Ajay ITXA-1499-17.doc IN HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 1499 OF 2017 Pr. Commissioner of Income Tax - 20, Mumbai Room No.422, 4th Floor, Piramal Chambers, Parel, Mumbai - 400012. Appellant Versus Sunil M. Thakkar B 161, Chinar Building, 16th Floor, R.A. Kidvai Road, Wadala, Mumbai 400031. PAN : ABZPT3346C Respondent Mr. Sham Walve a/w. Mr. Pritish Chaterji, Advocate for Appellant. CORAM : UJJAL BHUYAN, & MILIND N. JADHAV, JJ. ORDER : 11th FEBRUARY 2020 JUDGMENT (PER MILIND N. JADHAV, J.) :- 1. This appeal has been preferred by Revenue under Section 260A of Income Tax Act, 1961 (hereinafter referred to as Act ) against order dated 05 th July 2016 passed by Income Tax Appellate Tribunal, J Bench, Mumbai (hereinafter referred to as Tribunal ) in Income Tax (SS) Appeal No.173/Mum/2006 for block period 01 st 1 of 31 Ajay ITXA-1499-17.doc April 1988 to 13th February 1999. 2. Assessing Officer passed detailed assessment order dated 28th February 2001 in respect of block period and made several additions and dis-allowances to income of assessee for block period. first Appellant Authority i.e. Commissioner of Income Tax (Appeals) (hereinafter referred to as CIT (A)) allowed appeal of assessee by deleting additions under various heads made by Assessing Officer to income of assessee. revenue challenged deletion made by CIT (A) in respect of five heads before Tribunal. Tribunal by its order dated 05 th July 2016 upheld order passed by CIT (A). 3. brief facts relevant for purpose of deciding present appeal are as follows : 3.1. On basis of information received from Investigation Wing of Income Tax Department in case of M/s. Galaxy Plasto O-Chen Industry Ltd., it was revealed that said company belonged to one Vora family comprising of three brothers, viz Naresh B. Vora, Sudhir B. 2 of 31 Ajay ITXA-1499-17.doc Vora and Nitin B. Vora. Under provisions of Section 133A of Act, survey was conducted at business premises of above company on 04th September 1998, pursuant to which books of accounts and other documents were seized and impounded on 25th September 1998. 3.2. statements of Mr. Nitin B. Vora and Mr. Sudhir B. Vora were recorded on 25th September 1998, 15th November 1998 and 16th November 1998. Mr. Nitin B. Vora stated that he was in Hawala business and he admitted to concealment of Rs.1.35 Crores and admitted to providing accommodation entries to various parties. Mr. Nitin B. Vora also stated that, he was holding quota of Naphtha which he used to sell in open market for cash at high premium and would issue bogus bills to seller of Naphtha and dealers of other chemicals and in return he would receive cash from Bank and cheques on commission basis. 3.3. Further investigation was carried out by Income Tax Department and it was found that one of party involved in aforesaid business was Thakkar family consisting of Manoj Thakkar and his three sons namely Atul M. 3 of 31 Ajay ITXA-1499-17.doc Thakkar, Mayur M. Thakkar and Sunil M. Thakkar. Sunil M. Thakkar is assessee in present case. Thakkar family members used to send cash to Vora family for obtaining accommodation entries. 3.4. Further investigation was done, consequent upon which Assessing Officer issued notice under Section 158BC on 13th December 1999 and called on assessee (Mr. Sunil M. Thakkar) to file return covering block period from 01st April 1988 to 13th February 1999. 3.5. assessee filed return of income for block period showing undisclosed income of Rs.12,58,739.00. 3.6. Assessing Officer issued notice under Section 142 (1) of Act with detailed questionaire served upon assessee and reply was received from assessee. 3.7. Assessing Officer thereafter passed detailed assessment order in respect of block period and made number of additions and dis-allowances to income of assessee. 4 of 31 Ajay ITXA-1499-17.doc 3.8. assessee filed appeal before CIT (A). CIT (A) allowed appeal of assessee by deleting additions made by Assessing Officer. Revenue challenged deletion made by CIT (A) in respect of five heads before Tribunal. 3.9. Tribunal passed its order dated 05 th July 2016 and returned finding that deletion of additions made by CIT (A) were quite reasonable and did not require any interference. Appeal of Revenue was dismissed. 3.10. Hence present appeal by revenue. 