M/s. Vrindavan Farms (P) Ltd., New Delhi V. DCIT, New Delhi

CO 238/DEL/2013

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9682 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 24 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 06-06-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2008-2009
• Appeal Filed On: 13-12-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R S MEENA
• Assessee Lawyers: V MOHAN
• Keywords: Gross profit estimation; Gift; Business income; Revision of order; Income from undisclosed sources; Search and seizure; Opportunity of being heard; Earning of tax free income; Accommodation entries; Block assessment; Revised return; Documents seized; Reassessment proceedings
• Section: 143(3); 133A; 153A; 139(5); 131; 68; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH H : NEW DELHI) BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER AND SHRI C.M. GARG, JUDICIAL MEMBER ITA NOS.3359, 3360 & 3361/DEL./2013 (ASSESSMENT YEARS : 2006-07, 2007-08 & 2008-09) DCIT, CENTRAL CIRCLE 13, VS. M/S. VRINDAVAN FARMS (P) LTD., NEW DELHI. A 2/96, ASHIRWAD APARTMENT, PASCHIM VIHAR, NEW DELHI 110 063. (PAN : AAACV0737G) CO NOS.236, 237 & 238/DEL/2013 (IN ITA NOS.3359, 3360 & 3361/DEL./2013) (ASSESSMENT YEARS : 2006-07, 2007-08 & 2008-09) M/S. VRINDAVAN FARMS (P) LTD., VS. DCIT, CENTRAL C IRCLE 13, A 2/96, ASHIRWAD APARTMENT, NEW DELHI. PASCHIM VIHAR, NEW DELHI 110 063. (PAN : AAACV0737G) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VED JAIN, CA AND SHRI V. MOHAN, ADVOCATE REVENUE BY : SHRI R.S. MEENA, CIT DR ORDER PER BENCH : ITA NOS.3359, 3360 & 3361/DEL/2013 AND CO NOS.236, 237 & 238/DEL/2013 EMANATE FROM THE THREE RESPECTIVE ORDE RS OF THE CIT (APPEALS)- ITA NOS.3359, 3360 & 3361/DEL./2013 CO NOS.236, 237 & 238/DEL/2013 2 I, NEW DELHI DATED 12.03.2013. ALL THESE APPEALS A ND CROSS OBJECTIONS ARE DISPOSED OFF BY THIS COMMON ORDER AS THE FACTS ARE COMMON IN ALL THESE APPEALS AND CROSS OBJECTIONS. 2. THE GROUNDS OF APPEAL TAKEN BY THE REVENUE IN AL L THESE THREE APPEALS ARE SAME EXCEPT THE DIFFERENCE IN THE AMOUNT OF ADD ITION DELETED. THE GROUNDS OF APPEAL IN ITA NO.3359/DEL/2013 READ AS U NDER :- 1. THE ORDER OF THE LD. CIT (APPEALS) IS NOT CORRE CT IN LAW AND FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE FACTS, THE LD. CIT (A) HAS ERRED IN LAW IN DELETING THE ADDITION OF RS.11,00,0 00/- MADE BY AO ON ACCOUNT OF UNEXPLAINED SHARE APPLICATION MONEY RECE IVED BY THE ASSESSEE COMPANY WITHOUT APPRECIATING THE FACT THAT THE CRED ITWORTHINESS OF INVESTORS AND GENUINENESS OF TRANSACTION COULD NOT BE PROVED BY ASSESSEE. 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND ANY/ALL THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF HEARING OF TH E APPEAL. THE GROUNDS TAKEN IN ALL THE CROSS OBJECTIONS ARE S AME AND THE GROUNDS TAKEN IN CO NO.236/DEL/2013 READ AS UNDER :- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)] HAS E RRED BOTH ON FACTS AND IN LAW IN REJECTING THE CONTENTION OF THE ASSES SEE THAT THE PROCEEDINGS INITIATED UNDER SECTION 153A AGAINST THE APPELLANT ARE IN VIOLATION OF THE STATUTORY CONDITIONS AND THE PROCEDURE PRESCRIBED U NDER THE LAW AND AS SUCH THE SAME IS BAD IN LAW AND LIKELY TO BE QUASHE D. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN REJECTING THE CONTENTION OF THE ASSESSEE T HAT THE NOTICE ISSUED UNDER SECTION 153A BY THE AO IS BAD BOTH IN THE EYE OF LAW AND FACTS AS NO SEARCH WAS CARRIED ON IN ASSESSEE'S CASE, AS SUC H THE ASSESSMENT FRAMED IN CONSEQUENCE THEREOF IS ALSO BAD AND LIABL E TO BE QUASHED. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN REJECTING THE CON TENTION OF THE ASSESSEE THAT THE NOTICE ISSUED UNDER SECTION 153A BY THE AO IS IN VIOLATION OF THE PROVISIONS OF THE ACT AND AS SUCH THE ASSESSMENT FR AMED IN CONSEQUENCE THEREOF IS BAD. ITA NOS.3359, 3360 & 3361/DEL./2013 CO NOS.236, 237 & 238/DEL/2013 3 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ASSESSMENT FRAMED UNDER SECTION 153A/143(3) BEING AGAINST THE STATUTO RY PROVISION OF THE ACT AND THE PROCEDURE PRESCRIBED UNDER THE LAW, IS BAD AND THE SAME IS LIABLE TO BE QUASHED. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE GROUNDS OF CROSS OBJECTION. 3. THE MAIN GROUND IN THE CROSS OBJECTIONS FILED BY THE ASSESSEE IS WITH REGARD TO THE ABSENCE OF ANY SEARCH ACTION AT THE A SSESSEES PREMISES. SINCE THE ISSUE RAISED IN THE CROSS OBJECTIONS GOES TO TH E ROOT OF THE DISPUTE, THEREFORE, THE CROSS OBJECTIONS FILED BY THE ASSESS EE ARE BEING DECIDED FIRST. 4. WHILE PLEADING ON BEHALF OF THE ASSESSEE, LD. AR SUBMITTED THAT THERE WAS NO SEARCH OPERATION AT THE PREMISES OF THE ASSE SSEE, THEREFORE, NO NOTICE U/S 153A CAN BE ISSUED. ANY PROCEEDINGS OR ORDERS MADE IN CONSEQUENCE OF NOTICES ISSUED U/S 153A ARE ILLEGAL AND LIABLE TO B E QUASHED. LD. AR SUBMITTED THAT THERE IS NO PANCHNAMA DRAWN IN THE N AME OF ASSESSEE. NO ONE FROM THE INVESTIGATION WING OR INCOME TAX DEPARTMEN T HAS EVER VISITED THE PREMISES OF ASSESSEE. HE PLEADED THAT WHEN THE CIT (A) CALLED A REMAND REPORT, THE AO HAS STATED IN HIS REPORT THAT THE AS SESSEES NAME WAS THERE IN THE SEARCH WARRANT AND THAT WARRANT WAS EXECUTED AT THE ADDRESS, 1 2, CENTRAL MARKET, WEST PUNJABI BAGH, NEW DELHI. LD. AR SUBMI TTED THAT ASSESSEE HAS NOTHING TO DO WITH THIS PREMISES. HE FURTHER SUBMI TTED THAT ALL THE CORRESPONDENCES WITH THE INCOME-TAX DEPARTMENT WERE AT THE ADDRESS, A 2/96, ASHIRWAD APARTMENTS, PASHCHIM VIHAR, NEW DELH I. HE FURTHER ITA NOS.3359, 3360 & 3361/DEL./2013 CO NOS.236, 237 & 238/DEL/2013 4 SUBMITTED THAT SINCE THE EXECUTION OF THE SEARCH WA S NOT AT THE PREMISES OF THE ASSESSEE, THE PROCEEDINGS INITIATED AND THE ORDERS PASSED IN CONSEQUENCE THEREOF ARE BAD IN LAW AND LIABLE TO BE QUASHED. H E SUBMITTED THAT THIS ISSUE IS SQUARELY COVERED BY THE RECENT DECISION OF ITAT, DE LHI BENCH IN THE CASE OF ACIT, NEW DELHI VS. SARVMANGALAM BUILDERS & DEVELOP ERS PVT. LTD. IN ITA NO.196 TO 198/DEL/2011 AND CO NO.115 TO 117/DEL/201 1 DATED 14.03.2014 WHEREBY IN THE BACKGROUND OF SIMILAR FACTS, THE ITA T HAS HELD THAT SINCE NO SEARCH WAS CONDUCTED ON THE PREMISES OF THE ASSESSE E AND THE SEARCH CONDUCTED ON THE PREMISES NOT OWNED BY THE ASSESSEE , THE PROCEEDINGS U/S 153A OF THE ACT ARE INVALID AND BAD IN LAW. HE ALS O RELIED ON THE DECISION OF ITAT, MUMBAI IN THE CASE OF J.M. TRADING CORPN. VS. ACIT REPORTED IN (2008) 20 SOT 489 (MUM.) WHICH HAS BEEN UPHELD BY H ONBLE BOMBAY HIGH COURT IN ITS JUDGMENT DATED 29.06.2009 IN