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DCIT, Central Circle - 44, Room no. 656, 6th Floor, Aayakar Bhavan, M K Road, Mumbai -400 020 Vs. Shri Chimanlal K Mehta, 93 & 94, Koregaon Park, Pune -411 001
December, 30th 2014
               IN THE INCOME TAX APPELLATE TRIBUNAL
                     MUMBAI BENCH "G", MUMBAI
         . .
       ^ . . [,    ^  [, Û   ¢ 
         BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER
            AND SHRI VIVEK VARMA, JUDICIAL MEMBER
                ITA No. : 3767/Mum/2013, (Assessment year: 2010-11)
    DCIT, Central Circle - 44,                Vs Shri Chimanlal K Mehta,
    Room no. 656,                                 93 & 94, Koregaon Park,
    6th Floor, Aayakar Bhavan,                    Pune -411 001
    M K Road,                                       .:PAN: AAFPM 0905 P
    Mumbai -400 020
     (Appellant)                                  × (Respondent)
                     Appellant-assessee by     :  S/Shri H P Mahajani, S V Joshi,
                                                  Deepak Desai, Digant Mehta
                   Respondent-revenue by       :  Smt Abha Kala Chanda
                         Cross Objection (CO) 148/Mum/2014
                  Arising out of ITA No. : 3767/Mum/2013, AY 2010-11
    Shri Chimanlal K Mehta,                   Vs ACIT, Central Circle - 44,
    Koregaon Park, Pune -411 001                  Room no. 656,
      .:PAN: AAFPM 0905 P                         Mumbai -400 020
                                                       × (Respondent)
              Cross Objector assessee by        :      S/Shri H P Mahajani, S V Joshi,
                                                       Deepak Desai, Digant Mehta
             Respondent by                      :      Smt Abha Kala Chanda
           /Date of Hearing                              : 10-11-2014
           /Date of Pronouncement                        : 26-12-2014

Sr.   ITA/Cross Objection No. & Name of          Vs       Appeal by     A.Y.      CIT(A)'s
No.             the Assessee                             Assessee or               Order
                                                         Department                 Date
1     3777/Mum/2013- M/s Yerrowada             DCIT,     Department    2010-11   11.02.2013
      Investment Ltd, Deepak Comples Off       Cir.44,
      Golf Course Road, Shastrinagar,           Mum
      Yerwada, Pune -411006
2     CO 150/Mum/2014- M/s Yerrowada           ACIT,      Assessee     2010-11   11.02.2013
      Investment Ltd, 10-b Bakhtawar,          CC-44
      Nariman Point, Mumbai -400 021           Mum
        .:PAN: AAACY 0186 C
3     3765/Mum/2013 ­ Shri Deepak C            ACIT,     Department    2010-11   11.02.2013
      Mehta, 93 & 94 Koregaon Park, Pune       CC.44,
      -411 001                                  Mum
4     CO 149/Mum/2014- Shri Deepak C           ACIT,      Assessee     2010-11   11.02.2013
      Mehta, Gr. Floor, Kejriwal House, 7-N,   CC-44
      Gamadia Road, Mumbai -400 026             Mum
        .:PAN: AAHPM 6688 F
5     3766/Mum/2013 ­ Shri Shailesh C          ACIT,     Department    2010-11   11.02.2013
      Mehta, 93 & 94 Koregaon Park, Pune       CC.44,
      -411 001                                  Mum
6     CO 159/Mum/2014- Shri Shailesh C         ACIT,      Assessee     2010-11   11.02.2013
      Mehta, 93 SUM, Southman Road,            CC-44
      Koregaon Park, Pune -411 001              Mum
        .:PAN: AAFPM 3448 R
7     3764/Mum/2013 ­ Shri Ajay C              ACIT,     Department    2010-11   25.02.2013
      Mehta, 93 & 94 Koregaon Park, Pune       CC.44,
                                             2                             Shri Chimanlal K Mehta
                                                                          ITA No. 3767/Mum/2013
                                                                             CO 148/Mum/2014 &
                                                 Six Group comprising (06 ITAs & 06 Cos)=Total-14
      -411 001                               Mum
8     CO 146/Mum/2014- Shri Ajay C           ACIT,          Assessee     2010-11     25.02.2013
      Mehta, Ground Floor, Kejriwal House,   CC-44
      7-N, Gamadia Road, Mumbai -400026      Mum
        .:PAN: AAFPM 3456 K

       Appeals heard on 11.11.2014

Sr.   ITA/Cross Objection No. & Name of           Vs      Appeal by        A.Y.       CIT(A)'s
No.             the Assessee                             Assessee or                   Order
                                                         Department                     Date
1     3778/Mum/2013 - Shri Chimanlal K       ACIT,       Department      2009-10     11.02.2013
      Mehta, 93 & 94, Koregaon Park,         CC 44,
      Pune -411 001                           Mum
2     CO 147/Mum/2014- Shri Chimanlal        ACIT,          Assessee     2009-10     11.02.2013
      K Mehta, Ground Floor, Kejriwal        CC 44,
      House, 7-N, Gamadia Road,               Mum
      Pune -411 026
        .:PAN: AAFPM 0905 P
3     3779/Mum/2013 - Shri Ajay C            DCIT,       Department      2009-10     11.02.2013
      Mehta, 93 & 94, Koregaon Park,         CC 44,
      Pune -411 001                           Mum
4     CO 145/Mum/2014- Shri Ajay C           ACIT,          Assessee     2009-10     11.02.2013
      Mehta, Ground Floor, Kejriwal House,   CC 44,
      7-N, Gamadia Road,                      Mum
      Pune -411 026
        .:PAN: AAFPM 3456 K
          /Date of Hearing                                  : 11-11-2014
          /Date of Pronouncement                            : 26-12-2014



                                          
                                       ORDER
       ^  [, Û :    :
       PER VIVEK VARMA, JM:

               The appeals filed by the department & corresponding
       Cross Objections filed by the assessee, as captioned above, have
       been filed against the order of the CIT(A) 36, Mumbai, for
       assessment year 2009-10 against the different orders of [all
       dated 31.01.2012, except in the case of Shri Ajay C Mehta,
       which is dated 25.02.2013], Mumbai and another two appeals of
       the said Group & corresponding Cross Objections have been
       filed   against     different     orders        of    the    CIT(A)-36,      Mumbai,
       commonly dated 11.02.2013 for assessment year 2009-10. As all
       the appeals in these group, wherein the grounds raised are
       common, therefore, they have been clubbed heard together and
                                  3                             Shri Chimanlal K Mehta
                                                               ITA No. 3767/Mum/2013
                                                                  CO 148/Mum/2014 &
                                      Six Group comprising (06 ITAs & 06 Cos)=Total-14
are being disposed off by this consolidated order for the sake
convenience      &     brevity.       We       shall     take-up        ITA      No.
3767/Mum/2013, as a lead appeal in this group, wherein, the
department has raised the following grounds:
      ITA No. : 3767/Mum/2013 : Department Appeal :

              "1. On the facts and in the circumstances of the case and in law
              the Ld. CIT(A) erred in annulling the assessment on the ground
              of limitation by holding that the C.D. was created on 28.3.2003,
              falling beyond six years limitation period prescribed in section
              153A(1) without verifying the authenticity and alleged date of
              CD through forensic expert.
              2. On the facts and in the circumstances of the case and in law
              the Ld. CIT(A) erred in annulling the assessment on the basis of
              surmises and presumptions without verifying the facts as
              available on record.
              3. On the facts and in the circumstances of the case and in law
              the Ld. CIT(A) erred in deleting the addition of Rs.
              35,47,00,000/- on account of unaccounted receipts due to
              family arrangement ignoring the presumptions with regard to
              the entries found in sized material as per provisions of Section
              292C r.w.s. 132(4A) of I.T. Act.
              4. On the facts and in the circumstances of the case and in law
              the Ld. CIT(A) erred in deleting the addition of Rs.
              37,63,00,000/- on account of unaccounted payments due to
              family arrangement ignoring the presumptions with regard to
              the entries found in seized material as per provisions of Section
              292C r.w.s. 132(4A) of I.T. Act.
              5. On the facts and in law, the Ld. CIT(A) erred in annulling the
              assessment and deleting the additions by relying on the
              additional evidence in the form of family agreements dated
              March 2000 and 01.01.2003 but ignoring that these agreements
              indicated financial transactions during the years covered u/s
              153A of the I.T. Act.
              6. On the facts and in the circumstances of the case and in law
              the Ld. CIT(A) erred in admitting the additional evidence in
              violation of Rule 46A of the I.T. Rules 1962 without providing the
              AO opportunity to comment on merits.
              The appellant prays that the order of the CIT(A) on the above
              grounds be set aside and that of the Assessing Officer be
              restored.
              The appellant craves leave to amend or alter any ground and/or
              add new grounds which may be necessary".

2.    The facts are that there was a search action u/s 132(1) on
Deepak Group on 21.07.2009 and the instant assessment is a
consequence of the search.

3.    Assessment proceedings, consequent to search were
initiated by the AO and the AO raised certain queries with regard
                                       4                             Shri Chimanlal K Mehta
                                                                    ITA No. 3767/Mum/2013
                                                                       CO 148/Mum/2014 &
                                           Six Group comprising (06 ITAs & 06 Cos)=Total-14
to certain loose papers, marked as Annexure-A-5, Loose Paper
bundle no. 9.

4.    This paper had certain notings, which are as the following
abbreviations, used in the seized papers:
                      S.no.                 Name                      Abbreviation
                  1           Mr. Chimanlal Khimchand Mehta               CKM
                  2           Mr. Deepak Chimanlal Mehta                  DCM
                  3           Mr. Sailesh Chimanlal Mehta                 SCM
                  4           Mr. Ajay Chimanlal Mehta                    ACM
                  5           M/s. Deepak Fertilizers &                  DFPCL
                              Petrochemicals Corporation Ltd.
                  6           M/s. Deepak Nitrate Ltd                     DNL
                  7           M/s. Yerrowada Investments Ltd              YIL


     Page                                           Query
      No.
     37 &     Capital A/c. of all family members & their Groups shows amounts in
     38       Lakhs mentioning Capital, Loans taken, current liabilities, Deficits,
              Immovable Assets, Assets, Loans given & the Balance & further
              mentions the cash received & cash paid. The amount shown in these
              Capital Accounts appears to be in Lakhs. The Balance Sheets of the
              Group concerns are reproduced as under:

                                           DCM & Group
            Capital                         1000     Maryland                          392
         Other Liability                      67       Gotri                            17
          (Tax on YIL)
                                                          DNL                         647
                                                         Other                          4
                                                      Stock (Other)                     6
                                                        Balance                         1
                                            1067                                     1067

                                                            Cash Recd.            + 1,187
                                                            Cash paid             - 1,186
                                                                                        1

                                                    ACM & Group
               Capital                      2951          F.A.                         82
             Loan taken                      411         Gotri                         17
            Current Liab.                    416       Maryland                       279
                                                      Loan to Oth                     243
                                                      Curr. Assets                    705
                                                        Balance                      2452
                                            3778                                     3778

                                                            Cash Recd.            + 4,939
                                                            Cash paid             - 2,499
                                                                                    2,440
                                                                                      +12
                                                                                    2,452

                                                    SCM & Group
              Capital                         806        Gotri                          17
            Loan taken                         84      Bunglow                         396
                       5                             Shri Chimanlal K Mehta
                                                    ITA No. 3767/Mum/2013
                                                       CO 148/Mum/2014 &
                           Six Group comprising (06 ITAs & 06 Cos)=Total-14
    Deficit                             DFPCL-Sh                     2,153
-WCCL-2200
 -Others 753                2953
                                       YIL TDR Sh.                     94
                                     Loans to Others                   10
                                      Loan to Smart                   430
                            3843                                     3843

                                         Cash Recd.                 + 668
                                         Cash paid                - 3,621
                                         Deficit                    2,953

                                  CKM & Group
  Capital                   1,384        F.A.                           77
Loan taken                  2,924        Gotri                          21
Curr. Liab.                 2,924         YIL                        2,682
  Deficit                     216     YIL (Stock)                      325
                                        Baroda                          11
                                   Inv. Shares-Oth.                    305
                            3843     Stock ­ Others                    856
                                      Jewellery                         21
                                    Loan to others                     164
                                   Curr. Assets-Oth                    370
                            4,832                                    4,832

                                         Cash Recd.               + 3,547
                                         Cash paid                - 3,763
                                         Deficit                      216

                                        YIL
 Capital                    2537     DFPCL Shares                      597
Curr. Liab.                   10     Loan to Others                     35
                                     Current Assets
                                        -Others                         19
                                         -CKM                          216
                                         -SCM                          753
                                     Cash & Bank                       927
                                          Bal.
                            2,547                                    2,547

                                         Cash Recd.         + 1,896
                                         Cash paid              969
                                                 Loan to CKM/SCM
                                         Surplus                927

                                       WCCL
  Capital                      72          F.A.                          1
Loan Others                 2,200     Loan to SCM                    2,200
 Curr. Liab.                  308    Loan to Others                    118
                                    Curr. Assets-Oth.                   29
                                    Cash & Bk. Bal.                    232
                            2,580                                    2,580

                                         Cash Recd.               + 2,448
                                         Cash paid                - 2,216
                                         Surplus                      232

           Pl. reconcile the same with your Capital A/c., Balance
           Sheet, & Wealth Tax Statements. In case of non
                                      6                             Shri Chimanlal K Mehta
                                                                   ITA No. 3767/Mum/2013
                                                                      CO 148/Mum/2014 &
                                          Six Group comprising (06 ITAs & 06 Cos)=Total-14
                         submission of details & explanation & reconciliation of
                         these transactions, pl. explain why your Capital A/c.
                         should not be taken as per these papers & the Cash
                         payments & Cash receipts should not be considered
                         outside the Books of A/c. & your income be deduced
                         accordingly? Further, pl. prove the genuineness,
                         creditworthiness & identity of the Loans taken & the
                         Current Liabilities. In case of failure to submit the
                         relevant details/evidences, the same would be treated
                         as income of the respective persons u/s 68 of the IT Act,
                         for the relevant year".

5.    The AO sought explanation and decodification of the above
notings.

6.    The assessee vide letter dated 26.11.2011, submitted,
                  "The paper contains Groupwise probable balance sheets. It
                  seems that this statement is prepared somewhere in March
                  2003. This group balance sheet are prepared to ascertain the
                  situation of assets and the abilities after giving effect to some
                  transactions in line with family arrangement thought by Shri
                  CKM at that time. Broadly speaking around 2003 Shri CKM had
                  thought of giving control of DFPCL to Shri SCM, and control of
                  Deepak Nitrite to Shri DCM, Shri ACM was to be given liquid
                  fund in the form of capital is and Shri CKM had decided to keep
                  all the real estate properties and liabilities related to the real
                  estate.
                  Now go give effect to the above decided family arrangement, it
                  was required to transfer/sell some of the assets from some
                  family members to other family members at market rate.
                  Following type of transactions would have a rise to take place
                  among all the family members.
                  1) Shri DCM group to retain shares of DNL in his fold and Shri
                      DCM group was required to transfer other assets such as
                      shares of DFPCL to Shri SCM group and shares of YIL to Shri
                      CKM group.
                  2) Shri ACM group was required to transfer all the shares of
                      DFPCL in favour of Shri SCM group, all the shares of DNL in
                      favour of Shri DCM group and all the shares of YIL to Shri
                      CKM group.
                  3) Shri SCM group was required to retain all the shares of
                      DFPCL group and transfer all the shares of DNL to Shri DCM
                      group and all the shares of YIL to "Shri CKM group.
                  4) Shri CKM group was required to retain all the shares of YIL
                      and was required to transfer all the shares of DFPCL to Shri
                      SCM group and transfer of the shares of DNL to Shri DCM
                      group.
                  Now we also wanted to know what will be the picture of assets
                  and Liabilities of all the abovementioned groups after the above
                  said family arrangement transaction will be executed.
                  Accordingly we have prepared probable balance sheets of all the
                  groups of Shri CKM and family assuming that the above said
                  family transactions will happen.
                  Thus you will see that in the balance sheet of Shri DCM group
                  DFPCL shares and YIL shares are removed and DNL shares are
                                        7                             Shri Chimanlal K Mehta
                                                                     ITA No. 3767/Mum/2013
                                                                        CO 148/Mum/2014 &
                                            Six Group comprising (06 ITAs & 06 Cos)=Total-14
                  retained. In Shri ACM group all shares of DFPCL and DNL and
                  YIL are removed. In Shri SCM group all shares of DNL and YIL
                  are removed but DFPCL shares (both fully paid and partly paid)
                  are kept. In Shri CKM all the shares of DFPCL and DNL are
                  remove and shares of YIL are kept or added/purchased from
                  other group.
                  In this process of buying and selling various assets as per the
                  family arrangement thinking, each group will be either required
                  to take loan to purchase the shares/assets at market value or
                  each group may have surplus funds, if no assets are to be
                  purchased and only sale of assets to happen. These
                  transactions will finally lead to surplus balances in some of the
                  group and deficit in the bank balances in other group.
                  On the basis of above expected transactions , we had drawn up
                  probable balance sheet GroupWise after giving effect to the
                  above set transactions to determine which group will remain
                  with surplus funds and which group will need funds so that
                  execution of the above set transaction takes place.
                  Thus you will see that all the probable balance sheets are
                  prepared accordingly.
                  We had decided the above said approach and to a large extent
                  we have implemented also but timing of implementation were
                  different for different assets/liabilities. Broadly all these entities
                  continue to have the assets mentioned and some liabilities have
                  been discharged. It will take time to consolidate the entities to
                  show you the present status which will reflect similar picture
                  among the family only but since these were protected balance
                  sheets more for M I S and due to different parameters
                  assessment at that time like market rate at which shares will be
                  purchased or sold, market rate at which property will be sold,
                  the timing of the discharging liability, etc. However we can bring
                  the books of accounts for verification of the position as of 2009
                  or 2011.
                  We have filed all the income tax returns and wealth tax returns
                  wherever required for all these years and the Department can
                  verify the same.
                  It will be gross injustice if projections and its implementation
                  planning papers of the entire family matching with each other's
                  obligations and rights are construed as transactions outside
                  books and treated as cash payment and cash receipt.
                  Since projections have been made based on purchase and sale
                  of probable value of assets and subsequently resulting in assets
                  creation or daily ability creation cannot be proved from this
                  papers. However as mentioned earlier the books of accounts
                  based on above approach will slow the loan/Liabilities, etc. for
                  your verification and need not be construed other way|.