4. Revenue has projected following substantial questions of law :- (A) Whether on facts and in circumstances of case and in law, Hon. ITAT was right in deleting addition made on account of sale of Naphtha ignoring seized material and statement recorded u/s 131 of I.T. Act 1961, which established that assessee sold in open market Naphtha products at hefty cash premium and part of which unaccounted sale consideration routed back in books through accommodation entries and component of cash premium never 5 of 31 Ajay ITXA-1499-17.doc reflected in books of accounts ? (B) Whether on facts and in circumstances of case and in law, Hon. ITAT was right in deleting addition made on account of sale of delivery orders purchased from M/s Reliance Industries Ltd. ignoring seized material, on ground that it is not primary, which established that assessee earned unaccounted premium out of sale of goods ? (C) Whether on facts and in circumstances of case and in law, Hon. ITAT was right in deleting addition made on protective basis ignoring statement of Shri Naresh Vora who had categorically alleged that some of parties on whose behalf bogus invoices were raised by Thakkar brothers ? (D) Whether on facts and in circumstances of case and in law, Hon. ITAT was right in deleting addition made on account of foreign tour expenses ignoring fact that assessee has failed to adduce documentary evidence to prove genuineness of said expenses ? (E) Whether on facts and in circumstances of case and in law, Hon. ITAT was right in deleting addition made on account of household expenses ignoring fact that assessee has failed to explain cash withdrawals which were unrecorded in books of accounts ? 6 of 31 Ajay ITXA-1499-17.doc 5. Mr. Walve learned counsel appearing for appellant has laid thrust on assessment order and emphasized on modus operandi between public sector units, industries, illegal users of adulterated petrol, Vijan group, Vora group etc. for ascertaining role of assessee. He has drawn our attention to question No.8 and its answer in statement of Shri. Naresh B. Vora, which was recorded under Section 131 of Act. Question No.8 and its answer reads thus :- Q.8. Can you explain modus operandi as far sale of Naphtha in open market is concerned ? Ans. Naphtha is filled from factory of M/s. RRPL which is located at Sinner, Nashik or at times directly from refineries of public undertakings and being sold to various petroleum dealers on cash basis which is exclusively devoid of any record. This Naphtha is used for various purposes and most important among that is adulteration or mixing with petrol being sold at retail outlets. 5.1. Mr. Walve has thereafter drawn our attention to contents of question No.19 and its answer in statement of Naresh B. Vora which related to assessee taking accommodation entries on behalf of various parties. Question 7 of 31 Ajay ITXA-1499-17.doc No.9 and its answer reads thus :- Q.19. I am drawing your attention towards Vimal Deluse Note Book inventoried under Sl. No.1 of Annexure drawn at Vile Parle Office during course of Survey Persal of this note book refers certain entries against Sunil Carriers Rama Atlas etc. kindly explain these entries. Ans. All entries appearing under Sunil Carriers, Rama and Atlas are details of billed invoices and corresponding cash receipt from Sunil Thakkar. In other words, Sunil Thakkar has taken accommodation entries on behalf of Rama means M/s. RRPL, Atlas means Atlas Petrochemicals Ltd. Sunil Carriers is one of concern of Sunil Thakkar and that as why reference is appearing in this note book for eg. I will explain page no.4 of this note book which shows :- Sunil Carrier 13/9/97 Rama 1,01,640x5= 5,08,200/- Bank Commission =500/- Commission =21,000/- Atlas 1,20,200 x 5 = 6,00,000/- Bank Commission =1,200/- Commission =21,000/- ----------------------------------- 3,74,960/- Above mentioned entries are related to accommodation entries taken by Shri Sunil Thakkar for which name Sunil Carrier appears at top. 8 of 31 Ajay ITXA-1499-17.doc figures against Rama (M/s. RRPL) are nothing but calculation of value of one invoice multiplied by number of 5 invoices amount comes to Rs.5,08,200/- and Rs.500/-, Bank commission for 5 pay orders issued for 5 invoices referred earlier. Rs.21,000/- is my commission on total amount i.e. 5,08,200/-. Similar is calculation shown against Atlas (Atlas Petrochemicals). As matter of fact all transaction appearing in this note book against Rama and Atlas are transaction related to accommodation entries taken by Sunil Thakkar on behalf of M/s. RRPL & Atlas Petrochemicals Ltd. 5.2. Mr. Walve submitted that assessee was referred to in books of Vora group by several names such as Sunilbhai, Sunilbhai (baroda), Sunilbhai Bhanushali, Sunilbhai Bhanushali (baroda), Sunil Carrier, Sunil Transport and Sunil Agrawal and after reading answers to questions given by Vora group members, it was established that, assessee was involved in giving accommodation entries to various parties. He submitted that there was enough material on record to warrant implication and indictment of assessee. 9 of 31 Ajay ITXA-1499-17.doc 6. To appreciate questions framed and contentions advanced by learned standing counsel, it would be necessary to advert to orders passed by statutory authorities. 