ITA NO.2 76/2009 AND FURTHER, THE HONBLE SUPREME COURT HAS DISMISSED THE SLP FILED B Y THE REVENUE ON 06.09.2010 WHILE DECIDING CC NO.13456/2010 AGAINST THE JUDGMENT OF HONBLE BOMBAY HIGH COURT. IN THAT CASE, THE ITAT HELD THAT IN CASE, NO SEARCH IS CONDUCTED AGAINST A PERSON, THE PERIOD OF OPERATION TO WHICH THE PROVISIONS OF SECTION 153A WOULD APPLY, CANNOT BE D ETERMINED AND THE INVOKING OF PROVISIONS OF SECTION 153A IS BASELESS. IT WAS ALSO HELD THAT PROVISIONS OF SECTION 153A ARE ONLY APPLICABLE IN C ASE VALID SEARCH IS CONDUCTED AGAINST THE ASSESSEE U/S 132 OF THE ACT A ND ITAT HELD THAT ITA NOS.3359, 3360 & 3361/DEL./2013 CO NOS.236, 237 & 238/DEL/2013 5 PROCEEDINGS U/S 143(3) READ WITH SECTION 153A OF TH E ACT WERE NULL AND VOID AND THE SAME WERE CANCELLED. LD. AR ALSO RELIED ON THE DECISION OF ITAT, AHMEDABAD IN THE CASE OF DR. MANSUKH KANJIBHAI SHAH VS. ACIT REPORTED IN 129 ITD 376 (AHMEDABAD) FOR THE PROPOSITION THAT WH EN THE WARRANT OF AUTHORIZATION IN THE NAME OF TRUST AND THE ASSESSEE STANDS UNEXECUTED IN THE CASE OF ASSESSEE INDIVIDUAL. WHEN ONLY SURVEY ACTI ON U/S 133A IS CONDUCTED IN THE PREMISES OF THE ASSESSEES TRUST, IT WOULD N OT SATISFY THE REQUIREMENTS OF SECTION 153A AND THE AO WAS NOT JUSTIFIED IN INITIA TING PROCEEDINGS OR ASSUMING VALID JURISDICTION U/S 153A OF THE ACT AGA INST THE ASSESSEE. HE FURTHER SUBMITTED THAT WHEN THERE WAS NO INCRIMINAT ING MATERIAL FOUND DURING THE SEARCH PERTAINING TO THE ASSESSEE THEN ALSO THE ADDITION MADE BY THE AO IN THE PROCEEDINGS U/S 153A WAS NOT WARRANTED. HE SUB MITTED THAT IT IS A SETTLED LAW THAT NO ADDITION CAN BE MADE IN A PROCEEDINGS U /S 153A IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. HE SUBMITTED THAT THIS ISSUE IS COVERED BY THE DECISIONS OF VARI OUS COORDINATE BENCHES OF ITAT AND THE DECISION OF HONBLE JURISDICTIONAL DEL HI HIGH COURT. HE RELIED ON THE DECISION OF KUSUM GUPTA VS. DCIT IN ITA NO.4 873/DEL/2009 DATED 28.03.2013 WHEREIN THE ITAT HELD THAT WHEN NO INCRI MINATING MATERIAL FOUND OR STATEMENT RECORDED DURING THE COURSE OF SEARCH W AS THERE TO SUGGEST EVEN PRIMA FACIE THAT SOME UNDISCLOSED INCOME WAS THERE TO ATTRACT THE INVOCATION OF THE PROVISIONS LAID DOWN U/S 153A OF THE ACT FOR THE ADDITION AS PER THE ITA NOS.3359, 3360 & 3361/DEL./2013 CO NOS.236, 237 & 238/DEL/2013 6 DECISION OF SPECIAL BENCH OF ITAT ON THE ISSUE IN T HE CASE OF ALCARGO GLOBAL LOGISTICS LTD. VS. DCIT. WHEN NO ASSESSMENT HAS BE EN ABATED, ADDITION IN THE ASSESSMENT U/S 153A CAN BE MADE ONLY ON THE BAS IS OF INCRIMINATING MATERIAL RECOVERED DURING THE SEARCH. IN ABSENCE O F INCRIMINATING MATERIAL RECOVERED OR THE STATEMENT RECORDED DURING THE SEAR CH, THE ADDITION MADE ON ACCOUNT OF NON-GENUINENESS OF THE GIFT WAS HELD TO BE BEYOND JURISDICTION, WHICH WAS NOT MADE IN THE ORIGINAL ASSESSMENT U/S 1 43(3) OF THE ACT. HE ALSO RELIED ON THE DECISION OF ITAT IN THE CASE OF ACIT VS. ASHA KATARIA IN ITA NO.3105/DEL/2011 DATED 20.05.2013 WHERE ALSO THE IT AT HAS HELD THAT ANY ASSESSMENT THAT ARE ABATED, THE AO RETAINS THE ORIG INAL JURISDICTION AS WELL AS JURISDICTION CONFERRED ON HIM U/S 153A FOR WHICH AS SESSMENT SHALL BE MADE FOR EACH ASSESSMENT YEAR SEPARATELY. IN OTHER CASE S, IN ADDITION TO THE INCOME THAT HAVE 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 ACCOUNTS AND OTHER DOCUMENTS FOU ND IN THE COURSE OF SEARCH, BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT, AND (II) UNDISCLOSED INCOME OR PROPERTY DISCOVERED DURING TH E COURSE OF SEARCH. IN SUCH A BACKGROUND, THE ITAT HAS ALLOWED THE RELIEF. HE ALSO RELIED ON THE FOLLOWING CASE LAWS :- (I) CIT VS. LACHMAN DASS BHATIA 77 DTR 17 9DEL.) DT. 7.5.2012; (II) GURINDER SINGH BAWA VS. DCIT ITA NO.2075/MUM /2010 DT. 16.11.2012; ITA NOS.3359, 3360 & 3361/DEL./2013 CO NOS.236, 237 & 238/DEL/2013 7 (III) MGF AUTOMOBILES LTD. VS. ACIT ITA NO.4212/DEL/201 1 DT. 28.06.2013; (IV) ACIT VS. PRATIBHA INDUSTRIES LTD. 141 ITD 151 DT. 19.12.2012; (V) ACIT VS. PACL INDIA LTD. ITA NO.2637/DEL/2010 DT. 20.06.2013; (VI) SSP AVIATION LTD. VS. DCIT 346 ITR 177 (DEL.) DT. 29.03.2012; (VII) M/S. MARIGODL MERCHANDISE (P) LTD. VS. DCIT, CEN. C IRCLE, FARIDABAD; AND (VIII) MR. VINAY CHHADWA VS. ACIT. HE ALSO PLEADED THAT THE AO HAS SOUGHT CLARIFICATIO N REGARDING THE FACTS MENTIONED IN THE APPRAISAL REPORT VIDE HIS LETTER D ATED 10.08.2010 ADDRESSED TO THE ADIT (INV.), UNIT III (3), NEW DELHI. IN THIS LETTER, ASSESSING OFFICER CLEARLY MENTIONED THAT ASSESSMENTS IN SEVEN ASSESSE ES IN WHICH THE ASSESSEE HAS ONE OF THE NAMES CANNOT BE MADE UNDER THE PROVI SIONS OF SECTION 153A OF THE ACT. LD. AR ALSO SUBMITTED THAT FORM NO.49 WA RRANT OF AUTHORIZATION DOES NOT CONTAIN THE NAME OF THE ASSESSEE. THIS WA RRANT HAS BEEN EXECUTED AT THE PREMISES, 1 2, CENTRAL MARKET, WEST PUNJABI B AGH, NEW DELHI. HE SUBMITTED THAT ANNEXURE CLAIMED TO BE PART OF FORM NO.45 DOES NOT CONTAIN ANY SIGNATURE OF ANY WITNESSES OR THE PERSONS ON WH OM THE WARRANT WAS EXECUTED. FURTHER, PANCHNAMA ALSO DOES NOT CONTAIN NAME OF THE ASSESSEE. THE PREMISES ON WHICH THIS WARRANT WAS EXECUTED ALS O NOT BELONG TO THE ASSESSEE. 5. ON THE OTHER HAND, LD. DR SUBMITTED THAT THE WAR RANT OF AUTHORIZATION IN FORM NO.45 MENTIONS NAME OF TWO COMPANIES PLUS OTHE RS AS PER ANNEXURE. THE ANNEXURE WAS ANNEXED TO FORM NO.45 IS PLACED AT PAGE 116 OF THE PAPER ITA NOS.3359, 3360 & 3361/DEL./2013 CO NOS.236, 237 & 238/DEL/2013 8 BOOK. IT IS CONTAINING THE NAME OF THE ASSESSEE, M /S. VRINDAVAN FARMS PVT. LTD. THE QUERY RAISED BY THE AO WAS DULY REPLIED B Y THE CONCERNED ADIT (INVESTIGATION). FURTHER, THE PANCHNAMA WAS ALSO P REPARED IN THE NAME OF TWO COMPANIES AND OTHERS AS PER ANNEXURE. THEREFORE, A SSESSEE CANNOT SAY THAT NO SEARCH WARRANT WAS ISSUED AND NO SEARCH WAS CONDUCT ED ON THE ASSESSEE. HE ALSO SUBMITTED THAT SEARCH WAS CONDUCTED AT THE ASS ESSEE AS WARRANT WAS ISSUED IN ASSESSEES NAME AND PANCHNAMA WAS ALSO DR AWN ACCORDINGLY. THE WARRANT WAS EXECUTED ON 1 2, CENTRAL MARKET, WEST PUNJABI BAGH, NEW DELHI. HE RELIED ON THE ORDER OF THE ASSESSING OFF ICER AND PLEADED THAT THE ASSESSEE IS A GROUP COMPANY OF SWASTIK PIPES GROUP AND THE DIRECTORS OF THE ASSESSEE COMPANY ARE MANAGING THE AFFAIRS OF OTHER GROUP COMPANIES ALSO. THE NAME OF THE ASSESSEE FIGURES IN THE SATISFACTIO N NOTE AND WARRANT OF AUTHORIZATION ISSUED U/S 132. HE PLEADED THAT SOME TIMES NAME OF A PERSON INVESTIGATED OR SEARCHED MAY NOT EXACTLY TALLY WITH THE REAL OFFICIAL NAME AND SEARCH AND SEIZURE ACTION REQUIRE MAINTAINING