Lata Jain, New Delhi V. DCIT CC-21,

CO 239/DEL/2009

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 0517 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 9 month(s) 17 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 13-05-2015
• Assessment Year: 1999-2000
• Appeal Filed On: 11-08-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SULEKHA VERMA
• Keywords: Capital asset; Gift; Search and seizure; Question of law; Difference of opinion; Block assessment; Condonation of delay; Change of opinion
• Section: 143(3); 2(14); 153A; 234B; 147; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D , NEW DELHI) BEFORE SHRI G. C. GUPTA, HONBLE VICE PRESIDENT AND SHRI T.S. KAPOOR, ACCOUNTANT MEMBER I.T.A. NO.2140, 2141 /DEL/2008 ASSESSMENT YEAR : 1998-99 AND 1999-2000 DCIT, CC-21, VS. SMT. LATA JAIN, NEW DELHI 22-A, RAJPUR ROAD, CIVIL LINES, DELHI GIR / PAN:AANPJ5648L C.O. NO.159 AND 239/DEL/2009 (ASSESSMENT YEAR 1998-99 AND 1999-2000) SMT. LATA JAIN, VS. DCIT, CC-21, 22A, RAJPUR ROAD, NEW DELHI CIVIL LINES, DELHI (APPELLANT) (RESPONDENT) APPELLANT BY : MS. SULEKHA VERMA, CIT, DR RESPONDENT BY : SHRI RAJESH JAIN, CA DATE OF HEARING : 13.05.2015 DATE OF PRONOUNCEMENT : 29.05.2015 ORDER PER T.S. KAPOOR, AM: THESE ARE TWO APPEALS FILED BY REVENUE AGAINST TWO SEPARATE ORDERS OF LD. CIT(A) BOTH DATED 07.03.2008. THE GROUNDS OF A PPEALS TAKEN BY REVENUE IN THESE APPEALS ARE REPRODUCED AS UNDER: (I) I.T.A.NO. 2140/DEL/2013: ITA NO.2140,2141/DEL/2008 C.O.159 AND 239/DEL/2009 2 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD CIT (A) HAS ERRED IN HOLDING GOLD/SILVER UTENSIL AS CAP ITAL ASSETS INSTEAD OF PERSONAL EFFECTS BY OBSERVING THAT 'IT IS IMMATE RIAL WHETHER THE ARTICLES MADE OF GOLD OR SILVER, ARE IN THE SHAPE O F UTENSILS OR IN THE FORM OF FURNITURE' 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD. CIT(A) HAS ERRED IN DIRECTING THE A.O. TO RECOMPUTE D THE CAPITAL GAIN ON SALE OF THESE ARTICLES (I.E.) UTENSILS) MAD E OF GOLD AND SILVER AFTER ALLOWING THE BENEFIT OF INDEXATION.' 3. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD. CIT(A) HAS ERRED IN DIRECTING THAT THE A.O. SHOULD FOLLOW AND RECOMPUTED INTEREST U/S 234B WITHOUT POINTING AN ER ROR IN COMPUTATION OF INTEREST U/S 234B DONE.' (II) I.T.A.NO. 2141/DEL/2013: 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD CIT (A) HAS ERRED IN DIRECTING TO ALLOW THE BENEFIT OF CARRY FORWARD OF LOSSES FOR THE A.Y. 1998- 99 UNDER CAPITAL GAIN ON SALE OF GOLD/SILVER UTENSILS AGAINST CAPITAL GAIN FOR THE A .Y. 1999- 2000.' 2. THE ASSESSEE HAS ALSO FILED CROSS OBJECTIONS AGA INST THESE APPEALS AND THE GROUND OF CROSS OBJECTIONS TAKEN BY ASSESSEE AR E REPRODUCED AS UNDER: (I) C.O. NO.159/DEL/2009:- 1. THAT THE LEARNED DCIT ERRED IN ASSESSING THE IN COME OF THE APPELLANT AT RS.4,15,17,250/- AGAINST INCOME RETURN ED AT RS.34,59,120/- WITHOUT PROVIDING SUFFICIENT OPPORTU NITY TO THE APPELLANT. 2. 2.1 THAT THE LEARNED DCIT FAILED TO APPRECIATE THE ORIGINAL ASSESSMENT IN THE INSTANT CASE WAS COMPLETED U/S- 1 43(3) VIDE ORDER DATED 9TH AUGUST 2000, ACCEPTING THE RETURNED INCOM E AND CLAIM OF CARRY OF CAPITAL LOSS AMOUNTING TO RS. 87,64,069/- AND AGAIN IN THE PROCEEDINGS U/S- 147 / 143(3), VIDE ORDER DATED 10 TH MARCH 2006, THE SAID FIGURE OF RETURNED INCOME AND CAPITAL LOSS WAS ACCEPTED. THAT IT IS NOT PERMISSIBLE UNDER LAW TO MAKE A DIFFERENT AS SESSMENT OF INCOME ITA NO.2140,2141/DEL/2008 C.O.159 AND 239/DEL/2009 3 ON THE SAME FACTS, WITHOUT BRINGING ANY NEW MATERIA L ON RECORD, IN ASSESSMENT U/S 153 A OF THE ACT. 2.2 THAT THE LAW DOES NOT PERMIT CHANGE OF OPINION ON THE SAME SET OF FACTS BY THE A.O. 3. THE LEARNED CTT(A) ERRED IN NOT FOLLOWING THE BI NDING JUDICIAL PRECEDENTS OF JURISDICTIONAL HIGH COURT JINDAL PHOT O FILMS LIMITED 256 ITR 1 (DELHI), -KELVINATOR INDIA LIMITED EICHER LIMITED 213 CTR 57 WHICH WERE BROUGHT TO HIS NOTICE IN WRITTEN SUBM ISSIONS AND ERRED IN REJECTED THE LEGAL GROUND THAT THE ASSESSING OFF ICER IS NOT PERMITTED TO ASSESS THE INCOME ON DIFFERENT INCOME THAN THE I NCOME ASSESSED U/S-143(3) VIDE VALID ORDER DATED 9TH AUGUST, 2000, WITHOUT BRINGING ANY INCRIMINATING DOCUMENT FOUND IN CONSEQUENCE TO SEARCH U/S- 132(1) OF THE ACT ON 9TH DECEMBER, 2003. 