TaxTMI 
TaxTMI 
2026 (5) TMI 1843
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....s on 30/06/2019. Assessment proceedings have been initiated against the Assessee u/s 153C of the Income Tax Act, 1961 ('Act' for short). Assessment Orders came to be passed on 31/03/2023 for A.Y 2016-17 and 2017-18 by making certain additions. Aggrieved by the said assessment orders, Assessee preferred Appeals before the Ld. CIT(A). The Ld. CIT(A) vide common orders dated 14/10/2025, allowed the Appeals of the assessee by deleting the additions made by the A.O. As against the orders of the Ld. CIT(A) dated 14/10/2025, Revenue preferred the captioned Appeals in ITA Nos. 8973 & 8974/Del/2025. The assessee has also filed Cross Objection Nos. 67/Del/2026 and 69/Del/2026 by raising certain legal grounds. 3. The Ld. Departmental Representative vehemently submitted that the Ld. CIT(A) has committed grave error in deleting the additions made by the A.O. and by relying on the assessment order, sought for reversing the findings and conclusion of the Ld. CIT(A). The Ld. DR apart from making oral submissions The Ld. DR has also filed written submission which is reproduced as under: - 4. Per contra, the Ld. Assessees' Representative submitted that, the proceedings against the Assessee has....
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....re this Tribunal and the Co- ordinate bench of the Tribunal in the case of Sanjay Jain (supra) vide order dated 22/04/2206, while upheld the order of the Ld. CIT(A) in deleting the addition in following manners: "2. Heard and perused the records and relevant facts can conveniently be picked from the order of ld. CIT(A) itself, which narrates that a search was conducted by the Deputy Director of Income Tax, [DDIT)-Investigation, Unit 7(3) on Sanjay Jain and others on 30.06.2019. During the search and seizure operation, incriminating evidence in the form of mail and chat communication was found revealing that appellant and his brother Shri Sanjay Jain, in connivance with some other persons, namely, Shri Udai Shankar Awasthi, his son Shri AmolAwasthi, Shri Parvinder Singh Gahlaut, his son Shri VivekGahlaut, Shri AmendraDhari Singh were working with close proximity to Indian Potash Limited (IPL) and Indian Farmers Fertilizer Co-operative Organization (IFFCO) and have been influencing the fair price/market price at which fertilizer/fertilizer products are procured by them and other Indian consumers. Various incriminating chats between the appellant, Shri Parvinder Singh Gahlaut....
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.... 2.4 Hence effectively, the proceedings were initially initiated u/s 153A in this case but were later dropped to initiate fresh 153C Proceedings in view of satisfaction note and seized materials received from the AOs of search conducted on Alankit Group and Sh. Rajiv Saxena. 2.5 Based on the findings of the Search & Seizure proceedings and the material gathered, proceedings under Section 153C of the Act were initiated for AY 2010-11 to 2020-2021, making additions to the returned income of the appellant for each of these years. The additions made in Assessment year 2010-11 to 2020 21 are tabulated as under: Sr. No. A.Y. For ownership of money Addition based on Alankit and its associates in Rs. Addition based on Mr. Rajiv Saxena in Rs. Total in Rs. 1. 2010-11 69A 38,70,66,590/- 0 38,70,66,590/- 2. 2011-12 69A 12,35,11,360/- 1,00,00,000/- 13,35,11,360/- 3. 2012-13 69A 2,46,69,775/- 3,75,00,000/- 6,21,69,775/- 4. 2013-14 69A 3,12,71,658/- 0 3,12,71,658/- 5. 2014-15 69A 20,27,240/- 55,67,22,193/- 55,87,49,433/- 6. 2015-16 69A 6,09,62,250/- 19,90,00,0....
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....f fertilizers and fertilizers products in India. 4.1 In regard to issue related to search on Rajiv Saxena ld. Assessing Officer has relied the statement of Rajiv Saxena recorded u/s 132(4) wherein allegedly he had stated that money received from M/s Uralkali in his entities were actually commission income arising out of imports made by M/s IPL and IFFCO from Uralkali. Allegedly this money was actually paid for beneficial use of Shri Sanjay Jain who is Indian agent of various foreign fertilizers companies. The relevant extract of the statement have been reproduced in the assessment order. The contents of one document 'Uralkali summary sheet' allegedly seized from the premises of the Rajiv Saxena was made basis to conclude that Rajiv Saxena has made cash payment to the tune of USD 61.18 million to Sanjay Jain in India as instructed by Shri Pankaj Jain. 4.2 The assessing officer also mentioned that the content of summary sheet was corroborated by proof of inward remittance to certain entities in India which had connection with Shri Rajiv Saxena. 4.3 Ld. Assessing officer observed that from reference to FT & TR it was established that entities of Rajiv Saxena received....
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.... funds of Sanjay Jain and trading associates by raising bogus bills from their group entities to Triton BMCC. The money was received in the Alankit Group of companies a/c and later equivalent cash was paid to Shri Sanjay Jain& Others, accordingly, additions were made. 6. Ld. DR has heavily relied these findings to contend that assessing officer has relied of electronic evidence which were duly corroborated and it was asserted on behalf of the department that ld. CIT(A) has far stretched the rule of evidence to doubt the evidences relied by the assessing officer. 7. We find that ld. CIT(A) has very cautiously and very extensively gone through the material which was relied by ld. assessing officer to conclude that the oral statement of witness and documents which were relied by the ld. assessing officer lack sufficient credibility and the veracity stood impeached. 8. We find that ld. CIT(A) has taken into consideration the fact that when Rajiv Saxena was deported from Dubai to India on 31.01.2019 by Enforcement Directorate no laptop or any electronic device was found or seized and it was undisputed that whatever material has been relied by the assessing officer in t....