7.    The AO after considering the submissions of the assessee, came
to the view that the notings of "cash paid" and "cash received" have to
be read, as such, as there was actual cash transaction and he,
therefore, added Rs. 35,47,00,000/- "cash received" u/s 68 and Rs.
37,63,00,000/- "cash paid" as unaccounted payment.
                                         8                             Shri Chimanlal K Mehta
                                                                      ITA No. 3767/Mum/2013
                                                                         CO 148/Mum/2014 &
                                             Six Group comprising (06 ITAs & 06 Cos)=Total-14
8.   Against this order of the AO, the assessee approached the
CIT(A), before whom, the assessee reiterated his submissions made on
the addition made before the AO. He further submitted
           "On the issue of limitation the Authorized Representative submitted that
           the addition has been made in the context and with reference to the
           'family Arrangements'. He submitted that the first deed was in March,
           2000 and the second one on January, 2003. Thus, the assessment
           years relevant would be A.Y, 2000-01 and / or A.Y. 2003-04. Both these
           years fall beyond the period of six years i.e. from A.Y.2004-05 to 2009-
           10 for which the assessments u/s.153A could have been made & have
           actually been made by the AO. He submitted that copies of both the
           family agreements are part of the seized material.
           He submitted that the AO has circumvented this difficulty and made the
           addition in A.Y.2010-11 by observing that "Since the year or date has
           not been specified in the seized document, it would be construed as if
           the document & the entries there-on pertain to the year incidental to the
           Search, viz.A.Y.2010-11".
           The Authorized Representative submitted that there is no basis or factual
           background for such a step and in fact no such addition was warranted
           either in A.Y. 2010-11 or in any other year.
           He further submitted that the workings of redistribution of assets as per
           page Nos.37 & 38 which are the basis for the assessment have also
           been drawn up prior to 31 March, 2003 as is apparent from the seized
           CD 19.
           He further submitted that CD No.2, on being opened showed another five
           pages pertaining to group balance sheets. These five pages are the basis
           for preparation of two pages Nos.37 & 38, the cause of addition in the
           A.Y. 2010-11. These five pages have very clear headings as "BALANCE
           SHEET AS ON 13/03/2003".
           He submitted that information contained in the two pages i.e. 37 & 38
           pertain to the period before 31/03/2003 and hence additions made
           based on these two pages are time barred. To deal with the question of
           limitation and, incidental thereto the merits of the case, the entire factual
           conspectus of the matter has been examined by me. For this purpose the
           submissions made by the Authorized Representative on the merits of the
           matter are summarized below:
           a.        The Appellant is the father of, among others, Deepak (DCM)
           (eldest son), Sailesh (SCM) and Ajay (ACM). He is the founder of the
           Deepak Group of companies which include two listed companies Deepak
           Fertilizers and Petrochemicals Corporation Ltd. (DFPCL) and Deepak
           Nitrite Ltd. (DNL). The Group owns various assets and properties and
           has been carrying on various businesses over the last several decades.
           b.        There were disputes within the family. The Appellant, who is
           presently into his eighties, wanted to evolve a succession plan the aim of
           which was peace and harmony in the family. He along with his wife
           Mrs. Kanta Mehta desired to relinquish in favor of their sons, their
           interests in the two listed companies DFPCL and DNL.
           c.        In order to preserve peace and harmony in the family and, with
           a view to put an end to/prevent financial disputes and differences
           between the Appellant-father and his aforesaid three sons, in March,
           2000 or so the Appellant, his wife and three Sons entered into a family
           agreement drafted by M/s. Udwadia, Udeshi and Bergis, Solicitors and
           Advocates. The Authorized Representative submitted that 2000 Family
           Agreement forms part of the seized material (Pages 13 to 26 of the Paper
           Book).
                              9                             Shri Chimanlal K Mehta
                                                           ITA No. 3767/Mum/2013
                                                              CO 148/Mum/2014 &
                                  Six Group comprising (06 ITAs & 06 Cos)=Total-14
 d.        The first Family agreement was entered into in March, 2000,
 This agreement also forms part of the seized material.
 e.        Despite this Agreement the disputes did not die down
 whereupon a fresh Family Agreement was drawn up by M/s. Udwadia,
 Udeshi and Bergis, Solicitors, in January, 2003. This agreement also
 forms part of the seized material (Pages 1 to 12 of the Paper book).
 f.        In terms of the 2003 Family agreement the Family shares in
 DFPCL and DNL, which were notionally valued for this limited purpose,
 were to be again divided equally among the three Sons in such a way
 that each son was to receive assets of the value of Rs.53 crores.
 This Agreement also envisaged inter se transfer of shares of DFPCL and
 DNL and other family assets and liabilities to be retained by the
 Appellant and his wife.
 g.        The 2003 Agreement also provided for further inter se
 redistribution of other assets and liabilities between the family members.
 h.        The Authorized Representative explained that equal distribution
 of the family assets among the four Groups meant redistribution of
 assets involving various family members and their corporate entities.
 This basically involved ensuring that control, assets, and liabilities of
 specific entities were allotted to specific Group in the process ensuring
 that there was financial equality.
 i The Authorized Representative submitted towards this end, around
 12th March, 2003 i.e. soon after the Family agreement was entered into
 on 1st January, 2003, an exercise was undertaken where under
 probable /required redistribution of financial assets was plotted. Since
 this exercise involved as many as about 33 entities and financial assets
 of large number and value and diverse nature, it was thought expedient
 to plot in a separate accounting software used by appellant's office, the
 probable /required redistribution in the form of memorandum ledger
 accounts by recording memorandum journal entries etc. The idea was to
 ensure that all proposed effects are properly captured and equitable and
 culminate in desired results.
 j. He submitted that accordingly, the proposed redistribution was plotted
 on the Computer in Excel Format in great detail and the post-proposed
 redistribution financials were drawn up.
 k. A summary of the gross and net effect of this redistribution was also
 noted at the end of the memorandum financials (Pages G - ito G -11 of
 the box file).
 l. This exercise showed that CKM Group would receive assets from
 within group worth Rs. 3,547/- and would in turn have to give up assets
 from within group worth Rs.3,763/. The net result of the redistribution
 was to be deficit of Rs. 216/- payable by CKM Group. (Pages G-10 of Box
 File No.1).
DCM Group would receive assets from within group worth Rs. 1,187/-
and would in turn have to give up assets from within group worth Rs.
1,186/-. The net result of the redistribution was to be surplus of Rs.1
receivable by DCM Group (Page G-7 of Box File No. 1).
Similarly, SCM Group would receive assets from within group worth Rs.
668/- and would in turn have to give up assets from within group worth
Rs. 3,621/-. The net result of the redistribution was to be deficit of Rs.
2,953/- payable by SCM Group (Page G-9 of Box File No. 1).
Similarly ACM Group would receive assets from within group worth Rs.
4,939/- and would in turn have to give up assets from within group
worth Rs. 2,499/-. The net result of the redistribution was to be surplus
of Rs. 2,440/- receivable by ACM Group (Page G-8 of Box File No. 1).
Similarly YIL would receive assets from within group worth Rs.1896 and
would in turn have to give up assets from within group worth Rs.969/-.
                                    10                          Shri Chimanlal K Mehta
                                                               ITA No. 3767/Mum/2013
                                                                  CO 148/Mum/2014 &
                                      Six Group comprising (06 ITAs & 06 Cos)=Total-14
      The net result of the redistribution was to be deficit of Rs. 927/- payable
      by YIL(Page G-11 of Box File No. 1)
      m. He took me through the Paper Book containing all the basic documents
      starting from trial balance as on 13/03/2003, probable transactions in
      detail to give effect to the 'Family Arrangement' & probable balance
      sheets group wise on the basis of which additions have been made. The
      AR clarifies that these are all part of the seized material available with
      the AO.
      He further clarified that the trial balance as on 13.03 .2003 on Tally
      finally leads up to the audited accounts for the F.Y.20022003 for all
      members of the Deepak Group which are available along with the returns
      of income filed by all of them for A.Y.2003-04.
      He explained that "Group wise probable Balance sheets as on
      13/03/2003" which gives complete breakup & details of Liabilities and
      Assets constituent wise have ultimately got converted & reduced into the
      said two pages (37 & 38). He submitted that a comparison of extracts
      from the said two pages (37 & 38) and Balance sheet as on 13/03/2003
      (as available in CD No. 2".

9.     Thus to prove his point on facts, the assessee, during the
appeal proceedings before the CIT(A), opened the two CDs, i.e. 2
& 19 and following the path arrived at the two pages, i.e. 37 &
38 and it was pointed out that the last date of creation of pages
on the CDs whose printouts were found from the loose papers as
well, was dated 28.03.2003.

10.    The assessee also pointed out to the CIT(A), that the very
basis for addition, being the papers to be undated, lost its
credence. The assessee also submitted before the CIT(A) that the
use of the word `cash' was in fact loose assets, which were
transferred in and out of various entities, resulting and
consequent to the family arrangement.

11.    The CIT(A), after considering the detailed submissions and
also, after taking into account inconsequential remand report
submitted by the AO, held,
               "I have considered the facts of the case and perused the material
               on record including the CD2 and CD 19 submitted during the
               course of the hearing and opened by the representatives of the
               Appellant in my presence.
               On an examination of the material furnished by the Appellant during
               the course of the hearing and on perusing the two CD I am of the
               opinion that no new evidence is sought to be placed before me by the
               Appellant. The entire material including that on the two CD forms part
               of the seized material and was therefore with the AO when he passed
               the order.
                    11                          Shri Chimanlal K Mehta
                                               ITA No. 3767/Mum/2013
                                                  CO 148/Mum/2014 &
                      Six Group comprising (06 ITAs & 06 Cos)=Total-14
In the Remand Report the AO has not off ered any
comments in respect of assessment orders for A.Y.2010-11
without assigning any reason thereby suggesting that he had
nothing to say in the matter.
Beyond doubt CD 19 file having path name as 'copy
19\suresh\ohd\MyDocuments\data\MSODATA\EXCEL\INDBS
.XLS' contains same two pages as 37 & 38 copies of which have
been appended to the assessment order and which constitute the
basis for the impugned assessment.
CD No. 2, when opened showed another five pages
pertaining to group balance sheets. These five pages are the
basis for preparation of two pages No. 37 & 38. Relevant figures
on pages 37 & 38 perfectly match with the figures on 5 pages on
CD 2.
It is seen that these five pages have very clear headings as
"BALANCE SHEET AS ON 13/03/2003".
It is thus clear that two pages i.e. 37 & 38 are the summarized
version of five pages available on CD 2 and further that the
entire data contained therein pertains to the period before
31/03/2003
The AR has clarified that pages 37 & 38 represent probable
balance sheets drawn up in the context of Family agreement of
01/01/2003.
On an examination of the material on record it is quite clear
that there have been long standing disputes within the Mehta
family genesis of which goes beyond the year 2000. A series of
letters have been exchanged between the Appellant and his son
Sailesh wherein various claims and counter claims have been
raised.
The Appellant, who is into his eighties, as the head of the family
wanted to evolve a succession plan the aim of which was peace
and harmony in the family. He along with his wife Mrs. Kanta
Mehta desired to relinquish in favor of their sons, their interests
in the two listed companies DFPCL and DNL.
Since the 2000 Agreement did not result in settlement of
disputes a fresh Family Agreement was drawn up by M/s.
Udwadia, Udeshi and Bergis, Solicitors, in January, 2003.
Under this family agreement DCM would own and manage
DNL, SCM would own and manage DFPCL and ACM was to be
paid Cash of Rs. 53 crores being his share in the value of the
Family shares. For this purpose shares in DFPCL and
DNL, which were notionally valued and divided equally among
the three sons in such a way that each son was to receive
assets of the value of Rs 53 crores. The 2003 agreement
provided for various things including payment of specified
amounts and inter se redistribution of other assets and
liabilities between the family members as explained in detail by
the AR in his submissions.
As explained by the AR equal distribution of the family
assets among the four Groups meant redistribution of assets
involving various family members and their corporate entities.
This involved ensuring that control, assets, and liabilities of
specific entities were allotted to specific Group in the process
ensuring that there was financial equality.
An exercise of plotting probable /required redistribution of
financial assets as appearing on said pages 37 & 38 was
undertaken around 12th March, 2003 i.e. soon after the
Family agreement was entered into on 1st January 2003. Since
                             12                            Shri Chimanlal K Mehta
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                                                             CO 148/Mum/2014 &
                                 Six Group comprising (06 ITAs & 06 Cos)=Total-14
        this exercise involved as many as about 33 entities and
        financial assets of large number and value and diverse nature,
        the office of the Appellant thought expedient to plot in separate
        accounting software. An elementary exercise of preparing
        memorandum ledger accounts by recording memorandum
        journal entries etc was utilized for this purpose. The CDs on
        record also clearly establish the fact that the starting point of
        this entire exercise was Balance sheets as on 13.03.2003 as
        appearing in the books of account maintained by various group
        entities.
        The further fact which distinctly emerges from the seized
        material/CD is that the components of the figures of CASH PAID
        and CASH RECD as appearing at the end of these probable
        balance sheets are in fact liquid assets in the form of loans,
        liabilities, cash and bank balances etc.
        The probable Balance sheet in the case of CKM Group as
        appearing on page 37 & 38 reads as under:s
                                                   CKM & Group
                    Capital           1,384    F.A.                              77
                  Loan taken          2,924    Gotri                             21
                 Current Liab.          306    YIL                            2,682
                    Deficit             216    YIL (Stock)                      325
                                               Baroda                            11
                                               Inv. Shares-Others               305
                                               Stock ­ Others                   856
                                               Jewellery                         21
                                               Loan to others                   164
                                               Current Assets-Other             370
                                      4,832                                   4,832

                                          Cash Recd.           + 3,547
                                          Cash paid             - 3,763
                                          Deficit                   216
        The AO has brought to tax Rs. 35.47 crores and Rs. 37.63 crores
        as unexplained cash received and cash paid.

