SKS ISPAT AND POWER LTD, MUMBAI V. DCIT CC 45, MUMBAI

CO 185/MUM/2012

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9601 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 28 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 07-05-2014
• Appeal Filed By: Assessee
• Bench Allotted: E
• Next Hearing Date: 29-04-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 09-08-2012
• Court: TRIBUNAL
• Department Lawyers: GIRIJA DAYAL
• Assessee Lawyers: GOVIND JHAVERI
• Keywords: Search and seizure; Valuation report
• Section: 143(3); 153A; 14A; 68; 132

Judgement Text

E IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIVEK VARMA, JM I.T.A. NO.8746/M/2010 (AY 2002 - 2003 ) I.T.A. NO.8747/M/2010 (AY 2003 - 2004) C.O.NO.183/M/2012 (ARISING FROM ITA NO.9199/M/2010) (AY 2002 - 03) C.O.NO.184/M/2012 (ARISING FROM ITA NO.9200/M/2010) (AY 2003 - 04) C.O.NO.185/M/2012 (ARISING FROM ITA NO.9201/M/2010) (AY 2004 - 05) C.O.NO.186/M/2012 (ARISING FROM ITA NO.9202/M/2010) (AY 2005 - 06) SKS ISPAT AND POWER LIMITED, 501B, ELEGANT BUSINESS PARK, J.B. NAGAR, ANDHERI (E), MUMBAI - 400 059. / VS. DCIT - CC 45, 6 TH FLOOR, AAYAKAR BHAVAN, MUMBAI - 20. ./ PAN : AAECS 3299 N ( / APPELLANT) .. ( / RESPONDENT ) I.T.A. NO.9199/M/2010 (AY 2002 - 2003) I.T.A. NO.9200/M/2010 (AY 2003 - 2004) I.T.A. NO.9201/M/2010 (AY 2004 - 2005) I.T.A. NO. 9202/M/2010 (AY 2005 - 2006 ) DCIT - CC 45, 6 TH FLOOR, AAYAKAR BHAVAN, MUMBAI - 20. / VS. SKS ISPAT AND POWER LIMITED, 501B, ELEGANT BUSINESS PARK, J.B. NAGAR, ANDHERI (E), MUMBAI - 400 059. ( / APPELLANT) .. ( / RESPONDENT ) / ASSESSEE BY : SHRI VIJAY MEHTA & MR. GOVIND JHAVERI / REVENUE BY : SHRI GIRIJA DAYAL, DR / DA TE OF HEARING : 29.04 .2014 / DATE OF PRONOUNCEMENT : 07 .05.2014 / O R D E R PER D. KARUNAKARA RAO, AM: THERE ARE 10 APPEALS UNDER CONSIDERATION INVOLVING ASSESSMENT YEARS 2002 - 03 TO 2005 - 06. OUT OF 10 APPEALS, THERE ARE 4 APPEALS BY THE REVENUE AND THE REST OF THEM ARE BY THE ASSESSEE. ASSESSEES APPEALS INCLUDE RAISING THE LEGAL ISSUE RELATING TO THE SUSTAINABILITY O F ADDITIONS WHICH ARE NOT SUPPORTED BY THE 2 SEIZED OR INCRIMINATING MATERIAL U/S 153A OF THE ACT. CONSIDERING THE LEGAL NATURE OF THE ISSUE RAISED IN THE CROSS APPEALS, FIRST WE UNDERTAKE THE LEGAL ISSUE FOR ADJUDICATION. 2. THE ASSESSEE FILED THE CROSS OBJECTION, WHICH INVOLVES THE SAID LEGAL ISSUE, VIDE C.O.NO.183/M/2012 (ARISING OUT OF APPEAL ITA NO.9199/M/2010) F O R A Y 2 0 0 2 - 2 0 0 3 ON 9.8.2012 AND THE EFFECTIVE GROUND RAISED BY THE ASSESSEE IN THIS CROSS OBJECTION READS AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ASSESSMENT ORDER PASSED UNDER SECTION 153A OF THE I.T. ACT IS BAD IN LAW AS THE ASSESSMENT WAS NOT PENDING AT THE TIME OF SEARCH AND THERE IS NO NEXUS BETWEEN FOLLOWING ADDITIONS MADE AND ANY INFORMATION & MATERIAL FOUND DURING THE SEARCH. 1. AD DITION U/S 68 OF THE I.T. ACT, 1961 IN RESPECT OF UNEXPLAINED SUNDRY CREDITORS RS. 41,91,94,855/ - . 