4. THAT THERE WAS NO JUSTIFICATION FOR LEVYING OF I NTEREST U/S- 234B, 234C OF THE ACT ON THE FACTS OF THE CASE AND AS PER LAW. 5. WITHOUT PREJUDICE TO THE GROUND NO. 6, INTEREST CHARGED U/S- 234B IS EXCESSIVE AND THE SAME IS NOT CALCULATED AS PER LAW. 6. THAT THE ASSESSMENT HAS NOT BEEN MADE IN ACCORDA NCE WITH LAW AND THE ADDITION MADE BY DCIT ARE ALSO UNSUSTAINABL E ON THE FACTS OF THE CASE AND AS PER LAW. (III) C.O.NO.239/DEL/2009: 1. THAT THE LEARNED CIT(APPEAL) ERRED IN NOT DISPO SING GROUND NO.2, IN RESPECT OF ASSESSING OF INCOME FROM BUSINE SS AT RS.L,20,5711 - AGAINST 'NIL' INCOME RETURNED BY THE APPELLANT UNDE R THE SAID HEAD OF INCOME, WITHOUT DISCUSSING IN THE ASSESSMENT ORD ER. 2. THAT THE LEARNED CIT(APPEAL) ERRED IN HOLDING THAT INTEREST U/S-234D IS LEVIABLE IN THE ASSESSMENT OF INCOME U/ S-153A I 143(3) IN RELATION TO ANY ASSESSMENT FRAMED AFTER 1ST JUNE, 2 003. 3. THAT THE CONTENTION OF LEARNED CIT(APPEAL) IN RE SPECT OF INTEREST U/S-234D HAS BEEN DECIDED AGAINST THE REVE NUE BY THE HONORABLE SPECIAL BENCH IN THE CASE OF EKTA PROMOTE RS LIMITED. 3. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH AN D SEIZURE OPERATION WAS CONDUCTED U/S 132 OF THE ACT ON 09.12.2003 AT THE R ESIDENTIAL AS WELL AS BUSINESS PREMISES OF RELATED PERSONS OF BEGUM GUTKA GROUP AND ASSESSEE IS A PART OF SUCH GROUP AND THEREFORE HER CASE WAS REO PENED IN VIEW OF THE ITA NO.2140,2141/DEL/2008 C.O.159 AND 239/DEL/2009 4 PROVISIONS OF SECTION 153A. THE ASSESSEE WAS REQUI RED TO FILE RETURN U/S 153A TO WHICH ASSESSEE SUBMITTED THAT THE ORIGINAL RETURN FILED BY HER BE TREATED AS RETURN FILED U/S 153A OF THE ACT. DURIN G THE ASSESSMENT PROCEEDINGS IN ASSESSMENT YEAR 1998-99, THE A.O. OB SERVED THAT THE ASSESSEE HAD CLAIMED A GROSS CAPITAL LOSS OF RS.90, 69,085/- AND AFTER SETTING OFF AGAINST OTHER CAPITAL GAIN AN AMOUNT OF RS.87,8 4,069/- HAS BEEN CLAIMED TO HAVE BEEN CARRIED FORWARD. THE A.O. OBSERVED TH AT THE ASSESSEE HAD INCURRED LONG TERM CAPITAL LOSS ON THE SALE OF GOLD AND SILVER UTENSILS AFTER CLAIMING INDEXATION. THE A.O. CONFRONTED THE ASSES SEE THAT THESE ASSETS WERE PERSONAL EFFECTS AND DOES NOT GET COVERED BY T HE DEFINITION OF CAPITAL ASSET. HOWEVER, THE ASSESSEE SUBMITTED THAT THE AS SETS DECLARED UNDER VDIS WERE NEVER SHOWN AS PERSONAL EFFECTS AND WERE NEVER USED AS PERSONAL ASSETS AND THE SAME QUALIFIES FOR BEING CLASSIFIED AS CAPI TAL ASSETS. THE A.O. DID NOT AGREE WITH THE CONTENTION OF ASSESSEE AND MADE AN ADDITION OF RS.3,77,58,105/- BY HOLDING AS UNDER: THE REPLY OF THE ASSESSEE HAS BEEN CONSIDERED CARE FULLY. BULK QUANTITY OF SILVER AND GOLD UTENSILS CLEARLY GOES T O SHOW THAT THEY WERE CLEARLY 'PERSONAL EFFECTS'. NOW) THE LAW IS WELL SE TTLED THAT THE EXPRESSION 'PERSONAL EFFECTS' INCLUDES SILVER/GOLD UTENSILS MEANT FOR PERSONAL USE THOUGH NOT FOR DAILY USE. LIKEWISE, IN SMT. SHREE KUMARI UNDRA V. CIT 228 ITR 548, 553, 556 & CIT V. BENARSH ILAL KATARUKA 185 ITR 493, 496 (CAL) 'SILVER UTENSILS CONSISTING OF THALIS, KATORIES AND TUMBLERS ETC. WERE HELD TO BE 'PERSONAL EFFECTS '. FURTHER, IN JAYANTILAL A SHAH V. CIT 156 ITR 448 (BORN) IT WAS HELD THAT EVEN THOUGH CERTAIN ARTICLES ARE NOT NORMALLY IN DAILY U SE, THESE CAN BE CONSIDERED AS 'PERSONAL EFFECTS' SO LONG AS