        The breakup of the said two figures as available on CD2 is as
        under:
                                         CKM & Group
Particulars                         CD No.2 (Groupwise Bala-     Two Pages 37 & 38
                                    nce sheets as on 13.3.2003   (also in CD No. 19)
LIABILITIES:
Capital Account            1,384                       1,384                  1,384
Loan taken from Others     2,924                       2,924                  2,924
Current Liabilities                                      308                    308
Loans taken
   From Group               745                                                    -
   Whitehall                637                                                    -
Current Liabilities
   Group                   2259                                                   -
   Calls payable            122                                                   -
(Treated as Cash paid in   3763                        3,763                 3,763
Pages 37 & 38)                                          8379                 8,379
ASSETS"
Fixed Assets
Fixed Assets                                              77                     77
Gotri Bunglow                                             21                     21
YIL Shares                                              2682                   2682
YIL Shares (Stock)                                       325                    325
Baroda Plot                                               11                     11
                             13                         Shri Chimanlal K Mehta
                                                       ITA No. 3767/Mum/2013
                                                          CO 148/Mum/2014 &
                              Six Group comprising (06 ITAs & 06 Cos)=Total-14
Investments in Shares
 Others                                             305                   305
 Stock ­ Others                                     856                   856
 Jewellery                                           21                    21
 Loan to Others                                     164                   164
 Current Assets ­ Other                             370                   370
Loan given
 To Group                  960                                              --
Current Assets
 Group
                           875                                             --
 Cash and Bank Balance
                          1712                                             --
                          3547                     3547                 3547
                                                   8379                 8379

       It is thus clear that the so called CASH PAID
              in fact is the total of the following
      Loans taken
       From Group                                                        745
      Whitehall                                                          637
      Current Liabilities
          Group                                                         2259
          Calls payable                                                  122
      (Treated as Cash paid in Pages 37 & 38)
                                               TOTAL                3763
                                                                      637
          Similarly the so called CASH RECD is in fact the total of the
                                   following:
      Loans taken
       From Group                                                     745
      Whitehall                                                       637
      Current Liabilities
         Group                                                       2259
         Calls payable                                                122
      (Treated as Cash paid in Pages 37 & 38)
                                        TOTAL                       3763
                                                                      637

        In my opinion, it is beyond doubt that the words CASH PAID
        and CASH RECD have been in fact used to refer to identified
        liquid assets by way of loans taken, loans given, current
        liabilities, and cash/bank balances which were proposed to be
        redistributed pursuant to the Family Agreement. These words
        do not represent hard cash received or hard cash paid as
        ordinarily -conveyed by these words.
        That the figures appearing on pages 37 and 38 are probable
        balance sheets is obvious.
        The purpose of entire balance sheets has also been satisfactorily
        explained by the appellant; it has its genesis in the long standing
        family disputes which are in fact still not settled.
        The fact that these probable balance sheets have been drawn
        up from the accounted balance sheets as on 13.03.2003 is also
        clearly reflected in CD 2 (G-6 to G-1 1 of the Paper Book - Box File
        No. 1).
        There is also merit in the contention of the AR that though by
        passing similar orders in the case of 5 group assessees,
        the AO has brought to tax Rs.242,75,00,000/- as
        unaccounted CASH, during search on 21.07.2009 no
        unaccounted cash was found at any place - office or
                                      14                          Shri Chimanlal K Mehta
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                                                                    CO 148/Mum/2014 &
                                        Six Group comprising (06 ITAs & 06 Cos)=Total-14
                  residence - across the Group. Similarly no accounted
                  investment or unaccounted expenditure was also found. This
                  lends further support to the contention of the appellant that
                  these are only probable or projected figures and not figures of
                  hard cash.
                  Another noteworthy fact which emerges on viewing CD 19
                  containing pages 37 & 38 is that the content there of was
                  created on 28.03.2003. The properties of this CD/file as
                  recorded in the computer at the time of its creation, which was
                  also demonstrated before me, appear as under:







                  There is therefore merit in the contention of the AR that this CD
                  was created on 28.03.2003 a date falling beyond six year
                  limitation period prescribed in section 153A(l) of the Act.
                  In my opinion the appeal merits being allowed both on grounds
                  of limitation and the ground that the figures are in any event
                  only probable balance sheets and do not reflect actual
                  transactions of CASH PAID AND CASH RECD. These probable
                  balance sheets were themselves based on balance sheets as on
                  13.03.2003 drawn up from the regular books of account
                  maintained by the appellant
                  Moreover the words CASH PAID AND CASH RECD do not in fact
                  reflect hard cash but identified and accounted liquid assets.
                  For all the reasons discussed hereinabove, the assessment is
                  annulled and ex consequential the sum of Rs. 73,10,00,000/-
                  added to the total income of the Appellant does not survive and
                  gets deleted".


12.   The   CIT(A),   thus    deleted      the     entire     addition       of    Rs.
73,10,00,000/- made in the hands of the assessee, Mr. Chimanlal
Khimchand Mehta.
                                   15                         Shri Chimanlal K Mehta
                                                             ITA No. 3767/Mum/2013
                                                                CO 148/Mum/2014 &
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13.   Against this order of the CIT(A), the department has filed appeal
before the ITAT.

14.   Before us, the DR submitted that the order of the CIT(A) suffered
from the basic foundation of truth that the papers, as relied upon by
the AO were undated and that there was an evidenced movement of
actual cash between the family members and entities.

15.   The DR also submitted that the CIT(A)'s reliance has been on the
run of CDs, which depicted a certain date. The DR submitted that the
factual aspect of the actual notings of the CDs has not been verified.
The DR, on these submissions pleaded that the case should be
restored to the file of the AO for re-examining and readjudication after
examining the authenticity of the CDs.

16.   On the other hand, the AR submitted that the entire basis of
additions made, as per facts and figures reproduced above in the
order, are certain looser papers, which as per hard copy were undated,
but when examined from the source, would result in, in the notings
made in the CDs, as made on 23.03.2003 and 28.03.2003. This was
done and on examined and rerun of the CDs by the CIT(A) himself,
which were found and seized by the search party on 21.07.2009. The
AR pointed out that seizure of CDs can be seen from the panchnamas
as prepared on 21.07.2009.

17.   The AR further submitted that characterization of the word
`cash' used in the notings was nothing but loans taken and given,
current liabilities and bank balances to be distributed, as a result of
on family settlement. It is proved from the fact that actual movement
of assets and liabilities was done immediately and wherever any
liability arose in the form of capital gains, taxes were paid in
accordance with law, on those assets.
                                       16                          Shri Chimanlal K Mehta
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18.   The AR also submitted that even in the remand report, the AO
accepted the fact that this family distribution was done in the period
prior to the 153A period and that is why no comments were made.

19.   The AR submitted that in the light of the above and complete
facts taken into consideration by the CIT(A), no infirmity can be seen.
The AR, therefore, submitted that the appeal as filed by the
department must be rejected.

20.   We have perused the arguments from either side and have also
perused the material placed before us along with the orders of the
revenue authorities.

21.   The following abbreviations, are used in the seized papers:
                              S.no.                 Name                  Abbreviation
                          1           Mr. Chimanlal Khimchand Mehta           CKM
                          2           Mr. Deepak Chimanlal Mehta              DCM
                          3           Mr. Sailesh Chimanlal Mehta             SCM
                          4           Mr. Ajay Chimanlal Mehta                ACM
                          5           M/s. Deepak Fertilizers &              DFPCL
                                      Petrochemicals Corporation Ltd.
                          6           M/s. Deepak Nitrate Ltd                  DNL
                          7           M/s. Yerrowada Investments Ltd           YIL


22.   The fact that papers and CDs were seized at the time of search
on 21.07.2007, is evidenced from the panchnama (APB Vol 3, Pg. 912).
It is also a fact that the hard copies of print out which were undated
were found in the loose papers, which, when examined by running the
CDs were found to be pertaining to 23.03.2003 and 28.03.2003, period
prior to the 153A proceedings.

23.   On examination of the seized print out, it is seen that the
impugned CDs
                                  17                         Shri Chimanlal K Mehta
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                                                               CO 148/Mum/2014 &
                                   Six Group comprising (06 ITAs & 06 Cos)=Total-14




was in fact created on 28.03.2003. This means that seized hard copies
was nothing but the print out of the CD prepared on 28.03.2003,
therefore, the assumption of the AO that since the papers were
undated, and therefore, they have to be presumed to be pertaining to
the financial year, in which they were found, losses its legs and this
assumption falls. Hence addition cannot be sustained on this
arguments.

24.   On the other hand, the submissions of the AR cannot be ignored
that all the assets and liabilities were distributed as per the family
arrangement immediately thereafter and wherever necessary, due
taxes had been paid.

25.   Before us though the AR placed reliance on the decisions of P R
Metrani vs CIT- 287 ITR 209 (SC) and Surendra M Khandhar vs ACIT
321 ITR 254 (Bom). In our view both these decisions may not be
necessary, because, the question of rebuttal on the proposed addition
is not occasioned because the additions made by the AO, have been
based on notings on the CDs prepared on 28.03.2003, which we have
                                   18                         Shri Chimanlal K Mehta
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                                                                CO 148/Mum/2014 &
                                    Six Group comprising (06 ITAs & 06 Cos)=Total-14
held pertained to period prior to the search period assessments under
section 153A and, therefore cannot be sustained.

26.   After perusing the entire material placed before us, we are of the
opinion that for tentative family settlement, the entire working was
done. In the process of working out the family settlement, the assessee
picked up the actual books figures as on 13.03.2003 of various entities
to arrive at reasonable distribution. Neither any income was received
nor accrued in favour of the assessee. The argument of the AO/DR
that there was actual movement of cash could not be substantiated by
the AO/DR, as not one currency note was found, which could be held
to be unaccounted. Even the fact that the figures taken by the
assessee for family distribution were from the actual books also could
not be negated by the AO or by the DR before us. The fact, that on
actual and final distribution of movable assets, as worked out, all
legitimate taxes had been paid by the various persons/entities has
also not been controverted by the DR/AO. This goes to prove that the
AO treaded on the path of suspicion and based his findings on
assumption.

27.   We therefore sustain the findings of the CIT(A), wherein he has
demolished the entire case of the AO, both on merits and legality,
accepting the fact that the assessment framed by the AO is erroneous,
as the figures are based on the CDs seized by the department, which
clearly shows creation of the same on 28.03.2003, which is beyond the
limitation period, as prescribed in section 153A.

28.   We also reject the GOA no. 6, wherein the department has
sought restoration of the case to the file of the AO, because of non
allowance of proper opportunity under Rule 46A. This has been
categorically rejected by the CIT(A), wherein he has held that the
assessee has not produced/submitted anything or any evidence, which
was not before the AO or was not in the seized material. Even in the
                                        19                          Shri Chimanlal K Mehta
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                                                                      CO 148/Mum/2014 &
                                          Six Group comprising (06 ITAs & 06 Cos)=Total-14
course of hearing before us, the DR could not bring out or point out
any document, which could be said to be taken into consideration by
the CIT(A) and not considered by the AO.

29.   We, therefore, reject the grounds as raised by the department
and consequentially dismiss the appeal as filed by the department.


30.   In the result, Departmental appeal, as filed by the revenue
stands dismissed.


31.   Now, we shall deal with remaining appeals, by following our lead
appeal in ITA No.3767/Mum/2013 as decided by us hereinabove of
this order filed by the department.


            ITA No. : 3777/Mum/2013 : Department Appeal :

32.   The department has raised the following grounds:
                    "1. On the facts and in the circumstances of the case and in law
                    the Ld. CIT(A) erred in annulling the assessment on the ground
                    of limitation by holding that the C.D. was created on 28.3.2003,
                    falling beyond six years limitation period prescribed in section
                    153A(1) without verifying the authenticity and alleged date of
                    CD through forensic expert.
                    2. On the facts and in the circumstances of the case and in law
                    the Ld. CIT(A) erred in annulling the assessment on the basis of
                    surmises and presumptions without verifying the facts as
                    available on record.
                    3. On the facts and in the circumstances of the case and in law
                    the Ld. CIT(A) erred in deleting the addition of Rs.
                    18,96,00,000/- on account of unaccounted receipts due to
                    family arrangement ignoring the presumptions with regard to
                    the entries found in sized material as per provisions of Section
                    292C r.w.s. 132(4A) of I.T. Act.
                    4. On the facts and in the circumstances of the case and in law
                    the Ld. CIT(A) erred in deleting the addition of Rs. 9,69,00,000/-
                    on account of unaccounted payments due to family arrangement
                    ignoring the presumptions with regard to the entries found in
                    seized material as per provisions of Section 292C r.w.s. 132(4A)
                    of I.T. Act.
                    5. On the facts and in law, the Ld. CIT(A) erred in annulling the
                    assessment and deleting the additions by relying on the
                    additional evidence in the form of family agreements dated
                    March 2000 and 01.01.2003 but ignoring that these agreements
                    indicated financial transactions during the years covered u/s
                    153A of the I.T. Act.
                    6. On the facts and in the circumstances of the case and in law
                    the Ld. CIT(A) erred in admitting the additional evidence in
                                      20                          Shri Chimanlal K Mehta
                                                                 ITA No. 3767/Mum/2013
                                                                    CO 148/Mum/2014 &
                                        Six Group comprising (06 ITAs & 06 Cos)=Total-14
                 violation of Rule 46A of the I.T. Rules 1962 without providing the
                 AO opportunity to comment on merits.
                 The appellant prays that the order of the CIT(A) on the above
                 grounds be set aside and that of the Assessing Officer be
                 restored.
                 The appellant craves leave to amend or alter any ground and/or
                 add new grounds which may be necessary.
                 A copy of the order of the CIT(A), Mumbai was received in this
                 office on 15.3.2013. The limitation date for filing of appeal u/s
                 253(2) is 13.5.2013. However, the appeal should be filed
                 immediately".

33.   The CIT(A) on consideration of the submissions as made by the
assessee along with the documents found seized, has observed:
                        "I have considered the facts of the case and
                        perused the material on record including the CD2
                        and CD19 submitted during the course of the
                        hearing and opened by the representatives of the
                        Appellant in my presence.
                        On an examination of the material furnished by the
                        Appellant during the course of the hearing and on
                        perusing the two CL) I am of the opinion that no new
                        evidence is sought to be placed before me by the
                        Appellant. The entire material including that on the two
                        CD forms part of the seized material and was therefore
                        with the AG when he passed the order.
                        In the Remand Report the AO has not off ered any
                        comments in respect of assessment orders for
                        A.Y.2010-11 without assigning any reason thereby
                        suggesting that he had nothing to say in the matter.
                        B e y o n d d o u b t C D 1 9 f il e h av i n g p a th n a m e as
                        ' c o p y l 9 \ s u r e s h \ o h d \ My Documents\data\MSGDATA\EX
                        CEL\INDBS.XLS' contains same two pages as 37 & 38
                        copies of which have been appended to the assessment
                        order and which constitute the basis for the impugned
                        assessment.
                        CD No. 2, when opened showed another five pages
                        pertaining to group balance sheets. These five pages
                        are the basis for preparation of two pages No. 37 & 38.
                        Relevant figures on pages 37 & 38 perfectly match with
                        the figures on 5 pages on CD 2.
                        It is seen that these five pages have very clear headings
                        as "BALANCE SHEET AS.
                        It is thus clear that two pages i.e. 37 & 38 are the
                        summarized version of five pages available on CD 2
                        and further that the entire data contained therein
                        pertains to the period before 31/03/2003
                        The AR has clarified that pages 37 & 38 represent
                        probable balance sheets drawn up in the context of
                        Family agreement of 01/01/2003.
                        On an examination of the material on record it is
                        quite clear that there have been long standing
                        disputes within the Mehta family genesis of which goes
                        beyond the year 2000. A series of letters have been
                        exchanged between the Mr. CKM and his son Sailesh
                        wherein various claims and counter claims have been
                   21                          Shri Chimanlal K Mehta
                                              ITA No. 3767/Mum/2013
                                                 CO 148/Mum/2014 &
                     Six Group comprising (06 ITAs & 06 Cos)=Total-14
       raised.
       Mr. CKM, who is into his eighties, as the head of the
       family wanted to evolve a succession plan the aim of
       which was peace and harmony in the family. He along
       with his wife Mrs. Kanta Mehta desired to relinquish in
       favor of their sons, their interests in the two listed
       companies DFPCL and DNL.
       Since the 2000 Agreement did not result in
       settlement of disputes a fresh Family Agreement
       was drawn up by M/s. Udwadia, Udeshi and
       Bergis, Solicitors, in January, 2003. Under this
       family agreement DCM would own and manage DNL,
       SCM would own and manage DFPCL and ACM was to
       be paid Cash of Rs. 53 crores being his share in the
       value of the Family shares. For this purpose
       shares in DFPCL and DNL, which were notionally
       valued and divided equally among the three sons in
       such a way that each son was to receive assets of the
       value of Rs.53 crores. The 2003 agreement provided
       for various things including payment of specified
       amounts and inter se redistribution of other assets and
       liabilities between the family members as explained in
       detail by the AR in his submissions.
       As explained by the AR equal distribution of the
       family assets among the four Groups meant
       redistribution of assets involving various family members
       and their corporate entities. This involved ensuring that
       control, assets, and liabilities of specific entities were
       allotted to specific Group in the process ensuring that
       there was financial equality.
       An exercise of plotting probable /required
       redistribution of financial assets as appearing on
       said pages 37 & 38 was undertaken around 12th March,
       2003 i.e. soon after the Family agreement was entered
       into on 1st January, 2003. Since this exercise involved
       as many as about 33 entities and financial assets of
       large number and value and diverse nature, the office
       of the Appellant thought expedient to plot in separate
       accounting software. An elementary exercise of
       preparing memorandum ledger accounts by recording
       memorandum journal entries etc was utilized for this
       purpose. The CDs on record also clearly establish the
       fact that the starting point of this entire exercise was
       Balance sheets as on 13.03.2003 as appearing in the
       books of account maintained by various group entities.
       The further fact which distinctly emerges from the seized
       material/CD is that the components of the figures of
       CASH PAID and CASH RECD as appearing at the end
       of these probable balance sheets are in fact liquid
       assets in the form of loans, liabilities, cash and bank
       balances etc. The probable Balance sheet in the case
       of YIL as appearing on page 37 & 38 reads as under:

