reasons explained by the assessee for\ndelay in filing the appeals is found to be good and sufficient and\naccordingly we condone this short delay of 34 days and admit the\nappeals for adjudication.2.       The main grounds for all the assessment years from 2007-08\n2012-13 are as follows:-2.1      Main grounds for AY 2007-08 in ITA No.307/Bang/2020:-"1.The learned Commissioner of Income-tax (Appeals) has erred\n         in partially confirming the order passed by Assessing Officer. The\n         order passed by learned assessing officer being bad in law against\n                                             ITA Nos.307 to 312/Bang/2020\n                                              Shri K.G. Krishna, BangalorePage 3 of 89the principles of natural justice and void-ab-initio was required to\nbe quashed in toto instead of being confirmed.2.      In any case, the learned Commissioner of Income-tax\n(Appeals) has erred in rejecting the contention of the appellant\nthat the application of section 153A of the Act lacked jurisdiction.\nThe order passed by the Assessing officer is bad in law especially\nin the absence of satisfaction to be recorded before the issue of\nnotice u/s 153A of the Act and such order is liable to be quashed.3.     In any case and without prejudice, the learned\nCommissioner of Income-tax (Appeals)has erred in confirming\nvarious additions made by the Assessing officer.  On      proper\nappreciation of facts and the law applicable, the additions\nmade/confirmed are wholly erroneous and are liable to be deleted.4.     The learned CIT(A) has erred in confirming the addition\nmade by the Assessing officer on account of opening capital\nbalance being unexplained to the extent of Rs. 33,29,000/- On\nproper appreciation of facts and the law applicable, the entire\nopening capital balance is duly explainable and the addition as\nmade/confirmed being contrary to available facts and law\napplicable is to be deleted in entirety.5.     The learned CIT(A) has erred in confirming the addition\nmade by the assessing officer by treating the agricultural income\nas Income from other sources on the ground that the agricultural\nincome as declared is at higher side considering the extent of land\nholding in year under appeal and the appellant had not filed any\ndocumentary evidence in support of the claim made. On the facts\nand circumstances of the case and the law applicable, the\nappellant actually earned the agricultural income as declared and\nthe addition as made/confirmed is adhoc, without any basis and\npurely on conjectures and surmises is to be deleted6.      The Learned CIT(A) has erred in confirming the\ndisallowance made by the Assessing officer to the extent of 50\npercent of the expenditure (net of Depreciation) debited to that\nprofit and loss account on the ground that the appellant did not\njustify the expenditure claimed. The conclusion of authorities\nbelow being wholly erroneous, without any basis and purely adhoc\nis to be rejected and the disallowance as made/sustained is to be\ndeleted.ITA Nos.307 to 312/Bang/2020\n                                                     Shri K.G. Krishna, BangalorePage 4 of 897.      The learned CIT(A) has erred in confirming the action of\n      the assessing officer in assessing the capital gain earned on sale of\n      property as Income under the head Business holding that the\n      appellant being a real estate businessman has failed to demonstrate\n      that property sold was held as capital asset. On proper\n      appreciation of facts, evidence available and the law applicable, the\n      property sold was held as investment/ Capital Asset and the same is\n      assessable under the head Short Term Capital Gain.8.      The learned CIT(A) has erred in sustaining the addition\n      made by the assessing officer on account of alleged payments made\n      by the appellant on purchase of property amounting to Rs\n      2,00,00,000/- by relying on agreement to sell dated 18/05/2006.\n      This agreement to sell was not registered and subsequently revised.\n      The action of authorities below in relying upon the document which\n      was never acted upon makes the entire addition totally erroneous\n      and such addition is to be deleted.9.     The appellant denies the liability to pay interest u/s 234A,\n      234B and 234C of the Act. The interest levied being wholly\n      erroneous is to be deleted.10.      In view of the above and on other grounds to be adduced at\n      the time of hearing it is requested that the impugned orders passed\n      by the CIT(A) and the Assessing Officer be quashed or atleast the\n      various additions made in the hands of the appellant be deleted and\n      the interest levied is also to be deleted."2.2   Main      grounds      for   assessment       year    2008-09       in   ITA\nNo.308/Bang/2020:-1. "The learned Commissioner of Income-tax (Appeals) has erred in\n     partially confirming the order passed by Assessing Officer. The\n     order passed by learned assessing officer being bad in law against\n     the principles of natural justice and void-ab-initio was required to\n     be quashed in toto instead of being confirmed.2. In any case, the learned Commissioner of Income-tax (Appeals)\n     has erred in rejecting the contention of the appellant that the\n                                                 ITA Nos.307 to 312/Bang/2020\n                                                  Shri K.G. Krishna, BangalorePage 5 of 89application of section 153A of the Act lacked jurisdiction. The\n   order passed by the Assessing officer is bad in law especially in the\n   absence of satisfaction to be recorded before the issue of notice u/s\n   153A of the Act and such order is liable to be quashed.3. In any case and without prejudice, the learned Commissioner of\n   Income-tax (Appeals) has erred in confirming various additions\n   made by the Assessing officer. On proper appreciation of facts and\n   the law applicable, the additions made/confirmed are wholly\n   erroneous and are liable to be deleted.4. The learned CIT(A) has erred in confirming the addition made by\n   the assessing officer by treating the agricultural income as\n   Income from other sources on the ground that the agricultural\n   income as declared is at higher side considering the extent of\n   land holding in year under appeal and the appellant had not filed\n   any documentary evidence in support of the claim made. On the\n   facts and circumstances of the case and the law applicable, the\n   appellant actually earned the agricultural income as declared\n   and the addition as made/confirmed is adhoc, without any basis\n   and purely on conjectures and surmises is to be deleted.5. The learned CIT(A) has erred in confirming the action of the\n   assessing officer in adding a sum of Rs. 2,36,34,000/- as\n   unexplained cash credit u/s 68 of the Act on the ground that the\n   appellant has not established identity, credit worthiness of the\n   creditors as well as genuineness of the transaction. All the\n   advances were duly confirmed by the creditors and received\n   through banking channels. The conclusion of authorities below\n   being wholly erroneous both on facts and law is to be rejected\n   and the addition made is to be deleted.6. The learned CIT(A) has erred in confirming the disallowance\n   made by the Assessing officer to the extent of 50 percent of the\n   expenditure debited to the profit and loss account on the ground\n   that the appellant did not justify the expenditure claimed. The\n   conclusion of authorities below being wholly erroneous, without\n   any basis and purely adhoc is to be rejected and the disallowance\n   as made/sustained is to be deleted.ITA Nos.307 to 312/Bang/2020\n                                              Shri K.G. Krishna, BangalorePage 6 of 897.1     The learned CIT(A) has erred in confirming the action of\nthe assessing officer in assessing the capital, gain earned on sale\nof property as Income under the head Business holding that the\nappellant being a real estate businessman has failed to\ndemonstrate that property sold was held as capital asset. On\nproper appreciation of facts, evidence available and the law\napplicable, the property sold was held as investment/ Capital\nAsset and the appellant had rightly declared the gain and same\nis to be accepted without any variation.7.2    The learned CIT(A) has erred in confirming the\ndisallowance made by the Assessing Officer amounting to\nRs.1,65,336/- on account of cost of acquisition and cost of\nimprovement in the absence of supporting evidence. The cost of\nacquisition and cost of improvement claimed is duly supported\nwith documentary evidence and same is to accepted and the\ndisallowance made is to be deleted.8.     The learned CIT(A) has erred in confirming the addition\nmade by the Assessing Officer on account of unexplained\nexpenditure amounting to Rs 3,80,00,250/- on the ground that as\nper the loose sheet seized during the course of search of N.C.\nMahesh, the appellant had made this payment to N.C. Mahesh\nand the appellant had -not proved the source of the payment\nmade. On proper appreciation of facts and the evidence, the\nappellant never made this payment at all. The addition made on\nan erroneous premise is to be deleted.9.      The learned CIT(A) has erred in holding that in terms of\nsection 292C of the Act, any document found in the course of\nsearch shall be belonging to the appellant and the contents of these\nevidences can be used for the purpose of assessment. The\nconclusion drawn being wholly erroneous both on facts and law\nis to be rejected in toto.10.     The appellant denies the liability to pay interest u/s 234A\nand 234B of the Act. The interest levied being wholly erroneous is\nto be deleted.11.    In view of the above and on other grounds to be adduced t\nthe time of haring it is requested that the impugned orders passed\nby the CIT(A) and the Assessing Officer be quashed or atleast the\n                                                   ITA Nos.307 to 312/Bang/2020\n                                                    Shri K.G. Krishna, BangalorePage 7 of 89various additions made in the hands of the appellant be deleted\n      and the interest levied is also to be deleted."2.3   Main     grounds      for   assessment       year    2009-10       in   ITA\nNo.309/Bang/2020:-1.      "The learned Commissioner of Income-tax (Appeals) has\n      erred in partially confirming the order passed by Assessing\n      Officer. The order passed by learned assessing officer being bad in\n      law against the principles of natural justice and void-ab-initio was\n      required to be quashed in toto instead of being confirmed.2.      In any case, the learned Commissioner of Income-tax\n      (Appeals) has erred in rejecting the contention of-the appellant\n      that the application of section 153A of the Act lacked jurisdiction.The order passed by the Assessing officer is bad in law especially\n      in the absence of satisfaction to be recorded before the issue of\n      notice u/s 153A of the Act and such order is liable to be quashed.3.     In any case and without prejudice, the learned\n      Commissioner of Income-tax (Appeals)has erred in confirming\n      various additions made by the Assessing officer.  On      proper\n      appreciation of facts and the law applicable, the additions\n      made/confirmed are wholly erroneous and are liable to be deleted.4.     The learned CIT(A) has erred in confirming the action of\n      the assessing officer in adding a sum of Rs. 78,97,764/- as\n      unexplained cash credit u/s 68 of the Act on the ground that the\n      appellant has not established the Identity, credit worthiness of the\n      creditors as well as genuineness of the transaction. All the\n      advances were duly confirmed by the creditors and received\n      through banking channels. The conclusion of authorities below\n      being wholly erroneous both on facts and law is to be rejected and\n      the addition made is to be deleted.5.1    The learned CIT(A) has erred in confirming the\n      disallowance made by the Assessing officer to the extent of 50\n      percent of the expenditure debited to the profit and loss account\n      amounting to Rs. 4,75,530/- on the ground that the appellant did\n      not justify the expenditure claimed. The conclusion of\n                                            ITA Nos.307 to 312/Bang/2020\n                                             Shri K.G. Krishna, BangalorePage 8 of 89authorities below being wholly erroneous, without any basis and\npurely adhoc in nature is to be rejected and the disallowance as\nmade/sustained is to be deleted.5.2    The learned CIT(A) has also erred in confirming the\ndisallowance made by the Assessing officer amounting to Rs.\n2,21,781/- being the loss on sale of Asset. On proper\nappreciation of facts, the disallowance as made/confirmed is\ncontrary to facts and law applicable is to be deleted.6.1    The learned CIT(A) has erred in confirming the action of the\nassessing officer in assessing the capital gain earned on sale of\nproperty as Income under the head Business holding that the\nappellant being a real estate businessman has failed to\ndemonstrate that property sold was held as capital asset. On\nproper appreciation of facts, evidence available and the 1w\napplicable, the property sold was held as investment/ Capital\nAsset and the appellant had rightly declared the gain under the\nhead Short Term Capital Gain and same is to be accepted without\nany variation.6.2 The learned CIT(A) has erred in confirming the disallowance\nmade by the Assessing Officer amounting to Rs.66,47,430/- on\naccount of cost of acquisition, selling expense and cost of\nimprovement in the absence of supporting evidence. The cost of\nacquisition, selling expense and cost of improvement claimed is\nduly supported with documentary evidence and same is to accepted\nand the disallowance made is to be deleted.7.      The learned CIT(A) has erred in confirming the addition\nmade by the Assessing Officer on account of unexplained\nexpenditure amounting to Rs 20,00,000/- on the ground that during\ncourse of search proceedings, the appellant had admitted this sum\nas unexplained income. On proper appreciation of facts and the law\napplicable, the addition as made/confirmed is erroneous is to be\ndeleted.8.      The appellant denies the liability to pay interest u/s 234A\nand 234B of the Act. The interest levied being wholly erroneous is\nto be deleted.ITA Nos.307 to 312/Bang/2020\n                                                    Shri K.G. Krishna, BangalorePage 9 of 899.      In view of the above and on other grounds to be adduced at\n      the time of hearing it is requested that the impugned orders passed\n      by the CIT(A) and the Assessing Officer be quashed or atleast the\n      various additions made in the hands of the appellant be deleted and\n      the interest levied is also to be deleted."2.4   Main     grounds      for   assessment       year    2010-11       in   ITA\nNo.310/Bang/2020:-1.     "The learned Commissioner of Income-tax (Appeals) has\n      erred in partially confirming the order passed by Assessing\n      Officer. The order passed by learned assessing officer being bad\n      in law against the principles of natural justice and void-ab-initio was required to be quashed in toto instead of being\n      confirmed.2.      In any case, the learned Commissioner of Income-tax\n      (Appeals) has erred in rejecting the contention 'of the appellant\n      that the application of section 153A of the Act lacked jurisdiction.\n      The order passed by the Assessing officer is bad in law especially\n      in the absence of satisfaction to be recorded before the issue of\n      notice u/s 153A of the Act and such order is liable to be quashed.3.     In any case and without prejudice, the learned\n      Commissioner of Income-tax (Appeals)has erred in confirming\n      various additions made by the Assessing officer. On proper\n      appreciation of facts and the law applicable, the additions\n      made/confirmed are wholly erroneous and are liable to be deleted.4      The learned CIT(A) has erred in confirming the action of\n      the assessing officer in adding a sum of Rs. 86,64,768/- as\n      unexplained cash credit u/s 68 of the Act on the ground that the\n      appellant has not established the Identity, credit worthiness of the\n      creditors as well as genuineness of the transaction. All the\n      advances were duly confirmed by the creditors and received\n      through banking channels. The conclusion of authorities below\n      being wholly erroneous both on facts and law is to be rejected and\n      the addition made is to be deleted.ITA Nos.307 to 312/Bang/2020\n                                             Shri K.G. Krishna, BangalorePage 10 of 895.      The learned CIT(A) has erred in confirming the\ndisallowance made by the Assessing officer to the extent of 50\npercent of the expenditure debited to the profit and loss account\namounting to Rs. 8,50,000/- on the ground that the appellant did\nnot justify the expenditure claimed. The conclusion of authorities\nbelow being wholly erroneous, without any basis and purely\nadhoc in nature is to be rejected and the disallowance as\nmade/sustained is to be deleted.6.1    The learned CIT(A) has erred in confirming the action of\nthe assessing officer in assessing the capital gain earned on sale\nof property as Income under the head Business holding that the\nappellant being a real estate businessman has failed to\ndemonstrate that property sold was held as capital asset. On\nproper appreciation of facts, evidence available and the law\napplicable, the property sold was held as investment/ Capital\nAsset and the appellant had rightly declared the gain under the\nhead Long Term Capital Gain and same is to be accepted without\nany variation.6.2     The-learned CIT(A) has erred in confirming the re-\ncomputation of profit as done by the Assessing officer amounting\nto Rs. 30,75,670/- on account of sale of land as against the Long\nterm Capital Gain offered by the appellant amounting to Rs.\n9,94,700/- and assessing the same under the head Business byi) disallowing the entire cost of improvement claimed by the\nappellant totalling to Rs. 15,84,240/- being interest on loan and\nDevelopment expensesii) disallowing the commission paid on sale of landiii) Denying the benefit of indexation on cost of acquisition. The\naction of the authorities below being wholly erroneous both on\nfacts and law is to be negated and the Long term capital gain as\noffered by the appellant is to be accepted.6.3     In any case, the CIT(A) has erred in confirming the action\nof Assessing officer in assessing the profit on sale of land\namounting to Rs. 30,75,670/- under the head Business without\nreducing the Long term Capital Gain offered by the appellant. This\naction of authorities below amounts to double addition and same is\nto be deleted.ITA Nos.307 to 312/Bang/2020\n                                                    Shri K.G. Krishna, BangalorePage 11 of 896.4    In any case, the re computation of profit on sale of land as\n      done/confirmed by the authorities below is erroneous and\n      excessive.7.      The learned CIT(A) has erred in confirming the addition\n      .made by the Assessing Officer on account of unexplained cash\n      credit amounting to Rs. 36,00,000/- u/s 68 of the Act On proper\n      appreciation of facts and the law applicable, the addition made is\n      wholly erroneous both on facts and law is to be deleted.8.      