THESE A RE MEANT FOR PERSONAL USE HUGE QUANTITY OF GOLD AND SILVER UTENS ILS. IN THE ASSESSEE'S CASE ALSO IT IS SEEN (STATEMENT OF ASSET S ACQUIRED OUT OF INCOME DECLARED UNDER VDIS 1997 MOST OF WHICH WERE APPARENTLY ACQUIRED BY INHERITANCE WAY BACK IN THE YEAR 1966-6 7 TO 68-69) THAT THE ITEMS SO!9- WERE PLATE, THALI, GLASSES ETC. MAD E OF GOLD AND SILVER. THESE ITEMS ARE QUITE SIMILAR TO THE ITEMS HELD TO BE 'PERSONAL EFFECTS' ITA NO.2140,2141/DEL/2008 C.O.159 AND 239/DEL/2009 5 U/S 2 (14) OF THE LT. ACT, 1961 BY THE HIGH COURTS IN THEIR DECISIONS REFERRED TO ABOVE. THUS, FACTUALLY AND LEGALLY NO D OUBT IS LEFT THAT THE IMPUGNED WERE 'PERSONAL EFFECTS'. SIMPLY BECAUSE TH E ASSESSEE DOES NOT SHOW THEM AS PERSONAL EFFECT IT WILL TAKE THEM OUT OF THE PURVIEW OF THE 'PERSONAL EFFECTS'. UTENSILS ARE IN ALMOST ALL THE CASES ARE 'PERSONAL EFFECTS'. EVEN OTHERWISE THE ASSESSEE HA S NOT ADVANCED ANY EVIDENCE TO REBUT THAT THEY WERE 'PERSONAL EFFECTS' EXCEPT ADVANCING THE SELF SERVING AVERMENT THAT SHE HAS NOT TREATED IT AS 'PERSONAL EFFECTS'. IN THE LIGHT OF THE FACTS & CIRCUMSTANCES DISCUSSED ABOVE, VERY CLEARLY THE ASSESSEE'S ATTEMPT TO TREAT THE SAME AS 'CAPITA L ASSET' FAILS. I HOLD THE UTENSILS MADE OF GOLD/SILVER AS 'PERSONAL EFFEC TS'. AFTER HOLDING SO THE CLAIM FOR INDEXATION ALSO WOULD BE REQUIRED TO BE DISALLOWED. NET RESULT OF IT WOULD BE DISALLOWANCE OF RS.3,77,58,10 5/ -CRORES ON ACCOUNT OF INCORRECT INDEXATION CLAIMED. IN ADDITIO N TO THE ABOVE DISALLOWANCE AS A CONSEQUENTIAL EFFECT EVEN IN FOLL OWING YEARS IN WHICH LOSS ON ACCOUNT OF INDEXATION HAS BEEN SET OF F AGAINST OTHER INCOMES WOULD ALSO BE REQUIRED TO BE DISALLOWED. FA CTS CLEARLY SUGGEST INCORRECT PARTICULARS/ CLAIM AND CONSEQUENT LY THE CONCEALMENT ON ASSESSEE'S PART FOR WHICH PENALTY PR OCEEDINGS ARE ALSO INITIATED. 4. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE LD. CIT(A) AND LD. CIT(A) HAS DELETED THE ADDITION MADE BY A.O. BY HOL DING AS UNDER: AS REGARDS TO SUBSTANTIAL ISSUE IS CONCERNED, I AM OF THE VIEW THAT THE APPELLANT HAS MERIT IN HER SUBMISSIONS. THE AO HAS DENIED THE BENEFIT OF INDEXATION IN THE COMPUTATION OF CAPITAL GAINS ON SALE OF GOLD AND SILVER ITEMS BY HOLDING THEM AS 'PERSONAL EFFECTS'. BY EXCLUDING THE VALUE OF INDEXATION, THE AO HAS TAKEN THE TOTAL SALE PROCEEDS ON THOSE ARTICLES AS INCOME AND APPLIED NO RMAL RATE OF TAXES. IT IS VERY RELEVANT TO REFER TO SECTION 2(14) WHICH DEFINE WHAT CONSTITUTES A 'CAPITAL ASSET'. CAPITAL ASSET MEANS PROPERTY OF ANY KIND HELD BY AN ASSESSEE BUT EXCLUDES CERTAIN ITEMS FROM ITS PURVIEW. APART FROM STOCK IN TRADE, RAW MATERIALS, CONSUMABLE STOR ES, THIS SECTION SPECIFICALLY EXCLUDES 'PERSONAL EFFECTS'. IN TURN T HE 'JEWELLERY' HAS BEEN TAKEN OUT OF THE CATEGORY OF 'PERSONAL EFFECTS'. AG AIN 'JEWELLERY' HAS ITA NO.2140,2141/DEL/2008 C.O.159 AND 239/DEL/2009 6 BEEN GIVEN INCLUSIVE MEANING IN THIS PROVISION. IN EFFECT THE JEWELLERY DO FALL UNDER CAPITAL ASSET FOR THE PURPOSE OF SECT ION 2(14) OF IT ACT. AS PER CLAUSE (II) OF SUBSECTION 14 OF SECTION 2, O RNAMENTS MADE OF GOLD, SILVER AND OTHER PRECIOUS METALS, AND ANY PRE CIOUS OR SEMI PRECIOUS STONES WHETHER OR NOT SET IN- ANY FURNITUR E, UTENSIL OR ARTICLES, ARE DEFINED AS 'JEWELLERY' FOR THE PURPOS ES OF CAPITAL ASSET. FROM THIS, IT IS VERY CLEAR THAT IT IS INTENDED TO SUBJECT THE SALE PROCEEDS OF JEWELLERY UNDER CAPITAL GAINS EVEN IF T HEY ARE MEANT FOR PERSONAL USE. ASSUMING THAT AN ASSESSEE SELLS JEWEL LERY WHICH IS BEING USED DAILY AS WEARING APPAREL, STILL THE SALE PROCE EDS HAVE TO BE COMPUTED UNDER CAPITAL GAINS. ONLY EXCEPTION IS AVA ILABLE IF THEY ARE PART OF STOCK IN TRADE OR RAW MATERIAL, _ OTHERWISE THERE IS NO OPTION AVAILABLE EXCEPT TO COMPUTE CAPITAL GAINS ON SALE