                                     YIL
 Capital                2537   DFPCL Shares                      597
Curr. Liab.               10   Loan to Others                     35
                               Current Assets
                                  -Others                         19
                        22                          Shri Chimanlal K Mehta
                                                   ITA No. 3767/Mum/2013
                                                      CO 148/Mum/2014 &
                          Six Group comprising (06 ITAs & 06 Cos)=Total-14
                                          -CKM                             216
                                          -SCM                             753
                                       Cash & Bank                         927
                                           Bal.
                              2,547                                      2,547

                                  Cash Recd.          + 1,896
                                  Cash paid               969
                                           Loan to CKM/SCM
                                  Surplus                 927
           The AO has brought to tax Rs. 18.96 crores and
           Rs. 9.69 crores as unexplained Cash received and
           cash paid.
           The break up of the said two f igures as available
           on CD 2 is under:

                                         YIL
Particulars                    CD No.2 (Groupwise Bala-     Two Pages 37 & 38
                               nce sheets as on 13.3.2003   (also in CD No. 19)
LIABILITIES:
Capital Account                                   2,537                  2,537
Current Liabilities                                  10                     10
     TOTAL                                        2,547                  2,547
ASSETS :
Fixed Assets                                            -                     -


Investments    in
Shares                                              597                    597
DFPCL                                                35                     35
Loan to Others                                       19                     19
 Current Assets ­
Other                 1,678
 Loan given
    To Group
                       170
Current Assets
     Group              48

Cash and Bank
Balance
(Treated as Cash
Received in Pages
37 & 38)
                      1896                         1896                  1896
          TOTAL                                   2,547                 2,547
           It is thus clear that the so called CASH PAID in
           fact is the total of the following:

           Loans given to CKM                          216
           Loans given to SCM                          753
           (Treated as Cash paid in
           Pages 37 & 38)
                      TOTAL                            969
           Similarly the so called CASH RECD is in fact the
           total of the following:
           ASSETS:
           Loan given
             To Group                                 1678
           Current Assets
            23                          Shri Chimanlal K Mehta
                                       ITA No. 3767/Mum/2013
                                          CO 148/Mum/2014 &
              Six Group comprising (06 ITAs & 06 Cos)=Total-14
 Group                                                   170
Cash and Bank Balance                                     48

 (Treated    as   Cash
received In Pages 37 &
38)
          TOTAL                                        1896

The difference between Cash Received of 1896
and Cash Paid of 969 is 927 which is shown as
Deficit (Cash & Bank Balance) in Pages 37 & 38.
In my opinion, it is beyond doubt that the words CASH
PAID and CASH RECD have been in fact used to refer
to identified liquid assets by way of loans taken,
loans given, current liabilities, and cash/bank balances
which were proposed to be redistributed pursuant to the
Family Agreement. These words do not represent hard
cash received or hard cash paid as ordinarily conveyed
by these words.
That the figures appearing on pages 37 and 38 are
probable balance sheets is obvious.
The purpose of the entire exercise of preparing
memorandum probable balance sheets has also been
satisfactorily explained by the appellant; it has its
genesis in the long standing family disputes which are
in fact still not settled.
The fact that these probable balance sheets have been
drawn up from the accounted balance sheets as on
13.03.2003 is also clearly reflected in CD 2 (G-6 to G-11
of the Paper Book - Box File No. 1).
There is also merit in the contention of the AR that
though by passing similar orders in the case of 5
group assessees, the AO has brought to tax
Rs.242,75,00,000/- as unaccounted CASH, during
search on 21.07.2009 no unaccounted cash was
found at any place - office or residence - across the
Group. Similarly no accounted investment or
unaccounted expenditure was also found. This lends
further support to the contention of the appellant that
these are only probable or projected figures and not
figures of hard cash.
Another noteworthy fact which emerges on viewing CD
19 containing pages 37 & 38 is that the content there
of was created on 28.03.2003. The properties of this
CD/file as recorded in the computer at the time of its
creation, which was also demonstrated before me,
appear as under:
                                      24                         Shri Chimanlal K Mehta
                                                                ITA No. 3767/Mum/2013
                                                                   CO 148/Mum/2014 &
                                       Six Group comprising (06 ITAs & 06 Cos)=Total-14




                        There is therefore merit in the contention of the AR
                        that this CD was created on 28.03.2003 a date
                        falling beyond six year limitation period prescribed in
                        section 153A(1) of the Act.
                        In my opinion the appeal merits being allowed both on
                        grounds of limitation and the ground that the figures
                        are in any event only probable balance sheets and
                        do not reflect actual transactions of CASH PAID AND
                        CASH RECD. These probable balance sheet were
                        themselves based on balance sheets as on 13.03.2003
                        drawn up from the regular books of account maintained
                        by the appellant. Moreover the words CASH PAID AND
                        CASH RECD do not in fact reflect hard cash but
                        identified and accounted liquid assets. For a ll the
                        reasons discussed hereinabove, the assessment is
                        annulled and ex consequentia the sum of
                        Rs.28,65,00,000/- added to the total income of the
                        Appellant does n o t s u r v i v e a n d g e ts d e l e te d " .

34.   As the issues involved in the impugned appeal are common as
deliberated and decided by us hereinabove, in our order while
adjudicating the Department appeal in ITA No. 3767/Mum/2013 at
length. The relevant conclusive paras of our order read as under:
                        20. We have perused the arguments from either side and
                        have also perused the material placed before us along
                        with the orders of the revenue authorities.
                        21. The following abbreviations, are used in the seized
                        papers:
                                 S.no.            Name              Abbreviation
                               1        Mr.            Chimanlal        CKM
                                        Khimchand Mehta
                               2        Mr. Deepak Chimanlal            DCM
                                        Mehta
            25                          Shri Chimanlal K Mehta
                                       ITA No. 3767/Mum/2013
                                          CO 148/Mum/2014 &
              Six Group comprising (06 ITAs & 06 Cos)=Total-14
      3          Mr. Sailesh Chimanlal             SCM
                 Mehta
      4          Mr.   Ajay     Chimanlal          ACM
                 Mehta
      5          M/s. Deepak Fertilizers          DFPCL
                 &         Petrochemicals
                 Corporation Ltd.
      6          M/s. Deepak Nitrate Ltd           DNL
      7          M/s.          Yerrowada           YIL
                 Investments Ltd

22.     The fact that papers and CDs were seized at the
time of search on 21.07.2007, is evidenced from the
panchnama (APB Vol 3, Pg. 912). It is also a fact that the
hard copies of print out which were undated were found
in the loose papers, which, when examined by running
the CDs were found to be pertaining to 23.03.2003 and
28.03.2003, prior period      to the period for 153A
proceedings.
23.     On examination of the seized print out, it is seen
that the impugned CDs




was in fact created on 28.03.2003. This means that
seized hard copies was nothing but the print out of the
CD prepared on 28.03.2003, therefore, the assumption of
the AO that since the papers were undated, and
therefore, they have to be presumed to be pertaining to
the financial year, in which they were found, losses its
legs and this assumption falls. Hence addition can be
sustained on this arguments.
24. On the other hand, the submissions of the AR cannot
be ignored that all the assets and liabilities were
distributed as per the family arrangement immediately
thereafter and wherever necessary, capital gains had
been paid.
                                    26                          Shri Chimanlal K Mehta
                                                               ITA No. 3767/Mum/2013
                                                                  CO 148/Mum/2014 &
                                      Six Group comprising (06 ITAs & 06 Cos)=Total-14
                        25. Before us though the AR placed reliance on the
                        decisions of
                        In the case of P R Metrani vs CIT- 287 ITR 209 (SC)
                        In the case of Surendra M Khandhar vs ACIT 321 ITR
                        254 (Bom)
                        in our view both these decisions may not be necessary,
                        because, the question of rebuttal on the proposed
                        addition has not been occasioned because the additions
                        made by the AO, have been based on notings on the CDs
                        prepared on 28.03.2003, which we have held cannot be
                        sustained.
                        26. We also reject the GOA no. 6, wherein the
                        department has sought restoration of the case to the file
                        of the AO, because of non allowance of proper
                        opportunity under Rule 46A. This has been categorically
                        rejected by the CIT(A), wherein he has held that the
                        assessee has not produced/submitted anything or any
                        evidence, which was not before the AO or was not in the
                        seized material.
                        27. We, therefore, reject the grounds as raised by the
                        department and consequentially dismiss the appeal as
                        filed by the department.
                        28. In the result, Departmental appeal, as filed by the
                        revenue stands dismissed.

35.   Following the above said paras, we dismiss the grounds involved
in department ITA No. 3777/Mum/2013. Accordingly, Department's
appeal stands dismissed.



         ITA No. : 3765/Mum/2013 : Department Appeal :

36.   The department has raised the following grounds:
                 "1. On the facts and in the circumstances of the case and in law
                 the Ld. CIT(A) erred in annulling the assessment on the ground
                 of limitation by holding that the C.D. was created on 28.3.2003,
                 falling beyond six years limitation period prescribed in section
                 153A(1) without verifying the authenticity and alleged date of
                 CD through forensic expert.
                 2. On the facts and in the circumstances of the case and in law
                 the Ld. CIT(A) erred in annulling the assessment on the basis of
                 surmises and presumptions without verifying the facts as
                 available on record.
                 3. On the facts and in the circumstances of the case and in law
                 the Ld. CIT(A) erred in deleting the addition of Rs.
                 11,87,00,000/- on account of unaccounted receipts due to
                 family arrangement ignoring the presumptions with regard to
                 the entries found in sized material as per provisions of Section
                 292C r.w.s. 132(4A) of I.T. Act.
                 4. On the facts and in the circumstances of the case and in law
                 the Ld. CIT(A) erred in deleting the addition of Rs.
                 11,86,00,000/- on account of unaccounted payments due to
                 family arrangement ignoring the presumptions with regard to
                                      27                          Shri Chimanlal K Mehta
                                                                 ITA No. 3767/Mum/2013
                                                                    CO 148/Mum/2014 &
                                        Six Group comprising (06 ITAs & 06 Cos)=Total-14




                 the entries found in seized material as per provisions of Section
                 292C r.w.s. 132(4A) of I.T. Act.
                 5. On the facts and in law, the Ld. CIT(A) erred in annulling the
                 assessment and deleting the additions by relying on the
                 additional evidence in the form of family agreements dated
                 March 2000 and 01.01.2003 but ignoring that these agreements
                 indicated financial transactions during the years covered u/s
                 153A of the I.T. Act.
                 6. On the facts and in the circumstances of the case and in law
                 the Ld. CIT(A) erred in admitting the additional evidence in
                 violation of Rule 46A of the I.T. Rules 1962 without providing the
                 AO opportunity to comment on merits.
                 The appellant prays that the order of the CIT(A) on the above
                 grounds be set aside and that of the Assessing Officer be
                 restored.
                 The appellant craves leave to amend or alter any ground and/or
                 add new grounds which may be necessary".


37.   The CIT(A) on consideration of the submissions as made by the
assessee along with the documents found seized, has observed:
                          "I have considered the facts of the case and perused the
                        material on record including the CD2 and Ct)19
                        submitted during the course of the hearing and
                        opened by the representatives of the Appellant in my
                        presence.
                        On an examination of the material furnished by the
                        Appellant during the course of the hearing and on
                        perusing the two CD I am of the opinion that no new
                        evidence is sought to be placed before me by the
                        Appellant. The entire material including that on the two
                        CD forms part of the seized material and was therefore
                        with the AO when he passed the order.
                        In the Remand Report the AO has not off ered
                        any comments in respect of assessment orders for
                        A.Y.2010-11 without assigning any reason thereby
                        suggesting that he had nothing to say in the matter.
                        B e y o n d d o u b t C D 1 9 f il e h av i n g p a t h n a m e as
                        ' c o p y l 9 \ s u r e s h \ o h d \ M y Documents\data\MSODAT
                        A\EXCEL\INDBS.XLS' contains same two pages as 37 &
                        38 copies of which have been appended to the
                        assessment order and which constitute the basis for the
                        impugned assessment.CD No. 2, when opened showed
                        another five pages pertaining to group balance sheets.
                        These five pages are the basis for preparation of two
                        pages No. 37 & 38. Relevant figures on pages 37 & 38.
                        The relevant figures on pages 37 & 38 perfectly match
                        with the figures on 5 pages on CD 2 It is seen that
                        these five pages have very clear headings as
                        "BALANCE SHEET AS ON 13/03/2003". It is thus
                        clear that two pages i.e. 37 & 38 are the summarized
                        version of five pages available on CD 2 and further
                        that the entire data contained therein pertains to the
            28                          Shri Chimanlal K Mehta
                                       ITA No. 3767/Mum/2013
                                          CO 148/Mum/2014 &
              Six Group comprising (06 ITAs & 06 Cos)=Total-14
period before 31/03/2003
The AR has clarified that pages 37 & 38 represent
probable balance sheets drawn up in the context of
Family agreement of 01/01/2003.
On an examination of the material on record it is
quite clear that there have been long standing
disputes within the Mehta family genesis of which
goes beyond the year 2000. A series of letters have
been exchanged between the Appellant and his son
Sailesh wherein various claims and counter claims
have been raised.
Mr. CKM, who is into his eighties, as the head of
the f amily wanted to evolve a succession plan the
aim of which was peace and harmony in the family.
He along with his wife Mrs. Kanta Mehta desired to
relinquish in favor of their sons, their interests in the
two listed companies DFPCL and DNL.
Since the 2000 Agreement did not result in
settlement of disputes a fresh Family Agreement
was drawn up by M/s. Udwaclia, Udeshi and
Bergis, Solicitors, in January, 2003. Under this
family agreement DCM would own and manage
DNL, SCM would own and manage DFPCL and ACM
was to be paid Cash of Rs. 53 crores being his share
in the value of the Family shares. For this
purpose shares in DFPCL and DNL, which were
notionally valued and divided equally among the
three sons in such a way that each son was to
receive assets of the value of Rs.53 crores. The
2003 agreement provided for various things
including payment of specified amounts and inter se
redistribution of other assets and liabilities between the
family members as explained in detail by the AR in his
submissions.
As explained by the AR equal distribution of the
f amily assets among the f our Groups meant
redistribution of assets involving various family
members and their corporate entities. This involved
ensuring that control, ass, and liabilities of specific
entities were , allotted to specific Group in the process
ensuring that there was financial equality.
An exercise of plotting probable /required
redistribution of financial assets as appearing on
said pages 37 & 38 was undertaken around 12th
March, 2003 i.e. soon after the Family agreement was
entered into on 1st January, 2003. Since this exercise
involved as many as about 33 entities and financial
assets of large number and value and diverse nature,
the office of the Appellant thought expedient to plot in
separate accounting software. An elementary exercise of
preparing memorandum ledger accounts by recording
memorandum journal entries etc was utilized for this
purpose. The CDs on record also clearly establish the
fact that the starting point of this entire exercise was
Balance sheets as on 13.03.2003 as appearing in the
books of account maintained by various group entities.
The further fact which distinctly emerges from the seized
material/CD is that the components of the figures of
            29                             Shri Chimanlal K Mehta
                                          ITA No. 3767/Mum/2013
                                             CO 148/Mum/2014 &
                 Six Group comprising (06 ITAs & 06 Cos)=Total-14
CASH PAID and CASH RECD as appearing at the end
of these probable balance sheets are in fact liquid
assets in the form of loans, liabilities, cash and bank
balances etc.
The probable Balance sheet in the case of DCM Group as
appearing on page 37 & 38 reads as under:
CAPITAL                   1000    MARYLAND                   392
OTHER                             Gotri                       17
LIABILITY (Tax
                             67   DNL                        647
on YIL)
                                  OTHER                        4
                                  STOCK OTHER                  6
                                  SH/.
                                                               1
                                  BALANCE
                          1067                              1067
                          Cash received +          1,187
                          Cash paid        _       1,186
                                                        1