The appellant denies the liability to pay interest u/s 234A\n      and 234B of the Act. The interest levied being wholly erroneous\n      is to be deleted.9.      In view of the above and on other grounds to be adduced at\n      the time of hearing it is requested that the impugned orders passed\n      by the CIT(A) and the Assessing Officer be quashed or atleast the\n      various additions made in the hands of the appellant be deleted\n      and the interest levied is also to be deleted."2.5   Main     grounds      for   assessment       year    2011-12       in   ITA\nNo.311/Bang/2020:-"1.    The learned Commissioner of Income-tax (Appeals) has\n      erred in partially confirming the order passed by Assessing\n      Officer. The order passed by learned assessing officer being bad\n      in law against the principles of natural justice and void-ab-\n      initio was required to be quashed in toto instead of being\n      confirmed.2.      In any case, the learned Commissioner of Income-tax\n      (Appeals) has erred in rejecting the contention or the appellant\n      that the application of section 153A of the Act lacked jurisdiction.\n      The order passed by the Assessing officer is bad in law especially\n      in the absence of satisfaction to be recorded before the issue of\n      notice u/s 153A of the Act and such order is liable to be quashed.3.     In any case and without prejudice, the learned\n      Commissioner of Income-tax (Appeals)has erred in confirming\n      various additions made by the Assessing officer. On  proper\n                                             ITA Nos.307 to 312/Bang/2020\n                                              Shri K.G. Krishna, BangalorePage 12 of 89appreciation of facts and the law applicable, the additions\nmade/confirmed are wholly erroneous and are liable to be deleted.4.      The learned CIT(A) has erred in confirming the addition\nmade by the assessing officer u/s 68 of the Act amounting to Rs.\n5,00,000/- on the ground that the appellant has not proved the\nidentity, genuineness and creditworthiness of the transaction. On\nthe facts and circumstances of the case and the law applicable,\nthere is no unexplained cash credit at all. The addition\nmade/confirmed is contrary to both facts and law is to be deleted.5.     The learned CIT(A) has erred in confirming the addition\nmade by the assessing officer by treating the agricultural income\nas Income from other sources on the ground that the agricultural\nincome as declared is at higher side considering the extent of land\nholding in year under appeal and the appellant had not filed any\ndocumentary evidence in support of the claim made. On the facts\nand circumstances of the case and the law applicable, the\nappellant actually earned the agricultural income as declared and\nthe addition as made/confirmed is adhoc, without any basis and\npurely on conjectures and surmises is to be deleted.6.     The learned CIT(A) has erred in confirming the\ndisallowance made by the Assessing officer to the extent of 50\npercent of the expenditure debited to the profit and loss account on\nthe ground that the appellant did not justify the expenditure\nclaimed. The conclusion of authorities below being wholly\nerroneous, without any basis and purely adhoc is to be rejected\nand the disallowance as made/sustained is to be deleted.\n7.1    The learned CIT(A) has erred in confirming the action of\nthe assessing officer in assessing the capital gain earned on sale\nof property as Income under the head Business holding that the\nappellant being a real estate businessman has failed to\ndemonstrate that property sold was held as capital asset. On\nproper appreciation of facts, evidence available and the law\napplicable, the property sold was held as investment/ Capital\nAsset and the appellant had rightly declared the gain under the\nhead Long Term Capital Gain and same is to be accepted without\nany variation.7.2     The learned CIT(A) has erred in confirming the re-\ncomputation of profit as done by the Assessing officer amounting\nto Rs. 1,61,82,436/- on account of sale of land as against the Long\n                                                    ITA Nos.307 to 312/Bang/2020\n                                                     Shri K.G. Krishna, BangalorePage 13 of 89term Capital Gain offered by the appellant amounting to Rs.\n      13,68,000/- and assessing the same under the head Business byi)      disallowing the entire cost of improvement claimed\n             by the appellant totalling to Rs. 1,38,53,487/- being interest\n             on loan and Development expensesii)     disallowing the commission paid on sale of landiii)    Denying the benefit of indexation on cost of\n             acquisition. The action of the authorities below being\n             wholly erroneous both on facts and law is to be negated\n             and the Long term capital gain as offered by the appellant\n             is to be accepted.8.      The appellant denies the liability to pay interest u/s 234A\n      and 234B of the Act. The interest levied being wholly erroneous is\n      to be deleted.9.      In view of the above and on other grounds to be adduced at\n      the time of hearing it is requested that the impugned orders passed\n      by the CIT(A) and the Assessing Officer be quashed or atleast the\n      various additions made in the hands of the appellant be deleted\n      and the interest levied is also to be deleted."2.6   Main     grounds      for   assessment        year    2012-13       in   ITA\nNo.312/Bang/2020:-1.     "The learned Commissioner of Income-tax (Appeals) has\n      erred in partially confirming the order passed by Assessing\n      Officer. The order passed by learned assessing officer being bad\n      in law against the principles of natural justice and void-ab-initio was required to be quashed in toto instead of being\n      confirmed.2.      In any case, the learned Commissioner of Income-tax\n      (Appeals) has erred in rejecting the contention of the appellant\n      that the application of section 153A of the Act lacked jurisdiction.\n      The order passed by the Assessing officer is bad in law especially\n      in the absence of satisfaction to be recorded before the issue of\n      notice u/s 153A of the Act and such order is liable to be quashed.ITA Nos.307 to 312/Bang/2020\n                                              Shri K.G. Krishna, BangalorePage 14 of 893.     In any case and without prejudice, the learned\nCommissioner of Income-tax (Appeals)has erred in confirming\nvarious additions made by the Assessing officer.  On      proper\nappreciation of facts and the law applicable, the additions\nmade/confirmed are wholly erroneous and are liable to be deleted.4.     The learned CIT(A) has erred in confirming the action of\nthe assessing officer in adding a sum of Rs. 1,70,00,000/- as\nunexplained cash credit u/s 68 of the Act on the ground that the\nappellant has not established the Identity, credit worthiness of the\ncreditors as well as genuineness of the transaction. All the\nadvances were duly confirmed by the creditors and received\nthrough banking channels. The conclusion of authorities below\nbeing wholly erroneous both on facts and law is to be rejected and\nthe addition made is to be deleted.5.      The learned CIT(A) has erred in confirming the\ndisallowance made by the Assessing officer to the extent of 50\npercent of the expenditure debited to the profit and loss account\namounting to Rs.5,55,000/- on the ground that the appellant did\nnot justify the expenditure claimed. The conclusion of authorities\nbelow being wholly erroneous, without any basis and purely\nadhoc in nature is to be rejected and the disallowance as\nmade/sustained is to be deleted.6.     The learned CIT(A) has erred in confirming the action of\nthe assessing officer in adding a sum of Rs. 83,00,000/- as\nunexplained cash credit u/s 68 of the Act on the ground that the\nappellant has not proved the cash deposits made in the bank\naccounts. On proper appreciation of facts and law applicable, the\ncash deposits are duly explainable. The addition as made/\nconfirmed is wholly erroneous is to be deleted.7.      Me appellant denies the liability to pay interest u/s 234A\nand 234B of the Act. The interest Ivied being wholly erroneous is\nto be deleted.8.      In view of the above and on other grounds to be adduced at\nthe time of hearing it is requested that the impugned orders passed\nby the CIT(A) and the Assessing Officer be quashed or atleast the\n                                                ITA Nos.307 to 312/Bang/2020\n                                                 Shri K.G. Krishna, BangalorePage 15 of 89various additions made in the hands of the appellant be deleted\n      and the interest levied is also to be deleted."3.    The one and only common addition ground raised by the\nassessee in all these appeals for all the assessment years is as\nfollows:Additional ground:-"In any case the authorities below have erred in\n      making/confirming the additions to income of the appellant. The\n      additions as made/confirmed are not sustainable in law\n      especially in the absence of incriminating material. Such\n      additions made/confirmed are bad in law and additions made\n      are to be deleted in entirety."3.1   We have heard the both the parties on admission of\nadditional grounds.     In our opinion, all the facts are already on\nrecord and there is no necessity of investigation of any fresh facts\nfor the purpose of adjudication of above ground. Accordingly, by\nplacing reliance on the judgement of Hon'ble Supreme Court in\nthe case ofNTPC Vs. CIT229 ITR 383 (SC) we inclined to admit\nthe additional ground for the purpose of adjudication as there was\nno investigation of any fresh facts otherwise on record and the\naction of the assessee is bonafide.4.    The additional evidences submitted by the assessee in all the\nassessment years indexed in respective paper books for AYs 2007-\n08 to 2012-13 in ITA Nos.307 TO 312/Bang/2020 are as follows:-4.1   Additional evidences For assessment year 2007-08 in ITA\nNo.307/Bang/2020:-ITA Nos.307 to 312/Bang/2020\n                                                           Shri K.G. Krishna, BangalorePage 16 of 89Si.                                    Particulars                                     Page\n No.                                                                                    No.1.      Copy of Cash book for the period 01/04/2006 to 31/03/2007.                    145 - 1592.      Copy of Ledger extracts of relevant expenditure debited to profit             160 - 167\n         and Loss Account for the year3.      Copy of ledger extract of land at keragalli village                           1684.      Copy of sale deed for purchase of property                                    169 - 1795.      Copy of Release deed/Relinquishment deed.                                     180 - 1906.      Ledger extract of Advance for site to Sundar Raj for the FY 2006-             19107.                                                            -„7.      C o p y o f a p p l i c a t i o n f i l e d f o r l o d g i n g c r i m i n a l 192 - 198\n         complaint against sundar Raj and others.8.      Copy of First Information Report.                                             199 - 203\n\n\n4.2      Additional evidences for assessment year 2008-09 in ITA\nNo.308/Bang/2020:-SI.                                   Particulars                                         Page No.\n  No.1.         Copy of Cash book for the period 01/04/2007 to 31/03/2008.102-1112.       Copy of Ledger extracts of relevant expenditure debited to profit                   112-124\n         and Loss Account for the year3.       Ledger extract of Vikram Jain along with relevant bank account                      125-127\n         extract and confirmation letter4.       Ledger extract of Manchayya V along with relevant bank account                      128-129\n         extract\n                                                        ITA Nos.307 to 312/Bang/2020\n                                                         Shri K.G. Krishna, BangalorePage 17 of 895.         Ledger extract of Kumar B M along with relevant bank account             130-137\n           extract and confirmation letter6.         Ledger extract of A N Nanjaiah along with relevant bank account          138-142\n           extract and confirmation letter\n                                                                                     143-1477.         Ledger extract of N C Mahesh along with confirmation of\n           transactions.1488.         Copy of letter dated 12.01.2015 filed with Assessing officer by N\n           C Mahesh9.         Memorandum of understanding dated 18.04.2007                             149-152\n\n\n\n4.3        Additional evidences for assessment year 2009-10 in ITA\nNo.309/Bang/2020:-SI.                                Particulars                                 Page No.\n     No.1.    Copy of Cash book for the period 01/04/2008 to 31/03/2009.415-4262.    Copy of Ledger extracts of relevant expenditure debited to profit\n           and Loss Account for the year                                            427-4433.    Copy of Journal Voucher                                                      4444.    Ledger extract of followingsa) Sale of Sites at Gollahalli Village445b) Sites at Gollahalli village                                             446c) Improvement expenditure of gollhalli sites                            447-458d) cash voucher of cost of improvement                                   459-5675.    Ledger extract commission on Gollahalli Sites                                5686.    Copy of Journal voucher and ledger              extract of Land     at\n           Bhugathahalli Village                                                    569-571\n                                                    ITA Nos.307 to 312/Bang/2020\n                                                     Shri K.G. Krishna, BangalorePage 18 of 897.     Ledger extract of S C Rajesh along with copy of compliant lodge\n                                                                                 572-577\n        before the Police Commissioner Bangalore and English translation\n        thereof\n\n\n4.4     Additional evidences for assessment year 2010-11 in ITA\nNo.310/Bang/2020:-Si.                                Particulars                               Page No.\n  No.1.      Copy of Cash book for the period 01/04/2009 to 31/03/2010.411-4292.     Copy of Ledger extracts of relevant expenditure debited to profit\n        and Loss Account for the year                                          430-4483.      Ledger extract of Narsimhamurthy K N along with relevant Bank         449-459\n         extract for acceptance loan and repayment thereof.4.      Ledger extract of Shantha Sreedharmurthy along with relevant           460-465\n         Bank extract for acceptance loan and repayment thereof.5.      Copy of bank statement evidencing          receipt of loan     from        466\n         Raghavendra Gupta\n\n                                                                                 467-4686.      Ledger extract of Sites at Oorkere7.      Ledger extract of commission paid on Oorkere sites                         469\n\n\n4.5     Additional evidences for assessment year 2011-12 in ITA\nNo.311/Bang/2020:-ITA Nos.307 to 312/Bang/2020\n                                                     Shri K.G. Krishna, BangalorePage 19 of 89Si.                               Particulars                               Page No.\n  No.1.       Copy of Cash book for the period 01/04/2010 to 31/03/2011.            851-8652.       Copy of Ledger extracts of relevant expenditure debited to profit      866-874\n         and Loss Account for the year3.       Copy of ledger extract A N Nanjaiaya along with relevant bank\n         extract for receipt and repayment of loan along with copy of bank      875-878\n         statement4.       Ledger extract of Oorkere sites                                        879-8815.       Ledger extract of commission paid                                      882-8836.       Ledger extract of Development expenses                                 884-891\n\n\n4.6      Additional evidences for assessment year 2012-13 in ITA\nNo.312/Bang/2020:-Si.                               Particulars                              Page No.\n  No.\n1.       Copy of Cash book for the period 01/04/2011 to 31/03/2012.          172 -- 1802.       Copy of Ledger extracts of relevant expenditure debited to profit 181 -- 196\n         and Loss Account for the year3.       Ledger extract of advance received from Shantha Sreedhar, 197 -- 200\n         Rajeshwari Minerals C Amaresh and Bhavana S and relevant\n         bank account extract.4.       Copy of agreement to sell dated 26.03.2012                          201 -- 2075.       The assessee filed petitions for all these assessment years for\nadmission of additional evidences, which were not filed before the\nlower authorities.       It was submitted that out of these additional\nevidences certain evidences are not available at the time of\n                                               ITA Nos.307 to 312/Bang/2020\n                                                Shri K.G. Krishna, BangalorePage 20 of 89assessment or at the time of first appellate authority.           In these\ncircumstances, assessee has no remedy except to file these\nadditional evidences before this Tribunal.          In our opinion, the\naction of the assessee is bonafide as the assessee was prevented by\nsufficient cause in not filing these documents during the course of\nassessment as well as first appellate stage.           Being so, in our\nconsidered view, in the given facts and circumstances of the case, it\nis appropriate to admit these additional evidences for adjudication\nin the interest of justice.   Accordingly, these additional evidences\nare admitted for the purpose of adjudication.6.    First common ground in this appeal is with regard to\nassuming jurisdictionu/s 153Aof the Income-tax Act,1961 ['the\nAct' for short] and thereafter framing the assessment under this\nprovision of the Act.6.1   This ground is agitated by assessee in main ground No.2 read\nwith additional ground herein above.6.2   Facts of the issue are that assessee is an individual engaged\nin business of real estate. There was a search actionu/s 132of the\nAct on 5.11.2012 in the group case of Shri K.G. Krishna. During\nthe course of search, the residence of Shri K.G. Krishna, located at\n"Jai Krishna Nilaya, No.1680/55, 5th Cross, 10th Main, 2nd Block,\nMysore Bank colony, Banshankari, Bengaluru 560 050" was\nsearched. According to the AO, consequent to the search operation\ncarried out by the Income tax authorities, various incriminating\ndocuments were also found and seized in the said residence of the\nassessee. The assessment for assessment years 2007-08 to 2012-ITA Nos.307 to 312/Bang/2020\n                                                     Shri K.G. Krishna, BangalorePage 21 of 8913 (6 years) has been framed. Now the contention of the Ld. A.R. is\nthat there is only seized material relating to the assessment years\n2007-08 were found during the course of search action in the case\nof the assessee. There were no seized materials for the assessment\nyears 2009-10, 2010-11 & 2011-12.                