P ROCEEDS OF THESE ARTICLES. IN THE INSTANT CASE THERE IS NO DISPUTE ABOUT NATUR E OF ARTICLES SOLD DURING THE YEAR. ALL THESE ITEMS ARE MADE OF G OLD AND SILVER WHICH WERE DECLARED UNDER VDIS 1997. SINCE THESE AR TICLES ARE MADE OF PRECIOUS METALS LIKE GOLD AND SILVER, IT IS DIFF ICULT TO EXCLUDE THEM FROM THE CATEGORY OF CAPITAL ASSET. IT IS IMMATERIA L WHETHER THE ARTICLES, MADE OF GOLD OR SILVER, ARE IN THE SHAPE OF UTENSILS OR IN THE FORM OF FURNITURE; THEY DO FALL IN THE DEFINITION O F CAPITAL ASSET. THE AO IS NOT CORRECT TO DENY THE BENEFIT OF COST INFLATIO N INDEXATION TO THE SALE PROCEEDS OF THESE ITEMS IN THE COMPUTATION OF CAPITAL GAINS. CONSEQUENTLY THE ORDER OF THE AO CANNOT BE SUSTAINE D IN VIEW OF THE ABOVE REASONS. ACCORDINGLY HE IS DIRECTED TO DELETE THE ADDITION MADE AND RECOMPUTE THE CAPITAL GAINS ON SALE OF THESE AR TICLES MADE OF GOLD AND SILVER AFTER ALLOWING THE BENEFIT OF INDEXATION . WHILE DOING SO HE SHOULD WORK OUT CORRECT AMOUNT OF CAPITAL GAIN ON S ALE OF DIAMONDS WHERE THE ASSESSEE HAS TAKEN THE MARKET VALUE AS ON 01.04.1987 AS AGAINST 01.04.1981 FOR THE PURPOSE OF COST OF DIAMO NDS FOR INDEXATION. FOR THE PURPOSE OF VDIS DECLARATION THE VALUE AS ON 1.4.87 IS TO BE ADOPTED, WHEREAS FOR CAPITAL GAINS THE BASE Y EAR SHOULD BE 1.4.1981. THE MARKET VALUE IN THE YEAR 1981 WOULD B E LESS THAN WHAT WAS ADOPTED. HENCE IT REQUIRES REWORKING BASED ON C ORRECT VALUE IN THE YEAR 1981. RESULTANTLY THE ULTIMATE THE LOSS ON CAPITAL GAIN ARRIVED ON SALE OF THE ABOVE REFERRED ARTICLES SHOULD BE AL LOWED TO BE CARRIED FORWARD TO THE SUBSEQUENT YEARS, SUBJECT TO VERIFIC ATION OF THE DUE DATE OF FILING RETURN OF INCOME. ITA NO.2140,2141/DEL/2008 C.O.159 AND 239/DEL/2009 7 5. THE REVENUE IS AGGRIEVED WITH THE ORDER OF LD. C IT(A) AND HAS FILED APPEAL BEFORE US AGAINST THE FINDINGS OF LD. CIT(A) . IN THE ASSESSMENT YEAR 1999-2000, THE REVENUE IS AGGRIEVED AS LD. CIT(A) H AS DIRECTED THE A.O. TO ALLOW BENEFIT OF CARRY FORWARD OF LOSSES FROM ASSES SMENT YEAR 1998-99. AGAINST BOTH APPEALS THE ASSESSEE HAS FILED CROSS O BJECTIONS AND ONE OF THE OBJECTIONS TAKEN BY ASSESSEE IN ASSESSMENT YEAR 199 8-99 IS REGARDING JURISDICTION OF A.O. TO MAKE ASSESSMENT U/S 153A IN VIEW OF THE FACT THAT ALREADY ASSESSMENT WAS COMPLETED TWICE I.E. ONCE U/ S 143(3) AND AGAIN U/S 143(3) READ WITH RESPECT TO SECTION 147 AND IN THES E TWO ASSESSMENTS NO SUCH CLAIM OF CAPITAL LOSS WAS DENIED AND THEREFORE DENI AL OF CAPITAL LOSS IN ASSESSMENT PROCEEDINGS U/S 153A ON THE SAME FACTS A ND CIRCUMSTANCES WILL AMOUNT TO CHANGE OF OPINION WHICH WAS NOT PERMISSIB LE. THE ASSESSEE HAS FURTHER TAKEN THE GROUND THAT IN THE ABSENCE OF INC RIMINATING DOCUMENTS NO ADDITION CAN BE MADE U/S 153A OF THE ACT. 6. AT THE OUTSET, LD. D.R. SUBMITTED THAT THE QUEST ION TO BE DECIDED BY HONBLE BENCH IS AS TO WHETHER THE GOLD AND SILVER UTENSILS SOLD BY ASSESSEE DURING THE YEAR 1998-99 CAN BE CLASSIFIED AS PERSON AL EFFECTS OR CAN BE CLASSIFIED AS CAPITAL ASSETS. LD. D.R. SUBMITTED T HAT THERE IS NO DISPUTE ABOUT THE FACT THAT THE DECLARED ARTICLES OF GOLD AND SIL VER WERE UTENSILS AS ADMITTED BY ASSESSEE AND THEREFORE, CANNOT BE CLASSIFIED AS JEWELLERY AS THE SAME CANNOT BE WORN. LD. D.R. SUBMITTED THAT LD. CIT(A) HAS WRONGLY HELD THE UTENSILS AS ITEMS OF JEWELLERY. THERE IS A LOT OF DIFFERENCE BETWEEN ITEMS OF JEWELLERY AND ITEMS OF UTENSILS. SHE REFERRED ON O RDER OF HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS BANARSILAL KATARNU KA 185 ITR 493 WHEREIN HON'BLE CALCUTTA HIGH COURT HAS HELD THAT S ILVER UTENSILS / GOLD UTENSILS CANNOT BE CLASSIFIED AS CAPITAL ASSETS AS THE VERY USE OF UTENSILS ITA NO.2140,2141/DEL/2008 C.O.159 AND 239/DEL/2009 8 PRESUPPOSES PERSONAL USE. LD. D.R. ALSO