TaxTMI 
TaxTMI 
2026 (7) TMI 1960
X X X X Extracts X X X X
X X X X Extracts X X X X
....department has raised common grounds of appeals as the assessment orders and order of ld. CIT(A), for all the 4 assessment years have identical findings and wordings except the amounts of quantum additions made varied as per the information with the AO. 2.1 On hearing both the sides, we find from the lead matter arising out of Assessment Year (AY) 2014-15 that assessee is s/o Mr. Parvinder Singh Gahlot also referred as 'P.S. Gahlaut' was Managing Director of India Potash Ltd. (hereinafter to as the "IPL") and non-resident of India since the last more than a decade. The background to these appeals is that Shri Rajiv Saxena, a practicing Chartered Accountant in Dubai, alleged to be involved in some money management activities for the benefit of some Indian nationals against the policies of the Indian Government, was brought to India through a proper legal course by the Enforcement Directorate officials in January 2019 from Dubai to New Delhi, though Shri Rajiv Saxena has charged this fact. During his interrogation and investigation thereafter, it got revealed that besides money management overseas, he was also allegedly involved in illegal activities of money laundering and one of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....benefit of the assessee. Protective additions on account of the very same secret commission were made in the hands of the assessee Shri Vivek Gahlaut, and substantive in the hands of father of appellant Shri PS Gahlaut. 2.3 Then before ld. CIT(A), assessee has taken 21 grounds of appeal but the prime focus of the assessee during the arguments / in submissions was on the legal issue on facts that no incriminating material was found during the course of search naming the assessee in any manner as the documentary information by way of an Excel Sheet as Exhibit 4 with the AO gathered from Shri Rajiv Saxena as copied in the assessment order which is the sole reason to initiate the assessment proceedings u/s. 153C of the Act, on 29.09.2021 as per the statement u/s. 132(4) of Mr Rajiv Saxena recorded on 02.07.2019. The assessee also took a ground of appeal that no cross-examination of Shri Rajiv Saxena, Shri A D Singh, Shri Pankaj Jain and Shri Sanjay Jain, etc. was afforded to the assessee during the course of assessment proceedings. However, on my directions in the case of Shri Udai Shankar Awasthi where the additions were made by relying on the information gathered from Shri Saxena ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....already quashed the assessment orders passed u/s. 153C of the Act on identical facts and legal position, in the case of Shri U S Awasthi. I have also, based on the averments by Shri P S Gahlaut in his appellate proceedings, have quashed the substantive assessment orders for the AY 2014-15, 2015-16 and 2017-18 and also deleted the substantive additions made in the AY 2016-17 vide appellate orders dated 14.10.2025 as I am of the view that there was no material on record to support the additions made in the assessment orders which were made on presumptions and hearsay. The entire information relied by the AO in the assessment orders were some internal unauthenticated documents the veracity of which is completely unproven even as per Shri Rajiv Saxena. Apparently the said excel sheet was never made in the regular course and was drawn for some specific reasons as doubted by the assessee. The said sheet nowhere demonstrates the actual movement of funds but are just entries got made for an oblique purpose by Saxena after he was deported from Dubai. Such excel sheet cannot transpire any confidence as to its correctness much less truthness in any manner. Thus, the same has to be disregarded....
X X X X Extracts X X X X
X X X X Extracts X X X X
....examination statement dated 09.01.2025 of Shri A D Singh and reproduced in my appellate order dated 07.05.2025 in the case of Shri U S Awasthi, which has also been relied herein by the assessee. It has been stated that "Further, PJSC Uralkali has never paid any consideration outside India to any person or entity pertaining to our potash exports to India Market'. One thing is patent from this statement that the alleged payments in Dubai through entities of Shri Saxena had no connection with the imports made by IPL and therefore, no direct connection with appellant can be made in respect thereof. 31. I find force in the submission of the assessee that when no material belonging to the assessee or information pertaining to him as such was found in the seized material, initiation of proceedings u/s. 153C of the Act was bad in law ab initio. The Hon'ble jurisdictional Delhi High Court in a recent judgment in Ishita Varshney Jain- DoJ: 22.11.2024 in W.P.(C) 15477/2024 & CM APPL. 68370/2024 has also quashed the proceedings-initiated u/s. 153C of the Act when neither any books of account nor documents, either belonging to the petitioner or containing information pertaining to the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... office in Dubai, then why he was not directed to bring the actual books of account with supporting evidence to give credence to his statements and the excel sheet relied in the assessment order. This supports the contention of the assessee that he gave false information by concealing the facts which is also an allegation made against him by the ED in the Hon'ble jurisdictional Delhi High Court. 