In the case of assessment\nyears 2008-09, no incriminating materials found in the course of\nsearch of assessee's premises. However, on the basis of materials\nfound at the search, in the case of N.C. Mahesh were used to make\nan addition of Rs.3,55,00,250/- in the assessment year 2008-09.\nAccording to the Ld. A.R., this assessment for assessment year\n2008-09 ought to have been completedu/s 153Cof the Act instead\nof 153A of the Act. With regard to the assessment year 2012-13, it\nwas submitted that originally assessee has not filed return of\nincome and there is a time limit to file a return of income for the\nassessment year 2012-13 on the date of search I.e. 5.11.2012. As\nsuch, the framing of assessment in all these assessment years\nexcept assessment year 2007-08 were invalid.                 Ld. A.R. relied on\nthe following judgements:-1) "DCIT Vs. Aggrawal Entertainment Pvt. Ltd.72 Taxmann.com\n      340, wherein it was held as follows:-2) "21. Turning to the fact of the case we find that\n            undisputedly no incriminating material was found during the\n            course of search and these averments in this regard were not\n            disputed by the Revenue. Isis also a fact that original\n            assessment was completed as return of income was filed on\n            19.01.2003and the return was processed undersection\n            143(1)of the Act. Thereafter, notice undersection 153Aofthe\n            Act was issued on 18.06.2014. Since the time for issuing of\n            notice undersection 143(2)of the Act against the original\n            return has been expired it is deemed that the assessment was\n            concluded and by issuing notice undersection 153A, the\n            Revenue intent to reopen the concluded assessment without\n                                              ITA Nos.307 to 312/Bang/2020\n                                               Shri K.G. Krishna, BangalorePage 22 of 89having any incriminating material found during the course of\n       search. In the absence of any incriminating material,\n       proceedings undersection 153Acannot be initiated and the\n       concluded assessment cannot he reopened. Therefore, we\n       have no hesitation in holding that proceeding initiated undersection 153Aare not valid and we accordingly find ourselves\n       in agreement with the order of the CIT(A) and rightly knock\n       down the assessment completed undersection 153Aof the\n       Act. We therefore confirm his order."2) PCIT Vs. Arvind Joshi & Co., Gujarat High Court in which it was held\n   as under:-"In the opinion of this court considering the fact that it is\n       settled legal position that in case of unabated assessment\n       undersection 153A(1)(b)of the Act, unless such\n       assessment is based upon incriminating documents\n       seized/impounded during the course of search, no\n       addition can be made, no infirmity can be found in the\n       impugned order passed by the Tribunal in upholding the\n       order passed by the Commissioner (Appeals). In the\n       absence of any legal infirmity in the impugned order, the\n       same does not give rise to any question of law, much less,\n       a substantial question of law, warranting interference."3) Om Prakash Gupta Vs. ACIT ITA Nos.277 to 281/Indore/2017 dated in\n   which it was held as under:-"The Hon'ble High Court of Gujarat in the case of PCIT\n       Vs. Desai Construction (supra) confirmed the view taken\n       by the Tribunal upholding the contention of the assessee\n       that as no incriminating material was found during the\n       course of search which could have enabled the\n       Assessing Officer to re-examine its claim for deduction\n       u/s 801B which was part of the assessment prior to the\n       search and such assessment unabated.Similarly Hon'ble\n       High Court of Bombay in the case ofContinental\n       Warehousing Corporation and All Cargo Global\n       Logistics Ltd(Supra) confirmed the view taken -by the\n                                                  ITA Nos.307 to 312/Bang/2020\n                                                   Shri K.G. Krishna, BangalorePage 23 of 89Special Bench of 1.T.A.T. Mumbai Bench decided in\n            favour of assessee dismissing the revenue's appeal\n            holding that there was no incriminating material found\n            during the course of search, the Tribunal was right in\n            holding the power conferredu/s 153Abeing not\n            expected to be exercised routinely, should be exercised\n            if the search revealed any incriminating material. If that\n            was not found then in relation to the second phase of\n            three years, there was no warrant for making an order\n            within the meaning of this provision".10.    Similar view was also taken by the Hon'ble High Court\n            of Delhi in the case of Kabul Chawla (2015) 61 taxmann 412.11.     We therefore in the given facts and circumstances\n            of the case and respectfully following the judgments\n            referred and relied by the Ld. Counsel for the assessee\n            are of the considered view that no addition/disallowance\n            was called for Assessment Year 2008-09 to 2010-11 as no\n            incriminating material was found during the course of\n            search at the premises of the assessee as the time limit of\n            issuance of noticeu/s 143(2)of the Act stood expired\n            much before the date of conducting searchu/s 132of the\n            Act. Accordingly all the three appeals of the assessee are\n            allowed"4) In the case ofDelhi International Airport Vs. Deputy\n         Commissioner of Income-taxdecided by Bangalore bench of ITAT\n         in ITA No.592 to 594/Bang/2017 in which it was held as under:-"Assessment framedu/s 153Aof the Act in the absence of\n         incriminating material is bad in law in the case of unabated\n         and completed assessments."6.3   Ld. D.R. submitted that in view of the judgement of Hon'ble\nKarnataka High Court in the case ofCanara Housing Development\nCompany Vs. DCIT(274 CTR 122)(Kar), wherein it was held that\n                                             ITA Nos.307 to 312/Bang/2020\n                                              Shri K.G. Krishna, BangalorePage 24 of 89once the assessment is validly reopened, AO has to take into\naccount all the 3 types of income to complete the assessment or\nreassessment, as the case may be. The 3 types of income are:1)    Income disclosed in the return of income\n\n      2)    Undisclosed income during the search\n      3)    Any other income which is not disclosed in the earlierreturn and not unearthed during the search.6.4   According to the Ld. D.R., there is an incriminating material\nfound during the searchu/s 153Aof the Act and all the 3 types of\nincome has to be assessed by the AO in view of the judgement of\nHon'ble Karnataka High Court cited (supra) and the condition\nprecedent for application ofsection 153Aof the Act is completely\nfulfilled. Accordingly, the assessment was framedu/s 153Aof the\nAct in all these 6 assessment years which has to be upheld.7.    Now we will give findings relating to this legal ground for\neach assessment year-wise.Assessment year 2007-08:-8.    We have heard the rival submissions and perused the\nmaterials available on record. We have carefully gone through the\nassessment orders.    First we will take up the assessment year\n2007-08. The A.O. made following additions:-ITA Nos.307 to 312/Bang/2020\n                                                     Shri K.G. Krishna, BangalorePage 25 of 89Sl.No.                                                                 Addition\n                                   Details                             made by\n                                                                        AO (in\n                                                                         lacs)\n   1       Unexplained opening capital                                     33.292.      Agricultural income declared by the assessee treated as         12.60\n           taxable income3.      Disallowance of expenditure claimed by assessee                 5.67\n           disallowed on adhoc basis4.      Capital gain treated as business Income                         1.605.      Unexplained investment                                           200Total                                                           2538.2. However, in this case there was a seized material to the\naddition made in respect of unexplained investment of Rs.2 crores\nwhich has been discussed by the AO in para 7 of the assessment\norder, wherein during the course of search operation one agreement\nof sale entered between assessee and Shri R. Sundar Raj for\npurchase of property situated at survey No.8, Khatriguppa village,\nmeasuring 10320 sq.ft. Was found and seized.                         As per this\nagreement, the total consideration was Rs.2 crores and it was paid\nin cash.     The agreement was confronted to the assessee by the\nsearch team and statement was recordedu/s 131(1A)of the Act on\n22.12.2012. The assessee has categorically stated in his statement\nthat this agreement was not acted upon. No cash has been paid.However, an agreement was entered with Shri R. Sundar Raj on\n18.5.2006 and another agreement was entered on 6.6.2006 with\nthe same person in respect of same scheduled property and\nassessee paid Rs.1.5 crores only by cheque drawn on Indian Bank\naccount and this amount was financed to the assessee by KCS\nInvestment Consultancy Pvt. Ltd.             According to the Ld. A.R., the\nassessment cannot be framed on the basis of agreement dated\n8.5.2006, which is only a dummy document and which is not acted\nupon. More so, on said date Shri R. Sundar Raj is not at all owner\nof the said property. Actually, he bought that property from Shri\n                                              ITA Nos.307 to 312/Bang/2020\n                                               Shri K.G. Krishna, BangalorePage 26 of 89Bhavani Housing Co-operative Society vide sale deed dated\n19.5.2006 only.     Therefore, by no stretch of imagination first\nagreement of sale could have been entered into on 18.5.2006 when\nShri R. Sundar Raj was not even owner of the site on this day. In\nany case, Mrs. Sundar Raj never was owner of the said site No.8.\nThis is the reason as to why the first purported agreement dated\n18.5.2006, the history of the acquisition of the property is not\nmentioned in the preamble to the agreement, whereas mentioning\nof such history is must in all said agreements of sale. Thus, it was\nsubmitted that the transaction with Shri R. Sundar Raj is under\nany litigation and same has been contested by the assessee in the\ncourt of law with regard to title of property and for defrauding the\nassessee and also paid an amount of Rs.1,50,02,990/- by way of\ncheque which is evident from the additional evidence filed by the\nassessee at page 191 of the paper book relating to the assessment\nyear 2007-08.Findings:-Assessment year 2007-08:-8.3. The scope of provisions ofsection 153Aof the Act could be\nsummarized as follows as per the order of the Mumbai Special\nBench in the case ofAll Cargo Global Logistics Ltd. Vs. Deputy\nCommissioner of Income-tax(23 taxmann.com 103):-Scenario                       Scope ofSection 153A1. No return of income is filed by    Since no return has been filed,\nthe assessee (whether or not          the entire income shall betime limit to file return of income   regarded as undisclosed income.has expired.Consequently, AO would have\n                                      the   authority/jurisdiction   to\n                                      assess the entire income, similar\n                                              ITA Nos.307 to 312/Bang/2020\n                                               Shri K.G. Krishna, BangalorePage 27 of 89to   jurisdiction in         regular\n                                     assessmentu/s 143(3).No requirement to restrict to\n                                     documents found during the\n                                     course of search.2. Return of Income just filed by    Since return filed is even\nthe assessee - return yet to be      pending to be processed, the\nprocessedu/s 143(1)- Time          return would be treated as\nlimit for issue of notice u/s        pending before the AO.\n143(2) not expired.Consequently, AO would have\n                                     authority/jurisdiction          to\n                                     assessee the entire income,\n                                     similar to jurisdiction in regular\n                                     assessmentu/s 143(3).\n3. Return of Income filed by the     Since intimation is not akin to\nassessee - return processed and      assessment and time limit for\nintimation issuedu/s 143(1)-       noticeu/s 143(2)hs not expired,Time limit for issue of notice u/s   even though return has been\n143(2) not expired.                  processed, it will be case where\n                                     return has not attained finality.Consequently, AO would have\n                                     authority/jurisdiction to assess\n                                     the entire income, similar to\n                                     jurisdiction      in       regular\n                                     assessmentu/s 143(3).\n4. Return of income filed by the     Return of income of the assessee\nassessee. Intimation passed or       shall be treated as having being\nnotu/s 143(1)and time limit for    accepted and attained finality.\nissue of noticeu/s 143(2)has       AO loses jurisdiction to verify the\nexpired.                             return of income\n\n                                     Since, no assessment would be\n                                     pending there would be no\n                                     abatement of any proceedings.\n\n                                     Accordingly,    the    scope   of\n                                     assessmentu/s 153Awould be\n                                     restricted   to     incriminating\n                                     material found during the course\n                                     of search.\n                                             ITA Nos.307 to 312/Bang/2020\n                                              Shri K.G. Krishna, BangalorePage 28 of 895. Noticeu/s 143(2)issued and Pending    regular  assessmentassessment pendingu/s 143(3)proceedings would abate and\n                                would     converge/merge    in\n                                proceedingsu/s 153A.Accordingly     the    scope    of\n                                  assessment undersection 153Awould cover the pending return\n                                  filed as well and would not be\n                                  restricted    to    incriminating\n                                  material found during the course\n                                  of search.\n6.  Assessment      u/s    143(3) Since      regular    assessment\ncompleted.                        proceedings        have      been\n                                  completed & are not pending,\n                                  there would be no abatement of\n                                  proceedings.\n\n                                 AO loses jurisdiction to review\n                                 the      completed      assessment.\n                                 Accordingly,       the    scope   of\n                                 assessmentu/s 153Awould be\n                                 restricted      to     incriminating\n                                 material found during the course\n                                 of search.\n7. Proceedingsu/s 147pending Pending\nwhere:                           assessment/reassessment\n(a)    Assessment     originally proceedingsu/s 147would\ncompletedu/s 143(3)abate            and          would\nOR                               converge/merge in proceedings\n(b)   No   assessment    earlieru/s 153A.\ncompleted u/s 143(3)\n                                 Accordingly, the powers of the\n                                 AO, in both the cases, shall\n                                 extent to:\n                                     (a) Assess income that would\n                                         validly be assessed in the\n                                         pending proceedings u/s\n                                         147, andIn the light of above, we will examine the facts of present case. In\nthe case in hand, there was seized material found during the course\n                                                 ITA Nos.307 to 312/Bang/2020\n                                                  Shri K.G. Krishna, BangalorePage 29 of 89of search action which were marked as A/KGK/1 to 5 and A/KGK-\n1/1. Out of this, one sale agreement entered by the assessee with\nShri R. Sundar Raj was found. On this basis, an addition of Rs.2\ncrores has been made. In case of assessmentu/s 153Aof the Act,\nthe completed assessment can be tinkered if there is incriminating\nmaterial found during the search.              Therefore, in the present\nassessment year there are incriminating material in the form of\nabove agreement to reopen the concluded assessmentu/s 153Aof\nthe Act.      Therefore, AO is justified in invoking the provisions ofsection 153Aof the Act to open the completed assessment and the\nsufficiency of seized material to reopen the assessment cannot be\nchallenged by assessee at this stage and he may question the\nadditions made on the basis of seized material separately.\nAccordingly, framing assessmentu/s 153Aof the Act is upheld in\nthe assessment year 2007-08.        This legal ground is dismissed in\nthis AY 2007-08.Assessment year 2008-09:-9.        In assessment year 2008-09, the AO made following additions\nwhile completing the assessmentu/s 143(3)r.w.s. 153A of the Act:-Sl.No.                         Details                            Addition\n                                                                  made by\n                                                                   AO (in\n                                                                    lacs)1      Agricultural income                                           122.     Disallowance of expenditure debited in the                 2.74\n            P&L account on adhoc basis\n     3.     Treatment of capital gain as business income               1.654.     Unexplained cash creditu/s 68of the Act                   2365.     Disallowance of unexplained expenditure                     380\n            Total                                                    632.73\n                                               ITA Nos.307 to 312/Bang/2020\n                                                Shri K.G. Krishna, BangalorePage 30 of 899.1. Ld. A.R. submitted that the above addition of Rs.380 lakhs is\nbased on the seized material found during the course of search\naction in the case of N.C. Mahesh and no material found during the\nsearch action in the case of assessee.        Being so, the assessment\ncannot be framedu/s 153Aof the Act.Findings:-9.2. In this assessment year there is a seized material found and\nseized during the course of search actionu/s 132of the Act in the\ncase of N.C. Mahesh which is marked as A/NCM/2, which is a loose\nslip, which shows various payments made by assessee to N.C.