7. During block assessment proceedings, modus operandi of trade as unravelled by Assessing Officer showed complex networking between Public Sector Units like; (i) Bharat Petroleum Corporation Ltd., (ii) Indian Oil Corporation Ltd; (iii) Hindustan Petroleum Corporation Ltd; (iv)Gas Authority of India Ltd., and industries manufacturing petro products like (i) Reliance Industries Ltd., (ii) Ram Remedies Pvt. Ltd., (iii) Silver Chemical Industries (Bom.) Pvt. Ltd., (iv) M/s. Paschim Petrochemical Pvt. Ltd. on one hand and illegal users mainly carrying out adulteration of petrol like (I) chain of petrol pumps scrupulously using "Naphtha" and "Naphtha based products" for adulteration of petrol procured from traders like Thakkar group and Vora group through their companies / concerns like; (i) Galaxy Plasto Chemical Industries Ltd., (ii) Thinsol Chemicals Pvt. Ltd. (iii) Minalshree Chemicals Pvt. Ltd. etc. 10 of 31 Ajay ITXA-1499-17.doc 8. Assessing Officer scrutinized books, notebook registers, loose papers, diaries and statements of various family members of Vora and Thakkar groups and came to following conclusion :- (i) that various concerns of Vora family were floated with sole intention of providing accommodation entries to several parties by way of furnishing fictitious bills showing purchase of petro-chemical products by such concerns leading to commission at pre- determined rate being received by Vora family members in cash for aforesaid service of providing accommodation entries; (ii) that number of business concerns dealing in petro-chemical products either as manufacturers, dealers or traders had utilized accommodation entries from concerns of Vora group; (iii) that these concerns procured petro chemicals either directly from pubic sector undertakings like; BPCL, HPCL, IOCL, GAIL etc, or through intermediaries providing accommodation entries and that amounts involved were large. 9. Assessing Officer duly scrutinized statements made by Vora and Thakkar family members 11 of 31 Ajay ITXA-1499-17.doc and on basis of facts, circumstances, evidence and transactions appearing in seized books confronted assessee (Mr. Sunil M. Thakkar) by notice under Section 131 of Act, inter-alia, providing assessee opportunity to examine Mr. Naresh B. Vora. Since assessee did not avail of opportunity at first instance assessee was provided further opportunity on 20 th February 2001 on which date assessee examined Mr. Naresh B. Vora. During cross examination of Mr. Naresh B. Vora it was revealed that assessee had been regularly depositing cash to avail accommodation entries for sale of "Naphtha" on behalf of M/s. Ram Remedies Pvt. Ltd. On basis of corroborative evidence obtained from seized books, documents, loose papers etc, Assessing Officer concluded that there was nexus of assessee with Vora group on one hand and with M/s. Ram Remedies Pvt. Ltd. on other hand. Assessing Officer further scrutinized and analyzed various dealings between parties on basis of following materials :- (i) Account books from Thakkar group, Vijan group and Vora group; (ii) Statements recorded of Vora group members; 12 of 31 Ajay ITXA-1499-17.doc (iii) Facts and circumstances evidencing transactions appearing in Vora group s books as paper transactions only; (iv) Cross examination of Mr. Naresh B. Vora; (v) Analysis of objection / observations, counter reply in facts available on record made by assessee; (vi) Corroborative evidences gathered during search and survey operations; (vii) Evidence relating to sale of premium as collected; (viii) Sale on delivery orders purchased from M/s. Reliance Industries Ltd.; (ix) Income earned from business of hiring of tankers during block period; (x) Expenses on foreign travel by assessee on basis of scrutiny of his passbook and various other books; (xi) Computation of total income for block period; (xii) Cash found from residence of assessee as appearing in books of Vora family. 10. After scrutiny and detailed analysis on basis of above, Assessing Officer vide assessment order dated 28th February, 2001 made following additions to income of assessee for block period 1 st April 1988 to 13th February 1999 : (i) Assessing Officer considered addition of undisclosed income at Rs.22,75,91,170.00 and 13 of 31 Ajay ITXA-1499-17.doc added income earnings on sale of Naphtha amounting to Rs.48,61,834.00 to income of assessee; (ii) Assessing Officer took 82% as average rate of premium and made further addition of Rs.36,38,634.00 towards unaccounted sale based on purchases made from Reliance Industries Ltd. to income of assessee; (iii) Assessing Officer added sum of Rs.22,11,000.00 as unexplained cash belonging to income of assessee and further sum of Rs.30,00,000.00 towards unaccounted capital for starting unaccounted trade; (iv) Assessing Officer added undisclosed cash deposits of Rs.6,27,97,057.00 on behalf of certain concerns in respect of accommodation entries; (v) Assessing Officer added sum of Rs.1,54,197.00 as income from business of hiring of tankers to income of assessee; (vi) Assessing Officer added sum of Rs.2,00,000,00 spent by assessee on foreign trip to income of assessee as also Rs.21,83,010.00 towards household expenses of assessee. 