CERTA IN DEGREE OF CONFIDENTIALITY. THE QUESTION WHETHER A SEARCH HAS BEEN CARRIED OUT IS DECIDED BY THE FACT WHETHER WARRANT OF AUTHORIZATION WAS EX ECUTED IN THE NAME OF THAT PERSON AND NOT BY THE FACT THAT WHETHER PANCHNAMA W AS DRAWN IN THE NAME OF THAT PERSON, AS PANCHNAMA IS A PROCEDURAL DOCUMENT RECORDING THE PRIMARY PROCEEDING OF SEARCH AND SEIZURE. HE PLEADED THAT IN THE PRESENT CASE, THE EXECUTION OF THE WARRANT OF AUTHORIZATION AT AN ADD RESS DIFFERENT FROM THE ITA NOS.3359, 3360 & 3361/DEL./2013 CO NOS.236, 237 & 238/DEL/2013 9 ADDRESS RECORDED AS REGISTERED OFFICE OF THE ASSESS EE COMPANY IS ALSO NOT VERY MATERIAL AS MANY GROUP CONCERNS ARE OPERATING FROM THE SAME PREMISES AND IT IS NOT POSSIBLE FOR THE INVESTIGATING OFFICERS TO P RECISELY VERIFY EACH AND EVERY PREMISES WHICH MAY RESULT IN COMPROMISING THE CONFI DENTIALITY / SECRECY OF THE INVESTIGATIONS. HE ALSO SUBMITTED THAT EVEN WH EN SEARCH AND SEIZURE WAS IN CONTRAVENTION OF SECTION 132 OF THE ACT, MATERIA L SEIZED WOULD LIABLE TO BE USED AGAINST THE PERSON IN WHOSE CUSTODY IT WAS SEI ZED, AS HELD BY HONBLE SUPREME COURT IN THE CASE OF POORAN MAL VS. DIRECTO R OF INSPECTION REPORTED IN 93 ITR 505. HE SUBMITTED THAT WHETHER AN ERROR COMMITTED BY OFFICER IN SEIZING DOCUMENTS WHICH MAY ULTIMATELY BE FOUND NOT TO BE USEFUL FOR OR RELEVANT TO PROCEEDINGS UNDER THE ACT WILL NOT BY I TSELF VITIATE SEARCH, NOR WILL IT ENTITLE AGGRIEVED PERSON TO AN OMNIBUS ORDER REL EASING ALL DOCUMENTS SEIZED. SUCH ISSUE WAS ALSO DECIDED IN FAVOUR OF T HE REVENUE BY THE APEX COURT IN THE CASE OF ITO VS. SETH BROTHERS REPORTED IN 74 ITR 836. HE SUBMITTED THAT IN VIEW OF THESE FACTUAL MATRIX AND LEGAL POSITION, CROSS OBJECTIONS FILED BY THE ASSESSEE DESERVE TO BE DISM ISSED. 6. WHILE PLEADING ON THE REVENUES APPEALS, LD. DR RELIED ON THE ORDERS OF THE ASSESSING OFFICER AND SUBMITTED THAT ASSESSEE C OMPANY HAS SHOWN SHARE CAPITAL FROM VARIOUS COMPANIES. ALL THESE COMPANIE S WERE SHOWING NOMINAL INCOME TO THE INCOME-TAX DEPARTMENT WHICH IS EVIDEN T FROM THEIR RETURN OF INCOME FILED WITH THE INCOME TAX DEPARTMENT. THE S AME HAS BEEN MENTIONED ITA NOS.3359, 3360 & 3361/DEL./2013 CO NOS.236, 237 & 238/DEL/2013 10 AT THE ASSESSING OFFICERS ORDER AT PAGE 3. HE SUBM ITTED THAT ALL THESE COMPANIES SHOWING THE RETURN OF INCOME BELOW RS.10, 000/- BUT HAVE SHOWN SUBSTANTIAL AMOUNT OF INVESTMENT IN THE ASSESSEES COMPANY. HE SUBMITTED THAT NO HUMAN BEING SHALL INVEST SO MUCH AMOUNT IN A PRIVATE LIMITED COMPANY IN A SHORT SPAN OF TIME WHEN THERE IS NO CH ANGE IN THE OVERALL BUSINESS ACTIVITIES OF THE ASSESSEE COMPANY AND INC OME OF THE ASSESSEE COMPANY, THEREFORE, THE CREDITWORTHINESS AND GENUIN ENESS OF THE TRANSACTIONS WERE NOT PROVED. THEREFORE, THE ADDITIONS MADE BY THE AO DESERVE TO BE SUSTAINED AND THE ORDERS OF THE CIT (A) MAY BE SET ASIDE ON THE ISSUE. 7. ON THE OTHER HAND, THE LD. AR SUBMITTED THAT THE AO HAS MADE THE ADDITION U/S 68 OF THE INCOME-TAX ACT, 1961 WITH RE GARD TO THE SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE IN THE A SSESSMENT FRAMED U/S 153A OF THE INCOME-TAX ACT, 1961. THERE WAS NO ALL EGATION AGAINST THE ASSESSEE. THERE WAS NO STATEMENT OR ADVERSE MATERI AL FOUND AND SEIZED DURING THE SEARCH OPERATION. THERE IS NO ADVERSE MATERIAL ON RECORD AGAINST THE SHAREHOLDERS THAT THESE WERE ENGAGED IN ANY ACCOMMO DATION ENTRY OPERATION. ALL THE EVIDENCES AND DETAILS WERE SUBMITTED BEFORE THE AO WHICH INCLUDED SHARE APPLICATION MONEY, CONFIRMATION, IDENTITY PRO OF, BANK STATEMENT, PAN, ITR, ETC. THE ASSESSING OFFICER HAS NOT COMMENTED U PON OR GIVEN ANY ADVERSE FINDING ON ANY OF THE DOCUMENTS SUBMITTED B Y THE ASSESSEE. THE ASSESSING OFFICER HAS ALSO NOT FOUND ANY ERROR IN T HE DOCUMENTARY EVIDENCES ITA NOS.3359, 3360 & 3361/DEL./2013 CO NOS.236, 237 & 238/DEL/2013 11 SUBMITTED BEFORE HIM. IN SUCH A SITUATION, THE ADD ITION MADE WAS COMPLETELY ARBITRARY AND SUCH POSITION HAS BEEN ACCEPTED BY VA RIOUS COURTS AND HE RELIED ON THE DECISION OF ITAT, DELHI IN THE CASE OF ITO, NEW DELHI VS. M/S. EMPIRE BUILDTECH PVT. LTD. IN ITA NO.4656/DEL/2009 DATED 3 0.04.2013 WHEREIN THE ITAT HAS HELD THAT WHEN ASSESSEE HAS SHARE APPLICAT ION AND FURNISHED FULL PARTICULARS OF THE SAME BEFORE THE ASSESSING OFFICE R, THE IDENTITY OF SUBSCRIBER IS PROVED BEYOND ANY DOUBT, CONFIRMATIONS WERE FILE D BEFORE ASSESSING OFFICER EITHER DIRECTLY BY THE INVESTOR OR BY ASSES SEE AND THE SHARE APPLICATIONS WERE ALSO SUBMITTED, THE PAYMENTS WERE MADE THROUGH BANKING CHANNEL, IN SUCH A SITUATION, WHEN ASSESSEE HAS FUR NISHED EVEN INCOME-TAX PARTICULARS OF THE SHARE SUBSCRIBERS THEN THE ASSES SING OFFICER WAS DUTY BOUND TO INVESTIGATE THE CREDITWORTHINESS OF THE SUBSCRIB ERS AND IN ABSENCE OF THE SAME, THE DELETION OF THE ADDITION BY THE CIT (A) W AS HELD JUSTIFIED . HE ALSO RELIED ON THE DECISION OF RPS INFRASTRUCTURE LTD. I N ITA NO.3200 TO 3202/DEL/2010 DATED 01.09.2013. HE ALSO SUBMITTED THAT THIS ISSUE IS SQUARELY COVERED BY THE FOLLOWING JUDGMENTS :- (I) CIT VS SOPHIA FINANCE LTD 205 ITR 98(DEL) (II) CIT VS ACHAL INVESTMENT LTD 268 ITR 211 (DEL) (III) CIT VS STELLAR INVESTMENTS LTD 192 ITR 298(DEL) (IV) CIT VS STELLAR INVESTMENTS LTD 251 ITR 263 (SC) (V) CIT VS DIVINE LEASING & FINANCE LTD 299 ITR 268(DEL ) (VI) CIT VS VALUE CAPITAL SERVICES P LTD 307 ITR 334 (DE L) (VII) CIT VS LOVELY EXPORTS P LTD 319 ITR 5 (SC) (VIII) CIT VS OASIS HOSPITALITIES P LTD 333 ITR 119 (DEL) ITA NOS.3359, 3360 & 3361/DEL./2013 CO NOS.236, 237 & 238/DEL/2013 12 (IX) CIT VS KAMDHENU STEELS AND ALLOY LTD 248 CTR 33 (DE L) (X) CIT VS K C FIBRES LTD 332 ITR 481 (DEL) (XI) CIT VS WINSTRAL PETROCHEMICALS LTD 330 ITR 603 (DEL ) (XII) CIT VS DWARKADHISH INVESTMENT P LTD 330 ITR 298 (DE L) (XIII) CIT VS ANTARTICA INVESTMENTS P LTD 262 ITR 493 (DEL ) (XIV) CIT VS MAKHANI& TYAGI P LTD 267 ITR 433 (DEL) (XV) CIT VS DOLPHIN CANPACK LTD 283 ITR 190 (DEL) FINALLY, HE SUBMITTED THAT THE REVENUES RELIANCE O N THE ORDER OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. NOVA PROMOTERS AN D FINLEASE P. LTD. REPORTED IN 342 ITR 169 (DEL.) IS MISPLACED. RATHE R THIS CASE FAVOURS ASSESSEES CASE AS ASSESSEES CASE IS COVERED BY PA RA 39 OF THE JUDGMENT, AS THE EVIDENCES OR MATERIAL ADDUCED BY THE ASSESSEE T O THE ASSESSING OFFICER, HAVE BEEN THROWN OUT WITHOUT AN ENQUIRY BY THE ASSE SSING OFFICER. THERE IS ABSOLUTELY NO MATERIAL, IN FACT, NO ALLEGATION TO I MPLICATE THE ASSESSEE IN ANY COLLUSIVE ACTIVITY. 8. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE OF CON DUCTION OF THE SEARCH ON THE ASSESSEE. THE ASSESSEE STATES THAT NO SEAR CH WAS EXECUTED ON IT. WE HAVE GONE THROUGH THE WARRANT OF AUTHORIZATION ISSU ED BY DIRECTOR OF INCOME- TAX (INV.) SHRI SHAILENDRA HANDA WHICH IS PLACED AT PAGE 24 25 OF THE PAPER BOOK. FROM THIS WARRANT OF AUTHORIZATION, WE FIND THAT IT HAS BEEN ISSUED TO M/S. NORTHERN STRIPS LIMITED, M/S. PLASTI C COATS PVT. LTD. AND OTHERS AS PER ANNEXURE. THE ANNEXURE IS PLACED AT PAGE 26 OF THE PAPER BOOK WHICH CONTAINS SIX NAMES AS UNDER :- ITA NOS.3359, 3360 & 3361/DEL./2013 CO NOS.236, 237 & 238/DEL/2013 13 (I) AGGARWAL ASSIGNMENTS PRIVATE LIMITED (II) VRINDABAN FARMS PRIVATE LIMITED (III) K.G. FINVEST & TRADE LIMITED (IV) ALLIED POLES (INDIA) LIMITED (V) GDA FINVEST PRIVATE LIMITED (VI) BANSAL TUBE TRADING COMPANY THE ASSESSEES NAME FIGURES AT SL.NO.2. THIS ANNEX URE IS ALSO SIGNED BY THE DIRECTOR OF INCOME-TAX (INV.) SHRI SHAILENDRA HAN DA ON 27.08.2008. THUS, THE ASSESSEES CLAIM THAT ITS NAME WAS NOT IN THE W ARRANT OF AUTHORIZATION IS FACTUALLY INCORRECT. NOW, THE SECOND CLAIM OF THE ASSESSEE THAT ITS NAME WAS NOT MENTIONED IN THE PANCHNAMA DRAWN. WE HAVE ALSO GONE THROUGH THE PANCHNAMA DRAWN. IT HAS BEEN PREPARED IN THE NAME OF M/S. NORTHERN STRIPS LTD., M/S. PLASTIC COATS PVT. LTD. AND OTHERS AS AN NEXURE TO WARRANT. THUS, THE ASSESSEES CLAIM THAT NO PANCHNAMA IS DRAWN IN HIS NAME IS ALSO NOT CORRECT. THIS WARRANT WAS ISSUED FOR THE PREMISES 1 2, CENTRAL MARKET, WEST PUNJABI BAGH, NEW DELHI AND THE SAME HAS BEEN EXECU TED AT THESE PREMISES. THUS, THERE WAS A WARRANT OF AUTHORIZATION IN THE N AME OF THE ASSESSEE AND IT HAS BEEN DULY EXECUTED. THE ASSESSEES CLAIM THAT WARRANT OF AUTHORIZATION HAS NOT BEEN EXECUTED AT THE ASSESSEES PREMISES A2/96, ASHIRWAD APARTMENTS, PASHCHIM VIHAR, NEW DELHI IS ALSO NOT H AVING ANY MERITS. THE ASSESSEE IS A GROUP COMPANY OF SWASTIK PIPES GROUP. WHILE CONDUCTING A SEARCH ON A GROUP, THE WARRANTS ARE ISSUED TO THE P REMISES WHICH ARE MAINLY ITA NOS.3359, 3360 & 3361/DEL./2013 CO NOS.236, 237 & 238/DEL/2013 14 USED BY THE GROUP FOR CONDUCTING BUSINESS OF THE CO MPANY AND WARRANTS ARE ISSUED IN RESPECT OF SUCH PREMISES. THERE ARE POSS IBILITIES THAT DOCUMENTS AND OTHER UNACCOUNTED WEALTH COULD HAVE BEEN FOUND AT A NY OF SUCH PREMISES OCCUPIED BY THE VARIOUS GROUP COMPANIES. IN VIEW O F THESE FACTS, WE FIND NO MERITS IN ASSESSEES PLEADINGS AND THE CASE LAWS RE LIED UPON ARE HAVING DIFFERENT FACTS. IN THE CASE OF J.M. TRADING CORPO RATION, THE PREMISES WERE OCCUPIED BY TENANTS. IN OTHER CASE, THE WARRANT WA S NOT EXECUTED. IN ASSESSEES CASE, WARRANT WAS ISSUED AND EXECUTED. IF THE ASSESSEES CONTENTION IS ACCEPTED WITH REGARD TO PREMISES AS MENTIONED BY ASSESSEE FOR CORRESPONDENCE OR REGISTERED OFFICE THEN VALID SEAR CH CAN BE CONDUCTED ONLY AT THE ASSESSEES PREMISES AND THEN IT WILL AMOUNT NOT TO CONDUCT THE SEARCH AT THE PREMISES WHERE VARIOUS INCRIMINATING DOCUMENTS OR WEALTH HAVE BEEN HIDDEN BUT IT DOES NOT BELONG TO THE ASSESSEE. THE REFORE, THIS ARGUMENT OF THE ASSESSEE HAS NO MERITS AND DESERVES TO BE REJECTED. CONSIDERING THE FACTUAL AND LEGAL POSITION, THE CROSS OBJECTIONS FILED HAVE NO MERITS. ONCE A VALID SEARCH IS CONDUCTED U/S 132 AGAINST THE ASSESSEE TH EN THE ASSESSING OFFICER HAS JURISDICTION TO ISSUE NOTICES U/S 153A AND TO C OMPLETE THE ASSESSMENT. THE CROSS OBJECTIONS FILED BY THE ASSESSEE STAND DI SMISSED. 9. THE OTHER ASPECT OF PLEADING IS WITH REGARD TO C OMPLETION OF ASSESSMENT WHERE NO INCRIMINATING DOCUMENTS WERE FOUND AND SEI ZED DURING THE SEARCH OPERATION AGAINST THE ASSESSEE. THE REVENUE HAS AL SO NOT RECORDED ANY ITA NOS.3359, 3360 & 3361/DEL./2013 CO NOS.236, 237 & 238/DEL/2013 15 STATEMENT WHICH SUGGESTS THAT SHARE CAPITAL OR SHAR E APPLICATION MONEY RECEIVED IS FROM ACCOMMODATION ENTRIES. ON THIS ISS UE, WE FIND THAT THERE ARE VARIOUS DECISIONS OF ITAT WHEREIN IT HAS BEEN CONSI STENTLY HELD THAT WHEN THERE IS NO ABATEMENT OF ASSESSMENT PROCEEDINGS THE N IN ABSENCE OF ANY INCRIMINATING DOCUMENTS OR UNACCOUNTED WEALTH OR ST ATEMENT AGAINST THE ASSESSEE THEN NO ADDITION CAN BE MADE IN THE ASSESS MENT FRAMED U/S 153A OF THE ACT. IN THE CASE OF KUSUM GUPTA VS. DCIT, CITE D SUPRA, THE ITAT HAS HELD AS UNDER :- ON PERUSAL OF THE ASSESSMENT ORDER FOR THE YEAR UN DER CONSIDERATION AND OTHERS IN QUESTION IN THE APPEALS BEFORE US, WE FIN D SUBSTANCE IN THE CONTENTION OF LD. AR THAT NO INCRIMINATING MATERIAL FOUND OR STATEMENT RECORDED DURING THE COURSE OF SEARCH WAS THERE TO S UGGEST EVEN PRIMA FACIE THAT SOME UNDISCLOSED INCOME WAS THERE TO ATTRACT T HE INVOCATION OF THE PROVISIONS LAID DOWN U/S 153A OF THE ACT FOR THE AD DITION AS PER THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL ON THE IS SUE IN THE CASE OF ALCARGO GLOBAL LOGISTICS LTD VS DCIT (SUPRA). AS DI SCUSSED ABOVE THE RATIO LAID DOWN IS THAT WHEN NO ASSESSMENT HAS BEEN ABATED, ADDITION THE ASSESSMENT U/S 153A CAN BE MADE ONLY ON THE BASIS O F INCRIMINATING MATERIAL RECOVERED DURING SEARCH. RESPECTFULLY FOLL OWING THIS DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL WE HOLD THAT IN T HE A.Y. INVOLVED IN THE APPEAL SINCE NO ASSESSMENT HAS BEEN ABATED, ADDITIO N MADE IN THE ASSESSMENT U/S 153A, IN ABSENCE OF INCRIMINATING MA TERIAL RECOVERED OR STATEMENT RECORDED DURING THE SEARCH, SHOWING NON-G ENUINENESS OF GIFTS WAS BEYOND JURISDICTION, HENCE ADDITION SO MADE AT RS.20,00,000/- ON ACCOUNT OF NON-GENUINENESS OF THE GIFT WHICH WAS NO T MADE IN THE ORIGINAL ASSESSMENT U/S 143(3) OF THE ACT, WAS RIGHTLY DELET ED BY THE LD. CIT(A) WITHOUT COMMENTING ON MERITS OF IT. THE SAME IS UPH ELD. THE ROUND IS ACCORDINGLY REJECTED.' IN THE CASE OF ACIT VS. ASHA KATARIA, CITED SUPRA, THE ITAT HELD AS UNDER :- '11. WE FURTHER NOTE THAT THIS IS A CASE OF SEARCH AND ASSESSMENT ORDER WAS PASSED U/S. 153A OF THE I. T. ACT. IT IS NOTED THAT NO INCRIMINATING MATERIAL OR EVIDENCE WAS FOUND OR SEIZED AT THE TIME OF SEAR CH AND THERE IS NO REFERENCE TO THE SAME IN THE ASSESSING OFFICER'S OR DER. IN THIS REGARD, WE FURTHER PLACED RELIANCE THE ORDER OF THE SPECIAL BE NCH OF THE ITA T IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT 13 7 ITD 287. IN THIS CASE ITA NOS.3359, 3360 & 3361/DEL./2013 CO NOS.236, 237 & 238/DEL/2013 16 WITH REFERENCE TO THE ASSESSMENT U/S. 153A OF THE I . T. ACT, IT WAS HELD THAT ANY ASSESSMENT THAT ARE ABATED, THE ASSESSING OFFIC ER RETAINS THE ORIGINAL JURISDICTION AS WELL AS JURISDICTION CONFERRED ON H IM U/S. 153A FOR WHICH ASSESSMENT SHALL BE MADE FOR EACH ASSESSMENT YEAR S EPARATELY. IN OTHER CASES IN ADDITION TO THE INCOME THAT HAVE ALREADY B EEN ASSESSED, THE ASSESSMENT U/S. 153A WILL BE MADE ON THE BASIS OF I NCRIMINATING MATERIAL WHICH IN THE CONTEXT OF RELEVANT PROVISIONS MEANS ( I) BOOKS OF ACCOUNTS, OTHER DOCUMENTS FOUND IN THE COURSE OF SEARCH, BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT AND (II) UNDISCLOSED INCOME OR PROPERTY DISCOVERED DURING THE COURSE OF SEARCH. 