\nMahesh. Thus, AO relied on the seized material procured during\nthe course of search in the case of N.C. Mahesh for making addition\nof Rs.3,80,00,250/-. In this assessment year AO inter-alia framed\nthe assessment as follows:-1.    Total income declared                             10,37,580/-2.    Agricultural income declared by assessee          12,00,000/-Rs.14,06,026/- treated as non-agricultural\n      income out of the above3.    Additionu/s 68of the Act                      2,36,34,000/-4.    Disallowance of expenditure debited to the P&L     2,74,094/-account, total expenditure debited (at 50% of\n      the above)5.    Capital gain treated as business income            1,65,336/-6.    Additions as per seized material procured 3,80,00,250/-during the course of search and seizure of Shri\n      N.C. Mahesh (A/NCM/2 - Loose slips)\n      Total                                           6,43,11,260/-9.3    The contention of the Ld. A.R. is that all the above additions\nexcept addition of Rs.3,80,00,250/- is based on no seized material.\nThe addition of Rs.3,80,00,250/- is only based on the seized\n                                                      ITA Nos.307 to 312/Bang/2020\n                                                       Shri K.G. Krishna, BangalorePage 31 of 89material which was procured not in the course of search operation\nof in assessee's case.9.4    On the other hand, it was the seized material in the form of\nloose slips procured from the search in the case of assessee's close\nrelative N.C. Mahesh. Further contention of A.R. is that in the case\nof assessee, there was searchu/s 132of the Act on 5.11.12\nrelevant to this assessment years 2008-09 no seized material\nunearthed from the possession of the assessee during the course of\nsearch action.      As such the assessment in this case cannot be\nframedu/s 153Aof the Act and assessment not to be framedu/s\n153Cof the Act as the seized material procured is from the search\nin the case of other person i.e. N.C. Mahesh. According to Ld. A.R.,\nsince in the present case the assessment was framedu/s 153Aof\nthe Act, which is bad in law, same to be quashed. In this case after\nsearch, noticeu/s 153Aof the Act, was issued and the assessment\nwas framed there under by the AO during the same period. There\nwas search in the case of N.C. Mahesh andin that casea loose slip\nA/NCM/2 was found and seized.                 On that basis, the addition of\nRs.3,80,00,250/- was made. As per second proviso tosection 153Cof the Act, the assessment proceedings pendingu/s 153Aof the Act\nin the case of assessee before AO would abate on the date of receipt\nof the seized material from the AO of Shri N.C. Mahesh and fresh\nproceedingsu/s 153Cof the Act ought to have been initiated.\nHowever,     it    is     seen       that,   upon     receipt    of    the    said\ninformation/materials, the AO did not assume jurisdictionu/s\n153Cof   the        Act,   but     rather    chose     to   use    the    said\nmaterials/information for making addition in the impugned orders\nof assessment concludedu/s 153Aof the Act.                     This has been\nclearly mentioned by the AO in the assessment order in para 5 in\n                                                   ITA Nos.307 to 312/Bang/2020\n                                                    Shri K.G. Krishna, BangalorePage 32 of 89pages 6 & 7 of the assessment order. In our opinion, the argument\nof assesseé's counsel has no legs to stand on the reason thatsection 153Cof the Act starts with non-absentee clause as follows:"153C(1) Notwithstanding anything contained in section 139, section\n      147, section 148, section 149, section 151 and section 153, where\n      assessing officer is satisfied that any money, bullion, jewellery or\n      other valuable article or thing or books of account or documents\n      seized or requisitioned belongs or belong to a person other than the\n      person referred to in section 153A, then the books of account or\n      documents or assets seized or requisitioned shall be handed over to\n      the Assessing Officer having jurisdiction over such other person and\n      that Assessing Officer shall proceed against each such other person\n      and issue such other person notice and assess or reassess income of\n      such other person in accordance with the provisions of section 153A".9.5    Being so, the assessment in this case was to be completedu/s 153Aof the Act and the AO was under a statutory obligation to\nconsider entire material irrespective of the place from where it was\nfound whether assessee's own place or some other place.                      There\ncannot be two assessments in case of searched party, oneu/s 153Aof the Act and anotheru/s 153Cof the Act.                At this point, it is\nappropriate draw support from judgement of jurisdictional High\nCourt in the case ofCanara Housing Development Company Vs.\nDCIT(274 CTR 122), wherein held as follows:-"10.Section 153Aof the Act starts with a non obstante clause. The\n       fetters imposed upon the Assessing Officer by the strict procedure\n       to assume jurisdiction to reopen the assessment under Sections 147\n       and 148, have been removed by the non obstante clause with which\n       sub-section (1) of Section 153A opens. The time-limit within which\n       the notice under Section 148 can be issued, as provided in Section\n       149 has also been made inapplicable by the non obstante clause.\n       Section 151 which requires sanction to be obtained by the\n       Assessing Officer by issue of notice to reopen the assessment under\n       Section 148 has also been excluded in a case covered by Section\n       153A. The time-limit prescribed for completion of an assessment or\n       reassessment by Section 153 has also been done away with in a\n                                              ITA Nos.307 to 312/Bang/2020\n                                               Shri K.G. Krishna, BangalorePage 33 of 89case covered by Section 153A. With all the stops having been pulled\nout, the Assessing Officer under Section 153A has been entrusted\nwith the duty of bringing to tax the total income of an assessee\nwhose case is covered by Section 153A, by even making\nreassessments without any fetters, if need be. Therefore, it is clear\neven if an assessment order is passed under Section 143(1) or\n143(3) of the Act, the Assessing Officer is empowered to reopen\nthose proceedings and reassess the total income taking note of the\nundisclosed income, if any, unearthed during the search. After such\nreopening of the assessment, the Assessing Officer is empowered to\nassess or reassess the total income of the aforesaid-years. The\ncondition precedent for application of Section 153A is there should\nbe a search under Section 132. Initiation of proceedings under\nSection 153A is not dependent on any undisclosed income being\nunearthed during such search. The proviso to the aforesaid section\nmakes it clear the Assessing Officer shall assess or reassess Lhe\ntotal income in respect of each assessment year falling within such\nsix assessment years. If any assessment proceedings are pending\nwithin the period of six assessment years referred to in the\naforesaid sub-section on the date of initiation of the search under\nSection 132, the said proceeding shall abate. If such proceedings\nare already concluded by the Assessing Officer by initiation of\nproceedings under Section 153A, the legal effect is the assessment\ngets reopened. The block assessment roped in only the undisclosed\nincome and the regular assessment proceedings were preserved;\nresulting in multiple assessments. Under Section 153A, however,\nthe Assessing Officer has been given the power to assess or\nreassess the total income of the six assessment years in question in\nseparate assessment orders. The Assessing Officer is empowered to\nreopen those proceedings and reassess the total, income, taking\nnote of the undisclosed income, if any, unearthed during the search.\nHe has been entrusted with the duty of bringing to tax the total\nincome of an assessee whose case is covered by Section 153A, by\neven making reassessments without any fetters. This means that\nthere can be only one assessment order in respect of each of the six\nassessment years, in which both the disclosed and the undisclosed\nincome would be brought to tax. When once the proceedings are\ninitiated underSection 153Aof the Act, the legal effect is even in\ncase where the assessment order is passed it stands reopened. In\nthe eye of law there is no order of assessment. Re-j opened means\nto deal with or begin with again. It means the Assessing Officer\nshall assess or reassess the total income of six assessment years.\nOnce the assessment is reopened, the assessing authority can take\nnote of the income disclosed in the earlier return, any undisclosed\nincome found during search or and also any other income which\nis not disclosed in the earlier return or which is not unearthed\n                                                    ITA Nos.307 to 312/Bang/2020\n                                                     Shri K.G. Krishna, BangalorePage 34 of 89during the search, in order to find out what is the "total income"of each year and then pass the assessment order. Therefore, the\n      Commissioner by virtue of the power conferred underSection 263of the Act gets no jurisdiction to initiate proceedings under the\n      said provision because the condition precedent for initiating\n      proceedings under Section 263 is any order passed under the Act\n      by the Assessing officer is erroneous insofar as it is prejudicial to\n      the interest of the revenue. Once the order passed by the Assessing\n      officer gets reopened, there is no order which can be said to be\n      erroneous insofar as it is prejudicial to the-interest of the revenue\n      which confers jurisdiction on the Commissioner to exercise the\n      power of the jurisdiction."9.6   Further, jurisdictional High Court in the case of Delhi\nInternational Airport Pvt. Ltd. In ITA No.322/2018 vide judgement\ndated 29.9.2021, wherein it was held as under:-"30. Thus, it is clear that the Assessing Office: while passing the\n  order under Section 153A read with Section 143[3] of the Act, ordinarily\n  cannot disturb the assessment/reassessment order which has attained\n  finality, unless the materials gathered in the course of the proceedings\n  establishes that. the finalized assessments are contrary to the material\n  unearthed during the, course of 153A proceedings, as held by the Co-\n  ordinate Bench of this Court in the case ofIBC Knowledge Park (P) Ltd.,\n  supra. A concluded assessment could not be disturbed without there being\n  any basis for doing so which is impermissible in law. Even in case of a\n  searched person, the same reason would hold good.As observed inCanara Housing Development Companysupra, the Assessing Officer is\n  empowered to assess or reassess the total income of six assessment years\n  i.e., the income which was returned in the earlier return, the income which\n  was unearthed during search and also any income which was not\n  disclosed in the earlier return or which was not unearthed during the\n  search by separate assessment orders but in our considered view the\n  completed assessments should be subject to the safeguards provided in\n  IBC Knowledge Park (P) Lid. supra."54. On a consideration of the relevant sections as well\n      as judicial precedentreferred to above, what ,?merges is that,Section 158BDof the Act deals with undisclosed income of a\n      third party. However, insofar as the incriminating material of the\n      searched person or other person detected during the course of\n      search is concerned, the same can be considered during the\n      course of assessment. Further, such incriminating material must\n      relate to undisclosed income which would empower the Assessing\n                                                  ITA Nos.307 to 312/Bang/2020\n                                                   Shri K.G. Krishna, BangalorePage 35 of 89Officer to upset or disturb a concluded assessment of the other\n     person. Otherwise, a concluded assessment would be disturbed\n     without there being any basis for doing so which is impermissible in\n     law. Even in case of a searched person, the same reason would hold\n     good as in case of any other person as observed by us, detection\n     or the existence of incriminating material is a must for disturbing\n     the assessment already made and concluded. But, at the same\n     time, such can be at three stages: one, at the stage when. the re-\n     assessment is initiated, the second, at the stage during the course\n     of reassessment and third, at u stage where the reassessment is\n     altered by a different assessment in respect of searched person or\n     in respect of third party.In this regard, reference may be made\n     to the decision of Apex Court in case of M/ s. Calcutta Knitwear\n     (supra) and based on the said decision, the CJ3DT has also\n     issued circular dated 31.12.2015 vide No.24/ 2015.The relevant\n     extract of the circular for ready reference can be extracted as\n     under:".......................""As regards the pending assessments are concerned only one assessment\nshall be made separately for each assessment year on the basis of the income\nunearthed during search and any other material existing or brought on the\nrecord of the Assessing Officer. Even in the absence of any incriminating\nmaterial abated „Assessment or reassessment could be done. The returns filed\nunderSection 139of the Act gets replaced by the returns filed under Section.\n15:3A[I] of the Act. Pending proceedings in appeal, revision/application shall\nnot abate subsequent to initiation of Section 153A proceedings. Further,\nrecording of satisfaction under Section 153A may not be necessary unlikeSection 153Cof the Act which mandates recording of satisfaction.For the reasons aforesaid, substantial question of law in ITA\nNcs.322/2018 to 324/2018, 354/2018 and 355/2018, substantial question of\nlaw No.1 in ITA Nos.380/2018, 382/2018 to 385/2018 and 197/2021 to\n199/2021 and substantial question of law Nos.1 and 2 in ITA No.381/2018 are\nanswered in favour of the assessee and against the Revenue.Substantial question of Law No.2 in ITA Nos.380/2018, 383/2018 to\n385/2018 is squarely covered by the ruling of the coordinate Bench of this\n'Court in ITA No.352/2018 and connecter? matters (DI) 25.05.2021) wherein\nthe said substantial question of law has been answered ir favour of the\nassessee and against the Revenue.ITA Nos.307 to 312/Bang/2020\n                                                   Shri K.G. Krishna, BangalorePage 36 of 89Substantial question of law No.2 in ITA No.382/2018 and substantial\n question of law No.3 in ITA Nos.380/2018, 383/2018 to 385/2018 does not\n arise for our consideration since the same are not pressed by the Revenue.Appeals stand disposed of accordingly."9.7   Being so, it cannot be said that Hon'ble High Court has\ndistinguished the judgement in the case ofCanara Housing\nDevelopment Company(supra) in the above judgement and theratiolaid down inthe case of Canara Housing Development\nCompany still holds good.        The assessment can be madeu/s 153Aof the Act in respect of each of the six assessment years, in which\nboth the disclosed and undisclosed income would be brought to tax.\nU/s 153A of the Act, assessing officer is empowered to reopen those\nproceedings and reassess the total income taking note of the\nundisclosed income, if any, unearthed during search. After such\nreopening of the assessment, the AO is empowered to assess or\nreassess the total income of the six years. The condition precedent\nfor application ofsection 153Aof the Act is there should be a\nsearchu/s 132of the Act. Initiation of proceedingsu/s 153Aof the\nAct is not dependent on any undisclosed income being unearthed\nduring search. The proviso to the aforesaid section makes it clear\nthat AO shall asses or reassess the total income in respect of each\nassessment year falling within such six assessment years. If any\nassessment proceedings are pending within the period of six\nassessment years, referred to in sub-section ofsection 153Aof the\nAct on the date of initiation of the searchu/s 132of the Act, the\nsaid proceedings shall abate.          If such proceedings are already\nconcluded by the AO, by initiation of proceedingsu/s 153Aof the\nAct, the legal effect is that assessment gets reopened. The block\n                                                  ITA Nos.307 to 312/Bang/2020\n                                                   Shri K.G. Krishna, BangalorePage 37 of 89assessment roped in, only the undisclosed income, and the regular\nassessment proceedings were preserved; resulting in multiple\nassessments. U/s 153A of the Act, however, the AO has been given\nthe power to assess or reassess the total income of the six\nassessment years in question in separate assessment orders. When,\nonce the proceedings are initiated under thesection 153Aof the\nAct, the legal effect is, even in case, where the assessment order is\npassed, it stands reopened. In the eye of law, there is no order of\nassessment.      Reopen means to deal with or begin with again. It\nmeans the assessing officer shall assess or reassess the total\nincome of six assessment years. Once the assessment is reopened,\nthe assessing authority can take note of the income disclosed in the\nearlier return, any undisclosed income found during the search\nor/and also any other income which is not disclosed in the earlier\nreturn or which is not unearthed during the search, in order to find\nout what is the "total income" of each year, and then pass the fresh\nassessment order. Therefore, it cannot be said that, there could be\ntwo assessments in case of the same assessee, oneu/s 153Aof the\nAct and anotheru/s 153Cof the Act.9.8   In our opinion, there can be only one assessment order in\nrespect of each of six assessment years in which both disclosed and\nthe undisclosed income would be brought to tax as held by\njurisdictional    high   court    in   the   case    of   Canara     Housing\nDevelopment Company cited (supra).9.9   This ground of appeal of the assessee is dismissed in AY\n2008-09.Assessment year 2009-10:-10.   In the assessment year 2009-10 the additions made by the\nAO are as under:-ITA Nos.307 to 312/Bang/2020\n                                               Shri K.G. Krishna, BangalorePage 38 of 89Addition\nSl.No.                       Details                           made by\n                                                                AO (in\n                                                                 lacs)\n1        Disallowance of expenditure charged to P&L                  6.97\n         Account on adhoc basis2.       Treatment of capital gain as business income              66.473.       Unexplained investment                                       204.       Unexplained cash credit                                   78.975.       Total                                                    172.42\n\n10.1. The Ld. A.R. submitted that in this assessment year there is\nno seized material whatsoever.      The AO is only considering the\nincome disclosed in the return of income filed by assessee before\nsearch as additional income which cannot be possible without any\nseized material.   