2. ADDITION U/S 68 OF THE I.T. ACT, 1961 IN RESPECT OF UNEXPLAINED SHARE APPLICATION MONEY RS. 3,68,50,000/ - 3. BRIEFLY STATED R ELEVANT FACTS RELATING TO THE SAID LEGAL ISSUE ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME FOR THE AYS 2002 - 03; 2003 - 04; 2004 - 05 AND 2005 - 06 AS PER THE PROVISIONS OF THE SECTION 139(1) OF THE ACT AND THE ASSESSMENTS WERE COMPLETED U/S 143(3) R.W.S. 15 3A OF THE ACT. THUS, THE ASSESSMENTS FOR THE SAID AYS HAVE REACHED FINALITY. THERE WAS A SEARCH AND SEIZURE ACTION ON THE ASSESSEE ON 10.11.2006 IN THE CASE OF M/S. SKS ISPAT LTD GROUP, WHICH IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF THE STEEL PRODUCTS. IN ALL THESE FOUR ASSESSMENTS, AO MADE A COMMON ADDITION UNDER THE HEADS (I) UNEXPLAINED SUNDRY CREDITORS AND (II) SHARE APPLICATION MONEY . BEFORE US, AT THE OUTSET, IT IS THE CLAIM OF THE ASSESSEE THAT THE SAID ADDITIONS WERE MADE WITHO UT THE ASSISTANCE OF ANY INCRIMINATING MATERIAL GATHERED DURING THE SEARCH AND SEIZURE OPERATION. IN THIS REGARD, LD COUNSEL BROUGHT OUR ATTENTION TO PARA 7 OF THE ASSESSMENT ORDER AND MENTIONED THAT THE BASIS FOR THE ADDITION IS THE FINANCIAL STATEMENTS ANNEXED WITH THE RETURN OF INCOME. OTHERWISE, THERE IS NO SEIZED MATERIAL IN POSSESSION OF THE AO WHICH IS INCRIMINATING INFORMATION THAT SUGGESTS THE NECESSITY OF MAKING THE SAID ADDITIONS VALIDLY. SIMILARLY, BRINGING OUR ATTENTION TO PARA 8 OF THE SA ID ORDER OF THE AO, LD COUNSEL DEMONSTRATED THAT NO SEIZED MATERIAL IS AVAILABLE IN SUPPORT OF MAKING THE SAID ADDITIONS. FURTHER, LD COUNSEL FILED COPIES OF THE JUDGMENT OF THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF JAI STEEL 3 (INDIA) VS. ACIT [2013] 259 CTR 281 (RAJ) FOR THE PROPOSITION THAT THE NOTICE U/S 153A CAN BE VALIDLY ISSUED FOR ALL THE 6 ASSESSMENT YEARS AND HOWEVER, THE ADDITIONS MADE WITHOUT SUPPORT OF THE INCRIMINATING MATERIAL ARE NOT SUSTAINABLE IN THE ASSESSMENT MADE U/S 153A OF THE ACT . FURTHER, LD COUNSEL ALSO FILED A COPY OF THE ORDER OF THE TRIBUNAL IN THE CASE OF SHRI GOVIND AGARWAL VS. ACIT VIDE ITA NOS.3389 & 3390/M/2011 (AYS 2002 - 03 & 2004 - 05), DATED 10.1.2014 WHEREIN ONE OF US (AM) IS A PARTY, AND MENTIONED THAT THE ASSESSEE S CASE STANDS COVERED , IN PRINCIPLE , BY THE SAID ORDER OF THE TRIBUNAL IN ITS FAVOUR. LD COUNSEL ALSO FILED ANOTHER DECISION OF THE TRIBUNAL IN THE CASE OF ATUL BAROT VS. DCIT [2014] 44 TAXMANN.COM 167 (MUMBAI TRIB) DATED 26.2.2014 FOR THE IDENTICAL PR OPOSITION. THIS IS THE CASE WHERE THE ASSESSMENT WAS ORIGINALLY COMPLETED UNDER SECTION 143(1) OF THE ACT. 4. ON THE OTHER HAND, LD DR FAIRLY MENTIONED THAT THE ORDERS OF THE REVENUE AUTHORITIES DO NOT INDICATE THE EXISTENCE OF ANY INCRIMINATING MATERIAL . HOWEVER, HE EXP LAINED THE PROVISIONS OF THE ACT TO POINT THAT SUMMARY ASSESSMENTS CANNOT BE REALLY CONSIDERED AS CONCLUDED ASSESSMENTS. HOWEVER, HE AGREED TO THE FACT THAT THIS ISSUE WAS ALREADY CONSIDERED IN THE CITED DECISIONS IN FAVOUR OF THE ASSESS EE. 5. WE HAVE HEARD BOTH THE PARTIE S ON THE LEGAL ISSUE AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE JUDGMENTS OF THE HONBLE HIGH COURT OF RAJASTHAN IN THE CASE OF JAI STEEL (INDIA) (SUPRA) AND OTHER DECISIONS OF THE COORDINATE BENC H OF THE ITAT MUMBAI CITED ABOVE. FOR THE SAKE OF COMPLETENESS OF THE ORDER, WE FIND IT RELEVANT TO IMPORT THE RELEVANT PARAS FROM THE SAID COORDINATE BENCH DECISION IN THE CASE OF SHRI GOVIND AGARWAL (SUPRA) WHICH READ AS UNDER: DECISION OF THE TRIBUNAL : 9. WE HAVE HEARD BOTH THE PARTIES ON THE LEGAL ISSUE RELATING TO THE SUSTAINABILITY OR VALIDITY OF THE ADDITIONS MADE IN THE ASSESSMENTS MADE U/S 153A READ WITH SECTION 143(3) OF THE ACT IN RESPECT OF COMPLETED ASSESSMENTS. 