PLACED HER RELIANCE ON AN ORDER OF HON'BLE HIGH COURT OF CALCUTTA IN THE CASE OF SHREE KUMARI MUNDRA VS CIT 228 ITR 548 AND SUBMITTED THAT IN THIS CASE, THE HO NBLE TRIBUNAL HAD HELD THAT SILVER UTENSILS SOLD BY ASSESSEE WERE NOT PERS ONAL EFFECTS AGAINST WHICH THE HON'BLE HIGH COURT HELD THAT UTENSILS WERE PERS ONAL EFFECTS. IN VIEW OF ABOVE, LD. D.R. STRONGLY ARGUED THAT THE UTENSILS W ERE MEANT FOR PERSONAL PURPOSES AND ARE QUITE DIFFERENT FROM JEWELLERY AND THEREFORE NO CAPITAL GAIN OR LOSS WAS ALLOWABLE ON THE SALE OF SUCH PERSONAL EFFECTS. SHE ARGUED THAT LD. CIT(A) HAS WRONGLY HELD THAT THE ITEMS OF UTENS ILS AS JEWELLERY FOR THE PURPOSE OF CLASSIFYING THESE AS CAPITAL ASSETS. 7. LD. A.R. ON THE OTHER HAND SUBMITTED THAT THE UT ENSILS WERE NOT PERSONAL EFFECTS OF ASSESSEE AND IN THIS RESPECT, H E INVITED OUR ATTENTION TO PAPER BOOK PAGE 24 WHERE AN AFFIDAVIT SIGNED AND SW ORN BY ASSESSEE WAS PLACED WHEREIN ASSESSEE HAD CLAIMED THAT ASSESSEE H AD NOT USED THE UTENSILS FOR HER PERSONAL PURPOSES. LD. A.R. FURTHER RELIED UPON THE CASE LAW OF M K JAJODIA VS ITO DECIDED BY KOLKATA BENCH OF ITAT REP ORTED AT 20 TTJ 167. HE ARGUED THAT THE HONBLE TRIBUNAL IN THIS CASE HA S HELD THAT IN ORDER TO CONSTITUTE ITEMS OF PERSONAL EFFECTS, MERE POSSIBIL ITY THAT ARTICLES ARE CAPABLE OF BEING PUT TO PERSONAL OR HOUSEHOLD USE WAS NOT S UFFICIENT TO TREAT THOSE AS PERSONAL EFFECTS. LD. A.R. SUBMITTED THAT IN THIS CASE, THE HONBLE TRIBUNAL HAS HELD THAT THOUGH THE SILVER UTENSILS WERE CAPAB LE OF BEING USED FOR PERSONAL HOUSEHOLD USE, YET IN THE ABSENCE OF ANY W EAR AND TEAR DURING LONG PERIOD OF POSSESSION, THESE CANNOT BE SAID TO HAVE BEEN USED FOR PERSONAL USE OR HOUSEHOLD USE. OF ASSESSEE. LD. A.R. SUBMITTED THAT IN THE CASE OF ASSESSEE ALSO WHATEVER WAS DECLARED IN VDIS, THE SA ME UTENSILS HAVING SOME WEIGHT, WERE SOLD AS IS APPARENT FROM DECLARATION O F VDIS AND THE SALE BILLS ITA NO.2140,2141/DEL/2008 C.O.159 AND 239/DEL/2009 9 OF SUCH UTENSILS AND THEREFORE, CANNOT BE SAID THAT THE SAME WERE USED AS THERE IS NO DIFFERENCE IN WEIGHT OF UTENSILS AND IT WAS SUBMITTED THAT IN CASE THESE WERE USED FOR PERSONAL PURPOSES, THERE MUST H AVE BEEN SOME WEAR AND TEAR TO THEM. LD. A.R. FURTHER RELIED UPON THE CAS E LAW OF FAIZ MURTAZA ALI VS CIT DECIDED BY HON'BLE DELHI HIGH COURT REPORTED AT 360 ITR 200. LD. A.R. SUBMITTED THAT IN THAT CASE THE CLAIM OF ASSES SEE THAT THE ITEMS INHERITED BY HIM WERE ITEMS OF PERSONAL EFFECTS WAS DECIDED I N FAVOUR OF ASSESSEE ON THE BASIS OF AN AFFIDAVIT FILED BY ASSESSEE. LD. A .R. SUBMITTED THAT IN THE PRESENT CASE ALSO, THE ASSESSEE HAS FILED AFFIDAVIT AND HAS CLAIMED THAT THESE WERE HER PERSONAL EFFECTS AND THE AFFIDAVIT HAS NOT BEEN REBUTTED BY THE REVENUE. LD. D.R. REPLYING IN HER REJOINDER SUBMIT TED THAT THE CASE LAW DECIDED BY ITAT IS NOT RELEVANT AS THE ISSUE HAS BE EN DECIDED BY HON'BLE CALCUTTA HIGH COURT WHICH HAS BEEN RELIED UPON BY H ER AND REGARDING THE CASE LAW OF FAIZ MURTAZA ALI LD. D.R. SUBMITTED THA T IT WAS A CASE OF SALE OF ITEMS LIKE PAINTINGS, CARPETS AND FURNITURE ETC WHI CH INVARIABLY ARE ITEMS OF PERSONAL EFFECT AND ARE SIMILAR TO UTENSILS. 7. AS REGARDS THE CROSS OBJECTIONS FILED BY ASSESSE E, LD. D.R. OBJECTED TO THE C.O. ON THE BASIS THAT THESE WERE NOT FILED WIT HIN TIME AND NO APPLICATION FOR CONDONATION OF DELAY WAS FIELD AND THEREFORE, A RGUED THAT THE SAME NEED TO BE DISMISSED. LD. A.R. SUBMITTED THAT C.O. NO.1 59 IN RESPECT OF ASSESSMENT YEAR 1998-99 WAS FILED ON 24.06.2009 AND NOTICE CONTAINING MEMORANDUM OF GROUNDS OF APPEAL WAS RECEIVED BY THE ASSESSEE ON 05.06.2009. LD. A.R. ALSO PRODUCED ENVELOPE CONTAI NING NOTICE ALONG WITH DATE OF DISPATCH OF SUCH GROUND OF APPEAL AND, THER EFORE, ARGUED THAT THE C.O. 