12. IN THE BACKGROUND OF THE AFORESAID DISCUSSIONS AND PRECEDENTS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. C OMMISSIONER OF INCOME TAX (A). ACCORDINGLY, WE AFFIRM THE SAME ON THE ISS UE. IN THE CASE OF CIT VS. LACHMAN DASS BHATIA 77 DTR 17 (DEL.) DATED 07.05.2012, THE HON'BLE DELHI HIGH COURT HAS HELD A S UNDER :- 7. IT WILL BE SEEN FROM THE ABOVE THAT BOTH THE CI T (APPEALS) AND THE TRIBUNAL HAVE RECORDED A CONCURRENT FINDING THAT TH ERE WAS NO BASIS FOR MAKING ANY ADDITION TOWARDS LOW GROSS PROFIT. THEY HAVE FOUND THAT THE SEARCH ON THE ASSESSEE DID NOT YIELD ANY INCRIMINAT ING MATERIAL ON THE BASIS OF WHICH IT CAN BE SAID THAT THE ASSESSEE WAS INDUL GING IN UNDER-INVOICING OR SUPPRESSION OF SALES. THEY ALSO FOUND THAT THE D OCUMENTS ON WHICH THE ASSESSING OFFICER HAS PLACED RELIANCE, WERE SEIZED FROM A DIFFERENT PERSON AND NOT FROM THE ASSESSEE AND THAT NO NEXUS BETWEEN THAT PERSON AND THE ASSESSEE HAS BEEN ESTABLISHED BEYOND DOUBT. IN SUCH CIRCUMSTANCES, IT HAS BEEN HELD THAT THE SEIZED MATERIAL CANNOT BE USED A GAINST THE ASSESSEE. IT HAS ALSO BEEN RECORDED BY THE CIT(APPEALS), WHOSE DECIS ION HAS BEEN CONFIRMED BY THE TRIBUNAL, THAT THE DOCUMENTS UPON WHICH THE ASSESSING OFFICER PLACED RELIANCE RELATE TO A SUBSEQUENT PERI OD AND NOT TO THE YEARS UNDER CONSIDERATION. THEY RELATE TO THE PERIOD FROM 1.11.2005 TO 18.11.2005. IT HAS THUS BEEN CONCURRENTLY FOUND BY THE CIT(APPEALS) AND THE TRIBUNAL THAT EVEN IF AN ESTIMATE OF THE GROSS PROFITS HAS TO BE MADE, IT HAS TO BE BASED ON VALID MATERIAL WHICH WAS ABSENT IN THE PRESENT CASE AND THAT THERE WAS NO JUSTIFICATION FOR MAKING AN ADDIT ION FOR LOW GROSS PROFITS ON PURE GUESS WORK. THESE ACTUAL FINDINGS HAVE NOT BEEN SOUGHT TO BE DISTURBED OR IMPEACHED BY REFERENCE TO ANY MATERIAL OR EVIDENCE TO THE CONTRARY. THE ASSESSING OFFICER HAS NOT REFERRED TO ANY MATERIAL TO SHOW THAT THE QUALITY OF THE THING SOLD BY THE ASSESSEE WAS THE SAME AS THAT SOLD BY THE MEMBERS OF THE GROUP FROM WHOM THE SALE BILL S WERE SEIZED DURING THE SEARCH CARRIED OUT SIMULTANEOUSLY. THEREFORE TH E CIT (APPEALS) AND THE TRIBUNAL HAVE RIGHTLY HELD THAT THERE WAS NOTHING T O CONNECT THE ASSESSEE WITH THOSE SALE BILLS. IN THE LIGHT OF THIS POSITIO N, THEIR FINDING THAT NO ADDITION CAN BE MADE TO THE GROSS PROFIT BY SUBSTIT UTING THE SALE PRICE MENTIONED IN THE SEIZED SALE BILLS CANNOT BE SAID T O BE VITIATED AS ITA NOS.3359, 3360 & 3361/DEL./2013 CO NOS.236, 237 & 238/DEL/2013 17 UNREASONABLE. IN SUCH CIRCUMSTANCES, WE ARE UNABLE TO HOLD THAT THE TRIBUNAL WAS NOT RIGHT IN DELETING THE ADDITIONS MA DE TO THE GROSS PROFIT DECLARED BY THE ASSESSEE. ACCORDINGLY, WE ANSWER TH E QUESTION NO.2 IN ITA NOS. 1731/10 & 1733/10 AND QUESTION NO.1 IN ITA NO. 1734/2010 IN THE AFFIRMATIVE, IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. IN THE CASE OF GURINDER SINGH BAWA VS. DCIT ITA N O.2075/MUM/2010 DATED 16.11.2012, THE ITAT, MUMBAI BENCH HELD AS UN DER :- 6.1 THE SPECIAL BENCH IN THE CASE OF ALCARGO GLOBA L LOGISTICS LTD. (SUPRA), HAS HELD THAT PROVISIONS OF SECTION 153A C OME 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 NOTI CE TO THE PERSON REQUIRING HIM TO FURNISH THE RETURN OF INCOME FOR SIX YEARS I MMEDIATELY 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 ABATE D THE AO CAN MAKE ADDITIONS IN THE ASSESSMENT, EVEN IF NO INCRIMINATI NG MATERIAL HAS BEEN FOUND. BUT IN OTHER CASES THE SPECIAL BENCH HELD TH AT THE ASSESSMENT UNDER SECTION 153A CAN BE MADE ON THE BASIS OF INCRIMINAT ING MATERIAL WHICH IN THE CONTEXT OF RELEVANT PROVISIONS MEANS BOOKS OF A CCOUNT AND OTHER DOCUMENTS FOUND IN THE COURSE OF SEARCH BUT NOT PRO DUCED IN THE COURSE OF ORIGINAL ASSESSMENT AND UNDISCLOSED INCOME OR PROPE RTY DISCLOSED DURING THE COURSE OF SEARCH. IN THE PRESENT CASE, THE ASSE SSMENT 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 PENDING IN THIS CASE AND IN SUCH A CASE THERE WAS NO QUESTION OF ABATEMENT. THEREFORE, ADDI TION COULD BE MADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL FOUND D URING SEARCH. IN THE CASE OF MGF AUTOMOBILES LTD. VS. ACIT ITA NO.4212/DEL/2011 DATED 28.06.2013, THE ITAT, DELHI HAS HELD AS UNDER :- 4.2 WHEN WE TREAT TO TRACE THE CORRECT AND LOGICAL ANSWERS TO THE ABOVE CIRCUMSTANCES, CIRCUMSTANCES (A) IS ANSWERED BY THE ACT ITSELF, THAT IS, SINCE THE PROCEEDINGS ARE STILL PENDING, ALL THOSE PENDIN G PROCEEDINGS ARE ABATED AND THE ASSESSING OFFICER GETS A FREE HAND TO MAKE THE ASSESSMENT. CIRCUMSTANCES (B) HAS BEEN ANSWERED BY THE COURTS, INTERPRETING 2ND PROVISO ALONG WITH CLAUSE (B) TO SECTION 153A, WHER EIN THE HON'BLE DELHI HIGH COURT OBSERVES AND HOLD, 'WHERE THE ASSESSMENT OR REASSESSMENT PROCEEDINGS HAVE ALREADY BEEN COMPLETED AND ASSESSM ENT ORDERS HA-. BEEN PASSED DETERMINING THE ASSESSEE'S TOTAL INCOME AND SUCH ORDERS ARE SUBSISTING AT THE TIME WHEN THE SEARCH OR THE REQUI SITION IS MADE, THERE IS NO ITA NOS.3359, 3360 & 3361/DEL./2013 CO NOS.236, 237 & 238/DEL/2013 18 QUESTION OF ANY ABATEMENT SINCE NO PROCEEDINGS ARE PENDING, IN THIS LATTER SITUATION, THE ASSESSING OFFICER WILL REOPEN THE AS SESSMENTS OR REASSESSMENTS ALREADY MADE (WITHOUT HAL.1NG THE NEE D TO FOLLOW THE STRICT PROL.1SIONS OR COMPLYING WITH THE STRICT CONDITIONS OF SECTION 147, 148 AND 151) AND DETERMINE THE TOTAL INCOME OF THE ASSESSEE . SUCH DETERMINATION IN THE ORDERS PASSED U/S 153A WOULD BE SIMILAR TO THE ORDERS PASSED IN ANY REASSESSMENT, WHERE THE TOTAL INCOME DETERMINED IN THE ORIGINAL ASSESSMENT ORDER AND THE INCOME THAT ESCAPED ASSESSMENT ARE CL UBBED TOGETHER AND ASSESSED AS THE TOTAL INCOME. BUT WHEN WE COME TO T HIRD CIRCUMSTANCE I.E. CIRCUMSTANCE (C), WE FIND THAT THIS HAS BEEN LEFT U NANSWERED. PARA 23 OF THE JUDGMENT, THE HON'BLE DELHI HIGH COURT MENTIONS THA T THE ISSUE IS LEFT OPEN. IN THE CASE OF ACIT VS. PRATIBHA INDUSTRIES LTD. 141 ITD 151 DT. 19.12.2012, THE ITAT, BENCH C, MUMBAI HAS HELD AS UNDER :- 41. ON GOING THROUGH THE PROVISIONS OF SECTION 153 A, CLAUSE (B) OF SECTION 153A, 2ND PROVISO AN THE VARIOUS DECISIONS CITED BEFORE US, THREE POSSIBLE CIRCUMSTANCES EMERGE ON THE DATE OF INITIA TION OF SEARCH UNDER SECTION 132(1) OF THE INCOME TAX ACT, (A) PROCEEDIN GS ARE PENDING; (B) PROCEEDINGS ARE NOT PENDING BUT SOME INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH, INDICATING SOME INCOME AND/OR ASS ETS NOT DISCLOSED IN THE RETURN AND (C) PROCEEDINGS ARE NOT PENDING AND NO I NCRIMINATING MATERIAL HAS BEEN FOUND. 