10. THE STAND OF THE REVENUE IS THAT THE FIRST PROVISO TO SECTION 153A EMPOWERS THE AO TO ISSUE NOTICE U/S 153A OF THE ACT IN RESPECT OF THE 6 AYS PRIOR TO THE ASSESSMENT YEAR IN WHICH THE SEARCH TOOK PLACE. THE RELEVANCE OF THE EXISTENCE OF INCRIMINATING MAT ERIAL IS NOT PROVIDED IN THE SAID PROVISIONS. AS PER THE REVENUE THERE SHOULD NOT BE ANY DIFFERENCE QUA THE COMPLETED ASSESSMENTS AND THE ABATED ASSESSMENTS FOR ALL SIX AYS IN SO FAR AS THE POWERS OF THE AO IS CONCERNED AND HE IS EMPOWERED TO ISSUE NOTICE U/S 153A AND MAKE ADDITIONS EITHER BASED IN THE INCRIMINATING MATERIAL OR OTHERWISE. 4 11. PER CONTRA, THE CASE OF THE ASSESSEE IS THAT THE AO MAY BE EMPOWERED TO ISSUE NOTICES FOR ALL THE SIX AYS IN VIEW OF THE CITED DECISIONS IE JAI STEEL (INDIA) LTD (S UPRA), SCOPE (P) LTD (SUPRA) ETC. HOWEVER, IN CASE OF COMPLETED ASSESSMENTS, AO IS EMPOWERED TO MADE ADDITIONS ONLY BASED ON THE INCRIMINATING MATERIALS AND NOT OTHERWISE JAI STEEL (INDIA) LTD (SUPRA), LMJ INTERNATIONAL LTD (SUPRA) , GURINDER SINGH BAWA (S UPRA) ETC . FOR MAKING THE ROUTINE ADDITIONS, WHICH ARE NORMALLY DONE IN THE REGULAR ASSESSMENTS, THE COMPLETED ASSESSMENT NEED NOT BE DISTURBED BY INVOKING THE PROVISIONS OF SECTION 153A OF THE ACT IF NOT FOR REITERATING THE RETURNED OR ASSESSED INCOME AS THE CASE MAY BE. JUDGMENT IN THE CASE OF JAI STEEL (INDIA) LTD (SUPRA) SUPPORTS THE ABOVE LEGAL PROPOSITION. AS PER THE ASSESSEE, REGARDING THE CASES OF ABATED ASSESSMENTS, CONSIDERING THE SCHEME OF ASSESSMENTS U/S 153A, PER CONTRA, EVEN THE ROUTINE ADDITI ONS ARE DONE IN THESE ASSESSMENTS. 12. WE HAVE HEARD THE PARTIES AND THEIR DIVERGENT STANDS ON THE LEGAL ISSUE AND THE VALIDITY OF THE INSTANT ASSESSMENT/REASSESSMENT WITH THE ROUTINE ADDITIONS U/S 68 AND SECTION 14A OF THE ACT BASED ON THE ACCOUNTED TRANS ACTIONS. THE INSTANT CASE FOR THE AY 2002 - 03 DEALS WITH THE CASE OF DISTURBING THE COMPLETED ASSESSMENT. EARLIER THE ASSESSMENT WAS COMPLETED U/S 143(1) OF THE ACT. COMPLETENESS OF THE SUMMARY ASSESSMENT IS CONSIDERED AND HELD IN FAVOUR OF THE ASSESSEE V IDE MANY JUDGMENTS CITED ABOVE. IN THE ASSESSMENT U/S 153A, THE AO MADE (I ) ADDITION U/S 68 ON ACCOUNT OF ARTIFICIALLY INFLATED INVESTMENT IN HOUSE DULY DISCLOSED IN THE BALANCE SHEET OF THE ASSESSEE RS.31,33,070/ - ; AND (II) DISALLOWANCE U/S 14A: RS. 23, 31,469/ - . ADMITTEDLY, THERE IS NO INCRIMINATING MATERIAL BEFORE THE AO TO SUPPORT THE ABOVE ADDITIONS. THE VALUATION REPORT, WHICH IS GARNERED BY THE AUTHORITIES CONSTITUTES MERE ESTIMATES AND THE PROVISIONS OF SECTION 132 IS NOT REQUIRED TO OBTAIN SUCH RE PORT FROM THE DVO. AS SUCH, FOR MAKING AFORESAID ADDITIONS OF RS 31,33,070/ - , AO HAS NOT USED EVEN THE SAID VALUATION REPORT AND THE AO DISALLOWED WHAT IS REPORTED IN THE BOOKS. SIMILAR IS THE CASE WITH THE ADDITIONS U/S 14A OF THE ACT. THEREFORE, UNDISPUT EDLY, THE IMPUGNED QUANTUM ADDITIONS ARE MADE MERELY BASED ON THE ENTRIES IN THE ACCOUNTED BOOKS AND CERTAINLY NOT BASED ON EITHER THE UNACCOUNTED BOOKS OF ACCOUNTS OF THE ASSESSEE OR BOOKS NOT PRODUCED TO THE AO EARLIER OR THE INCRIMINATING MATERIAL GATHE RED BY THE INVESTIGATION WING OF THE REVENUE. CONSIDERING THE LEGAL PROPOSITIONS