She submitted that had it been there in seized\nmaterial to show the above income as an additional income, the AO\nshould have made an addition. According to her in the assessment\nyear in 2009-10, there is no seized material of whatsoever to frame\nthe assessment. Further, she submitted that the assessee has filed\nthe original return of income on 9.5.2011.         Time limit to issue\nnoticeu/s 143(2)of the Act was 30.9.2012.          The case was not\nselected for scrutiny and there was no assessmentu/s 143(3)of the\nAct.   The assessment was already concluded for this assessment\nyear and in view of the judgment of jurisdictional High Court in the\ncase of Delhi International Airport cited (supra), the AO cannot\nframe the assessment without an iota of seized material in the\npresent assessment year 2009-10.        Accordingly, she prayed that\nassessment order to be quashed on this reason alone.10.2. The Ld. D.R. relied on the order of the Ld. CIT(A).ITA Nos.307 to 312/Bang/2020\n                                                Shri K.G. Krishna, BangalorePage 39 of 89Findings:-10.3. In assessment year 2009-10, the additions made by AO not\nbased on any seized material found during the course of search\naction in the case of assessee.       The assessee in this case filed\noriginal return of income on 9.5.2011. Time limit to issue a noticeu/s 143(2)of the Act was on or before 30.9.2012. No noticeu/s\n143(2)of the Act was issued to the assessee on or before 30.9.2012.Being so, framing of assessmentu/s 143(3)of the Act has already\nbeen concluded by operation of law on the date of search action i.e.\non 5.11.2012. As held by Special bench in the case ofAll Cargo\nGlobal   Logistics   Ltd.   Vs.   DCIT(2012)    18   ITR    (Trib)   106\n(Mumbai)(SB) that in case of assessments that are abated, the AO\nretains the original jurisdiction as well as jurisdiction conferred on\nhimu/s 153Aof the Act for which assessment shall be made for\neach of 6 assessment years separately. In other cases, in addition to\nthe income that has already been assessed, the assessmentu/s\n153Aof the Act will be made on the basis of incriminating material,\nwhich in the context of relevant provisions means (i) books of\naccounts, other documents, found in the course of search but not\nproduced in the course of original assessment, and (ii) undisclosed\nincome or property discovered in the course of search.                  The\nargument of the Ld. Counsel is that in this assessment year, notice\nto issue u/s 143(2) was already lapsed as on the date of search, no\nassessment could be made without basis of incriminating material\nfound during the course of search. We find force in the argument of\nLd. Counsel for the assessee in this assessment year 2009-10, the\naddition made by AO is not based on any seized material and the\nAO made additions in a routine manner which were disclosed to the\n                                                   ITA Nos.307 to 312/Bang/2020\n                                                    Shri K.G. Krishna, BangalorePage 40 of 89department by way of regular return of income filed by the assessee\nand no incriminating material was found during the course of\nsearch and to come to conclusion that the expenses or allowances\nclaimed by the assessee could be disregarded or income disclosed\nby the assessee could be considered as taxable.Further, Hon'ble\nKarnataka High Court in the case ofIBC Knowledge Park Pvt. Ltd.\nVs. CIT(382 ITR 346) had held that "unless material seized during\nthe course of search which suggest undisclosed income and are\nincriminating in nature, jurisdictionu/s 153Cof the Act cannot be\nassumed.Further, in the case ofPrincipal CIT Vs. Delhi\nInternational Ltd.in ITA No.322/2018 vide judgement dated\n29.9.2021, the jurisdictional High Court followed the earlier\njudgement in the case ofIBC Knowledge Park Pvt. Ltd.(supra).The\nrelevant findings of the said judgement in the case ofDelhi\nInternational Pvt. Ltd.(supra) reads as follows:-"30. Thus, it is clear that the Assessing Officer while\n         passing the order under Section 153A read withSection\n         143(3)of the Act, ordinarily cannot disturb the assessment /\n         reassessment order which has attained finality, unless the\n         materials gathered in the course of the proceedings\n         establishes that the finalized assessments are contrary to the\n         material unearthed during the course of 153A proceedings,\n         as held by the Coordinate Bench of this Court in the case ofIBC Knowledge Park (P) Ltd.supra. A concluded\n         assessment could not be disturbed without there being any\n         basis for doing so which is impermissible in law. Even in\n         case of a searched person, the same reason would hold\n         good......................."6.1 The judgment of the Hon'ble Delhi High Court in the case ofCIT\n      v. Kabul Chawlareported in (2016) 380 ITR 573 (Delhi) had\n      summarized the legal position as regards assessmentu/s 153Aof the\n      Act, as follows:-"37. On a conspectus of Section. 153A(1) of the Act, read\n         with the provisos thereto, and in the light of the law\n                                         ITA Nos.307 to 312/Bang/2020\n                                          Shri K.G. Krishna, BangalorePage 41 of 89explained in the aforementioned decisions, the legal position\nthat emerges is as under:i. Once a search takes place underSection 132of the Act,\nnotice under Section 153A(1) will have to be mandatorily\nissued to the person searched requiring him to file returns\nfor six A Ys immediately preceding the previous year\nrelevant to the A Y in which the search. takes place.\nii. Assessments and reassessments pending on the date of the\nsearch shall abate The total income for such AYs will have\nto be computed by the AOs as afresh exercise.\niii. The AO will exercise normal assessment powers in\nrespect of the six years previous to the relevant AY in which\nthe search takes place. The AO has the power to assess and\nreassess the 'total income of the aforementioned six years In\nseparate assessment orders for each of the six years. In\nother words there will be only one assessment order in\nrespect of each of the six AYs in which both the disclosed\nand the undisclosed income would be brought to tax".iv. Although. Section. 153 A does not say that additions\nshould be strictly made on the basis of evidence found in the\ncourse of the search, or other post-search material or\ninformation. available with the AO which can be related to\nthe evidence found, it does not mean that the assessment\n"can be arbitrary or made without any relevance or nexus\nwith the seized material. Obviously an assessment has to be\nmade under this Section only on the basis of seized\nmaterial."v. In absence of any incriminating material, the completed\nassessment can be reiterated and the abated assessment or\nreassessment can be made. The word 'assess' in Section\n153A is relatable to abated proceedings (i.e. those pending\non the date of search) and the word 'reassess' to completed\nassessment proceedings.vi. Insofar as pending assessments are concerned the\njurisdiction to make the original assessment and the\nassessment under Section 153A merges into one. Only one\nassessment shall be made separately for each A Y on the\nbasis of the findings of the search and any ether material\nexisting or brought on the record of the AD.ITA Nos.307 to 312/Bang/2020\n                                                    Shri K.G. Krishna, BangalorePage 42 of 89vi. Completed assessments can be interfered with by the AO\n          while making the assessment under Section 153 A only on\n          the basis of some incriminating material unearthed during\n          the course of search or requisition of documents or\n          undisclosed income or property discovered in the course of\n          search which were not produced or not already disclosed or\n          made known in the course of original assessment."\n       6.2 The Hon'ble jurisdictional High Court in the case of Pr.CIT v.\n       M/s.DelhiInternational Airport Pvt. Ltd.(supra) had also referred\n       to the judgment of the Hon'ble Delhi High Court in the case ofCIT\n       v. Kabul Chawla(380 ITR 573) (Refer para 20 of the Karnataka\n       High Court judgment). From the above judicial pronouncements,\n       cited supra, it is clear that the assessments which are not pending\n       and hence does not abate, the addition can be made only on the\n       basis of incriminating material found during the course of search."10.4          Therefore,     as    mentioned      in    the   judgement      of\njurisdictional High Court in the case ofDelhi International Pvt. Ltd.(supra), it is clear that, in case of persons searched, the assessment\nfor those assessment years where the assessments are concluded\nas on the date of search, cannot be disturbed unless incriminating\nmaterial pertain to such assessment year is found and seized\nduring the course of search.           Hence, in our opinion, completed\nassessment cannot be tinkered without the support of any\nincriminating     material    found     during    the   course     of   search.\nTherefore, the assessment framed for assessment 2009-10 without\nany incriminating material, the AO was not justified in framing\nassessment u/s 153A r.w.s. 143(3) of the Act. It is not the case of\nAO that the seized material, if any suggested the inflation of\nexpenditure, inflation of agricultural income or change of head of\nincome. Accordingly, we quash the assessment for the assessment\nyear 2009-10.ITA Nos.307 to 312/Bang/2020\n                                                     Shri K.G. Krishna, BangalorePage 43 of 89Assessment year 2010-11:-11.       With regard to assessment year 2010-11, the Ld. A.R.\nsubmitted that in this assessment year the addition made is as\nfollows:-Sl.No.      Details                                                  Addition\n                                                                     made by AO\n                                                                     (in lacs)\n1           Disallowance of expenditure debited to P&L account on              8.5\n            adhoc basis\n2.          Treatment of capital gain as business income                    30.753.          Unexplained cash credit                                            364.          Unexplained cash credit                                         86.64\n5.          Total                                                          161.9111.1.             The Ld. A.R. submitted that the assessee has filed\noriginal return for the assessment year 2010-11 on 1.9.2011 and\nthe noticeu/s 143(2)of the Act could have been issued on or before\n30.9.2012. The case was not selected for scrutiny and no noticeu/s 143(2)of the Act was issued.              No assessment was framed.\nAccording to her this is a concluded assessment and submitted that\nconcluded assessment cannot be reopened without any seized\nmaterial since in the assessment year under consideration, there is\nno       seized    material   to   reopen    the    concluded       assessment.\nAccordingly, she prayed that assessment order in this case to be\nquashed.11.2.             The Ld. D.R. relied on the order of the lower\nauthorities.Findings:-ITA Nos.307 to 312/Bang/2020\n                                                Shri K.G. Krishna, BangalorePage 44 of 8911.3.       In assessment year 2010-11, the additions made by AO\nnot based on any seized material found during the course of search\naction in the case of assessee.       The assessee in this case filed\noriginal return of income on 1.9.2011. Time limit to issue a noticeu/s 143(2)of the Act was on or before 30.9.2012. No noticeu/s\n143(2)of the Act was issued to the assessee on or before 30.9.2012.Being so, framing of assessmentu/s 143(3)of the Act has already\nbeen concluded by operation of law on the date of search action i.e.\non 5.11.2012. As held by Special bench in the case ofAll Cargo\nGlobal   Logistics   Ltd.   Vs.   DCIT(2012)    18   ITR    (Trib)   106\n(Mumbai)(SB) that in case of assessments that are abated, the AO\nretains the original jurisdiction as well as jurisdiction conferred on\nhimu/s 153Aof the Act for which assessment shall be made for\neach of 6 assessment years separately. In other cases, in addition to\nthe income that has already been assessed, the assessmentu/s\n153Aof the Act will be made on the basis of incriminating material,\nwhich in the context of relevant provisions means (i) books of\naccounts, other documents, found in the course of search but not\nproduced in the course of original assessment, and (ii) undisclosed\nincome or property discovered in the course of search.                  The\nargument of the Ld. Counsel is that in this assessment year, notice\nto issue u/s 143(2) was already lapsed as on the date of search, no\nassessment could be made without basis of incriminating material\nfound during the course of search. We find force in the argument of\nLd. Counsel for the assessee in this assessment year 2010-11, the\naddition made by AO is not based on any seized material and the\nAO made additions in a routine manner which were disclosed to the\ndepartment by way of regular return of income filed by the assessee\nand no incriminating material was found during the course of\n                                               ITA Nos.307 to 312/Bang/2020\n                                                Shri K.G. Krishna, BangalorePage 45 of 89search and to come to conclusion that the expenses or allowances\nclaimed by the assessee could be disregarded or income disclosed\nby the assessee could be considered as taxable.          In our opinion,\ncompleted assessment cannot be tinkered without the support of\nany incriminating material found during the course of search.\nTherefore, the assessment framed for assessment 2010-11 without\nany incriminating material, the AO was not justified in framing\nassessment u/s 153A r.w.s. 143(3) of the Act. It is not the case of\nAO that the seized material, if any suggested the inflation of\nexpenditure, inflation of agricultural income or change of head of\nincome. Accordingly, as discussed in assessment year 2009-10 on\nthis issue, we quash the assessment for the assessment year 2010-\n11 on similar lines.Assessment year 2011-12:-12.      With regard to assessment year 2011-12, addition made by\nthe AO is as under:Sl.No.     Details                                             Addition\n                                                               made by\n                                                               AO (in\n                                                               lacs)\n1          Agricultural income declared by the assessee              41.23\n           treated as taxable income\n2.         Adhoc disallowance of expenditure debited to               5.45\n           the P&L account\n3.         Capital gain treated as business income                 161.824.         Unexplained cash credit                                      55.         Total                                                    213.512.1.         The Ld. A.R. submitted that in this assessment year\nassessee filed original return on 15.12.2011. Time limit of issue of\nnoticeu/s 143(2)of the Act was on or before 30.9.2012. The case\nwas not selected for scrutiny. No assessment order was framed u/s\n                                               ITA Nos.307 to 312/Bang/2020\n                                                Shri K.G. Krishna, BangalorePage 46 of 89143(3) of the Act. The assessments were already concluded by the\noperation of law being these are concluded assessments, which\ncannot be reopened without any iota of seized material.                She\nsubmitted that in this assessment year 2011-12, there was no\nseized material during the course of search action. In the case of\nassessee no assessment could be framedu/s 153Aof the Act in the\nabsence of seized material in the case of concluded assessment.12.2.          The Ld. D.R. relied on the order of the lower\nauthorities.Findings:-12.3.          In assessment year 2011-12, the additions made by AO\nnot based on any seized material found during the course of search\naction in the case of assessee.       The assessee in this case filed\noriginal return of income on 15.12.2011.          Time limit to issue a\nnoticeu/s 143(2)of the Act was on or before 30.9.2012. No noticeu/s 143(2)of the Act was issued to the assessee on or before\n30.9.2012. Being so, framing of assessmentu/s 143(3)of the Act\nhas already been concluded by operation of law on the date of\nsearch action i.e. on 5.11.2012. As held by Special bench in the\ncase ofAll Cargo Global Logistics Ltd. Vs. DCIT(2012) 18 ITR (Trib)\n106 (Mumbai)(SB) that in case of assessments that are abated, the\nAO retains the original jurisdiction as well as jurisdiction conferred\non himu/s 153Aof the Act for which assessment shall be made for\neach of 6 assessment years separately. In other cases, in addition to\nthe income that has already been assessed, the assessmentu/s\n153Aof the Act will be made on the basis of incriminating material,\nwhich in the context of relevant provisions means (i) books of\n                                             ITA Nos.307 to 312/Bang/2020\n                                              Shri K.G. Krishna, BangalorePage 47 of 89accounts, other documents, found in the course of search but not\nproduced in the course of original assessment, and (ii) undisclosed\nincome or property discovered in the course of search.               The\nargument of the Ld. Counsel is that in this assessment year, notice\nto issue u/s 143(2) was already lapsed as on the date of search, no\nassessment could be made without basis of incriminating material\nfound during the course of search. We find force in the argument of\nLd. Counsel for the assessee in this assessment year 2011-12, the\naddition made by AO is not based on any seized material and the\nAO made additions in a routine manner which were disclosed to the\ndepartment by way of regular return of income filed by the assessee\nand no incriminating material was found during the course of\nsearch and to come to conclusion that the expenses or allowances\nclaimed by the assessee could be disregarded or income disclosed\nby the assessee could be considered as taxable.        In our opinion,\ncompleted assessment cannot be tinkered without the support of\nany incriminating material found during the course of search.Therefore, the assessment framed for assessment 2011-12 without\nany incriminating material, the AO was not justified in framing\nassessment u/s 153A r.w.s. 143(3) of the Act. It is not the case of\nAO that the seized material, if any suggested the inflation of\nexpenditure, inflation of agricultural income or change of head of\nincome.   Accordingly, as discussed in assessment year 2009-10 on\nthis issue, we quash the assessment for the assessment year 2011-\n12 on similar lines.Assessment year 2012-13:-13.         In   the   assessment   year    2012-13,    the    Ld.   A.R.\nsubmitted that in this assessment year the assessee has not filed\n                                              ITA Nos.307 to 312/Bang/2020\n                                               Shri K.G. Krishna, BangalorePage 48 of 89the original return of income. The assessment is pending which is\nabated.    