42. WHEN WE TREAD TO TRACE THE CORRECT AND LOGICAL ANSWERS TO THE ABOVE CIRCUMSTANCES, CIRCUMSTANCE (A) IS ANSWERED BY THE ACT ITSELF, THAT IS, SINCE THE PROCEEDINGS ARE STILL PENDING, ALL THOSE PENDIN G PROCEEDINGS ARE ABATED AND THE AO GETS A FREE HAND TO MAKE THE ASSESSMENT. CIRCUMSTANCE (B) HAS BEEN ANSWERED BY THE COURTS, INTERPRETING 2ND PROVI SO ALONG WITH CLAUSE (B) TO SECTION 153A, WHEREIN THE HON'BLE DELHI COUR T OBSERVES AND HOLD, 'WHERE THE ASSESSMENT OR REASSESSMENT PROCEEDINGS H AVE ALREADY BEEN COMPLETED AND ASSESSMENT ORDERS HAVE BEEN PASSED DE TERMINING THE ASSESSEE'S TOTAL INCOME AND SUCH ORDERS ARE SUBSIST ING AT THE TIME WHEN THE SEARCH OR THE REQUISITION IS MADE, THERE IS NO QUES TION OF ANY ABATEMENT SINCE NO PROCEEDINGS ARE PENDING. IN THIS LATTER SI TUATION, THE ASSESSING OFFICER WILL REOPEN THE ASSESSMENTS OR REASSESSMENT S ALREADY MADE (WITHOUT HAVING THE NEED TO FOLLOW THE STRICT PROVI SIONS OR COMPLYING WITH THE STRICT CONDITIONS OF SECTIONS 147, 148 AND 151) AND DETERMINE THE TOTAL INCOME OF THE ASSESSEE. SUCH DETERMINATION IN THE O RDERS PASSED UNDER SECTION 153A WOULD BE SIMILAR TO THE ORDERS PASSED IN ANY REASSESSMENT, WHERE THE TOTAL INCOME DETERMINED IN THE ORIGINAL A SSESSMENT ORDER AND THE INCOME THAT ESCAPED ASSESSMENT ARE CLUBBED TOGETHER AND ASSESSED AS THE TOTAL INCOME'. BUT WHEN WE COME TO THIRD CIRCUMSTAN CE I.E. CIRCUMSTANCE (C), WE FIND THAT THIS HAS BEEN LEFT UNANSWERED. PA RA 23 OF THE JUDGMENT, THE HON'BLE DELHI HIGH COURT MENTIONS THAT THE ISSUE IS LEFT OPEN. ITA NOS.3359, 3360 & 3361/DEL./2013 CO NOS.236, 237 & 238/DEL/2013 19 43. THIS, HAS BEEN EXPLAINED IN THE GRAPHIC MADE BE LOW I;LI1D THE RELEVANT PORTION IS IN ITALICS THEREIN. THIS CAN BE EXPLAINED THROUGH THIS GRAPHIC: SEARCH 153A FOR SIX YEARS ASSESSMENT PENDING . ASSESSMENT NOT - (1) PENDING -(2) 153A READ WITH ]43 (3) TO BE FRAMED, AS PER THE PROVISIONS MATERIAL FOUND-(2A) MATERIAL NOT FOUND-( 2B) ASSESSMENT TO BE FRAMED: ASSESSMENT UNDER ASSESSING INCOME UNEARTHED SECTION 153A TO BE IN SEARCH + ORIGINALLY FRAMED ONLY AS PER ASSESSED INCOME. ORIGINAL ASST. ASSESSMENT : UNDER WHETHER UNDER SECTION 153A/143 (3) SECTION 143(1) OR 143(3) 44. TO ANSWER THE QUESTION, AS TO WHAT SHALL BE THE ASSESSMENT OF TOTAL INCOME, WHERE THERE IS/ARE NO PENDING PROCEEDINGS A ND NO INCRIMINATING MATERIAL, WE HAVE TO TRACE OUT THE LOGICAL CONCLUSI ON, BY HARMONISING THE LEGISLATIVE INTENDMENTS AND THE JUDICIAL DECISIONS, AS HELD BY THE HON'BLE SUPREME COURT OF INDIA IN THE CASE OF K P VARGHESE (SUPRA), WHEREIN IT WAS OBSERVED, SO AS TO ACHIEVE THE OBVIOUS INTENTION OF THE LEGISLATURE AND PRODUCE A RATIONAL CONSTRUCTION. WHEN WE LOOK INTO THE DECISION OF THE HON'BLE DELHI HIGH COURT IN ANIL KUMAR BHATIA (SUPR A), WE FIND THAT THE HON'BLE COURT HAS POINTED OUT THAT IN CASE WHERE TH ERE IS NO ABATEMENT, TOTAL INCOME HAS TO BE DETERMINED BY DUBBING TOGETH ER THE INCOME ALREADY DETERMINED IN THE ORIGINAL ASSESSMENT ORDER AND THE INCOME THAT ESCAPED ASSESSMENT (SITUATION 2A IN THE GRAPHIC). IN THE CI RCUMSTANCE, WHAT WE ARE DEALING IN INSTANTLY, THERE ARE FINALIZED ASSESSMEN T PROCEEDINGS AND NO INCRIMINATING MATERIAL INDICATING ANY ESCAPED INCOM E (SITUATION 2B IN THE GRAPHIC). TAKING A CUE FROM THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF ANIL KUMAR BHATIA (SUPRA) WE CAN TREAD ON THE SAME PREMISE AND HOLD THAT ON CLUBBING, WHAT REMAINS IS THE INCO ME ORIGINALLY DETERMINED OR ASSESSED (I.E. INCOME ORIGINALLY DETE RMINED + ZERO = INCOME ORIGINALLY DETERMINED -AS THERE WAS NO INCRIMINATIN G MATERIAL). IN THE CASE OF ACIT VS. PACL INDIA LTD. ITA NO.26 37/DEL/2010 DATED 20.06.2013, THE ITAT, NEW DELHI HAS HELD AS UNDER : - ITA NOS.3359, 3360 & 3361/DEL./2013 CO NOS.236, 237 & 238/DEL/2013 20 THE ISSUES ARISES FROM THOSE PROCESSED RETURN CAN BE RAISED ONLY WHEN SOME MATERIALS FOUND AGAINST THE ASSESSEE. THE HON' BLE DELHI HIGH COURT IN THE CASE OF ANIL KR. BHATIA SITED IT SUPRA HELD THAT ASSESSMENT U/S 153(A) WOULD BE SIMILAR TO THE ORDERS PASSED IN ANY REASSE SSMENT, WHERE THE TOTAL INCOME DETERMINED IN THE ORIGINAL ASSESSMENT ORDER AND THE INCOME THAT HAS ESCAPED ASSESSMENT ARE CLUBBED TOGETHER AND ASSESSE D AS THE TOTAL INCOME. THE EXPIRY OF TIME FOR ISSUING NOTICE U/S 143(2) OF THE ACT TAKES AWAY THE JURISDICTION OF THE AO FOR ISSUING NOTICE U/S 143(2 ). IT IS JURISDICTIONAL POWER AVAILABLE WITH THE AO TO BE EXERCISED IN A GI VEN PERIOD. ONCE, IT IS EXERCISED THEN IT CAN BE COMPLETED ONLY BY MAKING O RDER U/S 143(3) OF THE ACT WITHIN THE TIME AVAILABLE U/S 153(1) OF THE ACT . ONCE SEARCH TAKES PLACE U/S 132(1) OF THE ACT AND COMPLETION OF PROCEEDING IS PENDING ON THAT DATE THEN SUCH PROCEEDINGS ABATE. THUS, THE SCOPE OF ASS ESSMENT U/S 153A DEPENDS UPON WHETHER ANY ASSESSMENT OR REASSESSMENT PROCEEDINGS WERE PENDING OR COMPLETED ON THE DATE OF THE SEARCH. WHE NEVER THE ABATED PROCEEDINGS ARE MERGED WITH THE PROCEEDINGS U/S 153 A THEN SCOPE OF ASSESSMENT IS VIDE AND IT WILL COVER ALL ISSUES ARI SING FROM THE ORIGINAL RETURN AND ISSUE ARISING ON THE BASIS OF INCRIMINAT ING DOCUMENTS, AND ASSETS FOUND AND SEIZED DURING THE SEARCH. WHEREVER THE P ROCEEDINGS ARE COMPLETED PRIOR TO THE SEARCH THEN NOTHING MERGES W ITH THE PROCEEDING U/S 153A OF THE ACT AND NOTHING ABATES. IN SUCH A SITU ATION, THE AO HAS TO RESPECT THE COMPLETENESS OF THE PROCEEDINGS. ADMIT TEDLY, IN THE CASE OF ASSESSEE, NO INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED. THE PROVISIONS OF SECTION 153A GIVE POWER TO ASSESSING OFFICER TO ASSESSEE AND REASSESS THE INCOME. THE ASSESSING OFFICER IS EMPO WERED TO MAKE ADDITION ON ACCOUNT OF UNDISCLOSED INCOME OR INCOME ESCAPED ASSESSMENT. IN THE CASE UNDER CONSIDERATION, THERE IS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH RELATING TO THE ASSESSMENT YEA R UNDER CONSIDERATION. THE TIME PERIOD FOR ISSUING NOTICE U/S 143 (2) WAS ALREADY EXPIRED PRIOR TO THE DATE OF SEARCH. THEREFORE, THE PROCEEDINGS DO N OT GET ABATED BY VIRTUE OF PROVISO TO SECTION 10. THEREFORE, THE QUESTION ARI SES WHETHER AO CAN MAKE ANY