The AO has brought to tax Rs.11.87 crores and
Rs.11.86 crores as unexplained CASH RECD and
CASH PAID".
                  30                          Shri Chimanlal K Mehta
                                             ITA No. 3767/Mum/2013
                                                CO 148/Mum/2014 &
                    Six Group comprising (06 ITAs & 06 Cos)=Total-14




     Similarly the so called CASH RECD is in fact the total of
the following:


ASSETS:
Loan given
  To Group                                                  150
Current Assets
 Group                                                     1011
 Others                                                       3
                  31                          Shri Chimanlal K Mehta
                                             ITA No. 3767/Mum/2013
                                                CO 148/Mum/2014 &
                    Six Group comprising (06 ITAs & 06 Cos)=Total-14
Cash and Bank Balance                                     23
(Treated as Cash Received In Pages
37 & 38)
                      TOTAL                             1187
     In my opinion, it is beyond doubt that the words CASH
     PAID and CASH RECD have been in fact used to refer
     to identified liquid assets by way of loans taken,
     loans given, current liabilities, and cash/bank balances
     which were proposed to be redistributed pursuant to the
     Family Agreement. These words do not represent hard
     cash received or hard cash paid as ordinarily conveyed
     by these words.
     That the figures appearing on pages 37 and 38 are
     probable balance sheets is obvious.
     The purpose of the entire exercise of preparing
     memorandum probable balance sheets has also been
     satisfactorily explained by the appellant; it has its
     genesis in the long standing family disputes which are
     in fact still not settled.
     The fact that these probable balance sheets have been
     drawn up from the accounted balance sheets as on
     13.03.2003 is also clearly reflected in CD 2 (G-6 to G-ll of
     the Paper Book - Box File No. 1).
     There is also merit in the contention of the AR that
     though by passing similar orders in the case of 5
     group assessees, the AO has brought to tax
     Rs.242,75,00,000/- as unaccounted CASH, during
     search on 21.07.2009 no unaccounted cash was
     found at any place - office or residence - across the
     Group.      Similarly     no accounted    investment      or
     unaccounted expenditure was also found. This lends
     further support to the contention of the appellant that
     these are only probable or projected figures and not
     figures of hard cash..
     Another noteworthy fact which emerges on viewing CD 19
     containing pages 37 & 38 is that the content there of was
     created on 28.03.2003. The properties of this CD/file as
     recorded in the computer at the time of its creation,
     which was also demonstrated before me, appear as
     under:




     There is therefore merit in the contention of the AR that this
     CII) was created on 28.03.2003 a date falling beyond
     six year limitation period prescribed in section 53A(1)
                                  32                          Shri Chimanlal K Mehta
                                                             ITA No. 3767/Mum/2013
                                                                CO 148/Mum/2014 &
                                    Six Group comprising (06 ITAs & 06 Cos)=Total-14
                      the Act.
                      In my opinion the appeal merits being allowed both on
                      grounds of limitation and the ground that the figures
                      are in any event only probable balance sheets and do
                      not reflect actual transactions of CASH PAID AND
                      CASH RECD. These probable balance sheets were
                      themselves based on balance sheets as on 13.03.2003
                      drawn up from the regular books of account maintained
                      by the appellant.
                      Moreover the words CASH PAID AND CASH RECD do not
                      in fact reflect hard cash but identified and accounted
                      liquid assets.
                      For all the reasons discussed hereinabove, the
                      assessment is annulled and ex consequentia the
                      sum of Rs.23,73,00,000/- added to the total income of
                      the Appellant does no t survive and ge ts del ete" .

38.   As the issues involved in the impugned appeal are common as
deliberated and decided by us hereinabove in our order while
adjudicating the Department's ITA No. 3767/Mum/2013 at length and
following the same decided another department's appeal in ITA
3777/Mum/2013. The relevant conclusive paras of our order read as
under:
                      "20. We have perused the arguments from either side
                      and have also perused the material placed before us
                      along with the orders of the revenue authorities.
                      21. The following abbreviations, as used in the seized
                      papers:
                          S.no.               Name               Abbreviation
                        1         Mr. Chimanlal Khimchand              CKM
                                  Mehta
                        2         Mr. Deepak Chimanlal Mehta           DCM
                        3         Mr. Sailesh Chimanlal Mehta          SCM
                        4         Mr. Ajay Chimanlal Mehta             ACM
                        5         M/s. Deepak Fertilizers &           DFPCL
                                  Petrochemicals Corporation
                                  Ltd.
                        6         M/s. Deepak Nitrate Ltd               DNL
                        7         M/s. Yerrowada Investments            YIL
                                  Ltd

                      22.     The fact that papers and CDs were seized at the
                      time of search on 21.07.2007, is evidenced from the
                      panchnama (APB Vol 3 912). It is also a fact that the
                      hard copies of print out which were undated were found
                      in the loose papers, which, when examined by running
                      the CDs were found to be pertaining to 23.03.2003 and
                      28.03.2003, prior to the period for 153A proceedings.

                      23.     On examination of the seized print out, it is seen
                      that the impugned CDs
            33                          Shri Chimanlal K Mehta
                                       ITA No. 3767/Mum/2013
                                          CO 148/Mum/2014 &
              Six Group comprising (06 ITAs & 06 Cos)=Total-14




was in fact created on 28.03.2003. This means that
seized hard copies was nothing but the print out of the
CD prepared on 28.03.2003, therefore, the assumption of
the AO that since the papers were undated, and
therefore, they have to be presumed to be pertaining to
the financial year, in which they were found, losses its
legs and this assumption falls. Hence addition can be
sustained on this arguments.
24. On the other hand, the submissions of the AR cannot
be ignored that all the assets and liabilities were
distributed as per the family arrangement immediately
thereafter and wherever necessary, capital gains had
been paid.
25. Before us though the AR placed reliance on the
decisions of
In the case of P R Metrani vs CIT- 287 ITR 209 (SC)
In the case of Surendra M Khandhar vs ACIT 321 ITR
254 (Bom)
in our view both these decisions may not be necessary,
because, the question of rebuttal on the proposed
addition has not been occasioned because the additions
made by the AO, have been based on notings on the CDs
prepared on 28.03.2003, which we have held cannot be
sustained.
26. We also reject the GOA no. 6, wherein the
department has sought restoration of the case to the file
of the AO, because of non allowance of proper
opportunity under Rule 46A. This has been categorically
rejected by the CIT(A), wherein he has held that the
assessee has not produced/submitted anything or any
evidence, which was not before the AO or was not in the
seized material.
27. We, therefore, reject the grounds as raised by the
department and consequentially dismiss the appeal as
filed by the department.
28. In the result, Departmental appeal, as filed by the
revenue stands dismissed.
                                     34                          Shri Chimanlal K Mehta
                                                                ITA No. 3767/Mum/2013
                                                                   CO 148/Mum/2014 &
                                       Six Group comprising (06 ITAs & 06 Cos)=Total-14
39.   Following the above said paras, we dismiss the grounds involved
in department ITA No. 3765/Mum/2013. Accordingly, Department's
appeal stands dismissed.

         ITA No. : 3766/Mum/2013 : Department Appeal :

40.   The department has raised the following grounds:
                 "1. On the facts and in the circumstances of the case and in law
                 the Ld. CIT(A) erred in annulling the assessment on the ground
                 of limitation by holding that the C.D. was created on 28.3.2003,
                 falling beyond six years limitation period prescribed in section
                 153A(1) without verifying the authenticity and alleged date of
                 CD through forensic expert.
                 2. On the facts and in the circumstances of the case and in law
                 the Ld. CIT(A) erred in annulling the assessment on the basis of
                 surmises and presumptions without verifying the facts as
                 available on record.
                 3. On the facts and in the circumstances of the case and in law
                 the Ld. CIT(A) erred in deleting the addition of Rs. 6,68,00,000/-
                 on account of unaccounted receipts due to family arrangement
                 ignoring the presumptions with regard to the entries found in
                 sized material as per provisions of Section 292C r.w.s. 132(4A)
                 of I.T. Act.
                 4. On the facts and in the circumstances of the case and in law
                 the Ld. CIT(A) erred in deleting the addition of Rs.
                 36,21,00,000/- on account of unaccounted payments due to
                 family arrangement ignoring the presumptions with regard to
                 the entries found in seized material as per provisions of Section
                 292C r.w.s. 132(4A) of I.T. Act.
                 5. On the facts and in law, the Ld. CIT(A) erred in annulling the
                 assessment and deleting the additions by relying on the
                 additional evidence in the form of family agreements dated
                 March 2000 and 01.01.2003 but ignoring that these agreements
                 indicated financial transactions during the years covered u/s
                 153A of the I.T. Act.
                 6. On the facts and in the circumstances of the case and in law
                 the Ld. CIT(A) erred in admitting the additional evidence in
                 violation of Rule 46A of the I.T. Rules 1962 without providing the
                 AO opportunity to comment on merits.
                 The appellant prays that the order of the CIT(A) on the above
                 grounds be set aside and that of the Assessing Officer be
                 restored.
                 The appellant craves leave to amend or alter any ground and/or
                 add new grounds which may be necessary".

41.   The CIT(A) on consideration of the submissions as made by the
assessee along with the documents found seized, has observed:
                        To further bolster his case the AR opened in my presence
                        the said two CD 2 and 19.
                        On      being     accessed        CD    19,   and    on
                        o p e n i n g h a v i n g p a t h n a m e a s 'copy 1
                        9\suresh\ohd\MyDocuments\data\MSODATA\EX
            35                          Shri Chimanlal K Mehta
                                       ITA No. 3767/Mum/2013
                                          CO 148/Mum/2014 &
              Six Group comprising (06 ITAs & 06 Cos)=Total-14