14 of 31 Ajay ITXA-1499-17.doc 11. Being aggrieved by above order, assessee preferred appeal before first appellate authority i.e. CIT (A), Mumbai. CIT (A) after considering entire gamut of evidence placed before Assessing Officer dealt with each and every addition made by Assessing Officer and vide its order dated 14th March, 2006 returned its findings as under :- 11.1. In respect of addition of Rs.2,92,90,123.00 as undisclosed exempted income disclosed by assessee, assessee had claimed exempted income of Rs.1,96,50,420.00 for remittances on basis of his residential status being non resident Indian. For year 1992 1993 and 1993 1994, status of appellant was non resident Indian and from assessment year 1994 1995 onwards for next eight years, status was not ordinarily resident and thus assessee was assessed in regular assessments accordingly. Assessing Officer held exemption of Rs.78,31,157.00 being receipt of India Development Bond (IDB) being not exempt and interest earned on said IDB for 23 months at rate of 12% per annum amounting to Rs.18,02,546.00, as income taxable in hands of assessee. 15 of 31 Ajay ITXA-1499-17.doc Assessing Officer held that Rs.1,71,20,932.00 had been actually remitted in assessee s account. assesse submitted before CIT (A) that no addition could be made on this account, since no incriminating document was found during search and that proceeds of Bonds could not be added as undisclosed income as said bonds were issued by State Bank of India and letter of State Bank of India and folio number of bonds were made available to Assessing Officer. assessee also submitted that notional interest @ 12% per annum was considered wrongly by Assessing Officer as against actual interest received @ 9% per annum. After considering evidence on record CIT (A) returned its finding in respect of aforesaid issue in favour of assessee on ground that assessee was non resident Indian during assessment year 1992 1993 and 1993 1994 and there was no incriminating material found during search on record indicting assessee. CIT (A) gave detailed findings deleting above addition made by Assessing Officer. 11.2. In respect of addition on account of sale of Naphtha on premium amounting to Rs.12,48,00,000.00 CIT (A) 16 of 31 Ajay ITXA-1499-17.doc considered submissions of assessee that no evidence was found by Assessing Officer during search to suggest and implicate that assessee was in business of sale of Naphtha. Therefore, CIT (A) held that addition made under Section 159BB was uncalled for as it did not justify said addition. CIT (A) gave detailed findings after going through seized material and statements of various witnesses and returned finding in favour of assessee that addition made by Assessing Officer was not based on any documentary evidence whatsoever and not in conformity with reference to seized materials gathered during search, thereby deleting above addition made by Assessing Officer. 11.3. In respect of addition on account of sale and delivery of Naphtha amounting to Rs.36,38,000.00 CIT (A) once again came to conclusion that, since there were no details / material available with respect to vehicles owned by assessee that were allegedly used for transactions finding of Assessing Officer was not sustainable in absence of direct involvement of assessee, thereby deleting above addition made by Assessing Officer. 17 of 31 Ajay ITXA-1499-17.doc 11.4. In respect of addition of cash amount of Rs.23,11,000.00 found during search in assessee s premises, which was claimed by Mr. Atul Thakkar (assessee's brother) admitting that said cash belonged to him, CIT (A) after considering evidence on record came to conclusion that since this amount was declared as undisclosed income in block return by Mr. Atul Thakkar, it could not be made attributable to and foisted on assessee. CIT (A) therefore deleted this addition made by Assessing Officer after considering fact that Mr. Atul Thakkar had paid taxes on said cash amount as it belonged to him and that there was no evidence on record to link cash to assessee. 11.5. In respect of unaccounted initial capital amounting to Rs.30,00,000.00, CIT (A) came to conclusion that, since addition on account of alleged sale of Naphtha on premium had been deleted, this addition of unaccounted initial capital required for said transaction could not be upheld. Hence, in absence of any evidence of sale of Naphtha on premium by assessee, question of adding 18 of 31 Ajay ITXA-1499-17.doc this unaccounted initial capital required to start business did not arise and same was deleted. 