PLACE BEFORE US BY THE ASSESSEES COUNSEL, WE ARE OF THE OPINION, SUCH ASSESSMENTS OR ADDITIONS ARE UNSUSTAINABLE IN LAW. 13. FOR THE SAKE COMPLETENESS OF THE ASSESSEE, WE IN SERT HERE SOME OF THE EXTRACTS FROM RELEVANT JUDGMENTS AND THEY ARE: A. [2013 36 TAXMANN.COM 523 (RAJASTHAN) IN THE CASE OF JAI STEEL (INDIA) VS. ACIT - FROM HELD PORTION: .THE REQUIREMENT OF ASSESSMENT OR REASSESSMENT UNDER THE SAID SECTION HAS TO BE READ IN THE CONTEXT OF SECTIONS 132 OR 132A, INASMUCH AS, IN CASE NOTHING INCRIMINATING IS FOUND ON ACCOUNT OF SUCH SEARCH OR REQUISITION, THEN THE QUESTION OF REASSESSMENT OF THE CONCLUDED ASSESSMENTS DOES NOT ARISE , WHICH WOULD REQUIRE MORE REITERATION AND IT IS ONLY IN THE CONTEXT OF THE ABATED ASSESSMENT UNDER SECOND PROVISO WHICH IS REQUIRED TO BE ASSESSED. FROM A PLAIN READING OF THE PROVISION ALONG WITH THE PURPOSE AND PURPORT OF THE SAID PROVISION, WHICH IS INTRICATELY LINKED WITH SEARCH AND REQUISITION UNDER SECTIONS 132 AND 132A, IT IS APPARENT THAT: ( A ) THE ASSESSMENTS OR REASSESSMENTS, WHICH STANDS ABATED IN TERMS OF SECOND PROVISO TO SECTION 153A, THE 5 ASSESSING OFFICER ACTS UNDER HIS ORIGINAL JURISDICTION, FOR WHICH, ASSESSMENTS HAVE TO BE MADE; ( B ) REGARDING OTHER CASES, THE ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL AND ( C ) IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE . .. THE ARGUMENT OF THE ASSESSEE THAT THE ASSESSING OFFICER IS ALSO FREE TO DISTURB INCOME, EXPENDITURE OR DEDUCTION DE HORS THE INCRIMINATING MATERIAL, WHILE MAKING ASSESSMENT UNDER SECTION 153A IS ALSO NOT BORNE OUT FROM THE SCHEME OF THE SAID PROVISION WHICH AS NOTICED ABOVE IS ESSENTIALLY IN CONTEXT OF SEARCH AND/OR REQUISITION. PARA 26 OF THE JUDGMENT: THE PLEA RAISED ON BEHALF OF THE ASSESSEE THAT AS THE FIRST PROVISO PROVIDES FOR ASSESSMENT OR REASSESSMENT OF THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSESSMENT YEARS, IS MERELY READING THE SAID PROVISION IN ISOLATION AN D NOT IN THE CONTEXT OF THE ENTIRE SECTION. THE WORDS 'ASSESS' OR 'REASSESS' HAVE BEEN USED AT MORE THAN ONE PLACE IN THE SECTION AND A HARMONIOUS CONSTRUCTION OF THE ENTIRE PROVISION WOULD LEAD TO AN IRRESISTIBLE CONCLUSION THAT THE WORD 'ASSESS' HAS BEEN USED IN THE CONTEXT OF AN ABATED PROCEEDINGS AND REASSESS HAS BEEN USED FOR COMPLETED ASSESSMENT PROCEEDINGS, WHICH WOULD NOT ABATE AS THEY ARE NOT PENDING ON THE DATE OF INITIATION OF THE SEARCH OR MAKING OF REQUISITION AND WHICH WOULD ALSO NECESSARILY S UPPORT THE INTERPRETATION THAT FOR THE COMPLETED ASSESSMENTS, THE SAME CAN BE TINKERED ONLY BASED ON THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS. B. [2012] 28 TAXMANN.COM 328 (MUMBAI TRIB.) IN THE CASE OF GURI NDER SINGH BAVA VS. DCIT . WHETHER SINCE ASSESSMENT UNDER SECTION 153A WAS PASSED BY ASSESSING OFFICER ON BASIS OF MATERIAL AVAILABLE IN RETURN OF INCOME AND THERE WAS NO REFERENCE TO ANY INCRIMINATING MATERIAL FOUND DURING SEARCH AND SINCE NO ASSESSMENT WAS ABATED, ASSESSMENT UNDE R SECTION 153A WAS TO BE QUASHED BEING MADE WITHOUT JURISDICTION AVAILABLE UNDER SECTION 153A - HELD, YES [PARA 6.2] [IN FAVOUR OF ASSESSEE] PARA 6.1 OF THE ORDER: THE SPECIAL BENCH IN THE CASE OF ALCARGO GLOBAL LOGISTICS LTD. ( SUPRA ), HAS HELD THAT PROVISIONS OF SECTION 153A COME INTO OPERATION