CEL\INDBS .XLS', he showed me file containing same
two pages as 37 & 38 which is the basis for the
impugned assessment.
He also drew my attention to the fact that as per the
computer record, this file having two pages similar to 37
& 38, was created on 28/03/2003. The copy of
computer printout was also placed on record.
He submitted that, in the circumstances, use of the
words 'Cash paid' and Cash received' has to be seen
in the facts and context of the case and not with
reference to the English dictionary as has been done by
the learned AO.
The AR submitted that the AO vide his letter dated
17.01.2012 had permitted the appellant to take copies
of all the seized material (including soft material)
which includes the material recorded on the said two
CDs. He submitted that the appellant obtained such
copies from the AO on 08.02.2012. Thus, no additional
evidence is contained in these CDs.
I have considered the facts of the case and perused
the material on record including the CD2 and CD19
submitted during the course of the hearing and
opened by the representatives of the Appellant in my
presence.
On an examination of the material furnished by the
Appellant during the course of the hearing and on
perusing the two CD I am of the opinion that no new
evidence is sought to be placed before me by the
Appellant. The entire material including that on the two
CD forms part of the seized material and was therefore
with the AO when he passed the order.
In the Remand Report the AO has not off ered
any comments in respect of assessment orders for
A.Y.2010-11 without assigning any reason thereby
suggesting that he had nothing to say in the matter.
Beyond doubt CD 19 file having path name as 'copy
l9\suresh\ohd\MyDocuments\data\MSODATA\EXCEL
\INDBS.XLS' contains same two pages as 37 & 38
copies of which have been appended to the assessment
order and which constitute the basis for the impugned
assessment.
CD No. 2, when opened showed another five pages pertaining to group balance sheets. These five pages are the basis for preparation of two pages No. 37 & 38. Relevant figures on pages 37 & 38 perfectly match with the figures on 5 pages on CD 2. It is seen that these five pages have very clear headings as "BALANCE SHEET AS ON 13/03/2003". It is thus clear that two pages i.e. 37 & 38 are the summarized version of five pages available on CD 2 and further that the entire data contained therein pertains to the period before 31/03/2003 The AR has clarified that pages 37 & 38 represent probable balance sheets drawn up in the context of Family agreement of 01/01/2003. 36 Shri Chimanlal K Mehta ITA No. 3767/Mum/2013 CO 148/Mum/2014 & Six Group comprising (06 ITAs & 06 Cos)=Total-14 On an examination of the material on record it is quite clear that there have been long standing disputes within the Mehta family genesis of which goes beyond the year 2000. A series of letters have been exchanged between the Appellant and his son Sailesh wherein various claims and counter claims have been raised. Mr. CKM, who is into his eighties, as the head of the f amily wanted to evolve a succession plan the aim of which was peace and harmony in the family. He along with his wife Mrs. Kanta Mehta desired to relinquish in favor of their sons, their interests in the two listed companies DFPCL and DNL. Since the 2000 Agreement did not result in settlement of disputes a fresh Family Agreement was drawn up by M/s. Udwaclia, Udeshi and Bergis, Solicitors, in January, 2003. Under this family agreement DCM would own and manage DNL, SCM would own and manage DFPCL and ACM was to be paid Cash of Rs. 53 crores being his share in the value of the Family shares. For this purpose shares in DFPCL and DNL, which were notionally valued and divided equally among the three sons in such a way that each son was to receive assets of the value of Rs.53 crores. The 2003 agreement provided for various things including payment of specified amounts and inter se redistribution of other assets and liabilities between the family members as explained in detail by the AR in his submissions. As explained by the AR equal distribution of the f amily assets among the f our Groups meant redistribution of assets involving various family members and their corporate entities. This involved ensuring that control, ass, and liabilities of specific entities were , allotted to specific Group in the process ensuring that there was financial equality. An exercise of plotting probable /required redistribution of financial assets as appearing on said pages 37 & 38 was undertaken around 12th March, 2003 i.e. soon after the Family agreement was entered into on 1st January, 2003. Since this exercise involved as many as about 33 entities and financial assets of large number and value and diverse nature, the office of the Appellant thought expedient to plot in separate accounting software. An elementary exercise of preparing memorandum ledger accounts by recording memorandum journal entries etc was utilized for this purpose. The CDs on record also clearly establish the fact that the starting point of this entire exercise was Balance sheets as on 13.03.2003 as appearing in the books of account maintained by various group entities. The further fact which distinctly emerges from the seized material/CD is that the components of the figures of CASH PAID and CASH RECD as appearing at the end of these probable balance sheets are in fact liquid assets in the form of loans, liabilities, cash and bank balances etc. 37 Shri Chimanlal K Mehta ITA No. 3767/Mum/2013 CO 148/Mum/2014 & Six Group comprising (06 ITAs & 06 Cos)=Total-14 SCM & Group Capital 806 Gotri 17 Loan taken 84 Bunglow 396 Deficit DFPCL-Sh 2,153 -WCCL-2200 -Others 753 2953 YIL TDR Sh. 94 Loans to Others 10 Loan to Smart 430 3843 3843 Cash Recd. + 668 Cash paid - 3,621 Deficit 2,953 The AO has brought to tax Rs.6.68 crores and Rs.36.21 crores as unexplained CASH RECD and CASH PAID". The break up of the said two figures as available on CD 2 is as under: 38 Shri Chimanlal K Mehta ITA No. 3767/Mum/2013 CO 148/Mum/2014 & Six Group comprising (06 ITAs & 06 Cos)=Total-14 39 Shri Chimanlal K Mehta ITA No. 3767/Mum/2013 CO 148/Mum/2014 & Six Group comprising (06 ITAs & 06 Cos)=Total-14 In my opinion, it is beyond doubt that the words CASH PAID and CASH RECD have been in fact used to refer to identified liquid assets by way of loans taken, loans given, current liabilities, and cash/bank balances which were proposed to be redistributed pursuant to the Family Agreement. These words do not represent hard cash received or hard cash paid as ordinarily conveyed by these words. That the figures appearing on pages 37 and 38 are probable balance sheets is obvious. The purpose of the entire exercise of preparing memorandum probable balance sheets has also been satisfactorily explained by the appellant; it has its genesis in the long standing family disputes which are in fact still not settled. The fact that these probable balance sheets have been drawn up from the accounted balance sheets as on 13.03.2003 is also clearly reflected in CD 2 (G-6 to G-ll of the Paper Book - Box File No. 1). There is also merit in the contention of the AR that though by passing similar orders in the case of 5 group assessees, the AO has brought to tax Rs.242,75,00,000/- as unaccounted CASH, during search on 21.07.2009 no unaccounted cash was found at any place - office or residence - across the Group. Similarly no accounted investment or unaccounted expenditure was also found. This lends further support to the contention of the appellant that these are only probable or projected figures and not figures of hard cash.. Another noteworthy fact which emerges on viewing CD 19 containing pages 37 & 38 is that the content there of was created on 28.03.2003. The properties of this CD/file as recorded in the computer at the time of its creation, which was also demonstrated before me, appear as under: There is therefore merit in the contention of the AR that this CII) was created on 28.03.2003 a date falling beyond six year limitation period prescribed in section 53A(1) the Act. In my opinion the appeal merits being allowed both on 40 Shri Chimanlal K Mehta ITA No. 3767/Mum/2013 CO 148/Mum/2014 & Six Group comprising (06 ITAs & 06 Cos)=Total-14 grounds of limitation and the ground that the figures are in any event only probable balance sheets and do not reflect actual transactions of CASH PAID AND CASH RECD. These probable balance sheets were themselves based on balance sheets as on 13.03.2003 drawn up from the regular books of account maintained by the appellant. Moreover the words CASH PAID AND CASH RECD do not in fact reflect hard cash but identified and accounted liquid assets. For all the reasons discussed hereinabove, the assessment is annulled and ex consequentia the sum of Rs.42,89,00,000/- added to the total income of the Appellant does no t survive and ge ts del ete" . 42. As the issues involved in the impugned appeal are common as deliberated and decided by us hereinabove in our order while adjudicating the Department appeal in ITA No. 3767/Mum/2013 at length and following the same decided another two appeal of the department in ITAs No. 3777/Mum/2013 & ITA 3765/Mum/2013. The relevant conclusive paras of our order read as under: "20. We have perused the arguments from either side and have also perused the material placed before us along with the orders of the revenue authorities. 21. The following abbreviations, are used in the seized papers: S.no. Name Abbreviation 1 Mr. Chimanlal Khimchand CKM Mehta 2 Mr. Deepak Chimanlal Mehta DCM 3 Mr. Sailesh Chimanlal Mehta SCM 4 Mr. Ajay Chimanlal Mehta ACM 5 M/s. Deepak Fertilizers & DFPCL Petrochemicals Corporation Ltd. 6 M/s. Deepak Nitrate Ltd DNL 7 M/s. Yerrowada Investments YIL Ltd 22. The fact that papers and CDs were seized at the time of search on 21.07.2007, is evidenced from the panchnama (APB Vol 3, Pg. 912). It is also a fact that the hard copies of print out which were undated were found in the loose papers, which, when examined by running the CDs were found to be pertaining to 23.03.2003 and 28.03.2003, period prior to the 153A proceedings. 23. On examination of the seized print out, it is seen that the impugned CDs 41 Shri Chimanlal K Mehta ITA No. 3767/Mum/2013 CO 148/Mum/2014 & Six Group comprising (06 ITAs & 06 Cos)=Total-14 was in fact created on 28.03.2003. This means that seized hard copies was nothing but the print out of the CD prepared on 28.03.2003, therefore, the assumption of the AO that since the papers were undated, and therefore, they have to be presumed to be pertaining to the financial year, in which they were found, losses its legs and this assumption falls. Hence addition can be sustained on this arguments. 24. On the other hand, the submissions of the AR cannot be ignored that all the assets and liabilities were distributed as per the family arrangement immediately thereafter and wherever necessary, capital gains had been paid. 25. Before us though the AR placed reliance on the decisions of In the case of P R Metrani vs CIT- 287 ITR 209 (SC) In the case of Surendra M Khandhar vs ACIT 321 ITR 254 (Bom) in our view both these decisions may not be necessary, because, the question of rebuttal on the proposed addition has not been occasioned because the additions made by the AO, have been based on notings on the CDs prepared on 28.03.2003, which we have held cannot be sustained. 26. We also reject the GOA no. 6, wherein the department has sought restoration of the case to the file of the AO, because of non allowance of proper opportunity under Rule 46A. This has been categorically rejected by the CIT(A), wherein he has held that the assessee has not produced/submitted anything or any evidence, which was not before the AO or was not in the seized material. 27. We, therefore, reject the grounds as raised by the department and consequentially dismiss the appeal as filed by the department. 28. In the result, Departmental appeal, as filed by the revenue stands dismissed. 42 Shri Chimanlal K Mehta ITA No. 3767/Mum/2013 CO 148/Mum/2014 & Six Group comprising (06 ITAs & 06 Cos)=Total-14 43. Following the above said paras, we dismiss the grounds involved in department's ITA No. 3766/Mum/2013. Accordingly, Department's appeal stands dismissed. ITA No. : 3764/Mum/2013 : Department Appeal : 44. The department has raised the following grounds: "1. On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in annulling the assessment on the ground of limitation by holding that the C.D. was created on 28.3.2003, falling beyond six years limitation period prescribed in section 153A(1) without getting any forensic examination. 2. On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in annulling the assessment on the basis of surmises and presumptions without verifying the facts as available on record. 3. On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in deleting the addition of Rs. 49,39,00,000/- on account of unaccounted receipts due to family arrangement ignoring the presumptions with regard to the entries found in sized material as per provisions of Section 292C r.w.s. 132(4A) of I.T. Act. 4. On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in deleting the addition of Rs. 24,99,00,000/- on account of unaccounted payments due to family arrangement ignoring the presumptions with regard to the entries found in seized material as per provisions of Section 292C r.w.s. 132(4A) of I.T. Act. 5. On the facts and in law, the Ld. CIT(A) erred in annulling the assessment and deleting the additions by relying on the additional evidence in the form of family agreements dated March, 2000 and 01.01.2003 but ignoring that these agreements indicated financial transactions during the years covered u/s 153A of the I.T. Act. 6. On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in admitting the additional evidence in violation of Rule 46A of the I.T. Rules 1962 without providing the AO opportunity to comment on merits. The appellant prays that the order of the CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored. The appellant craves leave to amend or alter any ground and/or add new grounds which may be necessary". 45. The CIT(A) on consideration of the submissions as made by the assessee along with the documents found seized, has observed: Thus the word CASH has been used in the context of liquid assets not only by the appellant but also by an external CA and by the Pane Off ice of the Appellant. This ther ef ore 43 Shri Chimanlal K Mehta ITA No. 3767/Mum/2013 CO 148/Mum/2014 & Six Group comprising (06 ITAs & 06 Cos)=Total-14 establ ishes a set pattern of using the wo rd CASH l oosel y not only wi th reference to hard cash but also other liquid assets. It is also a fact that the Letter dated 03.12.2008 was dictated to the Secretary of CKM and copies thereof were also marked to Company Executives, eminent Solicitor and also given to Arbitrators. T h e r e i s me r i t i n t h e c o n te n ti o n of th e A R t h a t s u c h o p e n r ef e re n c e to C A S H o r unaccounted transactions of such magnitude can be said to be contrary to normal human conduct. As rightly pointed out by the AR SCM in his letter dated 11/12/2008 has questioned the correctness of the contents of CKM;s letter dated 03/12/2008. It is seen that this letter is again marked to a Company Executive and to the same Solicitor. The Assessing Officer has not made a reference to this letter in the assessment order though it was part of the seized material. The other material fact which the Assessing Officer has not given due importance is that d u r i n g th e c o u r s e of th e s e a r c h c o v e r i n g t h e e n ti r e D e e p ak G r o u p c o v e r i n g b o t h residences of all family members and all the companies, no unaccounted cash was found. Going by the Assessing Officer own presumption, this cash transaction is supposed to have taken place during the period 01.04.2008 to 31.03.2009 while the search took place on 21.07.2009. During this extensive search neither was any unaccounted cash or any unaccounted investment or unaccounted expenditure was detected either by the search party or by the Assessing Officer during assessment proceedings barring use of the word CASH in the said letter of 03.12.2008. In my opinion this fact lends further credence to the argument of the AR that use of the word CASH in the said letter was in the context of liquid funds only and not hard cash as presumed by the Assessing Officer. The other relevant f act is that the f amily disputes particularly between CKM and SCM have not been settled even today and the matter is pending before Arbitrators. This fact is also coming out from the submissions made during assessment proceedings. It is also seen that the Assessing Officer has brought Rs.20 crores to tax in A.Y. 2009-10 only because there is use of the word CASH in the letter dated 03.12.2008. In my opinion there is no basis for such approach. The seized material clearly shows that family disputes are deep rooted and going on since prior to the year 2000. The first family agreement is of March, 2000. The second family agreement is of 01/01/2003. The 2003 agreement speaks of the Appellant being required to pay Rs.30 crs. to ACM on or before 31.03.2003. The agreement also notes as a fact that "which 44 Shri Chimanlal K Mehta ITA No. 3767/Mum/2013 CO 148/Mum/2014 & Six Group comprising (06 ITAs & 06 Cos)=Total-14 funds have been provided by CKM to SCM". Thus, according to the January 2003 agreement this was the only obligation undertaken by the Appellant vis- ã-vis SCM's liability to pay 53 crores to ACM. On the date of execution of the agreement itself on 01/01/2003 the agreement uses the past tense "which f unds have been provided by CKM to SCM" suggesting that the event, if at all, has already happened and CKM has already discharged his undertaking by providing funds to ACM as early as 01/01/2003. There is theref ore no basis f or the Assessing Off icer to come to a conclusion that the alleged CASH transaction took place in F.Y.2008-09 warranting an addition in A.Y.2008-09. The transaction of sale of FSI by the CKM Group company Sof otel to DFPCL, SCM Group Company, is also stated to have taken place in March, 2003. This transaction, was duly approved by the Board of Directors of DFPCL and has also been accepted by the Department both in the case of Sofotel and DFPCL. This transaction was undertaken to provide liquidity to the f amily. This event has also occurred in March 2003 which coincides with the deadline for discharge by SCM of his obligation to pay ACM Rs.30 crores on or before 3 1.03.2003 for which funds were provided by CKM at that point of time since SCM did not have liquidity. This fact also does not support the AO conclusion that the alleged CASH transaction took place in F.Y.2008-09 warranting an addition in A.Y.2008-09. On a combined reading of Para 18 and Para 31 of the Statement of facts with the appeal Memo two things emerge namely that CKM had provided (in the sense of arranged) assets worth Rs.30 crores for ACM and his group entities before 31/03/2003 and further that, in course of time, ACM was provided (in the sense of made available) funds in liquid form to the extent of Rs.34.83 crores by CKM by providing control over certain private companies having liquid funds. Correctness of this Statement of facts has not been challenged by the AO at any point of time after filing of the appeal memo and therefore should be presumed to be correct. In this manner CKM can be said to have discharged his only obligation towards ACM undertaken on behalf of SCM. The seized material does not and it is also not the case of the AC that there was any other obligation undertaken by CKM under the family agreement of 2003. There was therefore no question of CKM being required to pay hard CASH to ACM on behalf of SCM in pursuance of the said agreement. The word CASH has therefore to be necessarily interpreted consistent with the manner in which it has been generally used within Group which seems to be 45 Shri Chimanlal K Mehta ITA No. 3767/Mum/2013 CO 148/Mum/2014 & Six Group comprising (06 ITAs & 06 Cos)=Total-14 the normal conduct of the Group. The fact also remains that CKM and SCM and the rest of the family were having deep rooted differences which even the 2003 agreement did not fully resolve notwithstanding the fact that the scheme of control over the two public limited companies was completely changed therein as compared to the 2000 family agreement. In my opinion in such a situation and in the background of such deep rooted family disputes, normal human conduct would be of settling inter se obligations and claims using accounted funds thereby clearly leaving a trail establishing fact of settlement of each claim and counter claim. In the face of the bitterness in relations between CKM and SCM as reflected in of some of the letters forming part of the seized material, presumption that CASH would have been paid by CKM to ACM on behalf of SCM would be contrary to normal human conduct. Normal human conduct would suggest payment by cheque or by providing other liquid funds only. The letter of 03.12.2008 has been formally marked to the Solicitor Bergis Desai and also to DAD and ACM. This would suggest that CKM wanted keep a trail of the discharge by him of his obligation to pay 30 crores on behalf of SCM. This conduct is more in tune with recording of fact of transactions in accounted funds rather than of unaccounted cash. Even on a preponderance of probability this would appear to be true. The fact that emerges on a conjoint reading of the relevant seized material is that the sum of Rs.20 crores in fact merely represents value of disputed net credit claimed by CKM from SCM arising out of sale of FSI in March, 2003 by Sofotel (CKM Group company) to DFPCL (SCM group company) and not cash as a plain and isolated reading of the letter dated 03.12.2008 would suggest. In my opinion keeping in mind the totality of the facts of the case there is no warrant for such plain and isolated reading. It is also seen that though as per the Family agreement of 2003 ACM was to be paid `cash' of 53 crores it is not the case of the Assessing Officer that ACM has in fact been paid Rs. 53 crores in unaccounted cash. In my opinion the addition of Rs. 20 crs made by the AO as unexplained payment in cash is contrary to the material on record. The addition is made purely on the basis of conjectures and surmises and on a plain and isolated reading of a solitary letter and without giving weightage to the other letters and other seized material on record and the to the conduct of the Group in the matter of use of the word CASH as clearly emerging from the seized material. The said figure of Rs. 20 crores does not represent any CASH transaction as presumed by the Assessing Officer". 