159 WAS FILED WELL WITHIN TIME, WHICH LD. D.R. ALSO ACCEDED. HOWEVER, LD. D.R. SUBMITTED THAT C.O. 239 FOR ASSES SMENT YEAR 1999- ITA NO.2140,2141/DEL/2008 C.O.159 AND 239/DEL/2009 10 2000 WAS NOT WITHIN TIME AS THE SAME WAS FILED ON 1 1.08.2009 WHEREAS NOTICE WAS RECEIVED BY ASSESSEE ON 21.06.2009 AND T HEREFORE, C.O. WAS FILED BEYOND THE MANDATORY PERIOD OF 30 DAYS. LD. A.R. C OULD NOT EXPLAIN THE DELAY IN C.O. FOR ASSESSMENT YEAR 1999-2000. LD. A .R. WAS HOWEVER ALLOWED TO ARGUE ON C.O. 159/DEL/2009 IN C.O. 159, THE ASSESSEE HAS SUBMITTED THAT ORIGINAL ASSESSMENT WAS COMPLETED ON 09.08.2000 U/S 143(3) AND THE CLAIM OF CARRY FORWARD OF CAPITAL LOSS WAS ALSO ALLOWED AND AGAIN IN PROCEEDINGS U/S 147 VIDE ORDER DATED 10.03.2006, TH E SAID CLAIM FOR CAPITAL LOSS WAS ACCEPTED. THEREFORE, IT WAS NOT PERMISSIB LE UNDER LAW TO MAKE A DIFFERENT ASSESSMENT OF INCOME ON THE SAME FACTS A ND CIRCUMSTANCES WITHOUT FINDING ANY NEW MATERIAL. LD. A.R. HAS STRONGLY PL ACED HIS RELIANCE ON THE JUDGEMENT OF HON'BLE DELHI HIGH COURT IN THE CASE O F JINDAL PHOTO FILMS VS ITO IN I.T.A. NO. 256 ITR 01 (DEL.), CIT VS KELVINA TOR OF INDIA LTD. 320 ITR 561, CIT VS EICHER LTD 213 CTR 57. LD. A.R. SU BMITTED THAT HAVING COMPLETED ASSESSMENT ON TWO OCCASIONS ONE U/S143(3) AND ANOTHER U/S 143(3) READ WITH SECTION 147, THERE WAS NO OCCASION AVAILABLE TO A.O. TO AGAIN MAKE ASSESSMENT U/S 153A ESPECIALLY IN VIEW O F THE FACT THAT NO NEW FACT OR MATERIAL WAS THERE. LD. A.R. ARGUED THAT CH ANGE OF OPINION IS NOT PERMITTED AS PER CASE LAWS RELIED UPON BY HIM. LD . A.R. VIDE GROUND NO.3 HAS ALSO AGITATED THAT IN THE ABSENCE OF INCRIMINAT ING DOCUMENT FOUND IN THE COURSE OF SEARCH, NO ADDITION CAN BE MADE. HE SUBM ITTED THAT ASSESSMENT DURING THE YEAR WAS COMPLETED VIDE ORDER DATED 09.0 8.2000 AND, WHICH STOOD COMPLETED ON THE DATE OF SEARCH, I.E. ON 09.12.2003 AND THEREFORE, ADDITION IF ANY COULD HAVE BEEN MADE ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL. IN SUPPORT OF THIS, LD. A.R. PLACED HIS RELIANCE ON THE FOLLOWING CASE LAWS: I) JAI STEEL (INDIA) 259 CTR 281 (RAJ.) II) MGF AUTOMOBILES LTD. IN I.T.A.NO. 4212 & 4213/D EL/2011 ITA NO.2140,2141/DEL/2008 C.O.159 AND 239/DEL/2009 11 III) KUSUM GUPTA IN I.T.A.NO. 4873/DEL/2009, 2510, 3312, 2833 /DEL/ 2011. IV) PACL INDIA LTD. IN I.T.A.NO. 2637/DEL/2010 V) DEEPAEN A. PARAEKH, MUMBAI I.T.A.NO. 467, 469, 4 60/2011 VI) JIGSNESH P. SHAH, MUMBAI I.T.A.NO. 1553 & 3173/ MUM/2010 VII) PARSVNATH DEVELOPERS LTD., DELHI I.T.A.NO. 518 8/DEL/2013 VIII) KABUL CHAWLA, DELHI I.T.A.NO. 779, 780, 781, 782/DEL/2013 IX) DCIT VS KURELE PAPE MILLS PVT. LTD. I.T.A.NO. 3 761/DLE/2011. 8. LD. A.R. FURTHER SUBMITTED THAT INTEREST CHARGED U/S 234B WAS EXCESSIVE AND WAS NOT AS PER LAW. LD. D.R. WHILE R EPLYING TO THE CROSS OBJECTIONS SUBMITTED THAT THE PROVISIONS OF SECTION 153A ARE VERY CLEAR AND IN A SEARCH CASE THE PROVISIONS OF SECTION153A AUTO MATICALLY BECOMES OPERATIVE AND ASSESSMENTS OF 6 YEARS HAS TO BE REOP ENED AND SHE FURTHER ARGUED THAT IT IS NOT A CASE OF CHANGE IN OPINION A S IN THE ORIGINAL ASSESSMENT ORDER, THE ISSUE OF CAPITAL LOSS ON SALE OF UTENSIL S WAS NOT CONSIDERED. LD. D.R. FURTHER SUBMITTED THAT AS DECIDED BY HON'BLE D ELHI HIGH COURT IN THE CASE OF ANIL KUMAR BHATIA, THE PROVISIONS OF SECTIO N 153 A ARE MANDATORY IN NATURE. AS REGARDS INCRIMINATING DOCUMENTS, THE LD. D.R. SUBMITTED THAT DURING SEARCH, VARIOUS INCRIMINATING DOCUMENTS WERE FOUND AND THE STATEMENT OF ASSESSEE WAS ALSO RECORDED AND, THEREF ORE, IT CANNOT BE SAID THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE SEAR CH PROCEEDINGS. IN THIS RESPECT LD. D.R. INVITED OUR ATTENTION TO AN ITAT O RDER IN THE CASE OF ASSESSEE HERSELF FOR THE ASSESSMENT YEAR 2000-01 PL ACED