11.6. In respect of addition of Rs.4,99,36,298.00 made on protective basis by Assessing Officer, CIT (A) came to conclusion that this addition was made without any material evidence on record. CIT (A) held that this addition was made on basis of statements recorded by Assessing Officer which stated that assessee was working on behalf of certain concerns in Ahmedabad and cash deposits made in name of "Sunil Baroda" appearing in impounded books referred to assessee i.e. Mr. Sunil M. Thakkar. CIT (A) extensively referred to reply filed by assessee in this regard and statement of Mr. Naresh Vora which was recorded by Assessing Officer and came to conclusion that there was no direct evidence available to establish that concerns in Ahmedabad viz, M/s. Atlas Petrochemical Ltd., Ankini Petrochemical Pvt. Ltd. or Avani Petrochemical Ltd. belonged to assessee. Hence, in absence of any direct evidence linking nexus of assessee to said firms / companies, CIT (A) deleted above addition of Rs.4,99,36,298.00 made by 19 of 31 Ajay ITXA-1499-17.doc Assessing Officer. 11.7. In respect of addition of Rs.2,00,000.00 towards foreign trip expenses by assessee during assessment year 1998 1999 being held taxable by Assessing Officer, CIT (A) after considering entire evidence returned finding that from materials seized and statements recorded during search proceedings no question was ever asked or investigation carried out regarding foreign travel of assessee. CIT (A) therefore concluded that in absence of any evidence it could not be held that above addition made to income by Assessing Officer was justified and therefore, this addition made by Assessing Officer was deleted. 11.8. In respect of addition of Rs.21,83,010.00 towards household expenses, Assessing Officer had on basis of entries found in one Gandhi diary during search of premises of Sunil Chemicals reflecting entries of monthly cash withdrawals had added same to income of assessee. CIT (A) held that, since no incriminating document or evidence was found which proved that 20 of 31 Ajay ITXA-1499-17.doc withdrawal was made by family members of assessee, it could not be held that assessee had earned this undisclosed income. assessee pleaded that there was no documentary evidence about concealing his household expenditure and that his household expenditure was much more than expenditure appearing in said books of accounts. It weighed with CIT (A) that Assessing Officer did not consider total withdrawals by all family members of assessee's family. CIT (A) held that in fact Assessing Officer had added Rs.62,00,000.00 approximately to income of all members of family of assessee for same period, and therefore considering these facts, addition made by Assessing Officer on account of withdrawal towards household expenses came to be deleted. 12. revenue being aggrieved by order passed by CIT (A) approached Income Tax Appellate Tribunal with respect to deletion of five additions made by CIT (A). Before Tribunal, revenue pleaded that deletion of following five additions was wrongfully done by CIT (A) 21 of 31 Ajay ITXA-1499-17.doc namely :- (i) deletion of addition on account of sale of Naphtha on premium amounting to Rs.12.48,61,834.00; (ii) deletion of addition on account of sale and delivery orders amounting to Rs.36,38,634.00; (iii) deletion of addition on account of protective basis relying upon statement of Naresh B. Vora as recorded by Assessing Officer amounting to Rs.4,99,36,28.00; (iv) deletion of addition on account of foreign tour expenses by assessee amounting of Rs.2,00,000.00 and (v) deletion of addition on account of household expenses on basis of entry found in one Gandhi diary amounting to Rs.21,83,010.00. 13. Tribunal after thoroughly considering entire evidence on record and materials available, vide order dated 5th July, 2016 held that Assessing Officer had to determine undisclosed income of block period in manner as required under Section 158BB of Act. Tribunal held that block assessment has to be framed on basis of material coming into hands of Assessing Officer during search which becomes foundation of proceedings. Tribunal considered challenge to 22 of 31 Ajay ITXA-1499-17.doc five deletions made by CIT (A) and after thoroughly examining each of five deletions did not find any illegality or infirmity in order of CIT (A) in deleting said additions, thereby upholding order passed by CIT (A). 