46 Shri Chimanlal K Mehta ITA No. 3767/Mum/2013 CO 148/Mum/2014 & Six Group comprising (06 ITAs & 06 Cos)=Total-14 46. As the issues involved in the impugned appeal are common as deliberated and decided by us hereinabove in our order while adjudicating the Department appeal in ITA No. 3767/Mum/2013 at length and following the same decided another three appeals of the department in ITAs No. 3777/Mum/2013, ITA 3765/Mum/2013 & 3766/Mum/2013. The relevant conclusive paras of our order read as under: "20. We have perused the arguments from either side and have also perused the material placed before us along with the orders of the revenue authorities. 21. The following abbreviations, are used in the seized papers: S.no. Name Abbreviation 1 Mr. Chimanlal CKM Khimchand Mehta 2 Mr. Deepak Chimanlal DCM Mehta 3 Mr. Sailesh Chimanlal SCM Mehta 4 Mr. Ajay Chimanlal ACM Mehta 5 M/s. Deepak Fertilizers DFPCL & Petrochemicals Corporation Ltd. 6 M/s. Deepak Nitrate Ltd DNL 7 M/s. Yerrowada YIL Investments Ltd 22. The fact that papers and CDs were seized at the time of search on 21.07.2007, is evidenced from the panchnama (APB Vol 3, Pg. 912). It is also a fact that the hard copies of print out which were undated were found in the loose papers, which, when examined by running the CDs were found to be pertaining to 23.03.2003 and 28.03.2003, period prior to the period for 153A proceedings. 23. On examination of the seized print out, it is seen that the impugned CDs 47 Shri Chimanlal K Mehta ITA No. 3767/Mum/2013 CO 148/Mum/2014 & Six Group comprising (06 ITAs & 06 Cos)=Total-14 was in fact created on 28.03.2003. This means that seized hard copies was nothing but the print out of the CD prepared on 28.03.2003, therefore, the assumption of the AO that since the papers were undated, and therefore, they have to be presumed to be pertaining to the financial year, in which they were found, losses its legs and this assumption falls. Hence addition can be sustained on this arguments. 24. On the other hand, the submissions of the AR cannot be ignored that all the assets and liabilities were distributed as per the family arrangement immediately thereafter and wherever necessary, capital gains had been paid. 25. Before us though the AR placed reliance on the decisions of In the case of P R Metrani vs CIT- 287 ITR 209 (SC) In the case of Surendra M Khandhar vs ACIT 321 ITR 254 (Bom) in our view both these decisions may not be necessary, because, the question of rebuttal on the proposed addition has not been occasioned because the additions made by the AO, have been based on notings on the CDs prepared on 28.03.2003, which we have held cannot be sustained. 26. We also reject the GOA no. 6, wherein the department has sought restoration of the case to the file of the AO, because of non allowance of proper opportunity under Rule 46A. This has been categorically rejected by the CIT(A), wherein he has held that the assessee has not produced/submitted anything or any evidence, which was not before the AO or was not in the seized material. 27. We, therefore, reject the grounds as raised by the department and consequentially dismiss the appeal as filed by the department. 28. In the result, Departmental appeal, as filed by the revenue stands dismissed. 47. Following the above said paras, we dismiss the grounds involved in department's ITA No. 3764/Mum/2013. Accordingly, Department's appeal stands dismissed. ITA No. : 3778/Mum/2013 : Department Appeal : AY 2009-10 : 48. The department has raised the following grounds: "1. On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in deleting the addition of Rs. 20,00,00,000/- on account of unaccounted receipts due to family arrangement ignoring the presumptions with regard to the entries found in sized material as per provisions of Section 292C r.w.s. 132(4A) of I.T. Act. 2. On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in admitting the additional evidence in 48 Shri Chimanlal K Mehta ITA No. 3767/Mum/2013 CO 148/Mum/2014 & Six Group comprising (06 ITAs & 06 Cos)=Total-14 violation of Rule 46A of the I.T. Rules 1962 without providing the AO opportunity to comment on merits. The appellant prays that the order of the CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored. The appellant craves leave to amend or alter any ground and/or add new grounds which may be necessary A copy of the order of the CIT(A), Mumbai was received in this office on 15.03.2013. The limitation date for filing of appeal u/s 253(2) is 13.5.2013. However, the appeal should be filed immediately"". 49. The CIT(A) on consideration of the submissions as made by the assessee along with the documents found seized, has observed: "Thus the word CASH has been used in the context of liquid assets not only by the appellant but also by an external CA and by the Pane Off ice of the Appellant. This theref ore establishes a set pattern of using the word CASH loosely not only wi th reference to hard cash but also other liquid assets. It is also a fact that the Letter dated 03.12.2008 was dictated to the Secretary of CKM and copies thereof were also marked to Company Executives, eminent Solicitor and also given to Arbitrators. T h e r e i s m e r i t i n t h e c o n te n ti o n o f th e A R th a t s u c h o p e n r ef e r e n ce to C A S H o r unaccounted transactions of such magnitude can be said to be contrary to normal human conduct. As rightly pointed out by the AR SCM in his letter dated 11/12/2008 has questioned the correctness of the contents of CKM;s letter dated 03/12/2008. It is seen that this letter is again marked to a Company Executive and to the same Solicitor. The Assessing Officer has not made a reference to this letter in the assessment order though it was part of the seized material. The other material fact which the Assessing Officer has not given due importance is that d ur i n g th e co ur se of th e se ar c h cove r i n g th e e n ti re D eep ak Gr o up co ve ri n g b o th residences of all family members and all the companies, no unaccounted cash was found. Going by the Assessing Officer own presumption, this cash transaction is supposed to have taken place during the period 0 1.04.2008 to 3 1.03.2009 while the search took place 011 21.07.2009. During this extensive search neither was any unaccounted cash or any unaccounted investment or unaccounted expenditure was detected either by the search party or by the Assessing Officer during assessment proceedings barring use of the word CASH in the said letter of 03.12.2008. In my opinion this fact lends further credence to the argument of the AR that use of the word CASH in the said letter was in the context of liquid funds only and not hard cash as presumed by the Assessing Officer. 49 Shri Chimanlal K Mehta ITA No. 3767/Mum/2013 CO 148/Mum/2014 & Six Group comprising (06 ITAs & 06 Cos)=Total-14 The other relevant fact is that the family disputes particularly between CKM and SCM have not been settled even today and the matter is pending before Arbitrators. This fact is also coming out from the submissions made during assessment proceedings. It is also seen that the Assessing Officer has brought Rs.20 crores to tax in A.Y. 2009-10 only because there is use of the word CASH in the letter dated 03.12.2008. In my opinion there is no basis for such approach. The seized material clearly shows that family disputes are deep rooted and going on since prior to the year 2000. The first family agreement is of March, 2000. The second family agreement is of 01/01/2003. The 2003 agreement speaks of the Appellant being required to pay Rs.30 crs. to ACM on or before 31.03.2003. The agreement also notes as a fact that "which funds have been provided by CKM to SCM". Thus, according to the January 2003 agreement this was the only obligation undertaken by the Appellant vis- à-vis SCM's liability to pay 53 crores to ACM. On the date of execution of the agreement itself on 01/01/2003 the agreement uses the past tense "which f unds have been provided by CKM to SCM" suggesting that the event, if at all, has already happened and CKM has already discharged his undertaking by providing funds to ACM as early as 01/01/2003. There is theref ore no basis f or the Assessing Off icer to come to a conclusion that the alleged CASH transaction took pl ace in F.Y.2008-09 warranting an addition in A.Y.2008-09. The transaction of sale of FSI by the CKM Group company Softel to DFPCL, SCM Group Company, is also stated to have taken place in March, 2003. This transaction, was duly approved by the Board of Directors of DFPCL and has also been accepted by the Department both in the case of Softel and DFPCL. This transaction was undertaken to provide liquidity to the f amily. This event has also occurred in March 2003 which coincides with the deadline for discharge by SCM of his obligation to pay ACM Rs.30 crores on or before 3 1.03.2003 for which hinds were provided by CKM at that point of time since SCM did not have liquidity. This fact also does not support the AG conclusion that the alleged CASH transaction took place in F.Y.2008-09 warranting an addition in A.Y.2008-09. On a combined reading of Para 18 and Para 31 of the Statement of facts with the appeal Memo two things emerge namely that CKM had provided (in the sense of arranged) assets worth Rs.30 crores for ACM and his group entities before 31/03/2003 and further that, in course of time, ACM was provided (in the sense of made available) hinds in liquid form to the extent of Rs.34.83 crores by CKM by providing control over certain private companies having liquid funds. 50 Shri Chimanlal K Mehta ITA No. 3767/Mum/2013 CO 148/Mum/2014 & Six Group comprising (06 ITAs & 06 Cos)=Total-14 Correctness of this Statement of facts has not been challenged by the AG at any point of time after filing of the appeal memo and therefore should be presumed to be correct. In this manner CKM can be said to have discharged his only obligation towards ACM undertaken on behalf of SCM. The seized material does not and it is also not the case of the AG that there was any other obligation undertaken by CKM under the family agreement of 2003. There was therefore no question of CKM being required to pay hard CASH to ACM on behalf of SCM in pursuance of the said agreement. The word CASH has therefore to be necessarily interpreted consistent with the manner in which it has been generally used within Group which seems to be the normal conduct of t h e G r o u p . The fact also remains that CKM and SCM and the rest of the family were having deep rooted differences which even the 2003 agreement did not fully resolve notwithstanding the fact that the scheme of control over the two public limited companies was completely changed therein as compared to the 2000 family agreement. In my opinion in such a situation and in the background of such deep rooted family disputes, normal human conduct would be of settling inter se obligations and claims using accounted funds thereby clearly leaving a trail establishing fact of settlement of each claim and counter claim. In the face of the bitterness in relations between CKM and SCM as reflected in of some of the letters forming part of the seized material, presumption that CASH would have been paid by CKM to ACM on behalf of SCM would be contrary to normal human conduct. Normal human conduct would suggest payment by cheque or by providing other liquid funds only. The letter of 03.12.2008 has been formally marked to the Solicitor Bergis Desai and also to DAD and ACM. This would suggest that CKM wanted keep a trail of the discharge by him of his obligation to pay 30 crores on behalf of SCM. This conduct is more in tune with recording of fact of transactions in accounted funds rather than of unaccounted cash. Even on a preponderance of probability this would appear to be true. The fact that emerges on a conjoint reading of the relevant seized material is that the sum of Rs.20 crores in fact merely represents value of disputed net credit claimed by CKM from SCM arising out of sale of FSI in March, 2003 by Sofotel (CKM Group company) to DFPCL (SCM group company) and not cash as a plain and isolated reading of the letter dated 03.12.2008 would suggest. In my opinion keeping in mind the totality of the facts of the case there is no warrant for such plain and isolated reading. It is also seen that though as per the Family agreement of 2003 ACM was to be paid 'cash' of 53 51 Shri Chimanlal K Mehta ITA No. 3767/Mum/2013 CO 148/Mum/2014 & Six Group comprising (06 ITAs & 06 Cos)=Total-14 crores it is not the case of the Assessing Officer that ACM has in fact been paid Rs.53 crores in unaccounted cash. In my opinion the addition of Rs.20 crs. made by the AO as unexplained payment in cash is contrary to the material on record. The addition is made purely on the basis of conjectures and surmises and on a plain and isolated reading of a solitary letter and without giving weightage to the other letters and other seized material on record and the to the conduct of the Group in the matter of use of the word CASH as clearly emerging from the seized material. The said figure of Rs.20 crores does not represent any CASH transaction as presumed by the Assessing Officer". 50. As the basic issues involved in the impugned appeal are common as deliberated and decided by us hereinabove in our order while adjudicating the Department appeal in ITA No. 3767/Mum/2013 at length and following the same decided another four appeals heard on 10.11.2014 of the department in ITAs No. 3777/Mum/2013, ITA 3765/Mum/2013, 3766/Mum/2013 & 3764/Mum/2013. The relevant conclusive paras of our order read as under: "20. We have perused the arguments from either side and have also perused the material placed before us along with the orders of the revenue authorities. 21. The following abbreviations, are used in the seized papers: S.no. Name Abbreviation 1 Mr. Chimanlal Khimchand CKM Mehta 2 Mr. Deepak Chimanlal Mehta DCM 3 Mr. Sailesh Chimanlal Mehta SCM 4 Mr. Ajay Chimanlal Mehta ACM 5 M/s. Deepak Fertilizers & DFPCL Petrochemicals Corporation Ltd. 6 M/s. Deepak Nitrate Ltd DNL 7 M/s. Yerrowada Investments YIL Ltd 22. The fact that papers and CDs were seized at the time of search on 21.07.2007, is evidenced from the panchnama (APB Vol 3, Pg. 912). It is also a fact that the hard copies of print out which were undated were found in the loose papers, which, when examined by running the CDs were found to be pertaining to 23.03.2003 and 28.03.2003, period prior to the period for 153A proceedings. 23. On examination of the seized print out, it is seen that the impugned CDs 52 Shri Chimanlal K Mehta ITA No. 3767/Mum/2013 CO 148/Mum/2014 & Six Group comprising (06 ITAs & 06 Cos)=Total-14 was in fact created on 28.03.2003. This means that seized hard copies was nothing but the print out of the CD prepared on 28.03.2003, therefore, the assumption of the AO that since the papers were undated, and therefore, they have to be presumed to be pertaining to the financial year, in which they were found, losses its legs and this assumption falls. Hence addition can be sustained on this arguments. 24. On the other hand, the submissions of the AR cannot be ignored that all the assets and liabilities were distributed as per the family arrangement immediately thereafter and wherever necessary, capital gains had been paid. 25. Before us though the AR placed reliance on the decisions of In the case of P R Metrani vs CIT- 287 ITR 209 (SC) In the case of Surendra M Khandhar vs ACIT 321 ITR 254 (Bom) in our view both these decisions may not be necessary, because, the question of rebuttal on the proposed addition has not been occasioned because the additions made by the AO, have been based on notings on the CDs prepared on 28.03.2003, which we have held cannot be sustained. 26. We also reject the GOA no. 6, wherein the department has sought restoration of the case to the file of the AO, because of non allowance of proper opportunity under Rule 46A. This has been categorically rejected by the CIT(A), wherein he has held that the assessee has not produced/submitted anything or any evidence, which was not before the AO or was not in the seized material. 27. We, therefore, reject the grounds as raised by the department and consequentially dismiss the appeal as filed by the department. 28. In the result, Departmental appeal, as filed by the revenue stands dismissed. 51. Following the above said paras, we dismiss the grounds involved in department's appeal in ITA No. 3778/Mum/2013. Accordingly, Department's appeal stands dismissed. 53 Shri Chimanlal K Mehta ITA No. 3767/Mum/2013 CO 148/Mum/2014 & Six Group comprising (06 ITAs & 06 Cos)=Total-14 ITA No. : 3779/Mum/2013 : Department Appeal : AY 2009-10 : 52. The department has raised the following grounds: "1. On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in deleting the addition of Rs. 20,00,00,000/- on account of unaccounted receipts due to family arrangement ignoring the presumptions with regard to the entries found in sized material as per provisions of Section 292C r.w.s. 132(4A) of I.T. Act. 2. On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in admitting the additional evidence in violation of Rule 46A of the I.T. Rules 1962 without providing the AO opportunity to comment on merits. The appellant prays that the order of the CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored. The appellant craves leave to amend or alter any ground and/or add new grounds which may be necessary A copy of the order of the CIT(A), Mumbai was received in this office on 15.03.2013. The limitation date for filing of appeal u/s 253(2) is 13.5.2013. However, the appeal should be filed immediately". 53. As the basic issues involved in the impugned appeal are common as deliberated and decided by us hereinabove in our order while adjudicating the Department appeal in ITA No. 3767/Mum/2013 at length and following the same decided another five appeals heard on 10.11.2014 of the department in ITAs No. 3777/Mum/2013, ITA 3765/Mum/2013, 3766/Mum/2013, 3764/Mum/2013 & 3778/Mum/2013. The relevant conclusive paras of our order read as under: "20. We have perused the arguments from either side and have also perused the material placed before us along with the orders of the revenue authorities. 