IF A SEARCH OR REQUISITION IS INITIATED AFTER 31.5.2003 AND ON SATISFACTION OF THIS CONDITION, THE AO IS UNDER OBLIGATION TO ISSUE NOTICE TO THE PERSON REQUIRING HIM TO FURNISH THE RETURN OF I NCOME FOR SIX YEARS IMMEDIATELY PRECEDING THE YEAR OF SEARCH. THE SPECIAL BENCH FURTHER HELD THAT IN CASE ASSESSMENT HAS ABATED, THE AO RETAINS THE ORIGINAL JURISDICTION AS WELL AS JURISDICTION UNDER SECTION 153A FOR WHICH ASSESSMENT SHALL BE MADE FOR EACH ASSESSMENT YEAR SEPARATELY. THUS IN CASE WHERE ASSESSMENT HAS ABATED THE AO CAN MAKE ADDITIONS IN THE ASSESSMENT, EVEN IF NO INCRIMINATING MATERIAL HAS BEEN FOUND. BUT IN OTHER CASES THE SPECIAL BENCH HELD THAT THE ASSESSMENT UNDER SECTION 153A CAN BE MAD E ON THE BASIS OF INCRIMINATING MATERIAL WHICH IN THE CONTEXT OF RELEVANT PROVISIONS MEANS BOOKS OF ACCOUNT AND OTHER DOCUMENTS FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT AND UNDISCLOSED INCOME OR PROPERTY DISCLOSED DURING THE COURSE OF SEARCH. IN THE PRESENT CASE, THE ASSESSMENT HAD BEEN COMPLETED UNDER SUMMARY SCHEME UNDER SECTION 143(1) AND TIME LIMIT FOR ISSUE OF NOTICE UNDER SECTION 143(2) HAD EXPIRED ON THE DATE OF SEARCH. THEREFORE, THERE WAS NO ASSESSMENT PEN DING IN THIS CASE AND IN SUCH A CASE 6 THERE WAS NO QUESTION OF ABATEMENT. THEREFORE, ADDITION COULD BE MADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING SEARCH. B. ALL CARGO GLOBAL LOGISTICS LTD. V. DEPUTY COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE - 44 [2012] 23 TAXMANN.COM 103 (MUM.) (SB) PARA 58 OF SB DECISIONS: THUS, QUESTION NO.1 BEFORE US IS ANSWERED AS UNDER : ( A ) IN ASSESSMENTS THAT ARE ABATED, THE AO RETAINS THE ORIGINAL JURISDICTION AS WELL AS JURISDICTION CONFERRED ON HIM U/S 153A FOR WHICH ASSESSMENTS SHALL BE MADE FOR EACH OF THE SIX ASSESSMENT YEARS SEPARATELY ; ( B ) IN OTHER CASES , IN ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT U/S 153A WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL , WHICH IN THE CONTEX T OF RELEVANT PROVISIONS MEANS - (I) BOOKS OF ACCOUNT, OTHER DOCUMENTS, FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT, AND (II) UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH. 14. THUS, IN CASE OF THE COMPLETED ASSESSMENTS EITHER U/S 143(1) OR 143(3), THE ABOVE EXTRACTS ARE UNIFORM IN ADVOCATING AGAINST MAKING ADDITIONS IN ROUTINE MANNER IN THE ASSESSMENTS MADE U/S 153A OF THE ACT WHEN THERE IS NO INCRIMINATING MATERIAL GATHERED IN THE SEARCH ACTION. STATUTORY NOTICE U/S 153A OF THE ACT CAN ALSO BE ISSUED TO REITERATE THE RETURNED INCOME OR FOR MAKING ADDITIONS BASED ON THE INCRIMINATING MATERIAL OR UNPRODUCED BOOKS OF ACCOUNT. OTHERWISE, ADDITIONS MADE IN ROUTINE MATTER AS IN THE P RESENT APPEAL ARE NOT SUSTAINABLE. FURTHER, FOR THE SAKE COMPLETENESS OF THE ORDER, WE HAVE PERUSED THE ORDERS/JUDGMENTS RELIED UPON BY LD DR FOR THE REVENUE AND FOUND THEY ARE D ISTINGUISHABLE ON FACTS FOR ONE REASON OR OTHER. TO START WITH, WE HAVE PERUSED THE JUDGMENT OF HONBLE HONBLE DELHI HIGH COURT IN THE CASE OF MADUGULA VENU (SUPRA) AND FIND THAT, THOUGH EXPLAINED THE PROVISIONS IN PLAIN LANGUAGE, IT DOES NOT DEALT WITH THE RELEVANCE OR FACTUM OF INCRIMINATING MATERIAL. FURTHER, THE JUDGMENT OF ANDHRA PRADESH HIGH COURT IN THE CASE OF GOPAL LAL BHADRUKA (SUPRA) IS NOT