14. Before we advert to impugned order passed by Tribunal, at outset, we would state that appeal under Section 260A of Act is required to be entertained only on substantial question of law arising out of order of Tribunal, keeping in mind that we cannot disturb findings of facts under Section 260A of Act unless such findings are shown to be ex-facie perverse, unsustainable and exhibit total non-application of mind. In case before us, additions / dis-allowances made by Assessing Officer were deleted by CIA(A) which order was not interfered with by Tribunal. 15. Order dated 05th July, 2016 passed by Tribunal :- 15.1. Tribunal considered first challenge with respect to deletion of addition on account of sale on premium of Naphtha amounting to Rs.12,48,61,834.00 and concurred 23 of 31 Ajay ITXA-1499-17.doc with findings of CIT (A) that this addition was merely based upon statement of Naresh B. Vora. Tribunal held that not single word had been written specifically relating to or pointing to evidence by Assessing Officer. Tribunal held that during entire proceedings under Section 132 (search proceedings) no incriminating material was found or seized which could show or prove that assessee was quota holder of Naphtha or that he owned factory manufacturing petrochemicals. Tribunal held that assessee was not confronted with alleged material and statement of Naresh B. Vora which was used against him and no investigation was carried out by Assessing Officer with respect to nexus of assessee with alleged Ahmedabad and Baroda parties. Tribunal held that CIT (A) specifically referred to statement of Naresh B. Vora dated 15th October 1998 and in particular to question Nos.3,4 and 5 and their answers and observation made by Assessing Officer relating to collection of evidence during the course of search and further details gathered during block assessment proceedings. However, Tribunal after scrutinizing same found that CIT (A) had correctly 24 of 31 Ajay ITXA-1499-17.doc analyzed facts and evidence and returned finding that there was no illegality or infirmity in order of CIT (A) in deleting addition on account of sale of Naphtha on premium and thus this ground of challenge raised by revenue came to be dismissed by Tribunal. 15.2. Tribunal considered second challenge with respect to deletion of addition on account of sale and delivery orders amounting to Rs.36,38,634.00. After looking into evidence before Assessing Officer which pertained to file containing bills of Reliance Industries Ltd. in favour of Galaxy Petrochemicals and certain other bills in name of assessee and one Suresh Mayur, Tribunal accepted fact that assessee had totally denied his involvement. Tribunal confirmed finding returned by CIT (A) while deleting this addition and concluded that addition on account of sale and delivery orders could not be sustained under Section 158BC in absence of independent primary evidence. Tribunal held that appearance of name of Sunil Bhai on two bills could not prove involvement of assessee and there were no reasons offered by Assessing Officer as to how he arrived at conclusion that 25 of 31 Ajay ITXA-1499-17.doc signature on two bills was that of assessee. Tribunal agreed with findings of CIT (A) in respect of deletion of addition on account of sale and delivery orders amounting to Rs.36,38,634.00 and upheld same. Thus this ground of challenge raised by revenue before Tribunal came to be dismissed. 15.3. Tribunal considered third challenge with respect to deletion of addition of Rs.4,99,36,298.00 which was made on protective basis merely relying on statement of Naresh B. Vora recorded by Assessing Officer that assessee was working on behalf of several parties in Ahmedabad and Baroda. This addition was made without any basis or specific evidence with respect to nexus of assessee with any party in Ahmedabad and Baroda. Therefore this addition was determined to be not justified. Tribunal considered fact that Assessing Officer had made no inquiries with alleged parties in Ahmedabad and Baroda as to whether assessee was working in Atlas Petrochemicals, Ankini Petrochemicals and / or Avani Petrochemicals. Therefore, above addition which was made merely on basis of statement of Naresh B. Vora 26 of 31 Ajay ITXA-1499-17.doc could not be sustained. Tribunal considered that there was no document to arrive at such conclusion. Tribunal also considered fact that in entire statement of Naresh B. Vora, there was no allegation that assessee was working on behalf of Atlas Petrochemicals, Ankini Petrochemicals and Avani Petrochemicals and therefore Tribunal agreed with findings given by CIT (A) in deleting addition of Rs.4,99,36,298.00 made on protective basis and thus this ground of challenge raised by revenue also came to be dismissed by Tribunal. 