21. The following abbreviations, are used in the seized papers: S.no. Name Abbreviation 1 Mr. Chimanlal CKM Khimchand Mehta 2 Mr. Deepak Chimanlal DCM Mehta 3 Mr. Sailesh Chimanlal SCM Mehta 4 Mr. Ajay Chimanlal ACM Mehta 5 M/s. Deepak Fertilizers DFPCL & Petrochemicals Corporation Ltd. 54 Shri Chimanlal K Mehta ITA No. 3767/Mum/2013 CO 148/Mum/2014 & Six Group comprising (06 ITAs & 06 Cos)=Total-14 6 M/s. Deepak Nitrate Ltd DNL 7 M/s. Yerrowada YIL Investments Ltd 22. The fact that papers and CDs were seized at the time of search on 21.07.2007, is evidenced from the panchnama (APB Vol 3, Pg. 912). It is also a fact that the hard copies of print out which were undated were found in the loose papers, which, when examined by running the CDs were found to be pertaining to 23.03.2003 and 28.03.2003, period prior to the period for 153A proceedings. 23. On examination of the seized print out, it is seen that the impugned CDs was in fact created on 28.03.2003. This means that seized hard copies was nothing but the print out of the CD prepared on 28.03.2003, therefore, the assumption of the AO that since the papers were undated, and therefore, they have to be presumed to be pertaining to the financial year, in which they were found, losses its legs and this assumption falls. Hence addition can be sustained on this arguments. 24. On the other hand, the submissions of the AR cannot be ignored that all the assets and liabilities were distributed as per the family arrangement immediately thereafter and wherever necessary, capital gains had been paid. 25. Before us though the AR placed reliance on the decisions of In the case of P R Metrani vs CIT- 287 ITR 209 (SC) In the case of Surendra M Khandhar vs ACIT 321 ITR 254 (Bom) in our view both these decisions may not be necessary, because, the question of rebuttal on the proposed addition has not been occasioned because the additions made by the AO, have been based on notings on the CDs prepared on 28.03.2003, which we have held cannot be sustained. 26. We also reject the GOA no. 6, wherein the department has sought restoration of the case to the file of the AO, because of non allowance of proper opportunity under Rule 46A. This has been categorically rejected by the CIT(A), wherein he has held that the assessee has not produced/submitted anything or any 55 Shri Chimanlal K Mehta ITA No. 3767/Mum/2013 CO 148/Mum/2014 & Six Group comprising (06 ITAs & 06 Cos)=Total-14 evidence, which was not before the AO or was not in the seized material. 27. We, therefore, reject the grounds as raised by the department and consequentially dismiss the appeal as filed by the department. 28. In the result, Departmental appeal, as filed by the revenue stands dismissed. 54. Following the above said paras, we dismiss the grounds involved in department's appeal in ITA No. 3778/Mum/2013. Accordingly, Department's appeal stands dismissed. Issue of limitation is not adjudicated since on merits, addition has been deleted while deciding Ground nos. 5 & 6. Therefore, addition of Rs. 20 crores on this count is hereby deleted. Hence, these grounds of appeal are hereby allowed. 55. Now, we shall deal with the Cross Objections filed by the assessee Group, one-by-one for assessment years 2010-11 & 2009-10 respectively. CO No. 148/Mum/2014 : By Assessee : Arising out of ITA 3767/Mum/2013 : 56. Following grounds have been raised in the Cross objection: 1) On the facts and in the circumstances of the case and in law, the Respondent objects to the learned Commissioner of Income Tax (Appeals) -36, Mumbai (the learned CIT(A)) not accepting the contention of the Respondent that the assessment order was bad in law and on facts. 1.1)On the facts and in the circumstances of the case and in law, the Respondent objects to the learned CIT(A) rejecting the contention of the Respondent before him that either no approval of the Additional Commissioner u/s 153D was at all obtained or that the said approval was non est as it suffered from severe inadequacies and for that reason also the impugned assessment order was bad in law. On facts and in the circumstances of the case and in law, the Respondent objects to the learned CIT(A) holding that the assessment order was passed by the learned AO after giving a reasonable opportunity of being heard to the respondent and that the order is not contrary to the principles of natural justice. 2) On the facts and in the circumstances of the case and in law, the Respondent objects to the learned CIT(A) holding that challenge to validity of the search u/s 132 could not be raised before him and therefore rejecting the contention of the Respondent that the assessment order, passed by the learned AO is bad in law in as much as the search u/s 132 of the Income Tax Act, 1961 was illegal and void. 56 Shri Chimanlal K Mehta ITA No. 3767/Mum/2013 CO 148/Mum/2014 & Six Group comprising (06 ITAs & 06 Cos)=Total-14 3) On the facts and in the circumstances of the case and in law, the Respondent objects to the learned CIT(A) not adjudicating Grounds Nos. 7 to 12 raised in the Appeal Memo filed before him for the reason that these grounds do not survive as he had annulled the assessment: 4) The appellant craves leave to add to, alter, delete or modify any of the above Objections". 57. After due deliberations we have conclusively dismissed the department appeal in ITA No. 3767/Mum/2013 on quantum and on facts. The instant CO filed by the assessee is primarily on legal issues involved, which according to us, would now become infructuous. We, therefore, reject the grounds raised in the CO. 58. As a result, the CO, as filed by the assessee is dismissed. CO No. 150/Mum/2014 : By Assessee : Arising out of ITA 3777/Mum/2013 : 59. Following grounds have been raised in the Cross objection: 1) On the facts and in the circumstances of the case and in law, the Respondent objects to the learned Commissioner of Income Tax (Appeals) - 36, Mumbai (the learned CIT(A)) not accepting the contention of the Respondent that the assessment order was bad in law and on facts. 1.1)On the facts and in the circumstances of the case and in law, the Respondent objects to the learned CIT(A) rejecting the contention of the Respondent before him that either no approval of the Additional Commissioner u/s 153D was at all obtained or that the said approval was non est as it suffered from severe inadequacies and for that reason also the impugned assessment order was bad in law. 2) On the facts and in the circumstances of the case and in law, the Respondent objects to the learned CIT(A) holding that challenge to validity of the search u/s 132 could not be raised before him and therefore rejecting the contention of the Respondent that the assessment order, passed by the learned AO is bad in law in as much as the search u/s 132 of the Income Tax Act, 1961 was illegal and void. 3) On the facts and in the circumstances of the case and in law, the Respondent objects to the learned CIT(A) not adjudicating Grounds Nos. 7 to 11 raised in the Appeal Memo filed before him for the reason that these grounds do not survive as he had annulled the assessment: 4) The appellant craves leave to add to, alter, delete or modify any of the above Objections". 60. After due deliberations we have conclusively dismissed the department appeal in ITA No. 3767/Mum/2013. On quantum and on 57 Shri Chimanlal K Mehta ITA No. 3767/Mum/2013 CO 148/Mum/2014 & Six Group comprising (06 ITAs & 06 Cos)=Total-14 facts. The instant CO filed by the assessee is primarily on legal issues involved, which according to us, would now become infructuous. We, therefore, reject the grounds raised in the CO. 61. As a result, the CO, as filed by the assessee is dismissed. CO No. 149/Mum/2014 : By Assessee : Arising out of ITA 3765/Mum/2013 : 62. Following grounds have been raised in the Cross objection: 1) On the facts and in the circumstances of the case and in law, the Respondent objects to the learned Commissioner of Income Tax (Appeals) -36, Mumbai (the learned CIT(A)) not accepting the contention of the Respondent that the assessment order was bad in law and on facts. 1.1)On the facts and in the circumstances of the case and in law, the Respondent objects to the learned CIT(A) rejecting the contention of the Respondent before him that either no approval of the Additional Commissioner u/s 153D was at all obtained or that the said approval was non est as it suffered from severe inadequacies and for that reason also the impugned assessment order was bad in law. On facts and in the circumstances of the case and in law, the Respondent objects to the learned CIT(A) holding that the assessment order was passed by the learned AO after giving a reasonable opportunity of being heard to the respondent and that the order is not contrary to the principles of natural justice. 2) On the facts and in the circumstances of the case and in law, the Respondent objects to the learned CIT(A) holding that challenge to validity of the search u/s 132 could not be raised before him and therefore rejecting the contention of the Respondent that the assessment order, passed by the learned AO is bad in law in as much as the search u/s 132 of the Income Tax Act, 1961 was illegal and void. 3) On the facts and in the circumstances of the case and in law, the Respondent objects to the learned CIT(A) not adjudicating Grounds Nos. 7 to 12 raised in the Appeal Memo filed before him for the reason that these grounds do not survive as he had annulled the assessment: 4) The appellant craves leave to add to, alter, delete or modify any of the above Objections". 63. After due deliberations we have conclusively dismissed the department appeal in ITA No. 3767/Mum/2013. On quantum and on facts. The instant CO filed by the assessee is primarily on legal issues involved, which according to us, would now become infructuous. We, therefore, reject the grounds raised in the CO. 58 Shri Chimanlal K Mehta ITA No. 3767/Mum/2013 CO 148/Mum/2014 & Six Group comprising (06 ITAs & 06 Cos)=Total-14 64. As a result, the CO, as filed by the assessee is dismissed. CO No. 159/Mum/2014 : By Assessee : Arising out of ITA 3766/Mum/2013 : 66. Following grounds have been raised in the Cross objection: 1) On the facts and in the circumstances of the case and in law, the Respondent objects to the learned Commissioner of Income Tax (Appeals) -36, Mumbai (the learned CIT(A)) not accepting the contention of the Respondent that the assessment order was bad in law and on facts. 1.1)On the facts and in the circumstances of the case and in law, the Respondent objects to the learned CIT(A) rejecting the contention of the Respondent before him that either no approval of the Additional Commissioner u/s 135D was at all obtained or that the said approval was non est as it suffered from severe inadequacies and for that reason also the impugned assessment order was bad in law. On facts and in the circumstances of the case and in law, the Respondent objects to the learned CIT(A) holding that the assessment order was passed by the learned AO after giving a reasonable opportunity of being heard to the respondent and that the order is not contrary to the principles of natural justice. 2) On the facts and in the circumstances of the case and in law, the Respondent objects to the learned CIT(A) holding that challenge to validity of the search u/s 132 could not be raised before him and therefore rejecting the contention of the Respondent that the assessment order, passed by the learned AO is bad in law in as much as the search u/s 132 of the Income Tax Act, 1961 was illegal and void. 3) On the facts and in the circumstances of the case and in law, the Respondent objects to the learned CIT(A) not adjudicating Grounds Nos. 7 to 12 raised in the Appeal Memo filed before him for the reason that these grounds do not survive as he had annulled the assessment: 4) The appellant craves leave to add to, alter, delete or modify any of the above Objections". 67. After due deliberations we have conclusively dismissed the department appeal in ITA No. 3767/Mum/2013. On quantum and on facts. The instant CO filed by the assessee is primarily on legal issues involved, which according to us, would now become infructuous. We, therefore, reject the grounds raised in the CO. 68. As a result, the CO, as filed by the assessee is dismissed. 59 Shri Chimanlal K Mehta ITA No. 3767/Mum/2013 CO 148/Mum/2014 & Six Group comprising (06 ITAs & 06 Cos)=Total-14 CO No. 146/Mum/2014 : By Assessee : Arising out of ITA 3764/Mum/2013 : 69. Following grounds have been raised in the Cross objection: 1) On the facts and in the circumstances of the case and in law, the Respondent objects to the learned Commissioner of Income Tax (Appeals) -36, Mumbai (the learned CIT(A)) not accepting the contention of the Respondent that the assessment order was bad in law and on facts. 1.1)On the facts and in the circumstances of the case and in law, the Respondent objects to the learned CIT(A) rejecting the contention of the Respondent before him that either no approval of the Additional Commissioner u/s 153D was at all obtained or that the said approval was non est as it suffered from severe inadequacies and for that reason also the impugned assessment order was bad in law. On facts and in the circumstances of the case and in law, the Respondent objects to the learned CIT(A) holding that the assessment order was passed by the learned AO after giving a reasonable opportunity of being heard to the respondent and that the order is not contrary to the principles of natural justice. 2) On the facts and in the circumstances of the case and in law, the Respondent objects to the learned CIT(A) holding that challenge to validity of the search u/s 132 could not be raised before him and therefore rejecting the contention of the Respondent that the assessment order, passed by the learned AO is bad in law in as much as the search u/s 132 of the Income Tax Act, 1961 was illegal and void. 3) On the facts and in the circumstances of the case and in law, the Respondent objects to the learned CIT(A) not adjudicating Grounds Nos. 7 to 12 raised in the Appeal Memo filed before him for the reason that these grounds do not survive as he had annulled the assessment: 4) The appellant craves leave to add to, alter, delete or modify any of the above Objections". 70. After due deliberations we have conclusively dismissed the department appeal in ITA No. 3767/Mum/2013. On quantum and on facts. The instant CO filed by the assessee is primarily on legal issues involved, which according to us, would now become infructuous. We, therefore, reject the grounds raised in the CO. 71. As a result, the CO, as filed by the assessee is dismissed. CO No. 147/Mum/2014 : By Assessee : Arising out of ITA 3778/Mum/2013 : AY 2009-10 : 60 Shri Chimanlal K Mehta ITA No. 3767/Mum/2013 CO 148/Mum/2014 & Six Group comprising (06 ITAs & 06 Cos)=Total-14 72. Following grounds have been raised in the Cross objection: 1) On the facts and in the circumstances of the case and in law, the Respondent objects to the learned Commissioner of Income Tax (Appeals) -36, Mumbai (the learned CIT(A)) not accepting the contention of the Respondent that the assessment order was bad in law and on facts. 2) On the facts and in the circumstances of the case and in law, the Respondent objects to the learned CIT(A) holding that the assessment order was passed by the learned AO after giving reasonable opportunity of being heard to the respondent and that the order Is not contrary to the principles of natural justice. 3) On the facts and in the circumstances of the case and in law, the Respondent objects to the learned CIT(A) holding that challenge to validity of the search u/s 132 could not be raised before him and therefore rejecting the contention of the Respondent that the assessment order, passed by the learned AO is bad in law in as much as the search u/s 132 of the Income Tax Act,1961 was illegal and void. 4) On the facts and in the circumstances of the case and in law, the Respondent objects to the learned CIT(A) not annulling the assessment as the alleged `unaccounted cash' relates to a family arrangement made before 31/03/2003, which falls beyond the six years period of limitation laid down by law. 5) The appellant craves leave to add to, alter, delete or modify any of the above Objections". 73. After due deliberations we have conclusively dismissed the department appeal in ITA No. 3767/Mum/2013. On quantum and on facts. The instant CO filed by the assessee is primarily on legal issues involved, which according to us, would now become infructuous. We, therefore, reject the grounds raised in the CO. 74. As a result, the CO, as filed by the assessee is dismissed. CO No. 145/Mum/2014 : By Assessee : Arising out of ITA 3779/Mum/2013 : AY 2009-10 : 75. Following grounds have been raised in the Cross objection: 1) On the facts and in the circumstances of the case and in law, the Respondent objects to the learned Commissioner of Income Tax (Appeals) -36, Mumbai (the learned CIT(A)) not accepting the contention of the Respondent that the assessment order was bad in law and on facts. 2) On the facts and in the circumstances of the case and in law, the Respondent objects to the learned CIT(A) holding that the assessment order was passed by the learned AO after giving reasonable opportunity of being heard to the respondent and that the order Is not contrary to the principles of natural justice. 61 Shri Chimanlal K Mehta ITA No. 3767/Mum/2013 CO 148/Mum/2014 & Six Group comprising (06 ITAs & 06 Cos)=Total-14 3) On the facts and in the circumstances of the case and in law, the Respondent objects to the learned CIT(A) holding that challenge to validity of the search u/s 132 could not be raised before him and therefore rejecting the contention of the Respondent that the assessment order, passed by the learned AO is bad in law in as much as the search u/s 132 of the Income Tax Act,1961 was illegal and void. 4) On the facts and in the circumstances of the case and in law, the Respondent objects to the learned CIT(A) not annulling the assessment as the alleged `unaccounted cash' relates to a family arrangement made before 31/03/2003, which falls beyond the six years period of limitation laid down by law. 5) The appellant craves leave to add to, alter, delete or modify any of the above Objections". 76. After due deliberations we have conclusively dismissed the department appeal in ITA No. 3767/Mum/2013 on quantum and on facts. In the corresponding CO No. 148/Mum/2014 filed by the assessee is primarily on legal issues involved, which according to us, would now become infructuous. We, therefore, reject the grounds raised in the CO. 77. Thus, the CO, as filed by the assessee is dismissed. 72. All the appeals captioned at the head of the order, and connected to the lead case as filed by the department are dismissed. Corresponding COs as filed by the assessees are held to be infructuous and are dismissed. To sum-up: Department appeal in, ITA No. 3767/Mum/2013 stands dismissed ITA No. 3777/Mum/2013 stands dismissed ITA No. 3765/Mum/2013 stands dismissed ITA No. 3766/Mum/2013 stands dismissed ITA No. 3764/Mum/2013 stands dismissed ITA No. 3778/Mum/2013 stands dismissed ITA No. 3779/Mum/2013 stands dismissed. Assessee's CO in, CO No. 148/Mum/2014 stands dismissed CO No. 150/Mum/2014 stands dismissed 62 Shri Chimanlal K Mehta ITA No. 3767/Mum/2013 CO 148/Mum/2014 & Six Group comprising (06 ITAs & 06 Cos)=Total-14 CO No. 149/Mum/2014 stands dismissed CO No. 159/Mum/2014 stands dismissed CO No. 146/Mum/2014 stands dismissed CO No. 147/Mum/2014 stands dismissed. CO No. 145/Mum/2014 stands dismissed. Order pronounced in the open Court on 26th December, 2014. Sd/- Sd/- (. . [) . . ( [) Û (R C SHARMA) (VIVEK VARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Date : 26th December, 2014 /Copy to:- 1) /The Appellant/Applicant-Cross Objector. 2) × /The Respondent. 3) The CIT(A)-36, Mumbai. 4) The CIT(C) ­IV/Concerned ______, Mumbai 5) "G", , / The DR "G" Bench ITAT, Mumbai. 6) [ Copy to Guard File. /By Order / / True Copy / / / , Dy./Asstt. Registrar I.T.A.T., Mumbai *å .. *Chavan, Sr.PS
 
 
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