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.... and handed over the same to ED and based upon the facts it was concluded that the same was not incriminating evidence so far as Sushen Mohan Gupta is concerned as these electronic evidence were already with the department. The relevance of these findings is that Coordinate Bench has concluded that Enforcement Directorate had collected the evidences not in any contemporaneous search or arrest of any person but were procured subsequently and same have been relied by the assessing officer, as sacrosanct. 8.3 Then ld. CIT(A) has observed that all these evidences collected by the Enforcement Directorate were subject matter of an order dated 07.03.2024 of Hon'ble High Court in Bail Application of the assessee and Hon'ble High Court has made categorical observations that statement of Rajiv Saxena was not dependable. At page 31 while reproducing observation of Hon'ble High Court ld. CIT(A) has taken note of the fact as per Rajiv Saxena the evidence which ED was relying and genesis of which has been explained by Rajiv Saxena in his statement dated 05.06.2021 'was created by the staff of Rajiv Saxena' to answer the question by the ED. We consider it appropriate to reproduce the obs....
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....ing cash paid in India or overseas by the assessee to Triton Trading DMCC to Alankit Group. 13. Ld. CIT(A) has appreciated the fact that the excel sheet title "JPS" is not a cogent evidence to connect the assessee, with whatever transaction were allegedly recorded in the electronic form. Here itself we will like to observe that ld. AO has heavily relied electronic evidences but made no efforts to show in the assessment order that veracity of these digital devices and evidences was kept intact. Thus the observations made in other proceedings about same set of evidences were rightly considered by ld. CIT(A) to hold electronic evidences not reliable to arrive at conclusive findings. 14. Pertinent to mention is that ld. CIT(A) has also taken into consideration the Tribunal findings in the case of Amol Awasthi which is based on exactly same facts that no evidentiary value can be attached to this material. 15. In the light of aforesaid discussion we have no hesitation to conclude that the findings arrived by the ld. CIT(A) require not interference. As a consequence of aforesaid the ground raised by the department deserves to be rejected. The appeals filed by th....
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....tilizer Suppliers (e.g., M/s Uralkali Trading Gibraltar, BPC, Phosagro). Fertilizer prices were artificially inflated during negotiations to create a surplus margin for commissions. 2. Conduit (Dubai Layer 1) Rajiv Saxena's Entities (Midas Metal International LLC, Pacific International FZC). Suppliers paid "consultancy fees" into these entities. Saxena admitted no services were rendered; these were paper companie: used only to transfer funds. 3. Conduit (Dubai Layer 2) Vivek Gahlaut's Entities (primarily Thornlock Associates, Matrix DMCC, Mercon). Funds were transferred from Saxena's accounts to these entities controlled by the assessee's son, Sh. Vivek Gahlaut. 4. Final Destination Sh. Parvinder Singh Gahlaut (Assessee). The AO concluded that Vivek Gahlaut, a non-resident in Dubai, acted as a "front man" for his father. The funds were deemed kickbacks for the assessee's role as MD of IPL in approving the inflated contracts. I. Key Persons Involved in Manipulating Transactions "he AO identified a core group of individuals who collaborated to influence the decision-making process within Ind Potash Ltd (IPL) and IFFCO to generate illegal commissions.....
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....ng Satisfaction The AO assumed jurisdiction under Section 153C based on incriminating material received from the AOs of Shri Sanjay Jain and Shri Rajiv Saxena, both searched on June 30, 2019. 1. Digital Evidence and WhatsApp Chats (from Sanjay Jain & A.D. Singh): 1. Content: Communications showing that the assessee (as MD of IPL) and others were influencing fertilize procurement prices and artificially inflating them. Specific chats reveal the assessee providing names of associates as contact persons for "cooperation agreements" with foreign suppliers. 2. AO Mention Page: These are mentioned and reproduced extensively starting from Page 1 (intro) and detailed between Page 3 and Page 26 of the assessment orders. 2. Statement of Shri Rajiv Saxena recorded u/s 132(4): 1. Content: Saxena admitted that his Dubai entities received commissions from foreign fertilizer suppliers (like Uralkali) without providing actual services, acting as a conduit to transfer these funds to "Munna" (Amol Awasthi) and "Chota Munna" (Vivek Gahlaut, son of the assessee) on the instructions of Sanja Jain. 2. AO Mention Page: Detailed excerpts from the statement are provided starting on Pag....
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....Personal Benefit "he Excel sheets detailed that the routed funds were not just for business but were used for Vivek's personal and operational expenses, which Saxena managed on his behalf: · Personal Categories: Entries included categories such as "Interior Vivek," "Air ticket Geneva / Zurich," "Hot Geneva," and "Audit fees Thornlock advance.". Entity Payments: Payments were also routed through other entities listed in the sheets, such as Matrix DMCC Mercon, and Midas, which Saxena identified as being associated with Vivek. I. Corroboration of the Kickback Trail Che AO concluded that because Vivek was a non-resident residing in Dubai and served as a front for his father, hese entries proved the assessee was the ultimate beneficiary of the kickbacks .. The AO summarized this as: 'All the network of companies were established and operated to facilitate the movement of unaccounted commission beneficially earned by Sh P. S. Gahlaut ... Many of the entities ... were only pass through entities for the ultimate eneficial use of Assessee." (Para 77, Page 48, ITA 8972) .. (Para 77, Page 44-45 of the Assessment Order for the .6-17) The Assessing Officer (AO) co....