15.4. Tribunal considered fourth challenge with respect to deletion of addition of Rs.2,00,000.00 on account of foreign tour expenses on basis of evidence which was gathered. It was observed by Tribunal that during search and seizure proceedings no incriminating documents were found which could be linked with foreign trips made by assessee. Further assessment order was silent about evidence which could prove that assessee had spent Rs.2,00,000.00 on foreign trips in assessment year 1998 1999 and / or said money was unaccounted income of assessee. Tribunal concluded that revenue 27 of 31 Ajay ITXA-1499-17.doc failed to disclose that there was any material evidence available / seized in respect of unaccounted income for foreign travel during search proceedings. Hence Tribunal returned finding that there was no infirmity in order of CIT (A) in deleting addition of Rs.2,00,000.00 on account of foreign tour expenses and thus this ground of challenge raised by revenue also came to be dismissed. 15.5. Tribunal thereafter considered final ground of challenge with respect to deletion of addition of Rs.21,83,010.00 on account of household expenses in income of assessee. sole basis for this addition was entry found in one Gandhi diary in premises of Sunil Chemicals . said diary however was not found at time of search operations. said diary was not in handwriting of assessee or any of his family member. nexus of assessee to said diary could not therefore be established. Tribunal held that assessee was not directly concerned with said diary and therefore addition which was made by Assessing Officer was made on his conjectures and surmises. Tribunal therefore returned finding that estimated addition cannot be made. Tribunal 28 of 31 Ajay ITXA-1499-17.doc agreed with finding of CIT (A) that for making above addition, no incriminating document or evidence was found that could prove that withdrawals were made by assessee or his family members for their household expenses. Further it was assessee s case that aforesaid amount of Rs.21,83,010.00 was total withdrawal made by assessee's family and not by assessee alone and this was not considered by Assessing Officer. Tribunal agreed with finding of CIT (A) in deleting addition of Rs.21,83,010.00 on ground that said household expenditure incurred by family members of assessee was sufficient and did not require any interference. Thus this ground of challenge raised by revenue came to be dismissed. 16. Section 158BC requires Assessment Officer to determine undisclosed income of block period in manner provided under Section 158BB. Section 158BB (1) states that undisclosed income of block period shall be aggregate of total income of previous years falling within block period computed, in accordance with 29 of 31 Ajay ITXA-1499-17.doc provisions of Act, on basis of evidence found as result of search or requisition of books of account or other documents and such other materials or information as are available with Assessing Officer and relatable to such evidence, as reduced by aggregate of total income, or as case may be, as increased by aggregate of losses of such previous years. Therefore, while determining / computing undisclosed income of block period, Assessing Officer shall compute income on basis of evidence found as result of search or on requisition of books of accounts. This is so because correctness or otherwise of return filed in pursuance of notice under Section 158BC (a) has to be examined with reference to materials in possession of Assessing Officer having nexus to assessment of undisclosed income. Hence block assessment has to be framed in light of material coming in to possession of assessing authority pursuant to search, which is foundation of proceedings. 17. On thorough consideration, we have no reason to believe that above findings are otherwise incorrect or 30 of 31 Ajay ITXA-1499-17.doc improper. From above, it is clear that findings returned by Tribunal in respect of five deletions exhibit due application of mind on part of Tribunal and on basis of factual evidence on record. We do not find any perversity, much less any ambiguity, in findings returned by Tribunal. We find that CIT (A) has dealt with related issues in great detail which have been affirmed by Tribunal. Thus, there is concurrent findings of fact by two lower appellate authorities. We are in agreement with reasons recorded by Tribunal in respect of deletion of five additions made by CIT (A) and upheld by Tribunal. 18. In circumstances, we find that appeal filed by revenue is devoid of merit and same is liable to be dismissed. We therefore hold that no substantial question of law, much less any question of law, arises from order of Tribunal. 19. In view of above findings, appeal filed by Revenue is therefore dismissed with no order as to costs. (MILIND N. JADHAV, J.) (UJJAL BHUYAN,J.) 31 of 31 Digitally signed by Ravindra Ravindra M. Amberkar M. Date: Amberkar 2020.06.05 16:32:00 +0530 Pr. Commissioner of Income-tax-20, Mumbai v. Sunil M. Thakkar