ADDITION IN THE REASSESSMENT PROCEEDINGS U/S 15 3A AFTER MAKING INQUIRIES WHICH ARE NOT SUGGESTED BY ANY DOCUMENT O R ASSET SEIZED DURING THE SEARCH. IT DEPENDS ON THE NATURE OF ADDITION. THE FACTS AND CIRCUMSTANCES OF THE ASSESSEE CLEARLY SHOW THAT NO INCRIMINATING DOCUMENT FOUND RELATING TO THE LAND DEVELOPMENT EXPENSES DEB ITED IN THE BOOKS OF ACCOUNTS. NO MATERIAL WAS ON THE RECORD ON THAT BA SIS WHICH INCOME OF ASSESSEE COULD BE FURTHER ASSESSED BY ASSESSING OFF ICER. THEREFORE, THE ASSESSING OFFICER HAS NO JURISDICTION TO MAKE OR TO ROVING OR FISHING INQUIRIES TO FIND OUT WHETHER ANY INCOME HAS ESCAPE D ASSESSMENT DURING THESE REASSESSMENT PROCEEDINGS. PARTICULARLY, WHEN THERE IS NO INCRIMINATING MATERIAL FOUND AND SEIZED DURING THE COURSE OF SEARCH U/S 132(1) OF THE ACT AND NOTHING IS AVAILABLE IN RECOR D TO REASSESS THE INCOME OF ASSESSEE. IN VIEW OF THE ABOVE, THIS IS NOT A F IT CASE FOR MAKING THE ADDITION IN THE YEAR UNDER CONSIDERATION, THE SAME ARE DELETED. ITA NOS.3359, 3360 & 3361/DEL./2013 CO NOS.236, 237 & 238/DEL/2013 21 IN THE CASE OF SSP AVIATION LTD. VS. DCIT 346 ITR 177 (DEL.) DT. 29.03.2012, HON'BLE DELHI HIGH COURT HAS HELD AS UN DER :- 17. THE JUDGMENT OF THIS COURT IN SARAYA INDUSTRIE S LTD. (SUPRA) WAS RELIED UPON BY MR. BAJPAI, IN SUPPORT OF HIS CONTEN TION THAT THE SEIZURE OF THE DOCUMENT MUST BE OF SUCH NATURE THAT EVEN CLOSE D ASSESSMENTS FOR SIX YEARS COULD BE REOPENED AND THIS REQUIREMENT POSTUL ATES THAT THE PROVISIONS OF SECTION 153C CAN BE SET IN MOTION ONLY IF THERE IS A FINDING THAT THE SEIZED DOCUMENT OR BOOKS OF ACCOUNT OR VALUABLE ART ICLE REPRESENTS THE UNDISCLOSED INCOME OF THE OTHER PERSON. THE SAID DE CISION DOES NOT ASSIST THE PETITIONER. THE SECTION MERELY ENABLES THE REVE NUE AUTHORITIES TO INVESTIGATE INTO THE CONTENTS OF THE DOCUMENT SEIZE D, WHICH BELONGS TO A PERSON OTHER THAN THE PERSON SEARCHED SO THAT IT CA N BE ASCERTAINED WHETHER THE TRANSACTION OR THE INCOME EMBEDDED IN THE DOCUM ENT HAS BEEN ACCOUNTED FOR IN THE CASE OF THE APPROPRIATE PERSON . IT IS AIMED AT ENSURING THAT INCOME DOES NOT ESCAPE ASSESSMENT IN THE HANDS OF ANY OTHER PERSON MERELY BECAUSE HE HAS NOT BEEN SEARCHED UNDER SECTI ON 132 OF THE ACT. IT IS ONLY A FIRST STEP TO THE ENQUIRY, WHICH IS TO FOLLO W. THE ASSESSING OFFICER WHO HAS REACHED THE SATISFACTION THAT THE DOCUMENT RELATES TO A PERSON OTHER THAN THE SEARCHED PERSON CAN DO NOTHING EXCEPT TO F ORWARD THE DOCUMENT TO THE ASSESSING OFFICER HAVING JURISDICTION OVER THE OTHER PERSON AND THEREAFTER IT IS FOR THE ASSESSING OFFICER HAVING J URISDICTION OVER THE OTHER PERSON TO FOLLOW THE PROCEDURE PRESCRIBED BY SECTIO N 153A IN AN ATTEMPT TO ENSURE THAT THE INCOME REFLECTED BY THE DOCUMENT HA S BEEN ACCOUNTED FOR BY SUCH OTHER PERSON. IF HE IS SO SATISFIED AFTER OBTA INING THE RETURNS FROM SUCH OTHER PERSON FOR THE SIX ASSESSMENT YEARS, THE PROC EEDINGS WILL HAVE TO BE CLOSED. IF THE RETURNS FILED BY THE OTHER PERSON FO R THE PERIOD OF SIX YEARS DOES NOT SHOW THAT THE INCOME REFLECTED IN THE DOCU MENT HAS BEEN ACCOUNTED FOR, ADDITIONS WILL BE ACCORDINGLY MADE A FTER FOLLOWING THE PROCEDURE PRESCRIBED BY LAW AND AFTER GIVING ADEQUA TE OPPORTUNITY OF BEING HEARD TO SUCH OTHER PERSON. THAT, IN SUM AND SUBSTA NCE, IS THE POSITION. IN THE CASE OF M/S. MARIGOLD MERCHANDISE (P) LTD. V S. DCIT, CEN. CIRCLE, FARIDABAD IN ITA NO.2666 & 2667/DEL/2013 DATED 27.1 2.2013, THE ITAT, DELHI HELD AS UNDER :- 5. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUG H THE RELEVANT MATERIAL PLACED ON RECORD. COMING TO T FIRST ISSUE, THE LEGALITY OF ADDITION, IT IS SETTLED LAW THAT IN BLOCK ASSESSMENT CONSEQUENT TO SEARCH U/S 153A READ WITH SEC. 143(3) NO ADDITION CAN BE MADE UNLESS SOM E INCRIMINATING MATERIAL IN THIS BEHALF IS FOUND AS A RESULT OF SEA RCH. IT EMERGES FROM RECORD THAT NO INCRIMINATING MATERIAL IN BEHALF OF THE PUR CHASE OF THESE LANDS AND SALE OF THESE LANDS HAVE BEEN FOUND AS A RESULT OF SEARCH. IN ANY CASE THE ITA NOS.3359, 3360 & 3361/DEL./2013 CO NOS.236, 237 & 238/DEL/2013 22 WHOLE ISSUE REVOLVES AROUND THE CHANGE OF NATURE OF INCOME I.E. FROM EXEMPT TO TAXABLE AS BUSINESS INCOME. THE PURCHASES OF AGRICULTURAL LAND HAS BEEN ACCEPTED BY DEPARTMENT AS PART OF FIXED AS SET/ INVESTMENT OF THE ASSESSEE BY ASSESSMENT U/S 143(3). BOTH THE LOWER A UTHORITIES HAVE RATHER RELIED ONLY ON THE ORIGINAL RETURN OF INCOME, RETUR NS ON RECORD AND EXPLANATIONS FILED BY THE ASSESSEE AND NOT ON ANY I NCRIMINATING MATERIAL FOUND AS A RESULT OF SEARCH. BESIDES, ID. DR HAS NO T BEEN ABLE TO POINT OUT ANY INCRIMINATING MATERIAL FOUND AS A RESULT OF SEA RCH OR THE RELIANCE OF THE LOWER AUTHORITIES THEREON. LD. DR HAS ENDEAVORED TO DISTINGUISH THE HON'BLE RAJASTHAN HIGH COURT JUDGMENT IN THE CASE O F JAI STEEL INDIA (SUPRA) FROM ASSESSEE'S CASE WHICH THE ID. COUNSEL FOR THE ASSESSEE HAS EFFECTIVELY COUNTERED BY CITING PARAS 25-26 OF THIS JUDGMENT, AS UNDER: '25. THE ARGUMENT OF THE LEARNED COUNSEL THAT THE A O IS ALSO FREE TO DISTURB INCOME, EXPENDITURE OR DEDUCTION DE HORS TH E INCRIMINATING MATERIAL, WHILE MAKING ASSESSMENT UNDER SECTION 153 A OF THE ACT IS ALSO NOT BORNE OUT FROM THE SCHEME OF THE SAID PROVISION WHI CH AS NOTICED ABOVE IS ESSENTIALLY IN CONTEXT OF SEARCH AND/OR REQUISITION . THE PROVISIONS OF SECTIONS 153A TO 153C CANNOT BE INTERPRETED TO BE A FURTHER INNINGS FOR THE AO AND/OR ASSESSEE BEYOND PROVISIONS OF SECTIONS 13 9(RETURN OF INCOME), 139(5) (REVISED RETURN OF INCOME), 147 (INCOME ESCA PING ASSESSMENT) AND 263 (REVISION OF ORDERS) OF THE ACT. 26. THE PLEA RAISED ON BEHALF OF THE ASSESSEE THAT AS THE FIRST PROVISION PROVIDES FOR ASSESSMENT OR REASSESSMENT OF THE TOTA L INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSESSM ENT YEARS, IS MERELY READING THE AID PROVISION IN ISOLATION AND NOT I TH E 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 W ORD 'ASSESS' HAS BEEN USED IN THE CONTEXT OF AN ABATED PROCEEDINGS AND REASSES S HAS BEEN USED FOR COMPLETED ASSESSMENT PROCEEDINGS, WHICH WOULD NOT A BATE AS THEY ARE NOT PENDING ON THE DATE OF INTIMATION OF THE SEARCH OR MAKING OF REQUISITION AND WHICH WOULD ALSO NECESSARILY SUPPORT THE INTERPRETA TION THAT FOR THE COMPLETED ASSESSMENTS, THE SAME CAN BE TINKERED ONL Y BASED ON THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH OR REQUISITION OF DOCUMENTS. ' 5.1. THE ISSUE IS NOT OF THE LEGAL CHALLENGE TO THE BLOCK ASSESSMENT ITSELF, THE ASSESSEE'S GROUNDS AND CONTENTIONS AGITATE ONE LEGAL ISSUE I.E. WHETHER IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH ADDITION CAN BE MADE BY ASSESSING OFFICER AS UNDISCLOSED INCOME U/S 153A. MORE SO WHEN ALL THESE TRANSACTIONS ARE DISCL OSED BY THE ASSESSEE IN THE ORIGINAL RETURNS OF INCOME AND ACCEPTED BY THE DEPARTMENT A SUCH. THUS MERELY BECAUSE A SEARCH IS CONDUCTED AND EVEN THOUG H NO INCRIMINATING MATERIAL IS FOUND AS A RESULT THEREOF THE ORIGINAL ASSESSMENT OF THE ASSESSEE CANNOT BE REVIEWED OR SUBSTITUTED BY A CHANGE OF OP INION ABOUT ANY CLAIM OF DEDUCTION, ALLOWANCE OR CLAIM OF EXEMPT INCOME. ITA NOS.3359, 3360 & 3361/DEL./2013 CO NOS.236, 237 & 238/DEL/2013 23 5.2. IN OUR CONSIDERED VIEW, HON'BLE DELHI HIGH COU RT IN THE CASE OF ANIL BHATIA (SUPRA) THOUGH HAS HE CONSEQUENT TO SEA RCH ASSESSING OFFICER HAS TO FRAME THE BLOCK ASSESSMENT FOR 6 YEARS. NEVE RTHELESS THE OTHER ISSUE WHICH HAS BEEN HELD IS TO THE EFFECT THAT ADDITION UNDER BLOCK ASSESSMENT CANNOT BE MADE U/S 153A AS UNDISCLOSED INCOME IF NO INCRIMINATING MATERIAL IS FOUND AS A RESULT OF SEARCH. THIS HAS B EEN FOLLOWED BY HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF JAI STEEL INDIA (SUPRA). BY NOW VARIOUS BENCHES OF THE ITA T INCLUDING DELHI HAVE UPHELD TH IS VIEW AND DELETED SUCH .ADDITIONS WHICH ARE NOT BASED ON INCRIMINATIN G MATERIAL FOUND AS A RESULT OF SEARCH WHICH ARE CITED BY THE ID. COUNSEL AND ARE MENTIONED ABOVE. IN VIEW THEREOF, ON THIS ISSUE WE HOLD THAT THE ASSESSING OFFICER COULD NOT HAVE MADE THESE ADDITIONS IN THE IMPUGNED ASSESSEE U/S 153A, THERE BEING NO INCRIMINATING MATERIAL INDICATING AN Y UNDISCLOSED INCOME FOUND AS A RESULT OF SEARCH. THIS GROUND OF THE ASS ESSEE IS ACCORDINGLY ALLOWED. IN THE CASE OF MR. VINAY CHHADWA VS. ACIT IN ITA NO .8578/MUM./2010 DATED 11.12.2013, THE ITAT, MUMBAI HAS HELD AS UNDE R :- 6. NOW COMING TO THE DECISIONS AS RELIED UPON BY T HE LEARNED DEPARTMENTAL REPRESENTATIVE. FROM THE ISSUES AND RA TIO DISCUSSED IN THESE JUDGMENTS, IT IS SEEN THAT THE HON'BLE DELHI HIGH C OURT HAS HELD THAT ONCE THERE IS A SEARCH, THE ASSESSING OFFICER IS REQUIRE D TO CALL UPON THE ASSESSEE TO FILE RETURN OF INCOME FOR EARLIER SIX YEARS, IN RESPONSE TO THE NOTICE UNDER SECTION 153A AND THE ASSESSMENT HAS TO BE COMPLETED FOR THESE SIX YEARS. IN THE PRESENT CASE, THE ISSUE IS ENTIRELY DIFFERENT A S THERE IS NO DISPUTE THAT NOTICE UNDER SECTION 153A CANNOT BE ISSUED OR NO AS SESSMENT CAN BE MADE. THE MAIN ISSUE INVOLVED IS, WHETHER THE ADDITION CA N DE MADE IN THE ORDER PASSED UNDER SECTION 153A ONCE THE SUBJECT MATTER O F ADDITION HAS ALREADY BEEN DISCUSSED AND INCOME HAS BEEN ASSESSED UNDER S ECTION 143 (3) THEN THE SAME CANNOT BE ROPED IN AGAIN UNDER SECTION 153 A, WITHOUT THERE BEING NAY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. THUS, THE GROUND RAISED BY THE ASSESSEE IS TREATED AS ALLOWED . IN VIEW OF THESE FACTS, WE HOLD THAT SUCH ADDITION CANNOT BE MADE U/S 153A AS THERE WAS NO MATERIAL WHICH COULD SHOW THAT SHARE A PPLICATION MONEY RECEIVED WAS NOT GENUINE OR IT HAS COME OUT OF THE COFFERS OF THE ASSESSEES UNACCOUNTED INCOME. 10. THE ISSUE RAISED IN THE REVENUES APPEALS IS WI TH REGARD TO THE CREDITWORTHINESS OF INVESTORS AND GENUINENESS OF TR ANSACTION. THE REVENUE ITA NOS.3359, 3360 & 3361/DEL./2013 CO NOS.236, 237 & 238/DEL/2013 24 HAS NOT DOUBTED THE IDENTITY OF THE SHARE APPLICANT . THE ONLY ISSUE RAISED IN REVENUES APPEALS IS WITH REGARD TO THE CREDITWORTH INESS OF THE INVESTORS AND GENUINENESS OF THE TRANSACTION. THE REVENUES SOLE RELIANCE FOR DOUBTING THE CREDITWORTHINESS OF SHARE APPLICANT IS BASED ON THE RETURN OF INCOME FILED BY THESE APPLICANTS. ALL THESE SHARE APPLICANTS WERE ON INCOME-TAX RECORD HAVING PAN. THE ITR DETAILS OF THE SAME WERE SUBMITTED BY THE ASSESSEE. VARIOUS DOCUMENTS RELATED TO THESE PERSONS WERE SUBMITTED, WHICH INCLUDE SHARE APPLICATION, BANK STATEMENT, BALANCE SHEET AND PROF IT & LOSS ACCOUNT OF THE SHAREHOLDERS, CONFIRMATIONS, PA, CERTIFICATE OF INC ORPORATION, ETC. THE ASSESSING OFFICER HAS NOT TAKEN ANY PAIN TO INVESTI GATE THE VERACITY OF THESE DOCUMENTS. WITHOUT DOUBTING ALL THESE DOCUMENTS, T HE ASSESSMENT HAS BEEN COMPLETED ON THE BASIS OF A PRESUMPTION THAT LOW RE TURN INCOME DECLARED BY THE SHARE APPLICANTS IS SUFFICIENT EVIDENCE TO DOUB T THE CREDITWORTHINESS OF THESE SHARE APPLICANTS. THE IDENTITY OF THESE SHAR E APPLICANTS WAS NOT IN DOUBT BY ASSESSING OFFICER WHICH HAS NOT BEEN EVEN DISPUT ED IN THE GROUNDS OF APPEAL TAKEN BY THE REVENUE, WE FIND THAT THE RATI O LAID DOWN BY HON'BLE SUPREME COURT IN THE CASE OF CIT VS LOVELY EXPORTS PVT. LTD., CITED SUPRA, IS APPLICABLE TO THE ASSESSEES CASE. THE DEPARTMENT IS FREE TO PROCEED TO REOPEN THE CASE OF SHAREHOLDERS IN ACCORDANCE WITH LAW. F URTHER, THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. GANGESHWARI METAL P LTD (2013) 214 TAXMAN 423 (DELHI) HAS HELD THAT THERE ARE TWO TYPE S OF CASES, ONE IN WHICH ITA NOS.3359, 3360 & 3361/DEL./2013 CO NOS.236, 237 & 238/DEL/2013 25 THE ASSESSING OFFICER CARRIES OUT THE EXERCISE WHIC H IS REQUIRED IN LAW AND THE OTHER IN WHICH THE ASSESSING OFFICER SITS BACK WITH FOLDED HANDS TILL THE ASSESSEE EXHAUSTS ALL THE EVIDENCE OR MATERIAL IN H IS POSSESSION AND THEN COMES FORWARD TO MERELY REJECT THE SAME ON THE PRES UMPTIONS. IN ASSESSEES CASE, THE ASSESSEE HAS SUBMITTED CERTAIN DOCUMENTS WHICH INCLUDE THE CONFIRMATION FROM THE SHAREHOLDERS AS WELL AS THEIR INCOME-TAX DETAILS AND COPY OF BANK ACCOUNTS. IN SUCH A CASE, THE ASSESSI NG OFFICER WOULD HAVE MADE FURTHER ENQUIRIES IF HE WAS IN DOUBT ABOUT THE GENUINENESS OF THE CONFIRMATION AND CREDITWORTHINESS OF THE SHAREHOLDE RS. BY NOT DOING SO, THERE WAS A COMPLETE LACK OF ENQUIRY ON THE PART OF THE A SSESSING OFFICER WHEN THE ASSESSEE HAS FURNISHED THE RELEVANT MATERIAL WITH R EGARD TO THE SHARE APPLICATION MONEY. THE ASSESSING OFFICER HAS NEITHE R ISSUED SUMMONS U/S 131 OF THE ACT NOR HAS HE RECEIVED BACK ANY UNSERVE D NOTICES FROM THE SHAREHOLDERS. IN THIS FACTUAL BACKGROUND, WE FIND THAT CIT (A) WAS JUSTIFIED IN DELETING THE ADDITION. THEREFORE, WE UPHOLD THE ORDER OF THE CIT (A). 11. IN THE RESULT, THE REVENUES APPEALS AS WELL AS CROSS OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 6 TH DAY OF JUNE, 2014. SD/- SD/- (C.M. GARG) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 6 TH DAY OF JUNE, 2014/TS ITA NOS.3359, 3360 & 3361/DEL./2013 CO NOS.236, 237 & 238/DEL/2013 26 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-I, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.