ON THE NOTICES ISSUED U/S 153A OF THE ACT AND THE SAME IS PRONOUNCED IN THE CONTEXT OF THE NOTICE U/S 153C OF THE ACT. FU RTHER, ALSO, THE COORDINATE BENCH DECISION IN THE CASE OF SCOPE (P) LTD (SUPRA) HAS GRANTED RELIEF TO THE ASSESSEE THOUGH THE NOTICE ISSUED U/S 153A OF THE ACT WAS UPHELD. HOWEVER, THIS ORDER HAS NOT CONSIDERED THE THEN EXISTING DECISION OF THE COORDINATE BENCH DECISION IN THE CASE OF PRATIBHA INDUSTRIES LTD (SUPRA) WHICH IS RELEVANT FOR THE PROPOSITION THAT THE COMPLETED ASSESSMENT MAY NOT BE DISTURBED IN THE ABSENCE OF ANY INCRIMINATING MATERIAL SPECIFIC TO THE ASSESSEE. IN FACT, ALL THESE JUDGMENTS TAK E SPIRIT FROM THE SPECIAL BENCH DECISION IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD (SUPRA), WHICH IS RELEVANT FOR THE PROPOSITION THAT THE ASSESSMENT U/S 153A WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL SUCH AS BOOKS OF ACCOUNTS, OTHER DOCUMENT S FOUND IN THE SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT AND UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF THE SEARCH. 15. WE ALSO FIND THAT THE CIT(A) MADE A REFERENCE TO THE INCRIMINATING MATERIAL, WHICH YIELDED DISCLOSU RE OF SOME UNDISCLOSED INCOME. BUT, ON PERUSAL OF THE DOCUMENTS, WE FIND THAT THE CIT(A) ENTERED INTO AN ERROR ZONE AND THE DISCLOSURE IS ONLY RS 5 CRORES IN THIS CASE AND THE SAME RELATES TO THE LANDS DEALS. IN PRINCIPLE THIS DISCLOSURE HAS NOTHING DO WIT H THE IMPUGNED ADDITIONS U/S 68 OR 14A OF THE ACT. IN THE INSTANT CASE, SPECIFIC TO THE ASSESSEE, NO INCRIMINATING MATERIAL WITH THE DETAILS WAS REFERRED EITHER IN THE ASSESSMENT ORDER OR IN THE ORDER OF THE CIT (A) FOR MAKING THE IMPUGNED ADDITIONS. AS PE R THE CITED JUDGMENT IN THE CASE OF JAI STEELS LTD, SUPRA, THE ASSESSMENT U/S 153A IS ONLY FOR REITERATION RATHER THAN MAKING ANY ADDITIONS IN A ROUTINE MANNER WITHOUT THE STRENGTH OF THE INCRIMINATING MATERIALS. SIMILAR VIEW WAS TAKEN UP BY THE ITAT, DELH I H BENCH, IN THE CASE OF V.K. FISCAL 7 SERVICES P LTD VS. DCIT VIDE ITA NOS.5460 TO 5465/DEL/2012 ( WWW.ITATONLINE.ORG ). IN THIS REGARD, PARA 13 FROM THE SAID ORDER OF THE ITAT DELHI BENCH (SUPRA) IS RELEVANT AND TH E SAME READS AS UNDER: 13. APPLYING THE ABOVE CASE LAWS TO THE FACTS OF THE CASE, WE HAVE TO NECESSARILY QUASH THE ASSESSMENT PROCEEDINGS FOR AY 2004 - 2005, 2005 - 06, 2007 - 08, 2008 - 09 ON THE FOLLOWING GROUNDS. (A) NO BOOKS OF ACCOUNTS BELONGING TO THE ASSESSE WERE FOUND AND SEIZED IN THE PREMISES OF THE OTHER PERSON. WHAT WAS FOUND WAS IN THE HARD DISK WAS ONLY A CONFIRMATION OF ACCOUNT THAT AN ATTACHED ANNEXURES. SUCH DOCUMENTS CANNOT BE SAID TO BE BOOKS OF ACCOUNTS OR DOCUMENTS BELONGING TO THE ASSESSEE. (B) THE REVENUE HAS NOT PRODUCED THE RECORD OF THE SEARCHED PERSON TO DEMONSTRATE THAT SATISFACTION WAS RECORDED DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN THE CASE OF M/S. GLOBAL REALITY VENTURES P. LTD. ON THE DATE OF RECORDING OF SATISFACTION, FIRST NO TICE U/S 153(C) WAS ISSUED. THERE IS NO INDICATION WHATSOEVER, THAT THE ASSESSMENT PROCEEDINGS IN THE CASE OF GLOBAL REALITY VENTURES P. LTD WERE IN PROGRESS OR NOT, AT THE POINT OF TIME AND THAT THE AO DURING THE COURSE OF THAT PROCEEDINGS RECORDED THIS S ATISFACTION. THE PROCEDURE CONTEMPLATED UNDER THE ACT WAS NOT FOLLOWED. (C) THE