IN PAPER BOOK PAGES 24-33 WHEREIN ITAT HAD UPHELD THE ADDITION ON ACCOUNT OF GIFTS RECEIVED BY ASSESSEE ON THE BASIS OF INCRIMINATING MATERIAL ONLY. SHE ARGUED THAT SINCE THE ADDITION MADE BY LOWER AUTHORITIES O N ACCOUNT OF BOGUS GIFTS WAS UPHELD BY ITAT, IT CANNOT BE SAID THAT NO INCRI MINATING MATERIAL WAS FOUND. LD. D.R. FURTHER ARGUED THAT PROVISIONS OF SECTION 153A ARE ITA NO.2140,2141/DEL/2008 C.O.159 AND 239/DEL/2009 12 MANDATORY PROVISIONS AND THE FRESH ASSESSMENTS HAS TO BE CARRIED OUT AND THERE IS NO REQUIREMENT OF INCRIMINATING MATERIAL A ND IN THIS RESPECT SHE RELIED UPON THE CASE LAW OF APOORVA EXTRUSION PVT. LTD. IN I.T.A. NO. 3308/DEL/2010 FOR THE ASSESSMENT YEAR 2002-03 DECID ED VIDE ORDER DATED 09.10.2014. LD. D.R. STRONGLY ARGUED THAT THE CASE LAW OF ANIL KUMAR BHATIA 29 TAXMAN 98 DECIDED BY HON'BLE DELHI HIGH C OURT IS VERY MUCH IN FAVOUR OF REVENUE WHEREIN THE HONBLE COURT HAS HEL D THAT ONCE THE PROVISIONS OF SECTION 153A ARE TRIGGERED, THE A.O. IS EMPOWERED TO ASSESSEE OR REASSESS THE TOTAL INCOME OF AFORESAID YEARS. L D. D.R. FURTHER HEAVILY RELIED UPON THE CASE LAW OF FILATEX INDIA LTD. 269/ 2014 DECIDED BY HON'BLE DELHI HIGH COURT WHEREIN SHE INVITED OUR ATTENTION TO THE QUESTION OF LAW FRAMED BY HON'BLE DELHI HIGH COURT AND FURTHER INVI TED OUR ATTENTION TO THE ANSWER GIVEN BY THE HON'BLE HIGH COURT. LD. D.R. S UBMITTED THAT THE HON'BLE HIGH COURT HAD CLEARLY DECIDED THE ISSUE IN FAVOUR OF REVENUE BY HOLDING THAT ADDITION U/S 153A NEED NOT BE RESTRICT ED OR LIMITED TO THE INCRIMINATING MATERIAL. LD. D.R. FURTHER PLACED HE R RELIANCE ON THE CASE LAW OF RAJ KUMAR IN I.T.A. NO. 56/2011 DECIDED BY HON'B LE ALLAHABAD HIGH COURT AND ALSO CASE LAW OF CANARA HOUSING DEVELOPME NT COMPANY IN I.T.A. NO. 38/2014 DECIDED BY KARNATAKA HIGH COURT. 9. LD. D.R. ALSO PLACED HER RELIANCE ON THE CASE LA W OF CIT VS KPIL JAIN 50 DTR 342 DECIDED BY HON'BLE DELHI HIGH COURT FOR THE PROPOSITION THAT THE QUESTION OF JURISDICTION HAS TO BE RAISED WITHI N A MONTH FROM THE DATE OF SERVICE OF NOTICE U/S 158BD OF THE ACT. LD. D.R. S UBMITTED THAT SINCE THE PROVISIONS OF SECSITON158 BD ARE PERI MATERIA WITH THE PROVISIONS OF SECTION 153A, THEREFORE, QUESTION OF JURISDICTION U/S 153A CAN BE RAISED ONLY WITHIN ONE MONTH FROM THE DATE OF SERVICE OF NOTICE, WHICH IN THE PRESENT CASE HAS ITA NO.2140,2141/DEL/2008 C.O.159 AND 239/DEL/2009 13 NOT BEEN DONE, THEREFORE, LEGAL OBJECTIONS RAISED B Y ASSESSEE ARE NOT TENABLE IN LAW. AS REGARDS THE ISSUE OF CHARGING OF INTERE ST U/S 234B, LD. D.R. SUBMITTED THAT IN THE CASE OF ASSESSEE HERSELF, :HO NBLE TRIBUNAL IN ASSESSMENT YEAR 2000-01 HAS DECIDED THE ISSUE IN FA VOUR OF REVENUE AND IN THIS RESPECT INVITED OUR ATTENTION TO PARA 8 & 9 OF THE ORDER PLACED IN PAPER BOOK PAGES 31 & 32. 10. WE HAVE HEARD RIVAL PARTIES AND HAVE GONE THROU GH THE MATERIAL PLACED ON RECORD. AS THE ASSESSEE HAS RAISED LEGAL ISSUE IN CROSS OBJECTIONS THEREFORE, WE FIRST TAKE UP CROSS OBJECTIONS. IN C ROSS OBJECTION NO.159/DEL/2008, THE ASSESSEE HAS TAKEN A GROUND TH AT ASSESSMENT WAS ALREADY COMPLETED U/S 143(3) AND THEN AGAIN U/S 143 (3) READ WITH SECTION 147 AND DURING THESE ASSESSMENTS, NO ADDITION WHAT SOEVER REGARDING DENIAL OF CAPITAL LOSS WAS MADE AND THEREFORE, WITHOUT ANY NEW MATERIAL, ADDITION U/S 153A WAS AGAINST LAW AS IT AMOUNTS TO CHANGE IN OPINION AND, THEREFORE, WAS NOT PERMISSIBLE. HOWEVER, WE FIND THAT THE PRO VISIONS OF SECTION 153A START WITH A NON OBSTANTE CLAUSE RELATING TO NORMAL ASSESSMENT PROCEDURE WHICH IS COVERED BY SECTIONS 139, 147, 148, 149, 15 1, 152 AND 153. THESE SECTIONS RELATE TO ASSESSMENT AND REASSESSMENT PROV ISIONS. PRIOR TO INTRODUCTION OF SECTION 153A, THERE WAS CHAPTER XIV -B OF THE ACT WHICH TOOK CARE OF