The AO has not recorded the proper satisfaction before\nissue of noticeu/s 153Aof the Act. Being so, the assessment order\nto be quashed.Findings:-13.1.        In this assessment year 2012-13, though there was no\nseized material, time limit to issue noticeu/s 143(2)of the Act is\nnot lapsed. The assessment is pending, which is abated and it is\nnot a concluded assessment.      Being so, the AO validly assumed\njurisdictionu/s 153Aof the Act consequent to the search actionu/s 132of the Act so as to frame the assessmentu/s 153Aof the\nAct. Accordingly, framing of assessmentu/s 153Aof the Act for the\nassessment year 2012-13 is valid.13.2. Conclusion    on   legal   issue:-    The   assessment     for   the\nassessment years 2009-10, 2010-11 and 2011-12 has been\nquashed on the basis that there was no seized material to frame\nassessment u/s 153A r.w.s. 143(3) of the Act as these assessments\nwere not pending as on the date of assessment and these are\nalready concluded assessments, which cannot be reopened without\nany seized materials.14.     Now we will decide each ground on merit in each appeal,\nwithout prejudice to our findings on legal issue in these\nassessment years i.e. 2009-10, 2010-11 & 2011-12.15.     First ground in ITA No.307/Bang/2020 in assessment\nyear 2007-08 is with regard to unexplained opening balance at\nRs.33.29 lakhs.ITA Nos.307 to 312/Bang/2020\n                                               Shri K.G. Krishna, BangalorePage 49 of 8915.1 The assessee shown opening balance in this assessment year\nat Rs.59,41,764/- in the balance sheet as on 1.4.2006. Income for\nthe assessment year 2004-05, 2005-06 & 2006-07 are Rs.16.3\nlakhs, Rs.44.39 lakhs and Rs.4.89 lakhs respectively, which total\nworks out at Rs.26.12 lakhs. The assessee was asked to explain\nthe opening balance vide letter dated 5.1.2015. According to the\nAO, assessee not explained the accumulation of opening capital.\nAccordingly, he considered an amount of Rs.26.12 lakhs which has\nbeen explained by the assessee and balance Rs.33.29 lakhs has not\nbeen explained by the assessee. Accordingly, he made addition of\nRs.33.29 lakhs. The Ld. CIT(A) confirmed the same. Against this\nassessee is in appeal before us.15.2. We have heard the rival submissions and perused the\nmaterials available on record. In this case, the addition was made\nonly on the reason that opening capital has not been explained by\nthe assessee in the relevant assessment year. In our opinion, AO\ncannot make any addition on the basis of carry forward opening\nbalance. In case had he any doubt, he could have questioned only\nin the earlier assessment year prior to assessment year 2007-08 not\nin the assessment year 2007-08. Accordingly, addition made by AO\nis deleted.16.   Next ground is regarding treatment of agricultural income\nas taxable income in assessment year 2007-08, 2008-09 &\n2011-12.ITA Nos.307 to 312/Bang/2020\n                                              Shri K.G. Krishna, BangalorePage 50 of 8916.1 In these assessment years, assessee declared agricultural\nincome and AO made addition towards agricultural income in these\nassessment years as follows:-Assessment       Agricultural     Agricultural\n                  year             income      income treated\n                                 declared by       as non-\n                                the assessee     agricultural\n                                   (in lacs)    income by the\n                                                 AO (in lacs)\n               2007-08                 14.60             12.602008-09                 14.06                122009-10                  6.21                  --\n               2010-11                  7.74                  --\n               2011-12                 47.23             41.23\n               2012-13                  6.38                  --16.2. We have heard the rival submissions and perused the\nmaterials available on record.       In assessment year 2011-12,\nassessment is already concluded and there is no seized material\nwhich shows the agricultural income as non-agricultural income.\nBeing so, addition cannot be made.16.3 In assessment years 2007-08 & 2008-09 though there was\nseized material relating to some other particular additions, there is\nno seized material with regard to showing the agricultural income\nas non-agricultural income in these two assessment years.16.4 The AO not brought any material to suggest that the income\ndeclared by the assessee as an agricultural income is earned from\nany other unknown sources.         The AO made an allegation that\nassessee has not filed details of agricultural land owned, crafts\ncultivated in various seasons, gross income earned                 out of\nagricultural operations, details of expenditure income to earn that\n                                             ITA Nos.307 to 312/Bang/2020\n                                              Shri K.G. Krishna, BangalorePage 51 of 89income and that the evidences, details of crop sold and not income\nearned and copies of RTC of the properties.In our opinion, in case\nof such assessments framedu/s 153Aof the Act as held by the\nDelhi bench in the case ofAshok Kumar Tyagi Vs. ACITin ITA\nNo.5652 to 5654/Del/2017 dated 17.3.2022, it is not possible to\ntreat the agricultural income as non-agricultural income without\nany seized material. Further, in a proceedingu/s 153Aof the Act,\naddition has to be made on the basis of incriminating material\nfound as a result of search. Since the decision of the assessment\nofficer to treat the agricultural income as income from other sources\nwhich is not based on incriminating material seized during the\ncourse of search action, no addition or disallowance could be made.\nAccordingly, addition is deleted in these two assessment years\n2007-08 & 2008-09.17.   Adhoc disallowance of expenditure charged under P&L\naccount in assessment years 2007-08 to 2012-13 (in all 6\nyears).17.1 These findings in AY 2009-10, 2010-11 & 2011-12 is\nwithout prejudice to our findings on legal issue.17.2 The AO disallowed the expenditure debited to the P&L\naccount in all these assessment years on adhoc basis.                The\nassessee has claimed various expenditure like accounting charges,\nbank charges, office maintenance, professional charges, rent,\nsalary, etc. by debiting all these expenditure to the P&L account.\nThe AO asked to furnish evidence for those expenditure.              The\nassessee expressed his inability to furnish any other evidences.ITA Nos.307 to 312/Bang/2020\n                                                  Shri K.G. Krishna, BangalorePage 52 of 89Since the assessee has involved in real estate business, some of the\nexpenditure is inevitable in the opinion of AO.                 However, he\ndisallowed 50% of the expenditure claimed by assessee in these\nassessment years as not incurred for the purpose of business. The\nassessee has filed before us various additional evidences in the form\nof cash book, ledger extracts relevant to expenditure debited to the\nP&L account in all these assessment years explaining that assessee\nhas actually incurred this expenditure and the AO have no iota of\nevidence to disbelieve that the assessee has not incurred any\nexpenditure which are debited to the P&L account.17.3. We have heard the rival submissions and perused the\nmaterials   available   on   record.      The     assessee      claimed   the\nexpenditure and disallowed by the AO is as follows:-Assessment        Expenditure               Adhoc •    Ground No. Page Nos.years         debited to Profit    disallowance of            of additional\n                   and Loss account        50% (net of               evidence\n                       net of              depreciation)\n                    depreciation\n     2007-08           11,34,062.00           5,67,031.00 6               160 - 167\n\n     2008-09             5,48,188.00 -        2,74,094.00 6               112 -- 124\n\n     2009-10            951,057.00 *          4,75,528.00 5.1             427 -- 443\n\n     2010-11            17,00,000.00          8,50,000.00 5               430 -- 448\n\n     2011-12            10,90,000.00          5,45,000.00 6               866 -878\n\n     2012-13            11,10,000.00          5,55,000.00 5               181 -- 196\n                                                   ITA Nos.307 to 312/Bang/2020\n                                                    Shri K.G. Krishna, BangalorePage 53 of 8917.4. We have carefully gone through the cash book for these\nassessment years and also ledger extracts filed by the assessee\nbefore us.   Admittedly, these are the regular books of accounts\nmaintained by assessee produced before the AO and only after\ngoing    through   the    P&L   account,        the   AO   disallowed    these\nexpenditures debited to the P&L account at 50% as not incurred\nwholly and exclusively for the purpose of business. To come to that\nconclusion, the AO have no material which is inappropriate.Accordingly, we will delete this addition made in all these\nassessment years on adhoc basis.           This ground of appeal of the\nassessee is allowed in all the above appeals.18.     Next ground in all these appeals is with regard to the\ntreating of income offered under head "Capital Gain" as\nbusiness income.         This ground for assessment year 2007-08,\n2008-09, 2009-10, 2010-11 & 2011-12.18.1 These findings in AY 2009-10, 2010-11 & 2011-12 is\nwithout prejudice to our findings on legal issue.For the Assessment year 2007-08:19.     The assessee along with one Mr. Kempegowda purchased an\nagricultural land from Shri R. Subbu Krishna on 24.8.2005 for a\ntotal consideration of Rs.8 lakhs. The assessee's share of cost of\nproperty along with stamp duty and registration was Rs.4,40,930/-.\nThe assessee filed a copy of sale deed, which is placed at additional\nevidence paper book at page Nos.169 to 179.                Subsequently, the\nassessee executed a relinquished deed on 6.3.2006, thereby he\nreleased his share of property           to Shri Kempegowda for a\n                                                       ITA Nos.307 to 312/Bang/2020\n                                                        Shri K.G. Krishna, BangalorePage 54 of 89consideration of Rs.6 lakhs. The assessee also filed copy of release\ndeed which is placed at additional evidence paper book page 180.\nThe assessee treated this property as a capital asset in his hands\nand    computed       the    capital     gain    on     entering     into       release\ndeed/relinquished deed.          The AO however, treated it as business\ntransaction and determined the business income from this\ntransaction as against the income shown by assessee under head\n"Capital gain". Against this, assessee is in appeal before us.19.1          We have heard the rival submissions and perused the\nmaterials available on record.           In this case, admittedly assessee\ntreated the purchase of agricultural land as capital asset and on\nrelinquishment of the same in favour of Shri Kempegowda, the\nincome resulted was treated as Capital gain.                   However, the AO\nwithout any material came to conclusion of the assessee holding the\nproperty as stock in trade and arrived at business income instead of\ncapital gain disclosed by the assessee. If there was no material in\nthe hands of AO to consider as this transaction as adventure in the\nnature of trade, we are of the opinion that the land was held by\nassessee as capital asset for investment, the income generated from\nthis transaction on entering into a relinquished deed, the income\nhas to be considered as short term capital gain and not as business\nincome.     This view of ours is supported by the order of the\ncoordinate bench of Hyderabad in the case of M/s.SSPLL Ltd. Vs.\nPCITin ITA No.976/Hyd/2012 dated 5.4.2013, wherein it was held\nas under and hence, this ground of assessee is allowed:-32. We have to see the intention of the assessee at the time of\n       acquiring the asset. The intention of he assessee herein is to\n       construct a building for setting up of its corporate office and it was\n       always a fixed asset and not a stock-in-trade. Even if the assessee\n       is in the business of real estate, the property acquired by the\n                                               ITA Nos.307 to 312/Bang/2020\n                                                Shri K.G. Krishna, BangalorePage 55 of 89assessee for the purpose of setting up of a corporate office cannot\nbe construed as a trading asset. The profit realised by sale of\ncurrent assets in the line of trading is income from business. On\nthe other hand, if the assessee sells a capital asset as an investor it\nis income from capital gain. The dominant or even the sole\nintention to resell is a relevant factor and raises a strong\npresumption but by itself is not conclusive proof of trading. The\nintention to resell would, in conjunction with the conduct of the\nassessee and other circumstances, point to the business character\nof the transaction. Profit made by sale of capital asset always\nincome from capital gain. One has to see whether the asset held by\nthe assessee as an investment or as a trading asset. Realisation of\ncapital asset is always income from capital gain.33. The transfer of right or relinquishment part and parcel of\nbusiness undertaking of the assessee is nothing but transfer of\ncapital asset within the meaning ofsection 2(14)of the IT Act. Any\nprofit arising from the transfer of capital asset must be chargeable\nunder the head "capital gain". The word "transfer" has been\ndefined insection 2(47)of the Act which lays down as under:"(47) transfer, in relation to a capital asset includes -(i)     the sale, exchange or relinquishment of the asset; or(ii)     the extinguishment of any rights therein; or(iii)   the compulsory acquisition thereof under any law; or(iv)    in a case where the asset is converted by the owner thereof\n        into, or is treated by him as, stock-in-trade of a business\n        carried on by him, such conversion or treatment; or(v)     any transaction involving the the allowing of the possession\n        of any immovable property to be taken or retained in part\n        of performance of a contract of the nature referred to insection 53Aof the Transfer of Property Act, 1882 (4 of\n        1882); or (vi) any transaction (whether by way of becoming\n        a member of, or acquiring share in, a co-operative society,\n        company or other association of persons or by way of any\n        agreement or any arrangement or in any other manner\n        whatsoever) which has the effect of transferring, or\n        enabling the enjoyment of, any immovable property."34. From the above definition it is clear that the word "transfer" is\ninclusive of definition which inter alia provides 6 situations under\nwhich there can be transfer in relation to the capital asset.\nRelinquishment of any rights in the capital asset is one of the\nsituation enumerated insection 2(47)of the Act. The word\n                                                   ITA Nos.307 to 312/Bang/2020\n                                                    Shri K.G. Krishna, BangalorePage 56 of 89"relinquishment" denotes that relinquishment should be only in the\n      case of capital asset with reference to the word "transfer" has been\n      defined. The right of the assessee over the landed property which\n      was part and parcel of the business undertaking of the assessee is\n      a capital asset. The moment assessee losses the right attached to a\n      part of the business undertaking of the assessee there is\n      relinquishment of right over the said property. The relinquishment\n      of assets or extinguishment of any right in it which may not amount\n      to a sale can also be considered as a transfer. Therefore, on this\n      we do not agree with the findings of the CIT(A) that there is no\n      transferu/s. 45of the Act and the assessee has done only business\n      transaction. Accordingly, we reverse the findings of the CIT(A) on\n      this issue and hold that the income accrued to the assessee out of\n      relinquishment of right over the property is to be chargeableu/s.\n      45of the Act and computation of capital gain has to be done in\n      accordance withsection 48of the IT Act. Accordingly, we direct\n      the Assessing Officer to compute the income under the head capital\n      gain on relinquishment of right over the impugned landed\n      property."19.2 Accordingly, this issue remitted to AO to decide the same in\nthe light of above observation after going through the additional\nevidence filed by the assessee before us.For assessment year 2008-09:-20.   In this assessment year assessee sold two pieces of land and\non sale of said land, assessee offered income at Rs.4,23,065/- and\nRs.14,664/- and offered it as short-term capital gain. However, the\nAO treated the income as business income as the assessee is in real\nestate business. The contention of the Ld. A.R. is that this property\nwas treated by assessee as a capital asset and held this property\nunder administrative portfolio and not trading portfolio, the\nproperty held under investment to be considered as a capital asset\nand the sale of the same to be treated as capital gain.ITA Nos.307 to 312/Bang/2020\n                                                        Shri K.G. Krishna, BangalorePage 57 of 8920.1           We have heard the rival submissions and perused the\nmaterials available on record. In this case, the assessee purchased\nthe first property on 27.2.2007 and the sale deed in March, 2007.\nAnother property was purchased by assessee on 13.2.2006 and sold\nin this assessment year under consideration.                   Income treated as\nshort term capital gain.          The Ld. CIT(A) confirmed the same by\nplacing reliance on his earlier order for assessment year 2007-08.\nAs discussed in the earlier para relating to assessment year 2007-\n08, the income generated from sale of this property to be considered\nas short-term capital gain and all the expenditure relating to these\ntransactions to be allowed in terms ofsection 49of the Act. If the\nassessee has treated this property as capital asset not as a stock in\ntrade, which is relating to investment portfolio and not trading\nportfolio, the income generated from the transaction to be treated\nas business income.          Accordingly, this issue remitted to AO to\ndecide the same in the light of above observation after going\nthrough the additional evidence filed by the assessee before us.For the assessment year 2009-10:21.     The   assessee      has    purchased          23   guntas   of   land    by\nBhugatahalli village for Rs.40.25 lakhs. The assessee incurred loss\non the sale of this property the loss has not been treated as capital\nloss.21.1 In case of another property situated at Gollahalli whereas the\nassessee      has   sold    21    sites   for     a    total   consideration     of\nRs.92,11,500/-The assessee computed the short term capital gain\nof Rs.25,64,072/-.         The AO treated it as business income.                The\n                                              ITA Nos.307 to 312/Bang/2020\n                                               Shri K.G. Krishna, BangalorePage 58 of 89income generated is treated as business income. The assessee filed\nadditional evidence in pages 445 to 568 for this assessment year\nproducing the ledger account of development expenses and copy of\nvouchers and prayed that the issue may be remitted.              