SATISFACTION IS RECORDED ON 23 RD JULY, 2010. THE RELEVANT AY WOULD BE 2011 - 12. THE SIX PRECEDING AYS RELEVANT TO THIS AY WOULD BE 2005 - 06 / 2006 - 07 / 2007 - 08 / 2008 - 09 / 2010 - 11 . THUS, THE NOTICE ISSUED U/S 153C FOR THE AY 2004 - 05 IS CLEARLY BARRED BY LIMITATION. (D) EVEN OTHERWISE, AS THERE IS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH, THE AO SHOULD HAVE DROPPED THE PROCEEDINGS INITIATED U/S 153C OF THE ACT. (E) A S THERE IS NO DISPUTE THAT NO ASSESSMENT OR REASSESSMENT HAS ABATED IN THIS CASE FOR THE REASON, THAT THE DATE OF SEARCH, THE DATE OF SEARCH WHICH IN THE CASE ON HAND WOULD BE 25.3.2010, BY VIRTUE OF FIRST PROVISO TO SECTION 153C, I.E., THE DATE OF PASSI NG AN ORDER U/S 127 TRANSFERRING THE CASES OF THE ASSESSEE TO THE PRESENT ASSESSING OFFICER NO ASSESSMENT OR REASSESSMENT WAS PENDING. WHEN NO ASSESSMENT HAS ABATED, THE QUESTION OF MAKING ANY ADDITION OR MAKING DISALLOWANCE WHICH ARE NOT BASED ON ONLY MA TERIAL FOUND DURING THE SEARCH IS BAD IN LAW. 16. IN THESE CIRCUMSTANCES, WE HAVE NO DOUBT ABOUT THE ABSENCE OF ANY SEIZED MATERIAL WHICH ARE INCRIMINATING IN NATURE TO BACK THE ADDITIONS U/S 68 OR 14A O THE ACT MADE IN THE ASSESSMENT MADE U/S 153A OF THE ACT FOR THE AY UNDER CONSIDERATION. REGARDING THE DVOS REPORT GATHERED DURING THE SEARCH ACTION, WE FIND THAT THE REPORT SUFFERS FROM CERTAIN DEFICIENCIES QUA COST OF CONSTRUCTION OF RESIDENTIAL PROPERTY AND THE LAND OBTAINED THERETO. THE SAID REPORT CONSTITUTES AN OPINION OF THE THIRD PARTY WHICH CANNO T BE USED BY THE AO FOR MAKING ADDITIONS AND SUCH ADDITIONS, IF ANY, CANNOT BE SUSTAINED LEGALLY. AS SUCH, WE FIND THAT THE AO HAS NOT USED THE SAID REPORT OF THE DVO ALSO FOR MAKING ADDITIONS OF RS. 31,33,007/ - , THE DIFFERENCE BETWEEN ACCOUNTED AMOUNT OF RS. 46,13,007/ - , CLAIMED AS THE AMOUNT SPENT ON CONSTRUCTION OF HOUSE AND ACQUISITION OF LAND AS ON 31.3.2002 MINUS RS. RS. 14.8 LAKHS, THE INVESTMENT MADE ON THE LAND PLOTS. AO MADE ADDITION FOR ASSESSEES FAILURE TO PROVIDE EVIDENCES / BILLS IN SUPPORT OF THE CLAIM OF EXPENDITURE ON THE CONSTRUCTION. IT THE PRESUMPTION OF THE AO THAT THE PLOTS SINCE ACQUIRED ONLY BY JULY 2001, THE ASSESSEE WOULD NOT HAVE SPEND RS. 31,33,007/ - BY 31.3.2002. THIS IS MERELY A PRESUMPTION RATHER CONCLUSION BASED ON ANY EV IDENCES. SUCH ADDITIONS ARE UNSUSTAINABLE IN LAW IN THE ASSESSMENTS MADE U/S 153A R.W.S 143(3) OF THE ACT. 17 . RAJASTHAN HIGH COURT JUDGMENT IN THE CASE OF JAI STEEL (INDIA) (SUPRA), VIDE PARA 18, IT IS CATEGORICALLY MENTIONED THAT THE REQUIREMENT OF ASSE SSMENT OR REASSESSMENT UNDER THE SAID SECTION (153A) HAS TO BE READ IN THE CONTEXT OF SECTIONS 132 OR 132A OF THE ACT, INASMUCH AS, IN CASE NOTHING INCRIMINATING IS FOUND ON ACCOUNT OF SEARCH OR REQUISITION, THEN THE QUESTION OF REASSESSMENT OF THE CONCLUD ED ASSESSMENTS DOES NOT ARISE, WHICH WOULD MORE REITERATION.. THUS, THE JUDGMENT OF HONBLE HIGH COURT IN THE CASE OF JAI STEEL LTD, SUPRA AND ABOVE DECISIONS OF THE TRIBUNAL ARE CATEGORICAL IN CONCLUDING THAT, IN CASE OF THE CONCLUDED ASSESSMENTS LI KE THE PRESENT ONE, THE ADDITIONS ARE MADE ONLY BASED ON THE INCRIMINATING MATERIAL DISCOVERED DURING THE SEARCH ACTION. THE FACTS OF THE JAI STEEL LTD (SUPRA) ARE IDENTICAL TO THE PRESENT ONE IE AO MADE ADDITIONS