35. There is no attempt by the AO to get the forensic verification of the said laptop which Shri Rajiv Saxena claimed to have been brought from Dubai. Leave aside, even it was never verified whether the same was really brought from Dubai or was bought in India when there are conflicting versions about the manner of the said information coming from Dubai either in laptop or in a pen drive by the son of Shri Saxena. No evidence is on record to rely the statement of Shri Saxena in any manner otherwise besides that he always seemed to shift his responsibility on others. Even, to the extent he did not give any bank account showing the transactions as per the Excel Sheet or never gave names of the entities including his where each of those amounts were received by him on behalf of the as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....her. 37. The Hon'ble jurisdictional Delhi High Court also in the bail case of Shri Sanjay Jain (supra) an alleged accomplice of the assessee in these income-tax proceedings has categorically held vide order dated 07.03.2024 that information relied by the government authorities including the income-tax department does not prima facie proves any wrong doing. In fact, the Hon'ble Jurisdictional Delhi High Court has therein delved on all the allegations of the income-tax and ED authorities as has been mentioned herein above before concluding that there is even money trail. 38. It is also a settled position of law that no addition in the assessment, can be made merely, based on assumptions, suspicion, guess work and conjuncture or on irrelevant inadmissible material. Reliance is placed in this regard on the following decisions: (i) Dhirajlal Girdharilal v. CIT [1954] 26 ITR 736 (SC) (ii) Dhakeswari Cotton Mills Ltd. v. CIT [1954] 26 ITR 775 (SC) (iii) Maharajadhiraja Kameshwar Singh of Darbhanga [1933] 1 ITR 94 (PC) (iv) LalchandBhagatAmbica Ram v. CIT [1959] 37 ITR 288 (SC) (v) Umacharan Shaw & Bros v. CIT [1959] 37 ITR 271....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to make the addition. 31. A reading of the assessment order would reveal that though the Assessing Officer at more than one place has stated that commission income has come to the assessee through entities controlled by him, however, he has contradicted himself by saying that the assessee is merely a pass-through entity and not the real beneficiary. This is the specific reason, why the Assessing Officer has made the additions on protective basis. In other words, the Assessing Officer was more or less convinced that the income does not belong to one of the two assessee's at whose hands additions were made. Even though, the Assessing Officer has alleged that the commission is meant for the real beneficiaries in India, however, he has failed to establish the money trail. The Assessing Officer has not brought on record any material to even demonstrate that the alleged commission received in the accounts of the entities allegedly controlled by the assessee have been transferred to India in any manner and if so, to which accounts they have been transferred and such accounts were controlled by whom. Nothing in this regard has been discussed by the Assessing Officer in the assessm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....espite the fact that initiation of it was time barred as held by held the Hon'ble jurisdictional Delhi High Court in Ojjus Medicare Pvt Ltd para 86 onwards (2024) 161 taxmann.com 160 (Delhi). 42.1 Since, the appeal has been decided on the above issue which has led to quashing of the assessment order, all other grounds taken by the assessee have become academic and have not been adjudicated. AY 2016-17 43. Since, the facts and law for this assessment year are identical to the facts and application of law for the AY 2014-15, the protective additions of Rs. 17,42,00,000/- for the AY 2016-17 is deleted as there is no material on record to support the addition as has been explained herein above. Thus, the protective addition of Rs. 17,42,00,000/- is stands deleted. 43.1 Since, the appeal has been decided on the above issue which has led to deletion of the entire addition made in the assessment order, all other grounds taken by the assessee have become academic and have not been adjudicated. AY 2017-18 44. Since, the facts and law for this assessment year are identical to the facts and application of law for the AY 2014-15, and based ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....has erred in holding that the proceedings were initiated on hearsay, whereas the AO had relied upon multiple independent evidences: seized books of account of Shri Saxena, statements under oath, fund-flow records, WhatsApp chats, and FT & TR verifications all of which independently point to the assessee's involvement. 8. The Ld. CIT(A) has erred in law in holding the 153C initiation as time-barred, without correctly applying the statutory 8 provisions and ignoring that the satisfaction note and seized material were duly received and examined before issuing notice u/s. 153C. 9. The Ld. CIT(A) has erred in deleting the protective addition made in the hands of Shri P.S. Gahlaut despite clear evidence that funds originating from Uralkali reached entities beneficially owned by him, for his fathers benefit, as reflected in seized beneficiary ledgers and the admission of Shri Rajiv Saxena. 10. The Revenue craves leave to add, alter, amend OR withdraw any ground at the time of hearing." 5. At the time of hearing of the appeals of the present assessee the Bench had observed that additions in the hands of the present assessee were merely protective additions u/s....