Without\nprejudice to our finding on legal issue for the purpose of completion\nof the proceedings, we remit this issue to the file of AO for fresh\nconsideration relating to both transactions as discussed in earlier\npara in this order in earlier assessment years under consideration.For the assessment year 2010-11:-22.   The assessee purchased 445 sites vide sale deed dated\n6.6.2006 from Shiva Shree Shelters and Shiva Shree Investments.\nOut of these sites, 10 sites were sold during the year under\nconsideration for a total consideration of Rs.31.20 lakhs.            The\nassessee filed copies of sale deed, which is filed at regular paper\nbook page Nos.233 to 251 for assessment year 2010-11.                 The\ncontention of the Ld. A.R. is that this property held by the assessee\nas capital asset and the gain arising out of these transactions to be\nconsidered as long term capital gain and prayed that the issue may\nbe remitted to the AO to consider this fact from the evidence\nproduced before him.     On the basis of evidence, the expenditure\nincurred for the purpose of improvement of the property to be\nallowed as a deduction even if the income is computed under head\n"Capital gain".   As discussed earlier, without prejudice to our\nfindings on legal issue, we remit this issue to the file of the AO to\nconsider all the evidences to decide whether the impugned property\nheld as a capital asset. If it is a capital asset, the income generated\nfrom the transfer of this property to be considered as income from\n                                                 ITA Nos.307 to 312/Bang/2020\n                                                  Shri K.G. Krishna, BangalorePage 59 of 89capital gain and all expenditure relating to the acquisition and\nimprovement of the property to be allowed in terms ofsection 49of\nthe Act. Accordingly, this issue remitted to AO to decide the same\nin the light of above observation after going through the additional\nevidence filed by the assessee before us.For assessment year 2011-12:-23.   In this assessment year the assessee sold 73 sites in Urukere\nfor a consideration of Rs.1,87,80,000/-.         The assessee computed\ncapital gain on this asset at Rs.13.68 lakhs. The AO considered the\ngain under head "Business income" and not allowed all the\nexpenditure   incurred     in    connection      with   the    transfer    as\ncommission, development expenses, interest on loans as the\nassessee not furnished the details. As discussed in the earlier para,\nassessee filed additional evidence which is placed at page nos.879\nto 891 with regard to incurring of various expenses like commission\npaid and development expenses and the AO not allowed the\nexpenditure though he treated as business income.                   Without\nprejudice to our findings on legal issue, this issue is remitted to\nAO to decide the same in the light of above observation after going\nthrough the additional evidence filed by the assessee before us.24.   Next ground in ITA No.307/Bang/2020, 309/Bang/2020\nfor the assessment year 2007-08 and 2009-10 with regard to\nunexplained investment.24.1 These findings in AY 2009-10 is without prejudice to our\nfindings on legal issue.ITA Nos.307 to 312/Bang/2020\n                                               Shri K.G. Krishna, BangalorePage 60 of 89For the assessment year 2007-08:25.   During the course of search, copy of purported agreement of\nsale entered between the assessee and Shri R. Sundar Raj for\npurchase of a property situated at Khatriguppe village measuring\nabout 10320 sq.ft. Was found and seized. Copy of purchase deed\nplaced at paper book pages 129 to 136 of assessee's paper book is\nas per this agreement a sum of Rs.2 crores was paid in cash. The\nassessee was examined on this issue by the searched team.              On\nstatement recorded on oath on 22.12.2012 the assessee stated that\nthe above agreement was not put into action and this was revised\nvide fresh agreement dated 6.6.2006, as per which a sum of\nRs.1,50,02,990/- was paid by assessee through banking channel to\nSbri R. Sundar Raj and his nominees.         This agreement was also\nplaced by assessee in assessee's paper book pages 121 to 128. The\nassessee categorically denied the sale deed dated 18.5.2006.However, the AO made an addition of Rs.2 crores on invoking\nprovisions ofsection 292Cof the Act by observing that whatever\ndocuments/books of accounts/money/bullion found in the course\nof search shall be belonging to the assessee and contains all those\nevidences can be used for the purpose of assessment. According to\nthe AO, there is a seized document showing the payment of Rs.2\ncrores by cash.    Accordingly, he made addition of Rs.2 crores\nrepresenting the undisclosed income of the assessee. Against this\nassessee is in appeal before us.25.1. We have heard the rival submissions and perused the\nmaterials available on record. As per the seized material, there was\nan agreement dated 18.5.2006 wherein assessee alleged to be\npurchased a property bearing survey No.8, Khatriguppe village\n                                                  ITA Nos.307 to 312/Bang/2020\n                                                   Shri K.G. Krishna, BangalorePage 61 of 89measuring 10320 sq.ft. Of land.             As per this agreement, the\nassessee has paid Rs.2 crores in cash to R. Sundar Raj.                     The\nstatement was recorded from the assessee by searched teamu/s\n131(1A)of the Act on 22.12.2012.           For clarify, we reproduce the\nstatement recorded from the assessee as follows:-"7. Unexplained Investment:During the course of search and seizure operation one agreement of\n     sale entered between the assessee and Sri. R Sunder Raj for purchase of\n     a property situated at sy.no.8, Kathriguppe village measuring _10320\n     s.ft. was found and seized. This document is enclosed as annexure -1. As\n     per the agreement, the total consideration was Rs.2.00 crore and it was\n     paid in cash. The assessee was confronted by DDIT (Inv).Sri K.G.\n     Krishna vide statement recorded u/s 131( I A) on 22.12.2012 has replied\n     as under:"Q.5 Please refer to your answer to question No.21 of\n            the sworn statement u/s.132(4) recorded during the\n            course of search proceedings uis.132 of the Income\n            tax Act, 1961 on 0 5 / 1 1/2012 wherein you have stated\n            that you have paid Rs.1.50 crores to Shri. R. Sundar\n            Raj. Please state whether you have disclosed this\n            amount to tax.Ans. I have entered into an agreement dated\n           18/05/2006 with Shri.R.Sunderqj for purchase of\n           property located at Sy.No.17/12 and -17/14 in the\n           layout formed by M/s.Bhavani Housing Co-op. Society\n           Ltd., Khatriguppe Village, Banashankari, Bangalore.\n           Though this agreement speaks of payment of Rs.2.00\n           crores in cash as sale consideration, it got revised at a\n           later stage as I refused to pay the consideration in\n           cash to the seller Shri. R. Sunderaj. The amount paid\n           :o Shri. R. Sunderaj is Rs.1.50 crores only by way of\n           cheque through my Indian Bank account. This amount\n           was given by M/s. KCS Investment Consultancy\n           Pvt.Ltd."It is stated that the above agreement got renewed at the later\n     stage. However, he has failed to produce a copy of the same. The DDIT\n     (Inv) has also confronted this document with the seller viz., Sri. R.\n     Sunder Raja and he has replied as under:ITA Nos.307 to 312/Bang/2020\n                                           Shri K.G. Krishna, BangalorePage 62 of 89"Q.12 I am showing you page Nos.68 to 71 marked as\n     A/KGK/5 which was seized during the course of search\n     proceedings u/s.I32 of the Income tax Act, 1961 from\n     the residence of Shri.K G Krishna, "Jayakrishna\n     Nilaya", No.1680/55, 5 111 A Cross, 10'h Main, 2 nd\n     Block, Mysore Bank Colony, Banashankari, Bangalore\n     560050 on 05/11/2012. Please go through the same and\n     explain.Ans.I would like to mention that I was promised a\n     land by Shri.K GKrishna through Al/s.Bhavani\n     Housing Co-operative Society ltd., at Khatriguppe\n     Village. But till date I have got no land from the said\n     society. However, once again Shri.K G Krishna has\n     created this document. I have not received any\n     amount either by way of cash or cheque from Shri.K\n     G Krishna except for the loan amount of Rs. 50.00\n     lakhs as mentioned above.Though it is alleged that the above document was a forged\ndocument the intention behind creation of such documents is not\nexplained. However, the agreement was duly signed by both the\nparties and it was mentioned that the cash portion of Rs.2.00\ncrores had been paid at the time of entering into the agreement.\nTherefore, both Shri.K G Krishna and Shri. R. Sunderaj have\nindulged in this unaccounted cash transaction and therefore the\ncash portion of Rs.2.00 crores should be taxed in the form of\nunexplained investment in the hands Sri K.G. Krishna. It is to be\nmentioned here that Sri. K G Krishna has replied that a sum of\nRs.1.50 crore was paid through cheque and it was given by M/s.\nKCS Investment Consultancy Pvt. Ltd., whereas Sri. R Sunder Raj\nhas denied even the cheque payment. Per contra the document\nfound and seized has revealed a fact that the entire sum was paid\nthrough cash.As persection 292Cof the IT Act the AO can presume that\nwhatever document/books of account/money/bullion found in the\ncourse of search shall be belonging to the assessee and the\ncontents on those evidences can be used for the purpose of\nassessment. In the present case part of the transactions were\naccepted by the assessee. Hence it is presumed that the seized\ndocument has reflected the true and correct transaction and\naccordingly. Rs.2,00,00,000/- is added as unexplained\ninvestment."ITA Nos.307 to 312/Bang/2020\n                                              Shri K.G. Krishna, BangalorePage 63 of 8925.2. On that basis, AO drew conclusion that in view of provision ofsection 292Cof the Act, he drew the presumption that assessee\npaid Rs.2 crores with regard to the property and addition was\nmade.   However, there was another agreement dated 6.6.20067\nwherein assessee has paid Rs.1,50,02,990/- to R. Sundar Raj by\nway of banking channels. Assessee filed a copy of ledger account\nbefore us. The contention of the Ld. A.R. is that Shri R. Sundar Raj\nwas absolute owner of the property on 18.5.2006.           However, R.\nSundar Raj has purchased this property from Shri Bhavani\nHousing Co-operative Society Ltd. Only on 19.5.2006.            Further,\nbeing so by any stretch of imagination on the date of agreement i.e.\n18.5.2006 Smt. R. Sundar Raj cannot sell the property. The Actual\nowner of the property was Shri R. Sundar raj and not Smt. R.\nSundar Raj. More so, Shri R. Sundar Raj has actually purchased\nthis property only on 19.5.2006 from Shri Bhavani Housing Co-operative Society Ltd.   Further, in agreement entered by Smt. R.\nSundar Raj on 18.5.2006 shows that the total consideration was\nRs.2,29,62,000/- out of which assessee has paid Rs.2 crores by\ncash on the date of agreement itself and balance amount of\nRs.2,96,20,000/- to be paid.    Further, clause (3) of this alleged\nagreement shows that the vacant possession of property will be\nhanded over to the assessee on payment of Rs.29.62 lakhs.\nHowever, clause (4) of this agreement, wherein mentioned that the\nvendor has received the entire sale consideration.        So there is a\ncontradiction to paras 3 & 4. Being so, the said agreement cannot\nbe relied upon. Further, it was also brought to our knowledge that\neven the sale deed dated 19.5.2006 was not resulted in execution of\nabsolute sale deed and there was a litigation between assessee and\nR. Sundar Raj and same has been pending before the court.ITA Nos.307 to 312/Bang/2020\n                                               Shri K.G. Krishna, BangalorePage 64 of 89Further, assessee filed a FIR against R. Sundar Raj which is placed\nin paper book at page 192 to 203 relating to this assessment year.\nAccordingly, he submitted that any stretch of imagination the\nagreement dated 18.5.2006 found during the course of search\ncannot be considered as a valid agreement. Admittedly, during the\ncourse of search action the searched team unearthed the agreement\ndated 18.5.2006 entered by the assessee with Smt. R. Sundar Raj,\nS/o Late Ramaswamy, aged about 51 years residing at 1228, 4th\nMain, 5th Cross, Chandra Layout, Bengaluru 560040 for sale of\nproperty bearing no.8 situated at 17/12, 17/4 & 17/14 and other\nsurvey numbers in the layout formed by Bhavani Housing Co-\noperative Society Ltd., Khatriguppe village, Banashankari, 3rd Stage,\nBangalore North Taluk, Bangalore, East to West 80 Ft., North to\nSouth   129   Ft.       As   per    this,    total   consideration    was\nRs.2,29,62,000/-. Out of this, assessee said to be paid Rs.2 crores\nby way of cash and balance to be paid at Rs.29.62 lakhs, which is\nmentioned in the clause (3) of this agreement. However, clause (4)\nshows that assessee paid entire sale consideration and the other\nparty has received entire sale consideration.25.3. The sale agreement dated 6.6.2006 shows that Shri R.\nSundar Raj, S/o Late Shri Ramaswamy, 50 years residing at 1228,\n4th Main, 6th Cross, 1st Stage, 3rd Phase, Chandra Layout, Bangalore\n560 040.   As per this sale agreement, the total consideration at\nRs.1,50,02,990/- and the entire sale consideration has been paid\nby way of banking channels. It is also brought to our notice that\nShri R. Sundar Raj was member of Shri Bhavani Housing Co-\noperative Society Ltd. And the sale deed in his favour has been\nregistered in respect of this alleged property on 19.5.2006 bearing\n                                                ITA Nos.307 to 312/Bang/2020\n                                                 Shri K.G. Krishna, BangalorePage 65 of 89document     No.948/2006-07        in    the     sub     registrar    office\nBasavanagudi, Bangalore. Thus, the Ld. A.R. submitted that if the\npayment has been made of Rs.2 crores on 18.5.2006, there was no\nnecessity of paying an amount of Rs.1,50,02,990/- to the vendor\nonce again on 6.6.2006.       As such, the earlier agreement dated\n18.5.2006 is not a valid agreement. It is a dummy document which\ncannot be considered for making any addition by AO in this\nassessment year under consideration. In our opinion, these facts to\nbe looked into by the AO and assessee not satisfactorily explained\nthese inconsistencies before the lower authorities. In view of this,\nwe remit this issue to the file of the AO to consider all the additional\nevidences namely ledger extract and advance paid for site to R.\nSundar Raj for the assessment year 2006-07 placed at additional\nevidence paper book page No.191 and copy of application filed for\nlodging criminal complaint against R. Sundar Raj & others vide\nadditional evidence paper book page Nos.192 to 198 and a copy of\nfirst information report vide page No.199. are as follows:-ITA Nos.307 to 312/Bang/2020\n                  Shri K.G. Krishna, BangalorePage 66 of 89ITA Nos.307 to 312/Bang/2020\n                  Shri K.G. Krishna, BangalorePage 67 of 89ITA Nos.307 to 312/Bang/2020\n                  Shri K.G. Krishna, BangalorePage 68 of 89ITA Nos.307 to 312/Bang/2020\n                  Shri K.G. Krishna, BangalorePage 69 of 89ITA Nos.307 to 312/Bang/2020\n                  Shri K.G. Krishna, BangalorePage 70 of 89ITA Nos.307 to 312/Bang/2020\n                  Shri K.G. Krishna, BangalorePage 71 of 89ITA Nos.307 to 312/Bang/2020\n                  Shri K.G. Krishna, BangalorePage 72 of 89ITA Nos.307 to 312/Bang/2020\n                  Shri K.G. Krishna, BangalorePage 73 of 89ITA Nos.307 to 312/Bang/2020\n                                               Shri K.G. Krishna, BangalorePage 74 of 8925.4. In our opinion, the AO has to consider these documents in\nproper perspective and decide the issue afresh.       This point has to\nbe considered by the AO. The issue remitted to the AO for fresh\nconsideration.26.   Next issue in assessment year 2009-10 is with regard to\nunexplained investment. A sum of Rs.20 lakhs has been added as\nunexplained investment in the hands of the assessee holding that\nassessee has paid cash to one Mr. Shri Rajesh for de-notification of\nland. The transaction was duly accounted in the books of accounts\nof the assessee and reflected in this financial statement.            The\nassessee has filed a copy of ledger extract, which is placed at page\n170 of the paper book related to this assessment year.                The\ncontention of the Ld. A.R. is that when it is reflected in the books of\naccounts of the assessee, it cannot be made addition in the hands\nof the assessee.26.1. We have heard the rival submissions and perused the\nmaterials available on record.    The assessee has taken this plea\nbefore lower authorities that the payment is accounted in his books\nof accounts. However, Ld. CIT(A) sustained the addition. In our\nopinion, there is no necessity of making such addition when the\ntransaction is duly reflected in the books of accounts as shown in\nthe ledger extract in page no.170 of the paper book. Accordingly,\nwe delete this addition.27.   Cash credit in the assessment year 2008-09 in ITA\nNo.308/Bang/2020:ITA Nos.307 to 312/Bang/2020\n                                                  Shri K.G. Krishna, BangalorePage 75 of 8927.1 In this assessment year assessee challenged the addition of\nRs.2,36,34,000/- madeu/s 68of the Act as unexplained credit.The AO made additionu/s 68of the Act in respect of following\ncredits:-Vikram Jain                 1,03,50,000/-\n      Manchaiah                     50,00,000/-\n      B.M. Kumar                    25,00,000/-\n      A.N. Nanjaiah                57,84,000/-\n      Total                       2,36,34,000/-\n\n\n27.2. According     to   the   above,    credits    were    not   explained\nsatisfactorily before him.      As such, the transactions cannot beconsidered as a genuine one and made additionu/s 68of the Act.\nBefore Ld. CIT(A), assessee took a plea that transactions are\nthrough banking channels and have been confirmed by the\nrespective creditors and cannot be considered as unexplainedu/s\n68of the Act. The Ld. CIT(A) observed that the assessee has not\nfiled PAN of these transactions, not established the identity and\ncreditworthiness of the creditors as well as genuineness of the\ntransaction.   The transactions are claimed to have been made\nthrough banking channels which even if drew, does not by itself\nestablish the genuineness of these transactions. In view of this, the\nLd. CIT(A) confirmed the additions.         Against this, assessee is in\nappeal before us.27.3 We have heard the rival submissions and perused the\nmaterials available on record. The assessee has filed the additional\nevidences in following form:-ITA Nos.307 to 312/Bang/2020\n                                               Shri K.G. Krishna, BangalorePage 76 of 891. Ledger extract of Vikram Jain along with relevant bank\n         account extract and confirmation letter pages 125 to 1272. Ledger extract of Manchaiah along with relevant bank\n         account extract pages 128 to 1293. Ledger extract of B.M. Kumar along with relevant bank\n         account extract and confirmation letter pages 130 to 137.4. Ledger extract A.N. Nanjaiah confirmation letter pages 138\n         to 142.27.4. In our opinion, these additional evidences were filed first time\nbefore this Tribunal and lower authorities have no occasion to\nexamine the same. Being so, these additional evidences remitted to\nthe file of AO for fresh consideration after giving opportunity of\nhearing to the assessee.     