BY REASSESSING U/S 8 153A ON THE COMPLETED A SSESSMENT U/S 143(1) OF THE ACT. THUS, CONSIDERING THE JUDGMENT IN THE CASE OF THE JAI STEEL LTD (SUPRA), THE ARGUMENTS ON THE LEGAL ISSUE RAISED BEFORE US STANDS COVERED. THEREFORE, CONSIDERING THE RAJASTHAN HIGH COURTS JUDGMENT IN THE CASE OF JAI STEELS LTD, SUPRA, WE HAVE NO DIFFICULTY IN (I) UPHOLDING THE ISSUE OF NOTICE U/S 153A OF THE ACT AND (2) IN DISAPPROVING THE MAKING OF THE IMPUGNED ADDITIONS U/S 68 AND 14A OF THE ACT, WHICH ARE NOT BACKED BY THE INCRIMINATING MATERIALS. IN THE ABSENCE OF INCRI MINATING MATERIAL, THE ROLE OF THE AO IS ONLY TO REITERATE THE RETURNED INCOME FILED IN RESPONSE TO THE NOTICE U/S 153A OF THE ACT. ACCORDINGLY, IN SUBSTANCE, THE COMMON LEGAL ISSUE RAISED IN THE GROUNDS FOR BOTH THE APPEALS OF THE ASSESSEE (ITA NO 3389&33 90/M/2011 ) IS ALLOWED . 6. WE HAVE ALSO EXAMINED THE SAID PARA 7 FROM THE ORDER OF THE AO AND THE RELEVANT LINES READ AS UNDER: 7. UNEXPLAINED SUNDRY CREDITORS: THE ASSESSEE IS ENGAGED IN THE SALE AND PURCHASE OF STEEL COILS / SHEET / PLATES STRUCTURALS / BARS. THE TRANSACTION RECORDED IN BALANCE SHEET, P&L A/C WERE EXAMINED. ON PERUSAL OF THE P&L A/C, IT IS FOUND THAT THERE IS PURCHASE OF RS. 84.50 CRORE , SALE OF RS. 72.52 CRS AND CLOSING STOCK OF RS. 13.28 CRS. ALSO ON PERUSAL OF THE BALA NCE SHEET, IT WAS FOUND THAT THERE ARE SUNDRY CREDITORS OF RS. 34.83 CRS AND UNSECURED LOAN OF RS. 1.30 CRS.. 7. FROM THE ABOVE IT IS CLEAR THAT THE BASIS FOR ADDITION ON ACCOUNT OF SUNDRY CREDITORS (PURCHASES) IS MERELY THE FINANCIAL STATEMENTS FILED BY THE ASSESSEE. SIMILAR IS THE CASE WITH REGARD TO THE ADDITION ON ACCOUNT OF SHARE APPLICATION MONEY ( PARA 8.1 OF THE ASSESSMENT ORDER IS RELEVANT IN THIS REGARD ) . CONSIDERING THE STATED POSITION, THERE IS NO SEIZED MATERIAL OR INCRIMINATING M ATERIAL TO SUPPORT THE ADDITIONS MADE BY THE AO ON ACCOUNT OF UNEXPLAINED SUNDRY CREDITORS (PURCHASES) AND ON ACCOUNT OF SHARE APPLICATION MONEY, WE ARE OF THE OPINION THAT THE SAID ADDITIONS ARE NOT SUSTAINABLE. ACCORDINGLY, THE LEGAL GROUND RAISED B Y THE ASSESSEE IS ALLOWED. 8. IN THE RESULT, THE CROSS OBJECTION RAISED BY THE ASSESSEE IS ALLOWED. 9. SINCE, THE ASSESSEE RAISED EXACTLY SIMILAR ISSUES IN ALL ITS CROSS OBJECTIONS AND THE ONLY DIFFERENCE IS IN FIGURES, THEREFORE, THE DECISION GIVEN BY US WHILE ADJUDICATING THE C.O.NO.183/M/2012 (AY 2002 - 2003) APPLIES TO ALL THE CROSS OBJECTIONS TOO . ACCORDINGLY, ALL THE GROUNDS RAISED BY THE ASSESSEE IN ITS CROSS OBJECTIONS ARE ALLOWED. THE OTHER APPEALS FILED BY THE ASSESSEE ARE DISMISSED AS ACADEMIC 10. CONSIDERING OUR DECISION GIVEN IN THE ABOVE PARAGRAPHS OF THIS ORDER WHILE ADJUDICATING THE ASSESSEES APPEALS /COS , THE ADJUDICATION OF GROUNDS RAISED BY THE 9 REVENUE IN ITS APPEALS BECOME S ACADEMIC. ACCORDINGLY, ALL THE GROUNDS RAISED BY THE REVENUE IN THEIR APPEALS ARE DISMISSED AS ACADEMIC. IN THE RESULT, ALL THE REVENUE APPEALS ARE DISMISSED. 11. IN THE RESULT, ALL THE 4 COS A R E A L L O W E D . 2 APPEALS OF THE ASSESSEE AND 4 APPEALS OF THE REVENUE ARE DISMISSED . ORDER PRONOUNCED IN THE OPEN C OURT ON 0 7 T H MAY, 2014. S D / - S D / - (VIVEK VARMA) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 0 7 .5.2014 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI