Hari Prasad Bhararia, Visakhapatnam V. THE DCIT, CENTRAL CIRCLE - 1, Visakhapatnam

CO 21/VIZ/2016

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 2407 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 month(s) 24 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 09-09-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 16-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: M B REDDY
• Keywords: Salary income; Document seized; Deemed dividend; Block assessment; Revised return; Documents seized
• Section: 143(3); 142(1); 153A; 132

Judgement Text

ITA NOS.435 TO 441/VIZAG/2014 & CO 21 TO 27/VIZAG/2 016 SRI HARI PRASAD BHARARIA, VISAKHAPATNAM 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NOS.435 TO 441/VIZAG/2014 ( / ASSESSMENT YEARS: 2005-06 TO 2011-12) DCIT, CENTRAL CIRCLE - 1, VISAKHAPATNAM VS. SRI HARI PRASAD BHARARIA, VISAKHAPATNAM [PAN: ABLPB6853A ] ( % / APPELLANT) ( &'% / RESPONDENT) C.O. NOS.21 TO 27/VIZAG/2016 (ARISING OUT OF I.T.A.NOS.435 TO 441/VIZAG/2014) ( / ASSESSMENT YEARS: 2005-06 TO 2011-12) SRI HARI PRASAD BHARARIA, VISAKHAPATNAM VS. DCIT, CENTRAL CIRCLE - 1, VISAKHAPATNAM ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI M.B. REDDY, DR / RESPONDENT BY : SHRI G.V.N. HARI, AR / DATE OF HEARING : 22.08.2016 / DATE OF PRONOUNCEMENT : 09.09.2016 ITA NOS.435 TO 441/VIZAG/2014 & CO 21 TO 27/VIZAG/2 016 SRI HARI PRASAD BHARARIA, VISAKHAPATNAM 2 / O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: THESE APPEALS FILED BY THE REVENUE AND CROSS OBJEC TIONS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER PASSED BY THE CIT(A)-1, HYDERABAD DATED 28.4.2015 FOR THE ASSESSM ENT YEARS 2005-06 TO 2011-12. SINCE, THE FACTS ARE IDENTICAL AND ISSU ES ARE COMMON, THEY ARE HEARD TOGETHER AND DISPOSED OFF, BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL DERIVING INCOME FROM SALARY FROM COMPANY AND INCOME FROM OTHER SOURCES. A SEARCH U/S 132 OF THE INCOME TAX ACT, 19 61 (HEREINAFTER CALLED AS 'THE ACT') WAS CONDUCTED IN THE BUSINESS PREMISES OF BOTHRA GROUP OF CONCERNS, VISAKHAPATNAM ON 2.11.2012. DUR ING THE COURSE OF SEARCH, INCRIMINATING DOCUMENTS/MATERIALS PERTAININ G TO THE ASSESSEE WAS FOUND AND SEIZED. CONSEQUENT TO SEARCH, THE CA SE WAS NOTIFIED TO CENTRAL CIRCLE AND ACCORDINGLY, NOTICE U/S 153A OF THE ACT WAS ISSUED REQUIRING ASSESSEE TO FILE RETURN OF INCOME FOR SIX ASSESSMENT YEARS, IMMEDIATELY PRECEDING THE ASSESSMENT YEAR IN WHICH SEARCH WAS CONDUCTED. IN THE MEAN TIME, THE ASSESSEE HAS FILED RETURN OF INCOME FOR THE ASSESSMENT YEARS 2005-06 TO 2011-12 ON 21.1 1.2012. THE CASE ITA NOS.435 TO 441/VIZAG/2014 & CO 21 TO 27/VIZAG/2 016 SRI HARI PRASAD BHARARIA, VISAKHAPATNAM 3 HAS BEEN TAKEN UP FOR SCRUTINY AND ACCORDINGLY, NOT ICES U/S 143(2) & 142(1) OF THE ACT ALONG WITH QUESTIONNAIRE WERE ISS UED. IN RESPONSE TO THE NOTICES, THE AUTHORIZED REPRESENTATIVE OF THE A SSESSEE APPEARED FROM TIME TO TIME AND PRODUCED BOOKS OF ACCOUNTS, O THER DOCUMENTS, ETC. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. NOTICED THAT THE ASSESSEE HAS RECEIVED LOANS AND ADVANCES F ROM M/S. SAMPATH VINAYAKA STEELS PVT. LTD., A COMPANY IN WHICH THE A SSESSEE IS MANAGING DIRECTOR HOLDING MORE THAN 30% SHARE CAPITAL. SINCE , THE TRANSACTION BETWEEN THE ASSESSEE AND COMPANY IS IN THE NATURE O F DEEMED DIVIDEND WITHIN THE MEANING OF SECTION 2(22)(E) OF THE ACT, THE A.O. ISSUED SHOW CAUSE NOTICE AND ASKED TO EXPLAIN THE TRANSACTIONS BETWEEN THE ASSESSEE AND THE COMPANY WITH NECESSARY EVIDENCES. IN RESPONSE TO SHOW CAUSE NOTICE, THE ASSESSEE SUBMITTED THAT HE H AD NOT TAKEN ANY LOANS/ADVANCES FROM M/S. SAMPATH VINAYAKA STEELS PV T. LTD., VISAKHAPATNAM. THE ASSESSEE FURTHER SUBMITTED THAT THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT IS NOT APPLICABLE TO TH E TRANSACTION TAKEN PLACE BETWEEN HIM AND HIS COMPANY, AS THE SAID AMOU NT RECEIVED FROM THE COMPANY IS IN THE FORM OF CURRENT ACCOUNT TRANS ACTION, WHEREIN THE COMPANY HAS CREDITED ALL AMOUNT RECEIVABLE BY HIM I N THE FORM OF ITA NOS.435 TO 441/VIZAG/2014 & CO 21 TO 27/VIZAG/2 016 SRI HARI PRASAD BHARARIA, VISAKHAPATNAM 4 SALARIES AND DIVIDEND AND DEBITED AMOUNT WITHDRAWN BY ME, THE NET EFFECT OF WHICH APPEARS DEBIT, THEREFORE, THE SAME CANNOT BE CALLED AS GRACIOUS PAYMENTS WHICH ATTRACTS DEEMED PROVISION P ROVIDED U/S 2(22)(E) OF THE ACT. THE ASSESSEE FURTHER SUBMITTED THAT HE HAD GIVEN HIS PERSONAL PROPERTY AS COLLATERAL SECURITY FOR AV AILING LOAN IN THE NAME OF THE COMPANY WITH AN UNDERSTANDING THAT THE COMPA NY SHOULD ACCOMMODATE FUNDS TO HIM WHEREVER SUCH NEED ARISES. IN FACT, HE HAD FACILITATED HIS COMPANY M/S. SAMPATH VINAYAK STEEL PVT. LTD., TO OPEN A CURRENT ACCOUNT WITH THE BANK FOR AVAILING CREDIT F ACILITIES AGAINST THE MORTGAGE OF PERSONAL PROPERTIES BELONGS TO HIM AND THE ASSESSEE IN TURN OPENED CURRENT ACCOUNT WITH THE COMPANY FOR ACCOMMO DATION OF FUNDS TO HIM WITH A MUTUAL UNDERSTANDING. IF HE HAD NOT M ORTGAGED HIS PERSONAL PROPERTIES WITH THE BANK FOR AVAILING CRED IT FACILITIES, HE HIMSELF WOULD HAVE ENJOYED CREDIT FACILITIES WITH THE BANK DIRECTLY, HOWEVER, IN THE INTEREST OF HIS COMPANY AND ALSO IN HIS OWN INT EREST, HE GAVE HIS PERSONAL PROPERTY AS COLLATERAL SECURITY BY MORTGAG ING TO THE BANK FOR AVAILING CREDIT FACILITIES, THEREFORE, WHATEVER AMO UNT RECEIVED FROM THE COMPANY CANNOT BE CONSIDERED AS LOANS/ADVANCES AS D EFINED UNDER THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT. IN SUPP ORT OF HIS ARGUMENTS, RELIED UPON THE DECISION OF HONBLE HIGH COURT OF K OLKATA IN THE CASE OF ITA NOS.435 TO 441/VIZAG/2014 & CO 21 TO 27/VIZAG/2 016 SRI HARI PRASAD BHARARIA, VISAKHAPATNAM 5 M.D. JINDAL VS. CIT AND ALSO ITAT VISAKHAPATNAM DEC ISION IN THE CASE OF DILIP KEDIA VS. ACIT. 4. THE A.O. AFTER CONSIDERING THE EXPLANATIONS OF T HE ASSESSEE AND ANALYZING PROVISIONS OF SECTION 2(22)(E) OF THE ACT , HELD THAT THE TRANSACTION BETWEEN THE ASSESSEE AND COMPANY IS COM ING WITHIN THE MEANING OF DEEMED DIVIDEND UNDER THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT, AS ALL THE 3 CONDITIONS REQUIRED FOR ATTRA CTING THE PROVISIONS ARE COMPLIED WITH. THE A.O. FURTHER HELD THAT THE PROV ISIONS OF SECTION 2(22)(E) OF THE ACT, CLEARLY SPELLED OUT CONDITIONS UNDER WHICH CIRCUMSTANCES THE DEEMED DIVIDEND IS ARISING. SINCE , ALL THE ABOVE CONDITIONS ARE SATISFIED, THE TRANSACTION BETWEEN T HE ASSESSEE AND THE COMPANY IS TREATED AS DEEMED DIVIDEND IN THE HANDS OF ASSESSEE. IN SUPPORT OF HIS ARGUMENTS, RELIED UPON THE DECISION OF HONBLE SUPREME COURT, IN THE CASE OF SMT. T. SARADA VS. CIT. 5. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE A SSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE A.O. THE ASSESSEE HAS TAKEN A LEGAL PLEA BEFORE THE CIT(A) AND ARGUED THAT THE ASSESSME NT ORDER PASSED BY THE A.O. U/S 143(3) R.W.S. 153A OF THE ACT, FOR THE ASSESSMENT YEAR 2005-06 TO 2009-10 WERE NOT PENDING ON THE DATE OF SEARCH, AS SUCH ITA NOS.435 TO 441/VIZAG/2014 & CO 21 TO 27/VIZAG/2 016 SRI HARI PRASAD BHARARIA, VISAKHAPATNAM 6 DESPITE THE PROVISIONS OF SECTION 153A OF THE ACT A RE APPLICABLE, ADDITIONS CANNOT BE MADE WHEN THERE IS NO INCRIMINA TING MATERIAL IN RESPECT OF SUCH ASSESSMENTS WHICH ARE NOT PENDING. THE ASSESSEE FURTHER SUBMITTED THAT AS PER THE PROVISIONS OF SEC TION 153A OF THE ACT, THE A.O. BY VIRTUE OF THE ABATEMENT CLOTHED IN THE SAID PROVISION I.E. 153A OF THE ACT, IS EMPOWERED TO FRAME ASSESSMENT A FRESH IN RESPECT OF PROCEEDINGS THAT ARE PENDING. THE ASSESSEE FURTHER SUBMITTED THAT WHERE SEARCH IS TAKEN PLACE, 3 POSSIBLE CIRCUMSTANC ES EMERGE I.E. (1) PROCEEDINGS THAT ARE PENDING (2) PROCEEDINGS ARE NO T PENDING, BUT SOME INCRIMINATING MATERIAL IS FOUND IN THE COURSE OF SE ARCH, INDICATING UNDISCLOSED INCOME/ASSETS (3) PROCEEDINGS ARE NOT P ENDING AND NO INCRIMINATING MATERIAL HAS BEEN FOUND. IN THE CASE OF ASSESSMENTS WHICH ARE NOT PENDING AS ON THE DATE OF SEARCH, THE N THE A.O. HAS NO JURISDICTION TO ASSESS THE INCOME OF COMPLETED ASSE SSMENTS IN THE ABSENCE OF INCRIMINATING DOCUMENTS. IN THE CASE OF ASSESSMENTS WHICH ARE PENDING AND ABATED AS ON THE DATE OF SEARCH, TH E A.O. GETS JURISDICTION TO ASSESS/RE-ASSESS THE INCOME IN RESP ECT OF THOSE ASSESSMENTS BASED ON THE BOOKS OF ACCOUNTS AND OTHE R INCRIMINATING DOCUMENTS FOUND DURING THE COURSE OF SEARCH. THE AS SESSEE FURTHER SUBMITTED THAT THE ASSESSMENTS FOR THE ASSESSMENT Y EAR 2005-06 TO 2009-10 ARE NOT PENDING AS ON THE DATE OF SEARCH, T HEREFORE, WHEN THE ITA NOS.435 TO 441/VIZAG/2014 & CO 21 TO 27/VIZAG/2 016 SRI HARI PRASAD BHARARIA, VISAKHAPATNAM 7 ASSESSMENTS ARE NOT PENDING, NO ADDITIONS CAN BE MA DE FOR THE RETURNED INCOME IN THE ABSENCE OF SEIZED MATERIALS. THE DEP ARTMENT COULD NOT FOUND ANY SEIZED DOCUMENTS TO SHOW THAT THE ADDITIO NS MADE BY THE A.O. TOWARDS DEEMED DIVIDEND U/S 2(22)(E) OF THE AC T IS ON ACCOUNT OF NON-DISCLOSURE OF SAID ADVANCES IN THE REGULAR RETU RN OF INCOME FILED FOR THE RESPECTIVE ASSESSMENT YEARS. IN THE ABSENCE OF INCRIMINATING DOCUMENTS, THE RETURN FILED BY THE ASSESSEE, WHICH IS NOT PENDING AS ON THE DATE OF SEARCH CANNOT BE TINKERED WITH. 6. AS REGARDS THE MERITS OF THE ISSUE, THE ASSESSEE SUBMITTED THAT TRANSACTIONS BETWEEN THE ASSESSEE AND THE COMPANY W ERE RECORDED IN THE BOOKS OF ACCOUNTS OF M/S. SAMPATH VINAYAKA STEE LS PVT. LTD. IN THE CURRENT ACCOUNT OF THE ASSESSEE AND HENCE THE SAME WILL NOT FALL UNDER THE CATEGORY OF UNRECORDED TRANSACTIONS. THE ASSESS EE FURTHER SUBMITTED THAT THE TRANSACTIONS BETWEEN HIM AND HIS COMPANY I S A NORMAL CURRENT ACCOUNT TRANSACTION, WHEREIN THE COMPANY HAS CREDIT ED ALL AMOUNTS PAYABLE TO HIM TOWARDS HIS SALARY AND OTHER RECEIPT S CORRESPONDING WITH DEBITS TOWARDS WITHDRAWALS AND THE NET RESULT OF WH ICH IS APPEARING DEBIT IN THE ACCOUNT, THEREFORE, THE SAME CANNOT BE CONSIDERED AS GRACIOUS PAYMENTS WITHIN THE MEANING OF SECTION 2(2 2)(E) OF THE ACT. IN SUPPORT OF HIS ARGUMENTS, RELIED UPON THE DECISION OF ITAT, SPECIAL ITA NOS.435 TO 441/VIZAG/2014 & CO 21 TO 27/VIZAG/2 016 SRI HARI PRASAD BHARARIA, VISAKHAPATNAM 8 BENCH IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD . VS. DCIT (2012) 137 ITD 287 AND ALSO THE DELHI HIGH COURT DECISION IN T HE CASE OF CIT VS. A.K. BHATIA REPORTED IN 211 TAXMAN 453. 7. THE CIT(A) AFTER CONSIDERING THE EXPLANATIONS FU RNISHED BY THE ASSESSEE, HELD THAT THE ASSESSING OFFICER IS NOT JU STIFIED IN MAKING ADDITION U/S 2(22)(E) OF THE ACT, TOWARDS DEEMED DI VIDEND IN THE ABSENCE OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. THE CIT(A), FURTHER, HELD THAT IT IS ALSO NOTED THA T IN A VERY RECENT DECISION DATED 30.1.2014 IN ITA NOS.5518 TO 5524/DE L/2012 IN THE CASE OF ACIT VS. SH. MANOJ NARAYAN, THE DELHI BENCH OF ITAT HELD THAT IN 153A/C ASSESSMENTS, ADDITIONS CANNOT BE MADE UNLESS THEY ARE BASED ON INCRIMINATING MATERIALS. EVEN, THE HONBLE JURI SDICTIONAL HIGH COURT, IN THEIR ORDER DATED 12.7.2013 IN ITA NOS.266/HYD/2 013, IN THE CASE OF M/S. HYDERABAD HOUSE PVT. LTD. UPHELD THE DECISION OF ITAT, HYDERABAD BENCH, WHEREIN IT IS HELD THAT COMPUTATION OF UNDIS CLOSED INCOME U/S 153A/C OF THE ACT, MUST BE WITH REFERENCE TO INCRIM INATING MATERIAL FOUND AS A RESULT OF SEARCH. AS OBSERVED BY THE HO NBLE ITAT, MUMBAI BENCH IN THE CASE OF M/S. PRADIP INDUSTRIES PVT. LT D., WHERE THERE IS NO ABATEMENT OF THE ASSESSMENT, TOTAL INCOME HAS TO BE DETERMINED BY CLUBBING TOGETHER THE INCOME ALREADY DETERMINED IN THE ORIGINAL ITA NOS.435 TO 441/VIZAG/2014 & CO 21 TO 27/VIZAG/2 016 SRI HARI PRASAD BHARARIA, VISAKHAPATNAM 9 ASSESSMENT ORDER AND THE INCOME THAT ESCAPED ASSESS MENT. IN THE INSTANT CASE, THE ADDITION MADE BY THE A.O. IS NOT BASED ON ANY INCRIMINATING MATERIAL. WITH THESE OBSERVATIONS, HE LD THAT THE A.O. IS NOT JUSTIFIED IN MAKING AN ADDITION U/S 2(22)(E) OF THE ACT U/S 143(3) R.W.S. 153A OF THE ACT, NOT ON THE BASIS OF ANY INCRIMINAT ING MATERIAL FOUND AT THE TIME OF SEARCH. 8. THE CIT(A), FURTHER, HELD THAT EVEN ON MERITS AL SO, IT IS NOTED THAT THE APPELLANT HAS MORTGAGED HIS PERSONAL PROPERTY T O THE BANKS AND OBTAINED LOANS FOR THE BUSINESS OF THE COMPANY. TH E DOCUMENTS FILED BY THE ASSESSEE REVEALS THAT THE ASSESSEE HAS MORTGAGE D HIS PERSONAL PROPERTY FOR THE PURPOSE OF OBTAINING OVER DRAFT LO AN FROM BANK FOR THE BUSINESS PURPOSE OF THE COMPANY. IN TURN, THE ASSE SSEE HAS RECEIVED CERTAIN AMOUNT FROM THE COMPANY WHICH CANNOT BE CON SIDERED AS GRACIOUS PAYMENT AND DOES NOT COME UNDER THE PURVIE W OF SECTION 2(22)(E) OF THE ACT. WITH THESE OBSERVATIONS, DELETE D ADDITIONS MADE BY THE A.O., TOWARDS DEEMED DIVIDEND UNDER THE PROVISI ONS OF SECTION 2(22)(E) OF THE ACT. AGGRIEVED BY THE CIT(A) ORDER , THE REVENUE IS IN APPEAL BEFORE US. 9. THE LD. D.R. SUBMITTED THAT THE ORDER OF THE LD. CIT(A) IS CONTRARY TO LAW AND FACTS. THE D.R. FURTHER SUBMITTED THAT T HE CIT(A) IS NOT ITA NOS.435 TO 441/VIZAG/2014 & CO 21 TO 27/VIZAG/2 016 SRI HARI PRASAD BHARARIA, VISAKHAPATNAM 10 JUSTIFIED IN HOLDING THAT THE TRANSACTIONS BETWEEN ASSESSEE AND HIS COMPANY IS NOT A GRACIOUS PAYMENT WHICH IS COMING W ITHIN THE MEANING OF LOAN OR ADVANCE OR DEFINED U/S 2(22)(E) OF THE A CT. THE LD. CIT(A) FAILED TO APPRECIATE THE FACT THAT ONCE A SEARCH IS TAKEN PLACE, THE ASSESSMENT OF 6 YEARS GETS RE-OPENED AND THE A.O. W ILL GET JURISDICTION TO ASSESS/RE-ASSESS TOTAL INCOME OF THOSE 6 ASSESSM ENT YEARS, WHETHER OR NOT ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. THE CIT(A) WITHOUT APPRECIATING THE FACTS HELD THAT THE A.O. IS NOT JUSTIFIED IN MAKING ADDITIONS U/S 2(22)(E) OF THE A CT, IN THE ASSESSMENT MADE U/S 143(3) R.W.S. 153A OF THE ACT, WITHOUT ANY INCRIMINATING MATERIAL. THE D.R. FURTHER ARGUED THAT THE PROVISIO NS OF SECTION 153A OF THE ACT, SHALL BE ATTRACTED UPON INITIATION OF SEAR CH PROCEEDINGS U/S 132 OF THE ACT, IN WHICH CASE THE CONCLUDED ASSESSMENT WILL BE RE-OPENED AS PER THE PROVISIONS OF SECTION 153A OF THE ACT AND S UCH RE-OPENING IS NOT DEPENDING UPON EXISTENCE OR OTHERWISE OF ANY UNDISC LOSED INCOME. THE LD. D.R. DREW OUR ATTENTION TO THE DECISION OF A.T. RAYUDU VS. CIT, IN ITA NOS.313 TO 319/VIZAG/2014 AND SUBMITTED THAT IN THE CASE OF UN- ABATED ASSESSMENTS, THE ASSESSING OFFICER CAN DETER MINE THE TOTAL INCOME BY CLUBBING THE INCOME ALREADY ASSESSED AND UNDISCLOSED INCOME FOUND DURING THE COURSE OF SEARCH AND THE BA SIS FOR ASCERTAINING SUCH UNDISCLOSED INCOME IS THE BOOKS OF ACCOUNTS OR OTHER DOCUMENTS ITA NOS.435 TO 441/VIZAG/2014 & CO 21 TO 27/VIZAG/2 016 SRI HARI PRASAD BHARARIA, VISAKHAPATNAM 11 NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT, BUT FOUND IN THE COURSE OF SEARCH AND ALSO UNDISCLOSED INCOME OR UND ISCLOSED PROPERTY DISCOVERED IN THE COURSE OF SEARCH. 10, THE LD. D.R. FURTHER ARGUED THAT AS REGARDS THE ADDITIONS TOWARDS DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT, THE TRANSA CTION BETWEEN THE ASSESSEE AND HIS COMPANY IS CLEARLY COMING WITHIN T HE MEANING OF DEEMED DIVIDEND, AS THE ASSESSEE HAS TAKEN LOANS AN D ADVANCES FROM HIS COMPANY AND THE COMPANY IS HAVING ACCUMULATED P ROFIT AS ON THE DATE OF SUCH LOAN AND ADVANCES. THOUGH THE ASSESSE E HAS MORTGAGED HIS PROPERTY FOR THE PURPOSE OF OBTAINING CREDIT FA CILITIES FOR HIS COMPANY, THIS ALONE IS NOT A DECIDING FACTOR TO HOL D THAT THE IMPUGNED TRANSACTION IS COMING WITHIN THE MEANING OF DEEMED DIVIDEND UNDER THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT. ONCE TH ERE IS A LOAN AND ADVANCE IN THE NAME OF A SHAREHOLDER HOLDING MORE T HAN 10% BENEFICIAL SHARES IN THE COMPANY AND THE COMPANY IS HAVING ACC UMULATED PROFIT AS ON THE DATE OF SUCH LOAN, THEN THE DEEMING FICTION PROVIDED U/S 2(22)(E) OF THE ACT WOULD APPLY. IN THE PRESENT CASE ON HAN D, THERE IS NO DISPUTE WITH REGARD TO THE LOANS AND ADVANCES AND ACCUMULAT ED PROFIT. WHETHER TRANSACTIONS BETWEEN THE ASSESSEE AND HIS COMPANY I S A GRACIOUS PAYMENT OR NOT, WHICH ATTRACTS THE PROVISIONS OF SE CTION 2(22)(E) OF THE ITA NOS.435 TO 441/VIZAG/2014 & CO 21 TO 27/VIZAG/2 016 SRI HARI PRASAD BHARARIA, VISAKHAPATNAM 12 ACT, CANNOT BE DECIDED BASED ON THE FACT THAT THE A SSESSEE HAS MORTGAGED HIS PROPERTY TO THE LOAN AVAILED BY THE C OMPANY. THE A.O. HAS RIGHTLY INVOKED THE PROVISIONS OF SECTION 2(22) (E) OF THE ACT TOWARDS LOAN AND ADVANCES AND HIS ORDER SHOULD BE UPHELD. 11. THE LD. A.R. FOR THE ASSESSEE, STRONGLY SUPPORT ED THE ORDER OF LD. CIT(A). THE LD. A.R. FURTHER SUBMITTED THAT THE LD . CIT(A) IS JUSTIFIED IN HOLDING THAT THE ADDITIONS MADE BY THE A.O. TOWARDS DEEMED DIVIDEND IS OUTSIDE THE SCOPE OF ASSESSMENTS U/S 143(3) R.W.S. 153A OF THE ACT. THE A.R. FURTHER SUBMITTED THAT THE CIT(A) IS JUSTI FIED IN HOLDING THAT THE AMOUNT PAID TO THE ASSESSEE BY HIS COMPANY IS NOT A GRACIOUS PAYMENT AND AS SUCH OUTSIDE THES SCOPE OF SECTION 2(22)(E) OF THE ACT. THE A.R. FURTHER SUBMITTED THAT THE ISSUE IS SQUARELY COVERE D BY THE DECISION OF ITAT, VISAKHAPATNAM BENCH, IN THE CASE OF L. SURYAK ANTHAM VS. ACIT 300 TO 305/VIZAG/2012 DATED 19.4.2016, WHEREIN THE COORDINATE BENCH HELD THAT IN THE CASE OF CONCLUDED ASSESSMENTS, THE A.O. HAS NO JURISDICTION TO MAKE ANY ADDITIONS TOWARDS RETURNED INCOME IN THE ABSENCE OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. IN THE CASE OF ABATED ASSESSMENTS AND ASSESSMENTS WHIC H ARE PENDING AS ON THE DATE OF INITIATION OF SEARCH, THE A.O. CAN A SSUME JURISDICTION TO ASSESS/RE-ASSESS INCOME WHICH IS FOUND DURING THE C OURSE OF SEARCH. IN ITA NOS.435 TO 441/VIZAG/2014 & CO 21 TO 27/VIZAG/2 016 SRI HARI PRASAD BHARARIA, VISAKHAPATNAM 13 THE PRESENT CASE ON HAND, THE ADDITIONS MADE BY THE A.O. TOWARDS DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT IS NOT BASE D ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH AND ACCORDINGLY, THE ADDITIONS MADE BY THE A.O. IS RIGH TLY DELETED BY THE CIT(A) AND HIS ORDER SHOULD BE UPHELD. 12. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE FACTUAL MATRIX OF THE CASE IS THAT THERE WAS A SEAR CH ACTION U/S 132 OF THE ACT. CONSEQUENT TO THE SEARCH, THE ASSESSEE CAS E WAS CENTRALIZED AND ACCORDINGLY, NOTICE U/S 153A OF THE ACT WAS ISS UED REQUIRING ASSESSEE TO FILE RETURN FOR 6 ASSESSMENT YEARS IMME DIATELY PRECEDING THE ASSESSMENT YEAR IN WHICH SEARCH IS CONDUCTED. THE A SSESSEE FILED RETURNS IN RESPONSE TO NOTICE U/S 153A OF THE ACT. THE A.O. COMPLETED THE ASSESSMENT U/S 143(3) R.W.S. 153A OF THE ACT AN D MADE ADDITIONS TOWARDS DEEMED DIVIDEND UNDER THE PROVISIONS OF SEC TION 2(22)(E) OF THE ACT. THE A.O. WAS OF THE OPINION THAT TRANSACTIONS BETWEEN THE ASSESSEE AND HIS COMPANY IS COMING WITHIN THE DEFINITION OF DEEMED DIVIDEND UNDER THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT . IT IS THE CONTENTION OF THE ASSESSEE THAT THE ASSESSMENT ORDER PASSED BY THE A.O. U/S 143(3) R.W.S. 153A OF THE ACT, FOR THE ASSESSMENT Y EARS 2005-06 TO ITA NOS.435 TO 441/VIZAG/2014 & CO 21 TO 27/VIZAG/2 016 SRI HARI PRASAD BHARARIA, VISAKHAPATNAM 14 2009-10 IS NULL AND VOID AS THE A.O. HAS MADE ADDIT IONS TOWARDS DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT WITHOUT ANY INCRIMINATING MATERIALS. THE ASSESSEE FURTHER CONTENDED THAT AS P ER SECTION 153A OF THE ACT, DE-NOVO ASSESSMENT CAN BE MADE ONLY IN RES PECT OF ASSESSMENT YEAR FOR WHICH THE ASSESSMENT PROCEEDINGS HAS BEEN ABATED AND THAT IN RESPECT OF ASSESSMENT YEARS FOR WHICH THE ASSESSMEN T HAD ALREADY BEEN COMPLETED, NO ADDITIONS CAN BE MADE U/S 153A OF THE ACT UNLESS THERE WAS INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. 13. THE A.O. HAS PASSED ASSESSMENT ORDERS U/S 153A OF THE ACT, FOR ALL THE SIX ASSESSMENT YEARS, IMMEDIATELY PRECEDING THE YEAR IN WHICH THE SEARCH WAS CONDUCTED. ACCORDING TO THE A.O., AS PER THE PROVISIONS OF SECTION 153A OF THE ACT, THERE IS NO LIMITATION OR RESTRICTION PROVIDED IN THE NEW PROCEDURE OF SEARCH ASSESSMENT ON THE POWER S OF THE A.O. FOR MAKING ASSESSMENT/RE-ASSESSMENT AND THE A.O. IS NOT REQUIRED TO CONFINE HIS ASSESSMENTS ON THE MATERIALS FOUND DURI NG THE COURSE OF SEARCH AS WAS THE CASE IN THE OLD PROCEDURE OF BLOC K ASSESSMENTS. IT IS THE CONTENTION OF THE ASSESSEE THAT THE A.O. CANNOT DISTURB THE COMPLETED ASSESSMENT UNLESS THERE WAS A SEIZED MATE RIAL. THE ASSESSEE FURTHER CONTENDED THAT WHERE ASSESSMENTS ARE NOT PE NDING AS ON THE DATE OF SEARCH AND TIME LIMIT FOR ISSUE OF NOTICE U /S 143(2) OF THE ACT ITA NOS.435 TO 441/VIZAG/2014 & CO 21 TO 27/VIZAG/2 016 SRI HARI PRASAD BHARARIA, VISAKHAPATNAM 15 HAS BEEN EXPIRED, IRRESPECTIVE OF THE FACT THAT THO SE ASSESSMENTS HAVE BEEN COMPLETED U/S 143(1) OR 143(3) OF THE ACT, THE N THE A.O. HAS NO POWER TO RE-ASSESS THE INCOME OF THOSE COMPLETED AS SESSMENT YEARS. WE FIND FORCE IN THE ARGUMENTS OF THE ASSESSEE, FOR THE REASON THAT THE COORDINATE BENCH OF THIS TRIBUNAL IN ITA NOS.300 TO 305/VIZAG/2012, IN CASE OF L. SURYAKANTHAM VS. ACIT, HAS CONSIDERED SI MILAR ISSUE AND HELD THAT THE A.O. HAD NO JURISDICTION TO MAKE ADDITIONS U/S 153A OF THE ACT, FOR THE ASSESSMENTS WHICH ARE NOT PENDING AS ON THE DATE OF SEARCH AND ALSO THE TIME LIMIT FOR ISSUE OF NOTICE U/S 143(2) OF THE ACT HAS BEEN EXPIRED. THE RELEVANT PORTION OF THE ORDER IS EXTR ACTED BELOW: 19. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MAT ERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. THE FACTUAL MATRIX OF THE CASE IS THAT THERE WAS A SEARCH ACTIO N U/S 132 OF THE ACT. DURING THE COURSE OF SEARCH, INCRIMINATING DOCUMENT S FOUND REVEALS THAT THE ASSESSEE HAS INFLATED LABOUR CHARGES FOR THE AS SESSMENT YEARS 2008- 09 & 2009-10. BASED ON THE DOCUMENTS FOUND DURING SEARCH, THE ASSESSEE HAS ACCEPTED THAT HE HAS INFLATED 10% LABO UR CHARGES AND WHICH IS COMMON IN THIS LINE OF BUSINESS. CONSEQUENT TO SEARCH ACTION U/S 132 OF THE ACT, THE ASSESSEE CASE HAS BEEN CENTRALIZED AND ACCORDINGLY FRESH ASSESSMENT PROCEEDINGS HAVE BEEN INITIATED BY ISSUI NG NOTICE U/S 153A/153C OF THE ACT FOR THE SIX ASSESSMENT YEARS I MMEDIATELY PRECEDING THE ASSESSMENT YEAR IN WHICH SEARCH WAS CONDUCTED. THE ASSESSEE HAS FILED REVISED RETURNS IN RESPONSE TO NOTICE U/S 153 A OF THE ACT AND ADMITTED THE ADDITIONAL INCOME DISCLOSED DURING THE COURSE OF SEARCH. THE CASE HAS BEEN SELECTED FOR SCRUTINY. DURING TH E COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO PRODUCE BOOK S OF ACCOUNTS AND RELEVANT BILLS & VOUCHERS IN SUPPORT OF EXPENDITURE CLAIMED. IN RESPONSE, THE ASSESSEE FILED WRITTEN SUBMISSION AND STATED TH AT THE BOOKS OF ACCOUNTS ARE NOT AVAILABLE AND HENCE CANNOT BE FURN ISHED. THEREFORE, THE A.O. ISSUED A SHOW CAUSE NOTICE AND ASKED TO EXPLAI N WHY THE NET PROFIT FROM THE BUSINESS SHALL NOT BE ESTIMATED. IN RESPON SE TO SHOW CAUSE NOTICE, THE ASSESSEE HAS FILED A WRITTEN REPLY AND CONTENDED THAT THE INCOME FOR THE ASSESSMENT YEAR 2004-05, 2005-06 AND 2007-08 CANNOT BE TINKERED WITH, AS THERE WAS NO INCRIMINATING MATERI AL FOUND DURING THE ITA NOS.435 TO 441/VIZAG/2014 & CO 21 TO 27/VIZAG/2 016 SRI HARI PRASAD BHARARIA, VISAKHAPATNAM 16 COURSE OF SEARCH FOR THE ABOVE ASSESSMENT YEARS AND AS SUCH NO ADDITIONS CAN BE MADE TO THE RETURNED INCOME. IT IS FURTHER S UBMITTED THAT AS PER SEC. 153A OF THE ACT, DE-NOVO ASSESSMENT CAN BE MAD E ONLY IN RESPECT OF THE ASSESSMENT YEAR FOR WHICH THE ASSESSMENT PROCEE DINGS HAD BEEN ABATED AND THAT IN RESPECT OF ASSESSMENT YEARS FOR WHICH THE ASSESSMENT HAD ALREADY BEEN REACHED A FINALITY, SUCH ASSESSMEN T COULD NOT BE MADE U/S 153A OF THE ACT UNLESS THERE WAS SEIZED MATERIA LS . 20. THE A.O. HAS PASSED REASSESSMENT ORDERS U/S 153 A/153C OF THE ACT FOR ALL THE SIX ASSESSMENT YEARS IMMEDIATELY PRECED ING THE YEAR IN WHICH SEARCH WAS CONDUCTED. ACCORDING TO THE A.O., AS PE R THE PROVISIONS OF SECTION 153A OF THE ACT, THERE IS NO LIMITATION OR RESTRICTION PROVIDED IN THE NEW PROCEDURE OF SEARCH ASSESSMENTS ON THE POWERS O F A.O. FOR MAKING ASSESSMENT/REASSESSMENT AND THE A.O. IS NOT REQUIRE D TO CONFINE HIS ASSESSMENTS ON THE MATERIAL FOUND DURING THE COURSE OF SEARCH AS WAS THE CASE IN THE OLD PROCEDURE OF BLOCK ASSESSMENTS. TH E NEW PROCEDURE OF BLOCK ASSESSMENT WAS EXPLAINED BY WAY OF PROVISIONS OF SECTION 153A OF THE ACT. AS PER SECTION 153A OF THE ACT, THE A.O. SHALL ASSESS OR REASSESS THE TOTAL INCOME OF THE SPECIFIED SIX ASSESSMENT YE ARS IRRESPECTIVE OF THE FACT THAT THE ASSESSMENT OF THE SAID YEARS WERE COM PLETED OR PENDING AS ON THE DATE OF SEARCH. THEREFORE, THE A.O. HAS REA SSESSED THE INCOME OF SIX ASSESSMENT YEARS AND RECOMPUTED THE PROFITS AFR ESH AFTER CONSIDERING THE RELEVANT FACTS AVAILABLE ON RECORD. IT WAS THE CONTENTION OF THE ASSESSEE THAT THE A.O. CANNOT DISTURB THE COMPLETED ASSESSMENTS UNLESS THERE WAS A SEIZED MATERIAL. THE ASSESSEE FURTHER C ONTENDED THAT WHERE ASSESSMENTS ARE NOT PENDING AS ON THE DATE OF SEARC H AND TIME LIMIT FOR ISSUE OF NOTICES U/S 143(2) OF THE ACT HAS BEEN EXP IRED, IRRESPECTIVE OF THE FACT THAT THOSE ASSESSMENTS HAVE BEEN COMPLETED U/S 143(1) OR 143(3) OF THE ACT, THEN THE A.O. HAS NO POWER TO REASSESS THE INCOME OF THOSE COMPLETED ASSESSMENT YEARS. 21. WE FIND FORCE IN THE ARGUMENTS OF THE ASSESSEE FOR THE REASON THAT THE ISSUE NO LONGER RES INTEGRA, AS THE ISSUE HAS B EEN ALREADY DECIDED BY THE ITAT, SPECIAL BENCH AND HELD THAT WHERE THE ASS ESSMENTS ARE NOT PENDING AS ON THE DATE OF SEARCH, THE A.O. LOSSES J URISDICTION U/S 153A OF THE ACT TO REASSESS THE INCOME OF THOSE COMPLETED A SSESSMENTS. THOUGH THE PROVISIONS OF SECTION 153A OF THE ACT DOES NOT SPECIFY ABATED AND COMPLETED ASSESSMENTS, THE NATURAL MEANING ASSIGNED TO IT SHOULD BE GIVEN TO INTERPRET THE PROVISIONS IN SUCH A WAY THA T WHICH SHALL NOT CAUSE UNDUE HARDSHIP TO THE TAX PAYERS. THE PROVISIONS OF SECTION 153A OF THE ACT EXPLAINED THE PROCEDURE OF ASSESSMENTS, ABATED ASSESSMENTS AND THE MANNER IN WHICH THE ASSESSMENT SHOULD BE FRAMED, WH ICH WAS FURTHER SUPPORTED BY CIRCULAR NO.7 OF 2003 ISSUED BY THE CB DT. WHEN THE LAW HAS EXPLAINED THE POSITION OF ABATED ASSESSMENTS, THEN THE SAME WAY THE COMPLETED ASSESSMENT SHOULD BE TREATED SO AS TO UND ERSTAND THAT THOSE ASSESSMENTS ARE REACHED FINALITY AND WHICH CANNOT B E TINKERED WITH UNLESS THERE WAS A SEIZED DOCUMENT. THEREFORE, WE ARE OF T HE CONSIDERED OPINION ITA NOS.435 TO 441/VIZAG/2014 & CO 21 TO 27/VIZAG/2 016 SRI HARI PRASAD BHARARIA, VISAKHAPATNAM 17 THAT WHERE SEARCH IS INITIATED, ALL PENDING ASSESSM ENTS ARE MERGE INTO ONE AND ONLY ONE ASSESSMENT FOR EACH ASSESSMENT YEAR SH ALL BE MADE SEPARATELY ON THE BASIS OF FINDINGS OF SEARCH AND O THER MATERIAL EXISTING OR BROUGHT ON RECORD BY THE A.O. IN RESPECT OF NON ABA TED OR COMPLETED ASSESSMENTS, THE ASSESSMENT WILL BE MADE ON THE BAS IS OF BOOKS OF ACCOUNTS OR OTHER RELEVANT DOCUMENTS FOUND DURING T HE COURSE OF SEARCH, BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSME NT. 22. IN THE PRESENT CASE ON HAND, ON PERUSAL OF THE D OCUMENT AVAILABLE ON RECORD, WE FIND THAT THE ASSESSMENT FOR THE ASSE SSMENT YEAR 2004-05 TO 2007-08 WERE NOT PENDING AS ON THE DATE OF SEARC H. THE FACT THAT THE ASSESSMENT HAS BEEN COMPLETED U/S 143(1) & 143(3) O F THE ACT ARE NOT MATERIAL. THE TIME LIMIT FOR ISSUE OF NOTICE U/S 14 3(2) OF THE ACT HAS BEEN EXPIRED. ON FURTHER VERIFICATION OF THE DOCUMENTS A VAILABLE ON RECORD, WE FIND THAT THERE WAS NO INCRIMINATING DOCUMENTS FOUN D DURING THE COURSE OF SEARCH IN RESPECT OF ASSESSMENT YEAR 2004-05 TO 200 7-08. THEREFORE, WE ARE OF THE OPINION THAT THE A.O. WAS NOT CORRECT IN REASSESSING THE TOTAL INCOME OF THE ASSESSMENT YEAR 2004-05 TO 2007-08 IN THE ABSENCE OF ANY SEIZED MATERIALS. ACCORDINGLY, WE DIRECT THE A.O. TO DELETE THE ADDITIONS MADE FOR THE ASSESSMENT YEAR 2004-05, 2005-06 & 200 7-08. 23. IT IS PERTINENT TO DISCUSS HEREIN THE CASE LAWS RELIED UPON BY THE ASSESSEE. THE ASSESSEE HAS RELIED UPON THE ITAT, S PECIAL BENCH DECISION IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT (2012) 137 ITD 287. THE COORDINATE BENCH OF THIS TRIBUNAL, WHILE DECIDI NG THE ISSUE IN FAVOUR OF THE ASSESSEE HELD AS UNDER: IN ASSESSMENTS THAT ARE ABATED, THE AO ARETAINS THE ORIGINAL JURISDICTION AS WELL AS JURISDICTION CONFERRED ON HIM U/S 153A F OR WHICH ASSESSMENTS SHALL BE MADE FOR EACH OF THE SIX ASSESSMENT YEARS SEPARATELY. IN OTHER CASES, IN ADDITION TO THE INCOME THAT HAS ALREADY B EEN ASSESSED, THE ASSESSMENT U/S 153A WILL BE MADE ON THE BASIS OF IN CRIMINATING MATERIAL, WHICH IN THE CONTEXT 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. 24. THE ASSESSEE RELIED UPON, A.P. HIGH COURT DECIS ION IN THE CASE OF CIT VS. M/S. AMR INDIA LTD. IN ITTA NO.354 OF 2014 D ATED 12.6.2014. THE HONBLE HIGH COURT HELD THAT THE A.O. HAS NO JURISD ICTION TO RE-AGITATE THE ASSESSMENTS WHICH WERE ALREADY COMPLETED AND SUBSID ING. THE RELEVANT PORTION IS EXTRACTED BELOW: WE HAVE HEARD SRI J.V. PRASAD, LEARNED COUNSEL FOR THE APPELLANT, AND GONE THROUGH THE IMPUGNED JUDGEMENT AND ORDER OF TH E LEARNED TRIBUNAL. IT APPEARS THAT THE LEARNED TRIBUNAL FOUND ON FACT T HAT AFTER COMPLETION OF ASSESSMENT PROCEEDINGS AND AFTER REACHING FINALITY THEREON, THE ASSESSING ITA NOS.435 TO 441/VIZAG/2014 & CO 21 TO 27/VIZAG/2 016 SRI HARI PRASAD BHARARIA, VISAKHAPATNAM 18 OFFICER TRIED TO REAGITATE THE ASSESSMENTS. ACCORD ING TO US, THE LEARNED TRIBUNAL HAS RIGHTLY HELD THAT THE ASSESSING OFFICE R HAS NO JURISDICTION TO REAGITATE THE ASSESSMENTS WHICH WERE ALREADY COMPLE TED AND SUBSISTING. WE THEREFORE DO NOT FIND ANY ELEMENT OF LAW TO BE D ECIDED IN THIS APPEAL. HENCE, THE APPEAL IS DISMISSED. THERE WILL BE NO O RDER AS TO COSTS. 25. THE ASSESSEE HAS RELIED UPON THE COORDINATE BEN CH DECISION OF ITAT, VISAKHAPATNAM IN THE CASE OF A.T. RAYUDU IN I TA NO.373 TO 379/VIZAG/2014. THE COORDINATE BENCH, UNDER SIMILAR CIRCUMSTANCES HELD THE ISSUE IN FAVOUR OF THE ASSESSEE. THE RELEVANT PORTION IS REPRODUCED HEREUNDER: 22. IN THIS REGARD, IT IS ALSO PERTINENT TO REFER TO THE FOLLOWING OBSERVATIONS MADE BY THE SPECIAL BENCH IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD (SUPRA):- 57 (F) IN THE CASE OF PARASHURAM POTTERY WORKS CO. LTD VS. ITO (106 JTR 57)(SC), IT HAS BEEN MENTIONED IN THE LAST PARAGRAPH OF THE JUDGMENT THAT THE COURT HAS TO BEAR IN MIND THAT THE POLICY OF LAW IS THAT THERE M UST BE A POINT OF FINALITY IN ALL LEGAL PROCEEDINGS, THAT STALE ISSUES SHOULD NOT BE REACTI VATED BEYOND A PARTICULAR STAGE AND THAT LAPSE OF TIME MUST INDUCE REPOSE IN AND SE T AT REST JUDICIAL AND QUASI JUDICIAL CONTROVERSIES AS IT MUST IN OTHER SPHERES OF HUMAN ACTIVITY. OUR DECISION IS IN CONSONANCE WITH THIS OBSERVATION. THE DECISION RENDERED BY THE SPECIAL BENCH THAT THE ASSESSING OFFICER CAN MAKE ADDITIONS IN THE CASE OF CONCLUDED ASSESSMENTS ON T HE BASIS OF INCRIMINATING MATERIALS IS ALSO BASED UPON THE DECISION RENDERED BY HONBLE SUPREME COURT IN THE CASE OF PARASHURAM POTTERY WORKS CO. LTD (SUPRA). 23. WE HAVE EARLIER NOTICED THAT THE HON'BLE JURIS DICTIONAL ANDHRA PRADESH HIGH COURT HAS ALSO UPHELD BY THE ORDERS PASSED BY THE TRIBUNAL BY FOLLOWING THE DECISION RENDERED BY THE SPECIAL BENCH IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD (SUPRA) IN THE FOLLOWING CASES: - (A) SREE LALITHA CONSTRUCTIONS (J1TA NO 368 OF 2014) (B) M/S. HYDERABAD HOUSE PVT LTD (ITTA NO.266 OF 2 013) (C)M/S. AMR INDIA LTD (FITA NO.357 /V/2014) FURTHER WE AGREE WITH THE CONTENTIONS OF THE ASSESS EE THAT THE DECISION RENDERED BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF GOP AL DAS BHADRUKA (SUPRA) HAVE BEEN RENDERED ON THE FACTS PREVAILING IN THOSE CASE S, SINCE THE ISSUE RELATING TO CONCLUDED ASSESSMENTS AND PENDING ASSESSMENTS WAS N OT BEFORE THE I1ON'BLE ANDHRA PRADESH HIGH COURT ON THE CONTRARY, THE ABOV E SAID THREE DECISIONS OF THE JURISDICTIONAL HIGH COURT COMES TO THE SUPPORT OF T HE ASSESSEE'S CONTENTIONS WITH REGARD TO THE LEGAL PROPOSITION AGITATED BEFORE US, BESIDES THE DECISIONS RENDERED BY VARIOUS OTHER HIGH COURTS. ACCORDINGLY, WE ARE O F THE VIEW THAT THE SCOPE OF ENQUIRY IN THE CASE OF UNABATED ASSESSMENTS, I.E., THE ASSESSMENT YEARS IN WHICH PROCEEDINGS ARE NOT PENDING, IS THAT THE UNDISCLOSE D INCOME SHOULD BE ASCERTAINED ITA NOS.435 TO 441/VIZAG/2014 & CO 21 TO 27/VIZAG/2 016 SRI HARI PRASAD BHARARIA, VISAKHAPATNAM 19 ONLY ON THE BASIS OF MATERIALS FOUND DURING THE COU RSE OF SEARCH. IF NO INCRIMINATING MATERIAL SHOWING ANY UNDISCLOSED INCOME WAS FOUND I N THE CASE OF CONCLUDED PROCEEDINGS, THEN THE QUESTION OF MAKING ANY ADDITI ON DOES NOT ARISE. IN THAT CASE, THE ASSESSING OFFICER SHOULD COMPLETE THE ASSESSMEN T OF THOSE YEARS BY DETERMINING THE VERY SAME TOTAL INCOME THAT WAS ASS ESSED IN THE EARLIER PROCEEDING. 24. IN VIEW OF THE ABOVE, WE ARE UNABLE TO AGREE W ITH THE CONTENTIONS OF LD STANDING COUNSEL THAT THE ASSESSING OFFICER WOULD G ET UNFETTERED POWERS IN THE CASE OF UNABATED ASSESSMENTS, ONCE THEY WERE REOPEN ED US 153A OF THE ACT. IN OUR VIEW, IN THE CASE OF UNABATED ASSESSMENTS, THE TOTAL INCOME SHOULD BE DETERMINED BY THE ASSESSING OFFICER BY COMBINING TH E INCOME ALREADY ASSESSED/DISCLOSED IN THE RETURN OF INCOME AND THE UNDISCLOSED INCOME, IF ANY, FOUND DURING THE COURSE OF SEARCH PROCEEDING. EVEN OTHERWISE, IT IS SETTLED PROPOSITION OF LAW THAT THE ASSESSEE IS ENTITLED TO TAKE SUPPORT OF THE DECISION IN HIS FAVOUR, WHEN TWO CONTRADICTORY VIEWS HAVE BEEN EXPRESSED BY THE HIGH COURTS. IN THE INSTANT CASE THE HONBLE JURISDICTIO NAL HIGH COURT COMES TO THE SUPPORT OF THE ASSESSEE IN RESPECT OF THE LEGAL PRO POSITION IN ADDITION TO THE DECISION RENDERED BY THE HON'BLE BOMBAY HIGH COURT. ACCORDINGLY, WE FIND MERIT IN THE CONTENTIONS OF THE ASSESSEE ON THE LEGAL ISS UE. 26. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO RESPECTFULLY FOLLOWING THE COORDINATE BENCH DECISIO N IN THE CASE OF ALL CARGO LOGISTICS PVT. LTD. (SUPRA), WE ARE OF THE OP INION THAT THE A.O. HAS MADE REASSESSMENT U/S 153A/153C OF THE ACT ON THE B ASIS OF INFORMATION/MATERIAL AVAILABLE IN THE RETURN OF INC OME, WITHOUT REFERRING TO ANY SEIZED MATERIAL. THEREFORE, FOLLOWING THE SPEC IAL BENCH DECISION (SUPRA) WE HOLD THAT THE A.O. HAD NO JURISDICTION T O MAKE ADDITIONS U/S 153A OF THE ACT FOR THE ASSESSMENTS WHICH ARE NOT P ENDING AS ON THE DATE OF SEARCH. IN THIS CASE, THE SEARCH WAS CONDUCTED ON 14.7.2009. THE ASSESSMENT FOR THE ASSESSMENT YEARS 2004-05 TO 2007 -08, WERE NOT PENDING AS ON THE DATE OF SEARCH. THE TIME LIMIT F OR ISSUE OF NOTICE UNDER SEC. 143(2) HAS BEEN EXPIRED. THEREFORE, THE A.O. H AS NO JURISDICTION TO REASSESS THE INCOME FOR THE ASSESSMENT YEAR 2004-05 TO 2007-08 IN THE ABSENCE OF ANY INCRIMINATING MATERIALS. HENCE, WE DELETE THE ADDITIONS MADE BY THE A.O. FOR THE ASSESSMENT YEAR 2004-05, 2 005-06 & 2007-08. ACCORDINGLY, THE GROUND RAISED BY THE ASSESSEE IS A LLOWED. 14. IN THIS VIEW OF THE MATTER AND CONSIDERING FACT S AND CIRCUMSTANCES OF THIS CASE AND ALSO RESPECTFULLY FO LLOWING THE DECISION OF CO-ORDINATE BENCH OF VISAKHAPATNAM, IN THE CASE OF L. ITA NOS.435 TO 441/VIZAG/2014 & CO 21 TO 27/VIZAG/2 016 SRI HARI PRASAD BHARARIA, VISAKHAPATNAM 20 SURYAKANTHAM VS. ACIT, IN ITA NOS.300 TO 305/VIZAG/ 2012, WE ARE OF THE VIEW THAT THE A.O. HAS MADE REASSESSMENT U/S 153A/153C OF THE ACT, ON THE BASIS OF INFORMATION/MATERIAL AVAIL ABLE IN THE RETURN OF INCOME, WITHOUT REFERRING TO ANY SEIZED MATERIAL. T HEREFORE, FOLLOWING THE SPECIAL BENCH DECISION (SUPRA) WE HOLD THAT THE A.O. HAD NO JURISDICTION TO MAKE ADDITIONS U/S 153A OF THE ACT, FOR THE ASSESSMENTS WHICH ARE NOT PENDING AS ON THE DATE OF SEARCH. THE ASSESSMENT FOR THE ASSESSMENT YEARS 2005-06 TO 2009 -10 WERE NOT PENDING AS ON THE DATE OF SEARCH. THE TIME LIMIT F OR ISSUE OF NOTICE UNDER SEC. 143(2) HAS BEEN EXPIRED. THEREFORE, THE A.O. HAS NO JURISDICTION TO REASSESS THE INCOME FOR THE ASSESSM ENT YEAR 2005-06 TO 2009-10 IN THE ABSENCE OF ANY INCRIMINATING MATE RIALS. THE CIT(A) HAS RIGHTLY DELETED THE ADDITIONS. WE DO NOT SEE AN Y REASON TO INTERFERE WITH THE ORDER OF CIT(A). HENCE, WE INCLI NED TO UPHOLD CIT(A) ORDER AND DIRECT THE A.O. TO DELETE THE ADDI TIONS MADE TOWARDS DEEMED DIVIDEND FOR THE ASSESSMENT YEAR 200 5-06 TO 2009- 10. 15. IN SO FAR AS ASSESSMENT YEAR 2010-11 & 2011-12 IS CONCERNED, THE A.O. MADE ADDITIONS TOWARDS DEEMED DIVIDEND UNDER T HE PROVISIONS OF SECTION 2(22)(E) OF THE ACT, BASED ON REGULAR BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE, WITHOUT REFERRING TO AN Y SEIZED MATERIAL ITA NOS.435 TO 441/VIZAG/2014 & CO 21 TO 27/VIZAG/2 016 SRI HARI PRASAD BHARARIA, VISAKHAPATNAM 21 FOUND DURING THE COURSE OF SEARCH. THEREFORE, WE A RE OF THE VIEW THAT EVEN IN THE CASE OF PENDING ASSESSMENTS, IN THE ABS ENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH WHICH SUGGEST UNDISCLOSED INCOME, THE A.O. HAS NO JURISDICTION TO MAKE ADDITIONS IN THE ORDER PASSED U/S 143(3) R.W.S. 153A OF THE ACT, TOW ARDS DEEMED DIVIDEND UNDER THE PROVISIONS OF SECTION 2(22)(E) O F THE ACT. WE FURTHER OBSERVED THAT THE ADDITIONS MADE BY THE A.O., TOWAR DS DEEMED DIVIDEND IS NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DU RING THE COURSE OF SEARCH. THE A.O. MADE ADDITIONS BASED ON THE REGULA R BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE. THEREFORE, WE ARE OF TH E VIEW THAT THE A.O. IS NOT CORRECT IN MAKING ADDITIONS TOWARDS DEEMED D IVIDEND U/S 2(22)(E) OF THE ACT, IN THE ASSESSMENT MADE U/S 143(3) R.W.S . 153A OF THE ACT. THIS VIEW WAS SUPPORTED BY THE DECISION OF ITAT, MU MBAI BENCH IN THE CASE OF ACIT VS. PRADIP INDUSTRIES PVT. LTD. REPORT ED IN 141 ITD 151, WHEREIN THE COORDINATE BENCH OF THIS TRIBUNAL, OBSE RVED THAT EVEN WHERE THERE IS NO PENDING PROCEEDINGS AND NO INCRIMINATIN G MATERIAL HAS BEEN FOUND, THE ASSESSING OFFICER IS STILL REQUIRED TO P ASS AN ORDER U/S 153A OF THE ACT, DESPITE THE FACT THAT THE ASSESSED INCOME WILL BE REMAINING THE SAME AS THAT WAS ORIGINALLY ASSESSED INCOME, SINCE THERE WAS NO INCRIMINATING MATERIAL. THEREFORE, WE DIRECT THE A. O. TO DELETE THE ITA NOS.435 TO 441/VIZAG/2014 & CO 21 TO 27/VIZAG/2 016 SRI HARI PRASAD BHARARIA, VISAKHAPATNAM 22 ADDITIONS MADE TOWARDS DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT, FOR THE A.Y. 2010-11 AND 2011-12. 16. COMING TO THE MERITS OF THE ISSUE. THE A.O. MAD E ADDITIONS TOWARDS DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT, ON A TRANSACTION BETWEEN ASSESSEE AND HIS COMPANY. THE A.O. WAS OF THE OPINION THAT THE TRANSACTIONS BETWEEN THE ASSESSEE AND HIS COMPA NY IS COMING WITHIN THE MEANING OF LOANS ADVANCES AS DEFINED U/S 2(22)(E) OF THE ACT. IT IS THE CONTENTION OF THE ASSESSEE THAT THE TRANS ACTION BETWEEN HIMSELF AND HIS COMPANY IS NOT A GRACIOUS PAYMENT, THEREFOR E, DEEMING FICTION PROVIDED U/S 2(22)(E) OF THE ACT HAS NO APPLICATION , AS THE DEBIT BALANCE APPEARING IN THE COMPANYS BOOKS OF ACCOUNTS IS A N ORMAL CURRENT ACCOUNT, WHEREIN THE COMPANY HAS CREDITED AMOUNTS P AYABLE TO HIM AND DEBITED AMOUNTS WITHDRAWN BY HIM AND NET RESULT OF WHICH IS SHOWN DEBIT BALANCE WHICH CANNOT BE CONSIDERED AS GRACIOU S PAYMENT. THE ASSESSEE FURTHER CONTENDED THAT HE HAD GIVEN HIS PE RSONAL PROPERTIES AS COLLATERAL SECURITY TO THE BANK FOR THE PURPOSE OF AVAILING CREDIT FACILITIES TO THE COMPANY, IN TURN THE COMPANY HAS GIVEN CERTA IN ADVANCES, THEREFORE, THE SAME CANNOT BE CONSIDERED AS GRACIOU S PAYMENTS WHICH ARE COMING WITHIN THE MEANING OF LOANS AND ADVANCES AS DEFINED U/S 2(22)(E) OF THE ACT. ITA NOS.435 TO 441/VIZAG/2014 & CO 21 TO 27/VIZAG/2 016 SRI HARI PRASAD BHARARIA, VISAKHAPATNAM 23 17. HAVING HEARD BOTH THE PARTIES AND HAVING CONSID ERED THE MATERIALS AVAILABLE ON RECORD, WE FIND THAT THE A.O. HAS MADE ADDITIONS TOWARDS LOANS AND ADVANCES UNDER THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT, ON THE GROUND THAT TRANSACTION BETWEEN THE ASSESSEE AND HIS COMPANY IS COMING WITHIN THE DEFINITION OF LOANS AND ADVANC ES. THE ASSESSEE CLAIMS THAT TRANSACTION BETWEEN HIMSELF AND HIS COM PANY IS NOT A GRACIOUS PAYMENT WHICH IS COMING WITHIN THE MEANING OF LOANS AND ADVANCES AS DEFINED U/S 2(22)(E) OF THE ACT. THE CI T(A) AFTER CONSIDERING THE EXPLANATION FURNISHED BY THE ASSESS EE AND ALSO FOLLOWING THE DECISION OF KOLKATA HIGH COURT, IN THE CASE OF PRADIP KUMAR MALHOTRA VS. CIT, HELD THAT THE TRANSACTION BETWEEN THE ASSE SSEE AND HIS COMPANY ARE NOT GRACIOUS PAYMENT WHICH IS COMING WI THIN THE MEANING OF LOANS AND ADVANCES AS DEFINED U/S 2(22)(E) OF TH E ACT. THE RELEVANT PORTION OF THE CIT(A) ORDER IS REPRODUCED HEREUNDER : 7.2 HOWEVER, EVEN ON MERITS ALSO, ALTERNATE CONTENTION OF THE APPELLANT IS CONSIDERED. IT IS NOTED THAT THE APPELLANT HAS MOR TGAGED HIS PERSONAL PROPERTY TO VARIOUS BANKS AND OBTAINED LOANS FOR THE BUSINESS O F THE COMPANY. THE DOCUMENTS FILED BY THE APPELLANT OF THE SANCTION LETTERS FROM VARIOUS BANKS SUPPORTS THIS CONTENTION AND THE DETAILS OF THE MORTGAGE LOANS TA KEN FROM VARIOUS BANKS ALONG WITH SANCTION LETTERS AND THE PROPERTIES PROVIDED B Y THE APPELLANT AS COLLATERAL SECURITY TO OBTAIN LOANS FROM THE SAID BANKS IS TAB ULATED BELOW. DATE OF SANCTION NAME OF THE BANK NAME OF THE BORROWER CREDIT FACILITY (RS.) PROPE RTY MORTGAGED 23.3.2004 STATE BANK OF HYDERABAD, SIRIPURAM JUNCTION, M/S. SAMPATH VINAYAK STEELS PVT. LTD. 30 LAKHS AGRICULTURAL LAND ITA NOS.435 TO 441/VIZAG/2014 & CO 21 TO 27/VIZAG/2 016 SRI HARI PRASAD BHARARIA, VISAKHAPATNAM 24 VIZAG 10.2.2006 STATE BANK OF HYDERABAD, SIRIPURAM JUNCTION, VIZAG M/S. SAMPATH VINAYAK STEELS PVT. LTD. 100 LAKHS 4 ST ORYED BUILDING ON 555 SQ.YDS SITUATED AT RAJENDRANAGAR, VIZAG IN THE NAME OF (A) HARI PRASAD BHARARIA (B) SHIVLAL BHARARIA (BROTHERS) RENEWAL STATE BANK OF HYDERABAD, SIRIPURAM JUNCTION, VIZAG M/S. SAMPATH VINAYAK STEELS PVT. LTD. 100 LAKHS 4 STORYED BUIL DING ON 555 SQ.YDS SITUATED AT RAJENDRANAGAR, VIZAG IN THE NAME OF (A) HARI PRASAD BHARARIA (B) SHIVLAL BHARARIA (BROTHERS) 7.11.2007 THE DHANALAKSHMI BANK, VIP ROAD, VIZAG M/S. SAMPATH VINAYAK STEELS PVT. LTD. 150 LAKHS (1) 4 STORYED BUILDING ON 555 SQ.YDS. SITUATED AT RAJENDRANAGAR, VIZAG IN THE NAME OF (A) HARI PRASAD BHARARIA (B) SHIVLAL BHARARIA (BROTHERS) (2) VUDA APARTMENT ADMEASURING 1485 SQ.FT. SITUATED AT MMTC COLONY, SEETHAMMADHARA, VIZAG IN THE NAME OF HARI PRASAD BHARARIA. RENEWAL THE DHANALAKSHMI BANK, VIP ROAD, VIZAG M/S. SAMPATH VINAYAK STEELS PVT. LTD. 150 LAKHS (1) 4 STOREYED BUILDING ON 555 SQ.YDS. SITUATED AT RAJENDRANAGAR, VIZAG IN THE NAME OF (A) HARI PRASAD BHARARIA (B) SHIVLAL BHARARIA (BROTHERS) (2) VUDA APARTMENT ADMEASURING 1485 SQ.FT. SITUATED AT MMTC COLONY, SEETHAMMADHARA, VIZAG IN THE NAME OF HARI PRASAD BHARARIA. 13.11.2009 AXIS BANK LTD., RAMNAGAR, VIZAG M/S. SAMPATH VINAYAK STEELS PVT. LTD. 300 LAKHS (1) 4 STORYED BUILDING ON 555 SQ.YDS SITUATED AT RAJENDRANAGAR, VIZAG IN THE NAME OF (A) HARI PRASAD BHARARIA (B) SHIVLAL BHARARIA (BROTHERS) (2) VUDA APARTMENT ADMEASURING 1485 SQ.FT. SITUATED AT MMTC COLONY, SEETHAMMADHARA, VIZAG IN THE NAME OF HARI PRASAD BHARARIA. 12.11.2010 AXIS BANK LTD. RAMNAGAR, VIZAG M/S. SAMPATH VINAYAK STEELS PVT. LTD. 400 LAKHS (1) 4 STORYED BUILDING ON 555 SQ.YDS. SITUATED AT RAJENDRANAGAR, VIZAG IN THE NAME OF (A) HARI PRASAD BHARARIA (B) SHIVLAL BHARARIA (BROTHERS) (2) VUDA APARTMENT ADMEASURING 1485 SQ.FT. SITUATED AT MMTC COLONY, SEETHAMMADHARA, VIZAG IN THE NAME OF HARI PRASAD ITA NOS.435 TO 441/VIZAG/2014 & CO 21 TO 27/VIZAG/2 016 SRI HARI PRASAD BHARARIA, VISAKHAPATNAM 25 BHARARIA. EVEN TILL DATE, THE AXIS BANK HAS GRANTED CASH CRE DIT FACILITY TO THE SAID COMPANY ON THE BASIS OF THE COLLATERAL SECURITY PRO VIDED BY THE PROPERTIES AND ALSO THE PERSONAL GUARANTEE OF THE APPELLANT AND HIS FAM ILY MEMBERS (LATEST SANCTION LETTER BEING 6.3.2013). 7.3 IT IS NOTED THAT THE FACTS IN THE CASE OF PRADIP KUMAR MALHOTRA VS CIT (SUPRA) ARE AKIN TO THE FACTS UNDER REFERENCE WHICH IS GIVEN BELOW. 'THE PHRASE 'BY WAY OF ADVANCE OR LOAN' APPEARING S UB-CLAUSE(E) OF SECTION 2(22) OF THE INCOME TAX ACT, 1961 MUST BE CONSTRUED TO MEAN T HOSE ADVANCES OR LOANS WHICH A SHAREHOLDER ENJOYS SIMPLY ON ACCOUNT OF BEING A P ERSON WHO IS THE BENEFICIAL OWNER OF SHARES (NOT BEING SHARES ENTITLED TO A FIX ED RATE OF DIVIDEND WHETHER WITH OR WITHOUT A RIGHT TO PARTICIPATE IN PROFITS) HO/DI NG NOT LESS THAN TEN PER CENT OF THE VOTING POWER; BUT IF SUCH LOAN OR ADVANCE IS GIVEN TO SUCH SHAREHOLDER AS A CONSEQUENCE OF ANY FURTHER CONSIDERATION WHICH IS B ENEFICIAL TO THE COMPANY RECEIVED FROM SUCH A SHAREHOLDER, IN SUCH CASE, SUC H ADVANCE OR LOAN CANNOT BE SAID TO BE DEEMED DIVIDEND WITHIN THE MEANING OF THE ACT . THUS, GRATUITOUS LOAN OR ADVANCE GIVEN BY A COMPANY TO THOSE CLASSES OF SHAR EHOLDERS WOULD COME WITHIN THE PURVIEW OF SECTION 2(22) BUT NOT CASES WHERE THE LO AN OR ADVANCE IS GIVEN IN RETURN TO AN ADVANTAGE CONFERRED UPON THE COMPANY BY SUCH SHAREHOLDER. THE ASSESSEE HAD SUBSTANTIAL SHAREHOLDING IN A PRIV ATE COMPANY. THE ASSESSEE PERMITTED HIS IMMOVABLE PROPERTY TO BE MORTGAGED TO THE BANK FOR ENABLING THE COMPANY TO TAKE THE BENEFIT OF LOAN AND IN SPITE OF REQUEST OF THE ASSESSEE, THE COMPANY WAS UNABLE TO RELEASE THE PROPERTY FROM MOR TGAGE. CONSEQUENTLY, THE BOARD OF DIRECTORS OF THE COMPANY PASSED A RESOLUTI ON AUTHORIZING THE ASSESSEE TO OBTAIN FROM THE COMPANY INTEREST FREE DEPOSIT UP TO RS.50 LAKHS AS AND WHEN REQUIRED. DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 1999-2000, THE ASSESSEE OBTAINED FROM THE COMPANY A SUM OF RS.20,7 5,000 BY WAY OF SECURITY DEPOSIT. OUT OF THE AMOUNT, A SUM OF RS.20 LAKHS WA S SUBSEQUENTLY RETURNED BY THE ASSESSEE TO THE COMPANY. IN THE ASSESSMENT MADE FOR 19992000 THE ASSESSING OFFICER ADDED THE SUM OF RS. 20,75, 000 AS DEEMED D IVIDEND. THIS WAS UPHELD BY THE TRIBUNAL. ON APPEAL TO THE H IGH COURT HELD, ALLOWING THE APPEAL, THAT FOR RETAINING THE B ENEFIT OF LOAN AVAILED OF FROM THE BANK, IF DECISION WAS TAKEN TO GIVE ADVANCE TO THE ASSESSEE SUCH DECISION WAS NOT TO GIVE GRATUITOUS ADVANCE TO ITS SHAREHOLDER BUT TO P ROTECT THE BUSINESS INTEREST OF THE COMPANY. THE SUM OF RS.20,75,000 COULD NOT BE TREAT ED AS DEEMED DIVIDEND,' 07.4 SINCE IN THE PRESENT CASE ALSO, THE APPELLANT HAS MORTGAGED HIS PROPERTY TO VARIOUS BANKS AND OBTAINED LOANS FOR THE BUSINESS O F THE COMPANY. EVEN THOUGH THERE IS A PERSONAL ELEMENT OF INDIVIDUAL BENEFIT T O THE APPELLANT, THE COMPANY FROM WHICH THE ADVANCES WERE TAKEN ALSO BENEFITED BY USI NG THE PROPERTY AS COLLATERAL ITA NOS.435 TO 441/VIZAG/2014 & CO 21 TO 27/VIZAG/2 016 SRI HARI PRASAD BHARARIA, VISAKHAPATNAM 26 SECURITY TO THE BANK. THUS, AS OBSERVED BY THE HON' BLE CALCUTTA HIGH COURT THAT THE LOAN OR ADVANCE GIVEN IN RETURN TO AN ADVANTAGE CON FERRED UPON THE COMPANY BY A SHAREHOLDER IS NOT A GRATUITOUS LOAN OR ADVANCE GIV EN BY THE COMPANY AND DOES NOT COME UNDER THE PURVIEW OF SECTION 2(22)(E). IN VIEW OF THE ABOVE, THE ADDITION MADE ON ACCOUNT OF DEEMED DIVIDEND BY THE ASSESSING OFFICER IS ORDERED TO BE DELETED FOR AYS 2005-06 TO 2011-12. SINCE TH E ISSUE IS DECIDED IN FAVOUR OF THE APPELLANT, THE MATTER RELATING TO THE APPELLANTS REMUNERATION DOES NOT ARISE. 18. THE CIT(A) HAS CONSIDERED THE ISSUE IN DETAIL A ND HELD THAT THE TRANSACTION BETWEEN THE ASSESSEE AND HIS COMPANY AR E NOT COMING WITHIN THE MEANING OF LOANS AND ADVANCES AS DEFINED U/S 2(22)(E) OF THE ACT. THE FACTS REMAIN UNCHANGED. THE REVENUE HAS FAILED TO BROUGHT ON RECORD ANY EVIDENCES TO PROVE THAT THE FINDINGS OF THE FACT RECORDED BY THE CIT(A) IS INCORRECT. THEREFORE, WE ARE OF T HE VIEW THAT THE CIT(A) HAS RIGHTLY DELETED ADDITIONS MADE TOWARDS DEEMED D IVIDEND UNDER THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT. WE DO N OT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A). HENCE, WE INCLINED TO UPHOLD THE CIT(A) ORDER AND DISMISS THE APPEAL FILED BY THE RE VENUE. 19. THE ASSESSEE HAS FILED CROSS OBJECTION IN SUPPO RT OF ORDER OF THE LD. CIT(A). THEREFORE, FOR THE REASONS RECORDED IN THE PRECEDING PARAGRAPHS, WE DISMISS THE CROSS OBJECTIONS FILED B Y THE ASSESSEE AS NOT MAINTAINABLE. ITA NOS.435 TO 441/VIZAG/2014 & CO 21 TO 27/VIZAG/2 016 SRI HARI PRASAD BHARARIA, VISAKHAPATNAM 27 20. IN THE RESULT, THE APPEALS FILED BY THE REVENUE IN ITA NOS.435 TO 441/VIZAG/2014 AND THE CROSS OBJECTIONS FILED BY TH E ASSESSEE IN CO NOS.21 TO 27/VIZAG/2016 ARE DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 9 TH SEPT16. SD/- SD/- ( . ) ( . ) (V. DURGA RAO) (G. MANJUNATHA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER # /VISAKHAPATNAM: ' /DATED : 09.09.2016 VG/SPS )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT THE DCIT, CENTRAL CIRCLE-1, VISA KHAPATNAM 2. / THE RESPONDENT SRI HARI PRASAD BHARARIA, 1 ST FLOOR, YOGESH TOWERS, PLOT NO.26, CBM COMPOUND, VISAKHAPATNAM 3. + / THE CIT(CENTRAL), HYDERABAD 4. + ( ) / THE CIT (A)-1, HYDERABAD 5. # . , . , # / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // 12 . (SR.PRIVATE SECRETARY) . , # / ITAT, VISAKHAPATNAM