This ground of the assessee is partly\nallowed for statistical purposes.28.    For assessment year 2009-10 in ITA No.309/Bang/2020.This ground is adjudicated in this A.Y. without prejudice to our\nfindings on legal issue.28.1 This ground is with regard to the unexplained credit of\nRs.78,97,764/-.       This ground is adjudicated herein without\nprejudice to annulling the assessment for assessment year 2009-10\nin earlier para.28.2. The assessee has shown following amounts as outstanding in\nthe balance sheet:-1. Baldev                    23,00,000/-2. Chandra Sekhar              4,00,000/-3. Narasimha Murthy          75,00,000/-ITA Nos.307 to 312/Bang/2020\n                                                Shri K.G. Krishna, BangalorePage 77 of 894. Shanta Sridhar             3,97,764/-Total                  1,05,97,764/-28.3. The AO asked the assessee to explain the nature of sources of\nthese advances. The assessee explained the receipt of money from\nShri Baldev and repaid him on 2.4.2011.            In case of Chandra\nSekhar, confirmation was submitted.          However, in the remaining\ncases, no details were given.     Being so, the AO considered the\nfollowing credits as unexplained creditsu/s 68of the Act.1. Narasimha Murthy                    75,00,000/-2. Shanta Sridhar                      3,97,764/-Total                              78,97,764/-28.4. On appeal, assessee explained that a sum of Rs.75 lakhs\nfrom Narasimha Murthy is received through banking channel and\nin case of Smt. Shanta Sridhar a sum of Rs.3,97,764/- which was\nreceived through bank account and repaid the entire amount in\nsubsequent assessment years. He also submitted before Ld. CIT(A)\nthat total amount of advance received from Smt. Shanta Sridhar\nwas Rs.20,64,768/- and the same was repaid on 29.3.2012 for\nwhich cheque No.6544 drawn on Vysya Co-operative Bank, APMC\nyard branch, Bengaluru, which was paid by K.M. Jayalakshmi on\nbehalf of the present assessee. However, Ld. CIT(A) not agreed with\nthe   submission of    the assessee     and     sustained addition       of\nRs.78,97,764/-.     Against this assessee is in appeal before us.\nBefore us the assessee submitted that the ledger extract along with\nbank statement for receipt of loans and advances for purchase of\nproperty from Narasimha Murthy and Shanta Sridhar, which is\nplaced at regular paper book page nos.97 to 118. Further, it was\n                                               ITA Nos.307 to 312/Bang/2020\n                                                Shri K.G. Krishna, BangalorePage 78 of 89submitted that Shanta Sridhar had entered into an agreement on\n28.7.2008 with the assessee for the purchase of sites at Urukere\nand paid an advance towards purchase of property. The assessee\nalso drew our attention to the sale agreement entered on 28.7.2008\nwith Smt. Shanta Sridhar Murthy, which is placed on record in\npage nos.105 to 118. The assessee also drew our attention to the\ndetails of repayment of loans and advances along with statements\nwhich are placed at page nos.578 to 589 of the additional evidence\nfiled before us, which is in the following form:-1. Ledger extract of Shanta Sridhar Murthy in support of\n            repayment made         - page nos.578 to 5832. Ledger extract of Narasimha Murthy in support of\n            repayment made         -pages 584 to 589\n\n\n28.5. The Ld. D.R. relied on the order of lower authorities.28.6. We have heard the rival submissions and perused the\nmaterials available on record. The assessee has filed the additional\nevidences as discussed above which the AO has no occasion to\nexamine it. Hence, the issue in dispute is remitted to the AO for\nfresh consideration after giving an opportunity of hearing to the\nassessee.29.   For assessment year 2010-11 in ITA No.310/Bang/2020.This ground is adjudicated in this A.Y. without prejudice to our\nfindings on legal issue.29.1 The assessee challenged addition of Rs.82,66,804/- as\nunexplained creditu/s 68of the Act. This issue is remitted to the\n                                              ITA Nos.307 to 312/Bang/2020\n                                               Shri K.G. Krishna, BangalorePage 79 of 89AO to examine the same afresh in the light of additional evidence,\nwhich is without prejudice to our findings on legal issue.For assessment year 2012-13 in ITA No.312/Bang/2020.30.   The assessee challenged addition of Rs.1,70,00,000/- as\nunexplained creditu/s 68of the Act. This issue is remitted to the\nAO to examine the same afresh in the light of additional evidence.31.   The next ground in ITA No.310/Bang/2020 in assessment\nyear 2010-11 is with regard to addition of Rs.36 lakhs and Rs.5\nlakhs in assessment year 2011-12 in ITA No.311/Bang/2020,\nas unexplained credit. These findings are without prejudice to\nour findings on legal issue in these assessment years.31.1. The assessee deposited cash to the extent of Rs.36 lakhs to\nthe bank account, which was not satisfactorily explained before the\nlower authorities.   Hence, it was treated as unexplained credits.\nWithout prejudice annulling of assessment of legal issue in the\nassessment year 2010-11, we are inclined to remit this issue to the\nfile of AO for fresh consideration since there is no much discussion\nin the order of the lower authorities on this issue and there was no\nproper enquiry by the AO on this issue. Similar is with regard to\naddition of Rs.5 lakhs in assessment year 2011-12.32.   In ITA No.312/Bang/2020 in assessment year 2012-13,\naddition of unexplained credit of Rs. 83 lakhs was made.ITA Nos.307 to 312/Bang/2020\n                                                Shri K.G. Krishna, BangalorePage 80 of 8932.1. The assessee deposited Rs.83 lakhs into his bank account for\nwhich no satisfactory explanation is given. Hence, it is treated as\nunexplained income of the assessee. After hearing both the parties,\nwe are of the opinion that this issue was not properly examined of\nthe addition and proper enquiry has not been made. Hence, the\nissue may be remitted to the file of AO. We accede to the request of\nthe assessee's counsel. Accordingly, this issue remitted to the AO\nto decide afresh after making proper enquiry and giving opportunity\nof hearing to the assessee.33.   Next    ground    in    ITA     No.308/Bang/2020           for   the\nassessment    year 2008-09 is with regard               to   addition of\nRs.3,55,00,250/- as unexplained expenditure.33.1. During the course of search and seizure operation in case of\nShri N.C. Mahesh, a loose sheet was found and seized marked as\nA/NCM/2, which reads as follows:ITA Nos.307 to 312/Bang/2020\n                  Shri K.G. Krishna, BangalorePage 81 of 89ITA Nos.307 to 312/Bang/2020\n                                             Shri K.G. Krishna, BangalorePage 82 of 8933.2. The searched team enquired with Shri N.C. Mahesh and\nasked him to explain the transaction. In his sworn statement, he\nreplied that the name written therein as "Krishnappa" refer to Shri\nK.G. Krishna, present assessee.    Accordingly, Shri K.G. Krishna\nasked to explain the investment of Rs.4,80,00,250/-. The present\nassessee has filed the written submission before the authorities on\n17.3.2015, wherein he denied the cash payment. The reply is as\nfollows:-ITA Nos.307 to 312/Bang/2020\n                  Shri K.G. Krishna, BangalorePage 83 of 89ITA Nos.307 to 312/Bang/2020\n                                                Shri K.G. Krishna, BangalorePage 84 of 8933.3. As per this reply, the advance payment given in cheque of\nRs.50 lakhs and another payment of Rs.50 lakhs (Rs.25 lakhs each\non 7.6.2007) has been admitted by both the persons and a\nconfirmation also given. The remaining cash portion was denied by\nthe assessee. According to the AO, the transaction mentioned in\nthe loose sheet is self-explanatory as AC-25-37 guntas was\npurchased @ Rs.18.5 lakhs totalling of Rs.4,79,61,250/- by paying\nthe stamp duty of Rs.39,000/-. The total cost was worked out at\nRs.4,80,00,250/-   in   the   next   page     date,   extent   rate,   total\nconsideration, payment and balance price are mentioned clearly.The entire amount has been funded by Shri K.G. Krishna and Shri\nN.C. Mahesh knows the transaction as he is also involved in it. But\nto whom the payment was made was not explained by both of them.\nAs far as the assessment is concerned, according to the AO, this\namount of Rs.4,80,00,250/- was investment made by assessee and\nassessee shown only Rs.1 crore out of it by way of banking channel\nand the balance amount of Rs.3,80,00,250/- as not disclosed to the\ndepartment. Hence, AO invoked the provisions ofsection 292Cof\nthe Act and made addition of Rs.3,80,00,250/- as income of the\nassessee. On appeal, Ld. CIT(A) observed that the onus lies on the\nassessee to disclose the transaction referred to in the seized\nmaterial. The contents of the seized material is explicit and gives\nno room for ambiguity the fact that assessee does not want to reveal\nanything about the transaction only gives one impression that he\nhas good reason to hide as implications/consequences would be\nmore than what the material reveals. Be it as it may, one has to\nconfine oneself to the seized material and not speculate on aspect\nnot known.     Accordingly, he observed that the assessee has\ndisclosed Rs.125 lakhs out of the payment shown in the seized\n                                               ITA Nos.307 to 312/Bang/2020\n                                                Shri K.G. Krishna, BangalorePage 85 of 89material at Rs.4,80,00,250/-.       Accordingly, he deleted another\nRs.25 lakhs out of addition made by AO at Rs.3,80,00,250/- and\nsustained addition of Rs.3,55,00,250/-. Against this assessee is in\nappeal before us.33.4. The Ld. A.R. submitted that on close perusal of noting/loose\nslips seized from Shri N.C. Mahesh as recorded at internal page\nNo.7 of the assessment order shows the top lines as below:-"Land registration to Krishnappa"It is therefore, a noting from same transaction with the same\nKrishnappa and not with the present assessee whose name is K.G.\nKrishna. In the order at page No.9 of the assessment order, it was\nstated that before the investigation authority, Shri N.C. Mahesh\nsupposed to have been stated that the name Krishnappa refers to\nK.G. Krishna.       However, no extracts of any such statement is\nrecorded in the assessment order nor any copy of such statement is\ngiven to the assessee.      A perusal of internal page No.7 of the\nassessment order shows that so called purported slip, it can be\nseen that the date mentioned in the end slip is 19.4.2008.             The\nassessee had given confirmation which is appearing at internal page\nNo.10 of the assessment order.        As per this confirmation after\n31.3.2008, the assessee had paid total of Rs.1,60,00,000/- all\nthrough banking channels. If so called purported slip at page No.7\nof the assessment order were to refer to the assessee, then atleast,\nthe cheque payment of Rs.1.6 crores at page No.10 should have\nbeen appeared in page No.7.            Such banking payments not\nappearing in such slip would itself clearly shows that the slip at\npage No.7 does not belong to the assessee.                  Further, the\nconfirmation referred by Shri N.C. Mahesh has not been doubted by\n                                                ITA Nos.307 to 312/Bang/2020\n                                                 Shri K.G. Krishna, BangalorePage 86 of 89the AO nor have they called Shri N.C. Mahesh called Shri N.C.\nMahesh for cross examination. This slip at page No.7 itself looks\ndubious    in   as    much    as     for   a   so-called   transaction    of\nRs.4,79,61,250/-,     wherein       the    stamp   duty    mentioned      at\nRs.39,000/-.    Further, though in the slip, there is mentioned of\ncheque and DD payment of Rs.3,01,50,000/- at the end of the slip,\nit   is   mentioned    as    cash     payment      from    Krishnappa      is\nRs.3,01,50,000/-.     In any case, the assessee has not made any\npayment in cash to Shri N.C. Mahesh and he also confirmed the\ntransaction with the assessee as appearing in page No.10 of the\nassessment order. According to the Ld. A.R., the Ld. CIT(A) would\nhave deleted entire addition instead of sustaining any addition of\nRs.3,55,00,250/- as against the addition made by the AO at\nRs.3,80,00,250/-.     He also drew our attention to the additional\nevidence filed before us at page Nos.143 to 147, which includes\nledger extracts of Shri N.C. Mahesh along with confirmation of\ntransactions.33.5. On the other hand, Ld. D.R. relied on the order of the Ld.\nCIT(A).33.6      We have heard both the parties and perused the materials\navailable on record.        Since the assessee filed the additional\nevidences, we remit this issue to the file of AO to decide the same in\nthe light of the additional evidences after considering the arguments\nof the assessee. The AO should also take note that addition cannot\nbe made only on the basis of noting on loose slips unless it is\nsubstantiated or corroborated by any material evidence in support\nof such notings in the loose slips or notings in diary. The suspicion\n                                                 ITA Nos.307 to 312/Bang/2020\n                                                  Shri K.G. Krishna, BangalorePage 87 of 89in the minds of the revenue authorities that the assessee made\ncertain payments as per the loose slips cannot be reason to make\nan addition. In the absence of concrete evidence brought on record\nby the authorities concerned, the addition cannot be made.               The\nsuspicion cannot replace the material evidence brought on record.\nIt is also be noted that authorities have to follow the principles of\nnatural justice and the discovery of the documents in the form of\nloose slips not enough to make an addition without giving an\nopportunity of cross examination of the concerned parties. The lose\nslips having certain jottings are not speaking one and it cannot be\nbasis for any inference to make an addition. Accordingly, this issue\nremitted to the AO for fresh consideration to decide in the light of\nabove observations.33.7     For brevity, we enclose herewith the ground-wise chart\nwith result of each appeal as Annexure -1.34. In      the       result,      ITA      Nos.307/Bang/2020,            ITA\nNo.308/Bang/2020 & 312/Bang/2020 are partly allowed for\nstatistical purposes. ITA Nos.309/Bang/2020, 310/Bang/2020 &\n311/Bang/2020 are allowed.Order pronounced in the open court on 24th June, 2022\n\n         Sd/-                                            Sd/-(Beena Pillai)                                 (Chandra Poojari)\n  Judicial Member                                Accountant Member\n\n\nBangalore,\nDated 24th June, 2022.\nVG/SPS\n                                                                                                                                                      ITA Nos.307 to 312/Bang/2020\n                                                                                                                                                       Shri K.G. Krishna, Bangalore\n\n                                                                                GROUND WISE CHART FOR ALL ASSESSMENT YEARS IN CASE OF K.G. KRISHNA                                         ANNEXURE-I\n                                            Additional             Additional                      Additional               Additional                 Additional             Additional\n                 ASSESSMENT YEARS\n                                            evidence     2007-08   evidence         2008-09        evidence      2009-10    evidence      2010-11      evidence     2011-12   evidence       2012-13\n                 Issues\n                                            page no.               page no.                        page no.                 page no.                   page no.               page no.\n    Sl.no.\n\n                 Unexplained Opening\n             1   Capital                                    Y\n\n             2   Agricultural Income                        Y                          Y                                                                               Y\n\n                 P/L A/c Expenditure\n             3   Disallowed                                 Y                          Y                            Y                        Y                         Y                        Y\n\n                 Capital Gain as Business   180-189                 160-167                          445-568                                            879-891\n             4   Income                                     Y                          Y                            Y          467-471       Y                         Y\n\n                                            191-203\n             5   Unexplained Investment                     Y                                                       Y\n                 Unexplained Cash                                                                    578-589                                            875-878\n             6   Credits                                                                                            Y                        Y                         Y                        Y\n\n                 Unexplained Cash                                   125-142                                                                                                    197-207\n             7   Credits U/s 68                                                        Y                                    449-466          Y                                                  Y\n\n                 Unexplained                                        143-158\n             8   Expenditure                                                           Y\n                 Ground No.1 in main\n                 ground : Assumption of\n                 jurisdiction u/s 153A of\n                 the Act is bad in law\n                 read with additional\n                 ground: No                                Y                           Y                            Y                        Y                         Y                        Y\n                 incriminating material\n                 to frame the\n                 assessment u/s 153A of\n                 the Act9RESULT                            PAS                        PAS                       QUASHED                  QUASHED                    QUASHED                    PASPARTLY ALLOWED FOR STATISTICAL PURPOSES - PAS\n                                    ITA Nos.307 to 312/Bang/2020\n                                     Shri K.G. Krishna, Bangalore\n\n\nCopy to:1.   The Applicant2.   The Respondent3.   The CIT4.   The CIT(A)5.   The DR, ITAT, Bangalore.6.   Guard file\n                                   By order\n\n\n                                Asst. Registrar,\n                                ITAT, Bangalore.