THE ASSESSMENTS TO BE MADE IN CASES OF SEARCH AND SEIZURE AND SUCH ASSESSMENTS WERE KNOWN AS BLOCK ASSESSMENTS BE CAUSE THE CHAPTER PROVIDES FOR A SINGLE ASSESSMENT TO BE MADE IN RESP ECT OF PERIOD OF BLOCK OF 10 YEARS. THE BLOCK ASSESSMENT SO MADE WAS INDEPEN DENT AND IN ADDITION TO NORMAL ASSESSMENT PROCEEDINGS AS CLARIFIED BY EXPLA NATION BELOW SECTION 158BA(2). AFTER INTRODUCTION OF GROUP OF SECTIONS 153A-153C, THE SINGLE BLOCK ASSESSMENT WAS GIVEN A GO BY. UNDER NEW SECT ION 153A IN A CASE ITA NO.2140,2141/DEL/2008 C.O.159 AND 239/DEL/2009 14 WHERE SEARCH IS INITIATED U/S 132, THE A.O. IS OBLI GED TO CALL UPON SEARCHED PERSONS TO FURNISH RETURN FOR 6 ASSESSMENT YEARS IM MEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO PREVIOUS YEAR IN WHICH SEARCH WAS CONDUCTED. ANOTHER FEATURE OF THIS SECTION IS THAT THE A.O. IS EMPOWERED TO INITIATE THE REASSESSMENT OF TOTAL INCOME OF AFORESAID YEARS. T HIS IS A DEPARTURE FROM EARLIER BLOCK ASSESSMENT SCHEME IN WHICH BLOCK ASSE SSMENT ROPED IN ONLY THE UNDISCLOSED INCOME AND THE REGULAR ASSESSMENT P ROCEEDINGS WERE PRESERVED RESULTING INTO MULTIPLE ASSESSMENTS. THE ARGUMENT OF LD. A.R. THAT ADDITION MADE U/S 153A ON SAME SET OF FACTS AN D CIRCUMSTANCES AMOUNT TO CHANGE OF OPINION DOES NOT HOLD ANY FORCE AS THE HON'BLE COURT IN THE CASES RELIED UPON BY LD. A.R. HAS HELD THE CONCEPT OF CHANGE OF OPINION IN CONTEXT TO PROVISIONS OF SECTION 147 OF THE ACT AND THESE DECISIONS ARE NOT APPLICABLE TO ASSESSMENTS MADE U/S 153A OF THE ACT. THE OBJECT OF SECTION153A IS TO ASSESS TOTAL INCOME INCLUDING THE DECLARED INCOME AS WELL AS UNDECLARED INCOME UNEARTHED DURING SEARCH. THER EFORE FROM THE ABOVE, IT FOLLOWS THAT IF DURING SEARCH PROCEEDINGS, THE SEAR CH TEAM FINDS SOME UNDISCLOSED INCOME, THEN A.O. IS BOUND TO INCLUDE T HIS INCOME IN THE ASSESSMENT U/S 153A IRRESPECTIVE OF THE FACT THAT E ARLIER IN PROCEEDINGS U/S 143(3), THE SAME WAS NOT CONSIDERED. THE HON'BLE H IGH DELHI COURT IN THE CASE OF ANIL KUMAR BHATIA 24 TAXMAN.COM 98 VIDE ORD ER DATED 07.08.2012 HAS HELD AS UNDER: A QUESTION MAY ARISE AS TO HOW THIS IS SOUGHT TO B E ACHIEVED WHERE AN ASSESSMENT ORDER HAD ALREADY BEEN PASSED IN RESP ECT OF ALL OR ANY OF THOSE SIX ASSESSMENT YEARS, EITHER UNDER SECTION 143(1)(A) OR SECTION 143(3) OF THE ACT. IF SUCH AN ORDER IS ALRE ADY IN EXISTENCE, HAVING OBVIOUSLY BEEN PASSED PRIOR TO THE INITIATIO N OF THE SEARCH/REQUISITION, THE ASSESSING OFFICER IS EMPOWE RED TO REOPEN THOSE PROCEEDINGS AND REASSESS THE TOTAL INCOME, TA KING NOTE OF THE UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SE ARCH. FOR THIS ITA NO.2140,2141/DEL/2008 C.O.159 AND 239/DEL/2009 15 PURPOSE, THE FETTERS IMPOSED UPON THE ASSESSING OFF ICER BY THE STRICT PROCEDURE TO ASSUME JURISDICTION TO REOPEN THE ASSE SSMENT UNDER SECTIONS 147 AND 148, HAVE BEEN REMOVED BY THE NON OBSTANTE CLAUSE WITH WHICH SUB SECTION (1) OF SECTION 153A OPENS. T HE TIME-LIMIT WITHIN WHICH THE NOTICE UNDER SECTION 148 CAN BE IS SUED, AS PROVIDED IN SECTION 149 HAS ALSO BEEN MADE INAPPLICABLE BY T HE NON OBSTANTE CLAUSE. SECTION 151 WHICH REQUIRES SANCTION TO BE O BTAINED BY THE ASSESSING OFFICER BY ISSUE OF NOTICE TO REOPEN THE ASSESSMENT UNDER SECTION 148 HAS ALSO BEEN EXCLUDED IN A CASE COVERE D BY SECTION 153A. THE TIME-LIMIT PRESCRIBED FOR COMPLETION OF A N ASSESSMENT OR REASSESSMENT BY SECTION 153 HAS ALSO BEEN DONE AWAY WITH IN A CASE COVERED BY SECTION 153A. WITH ALL THE STOPS HAVING BEEN PULLED OUT, THE ASSESSING OFFICER UNDER SECTION 153A HAS BEEN E NTRUSTED WITH THE DUTY OF BRINGING TO TAX THE TOTAL INCOME OF AN ASSE SSEE WHOSE CASE IS COVERED BY SECTION 153A, BY EVEN MAKING REASSESSMEN TS WITHOUT ANY FETTERS, IF NEED BE.' 11. IN VIEW OF ABOVE, THE GROUND NO.2 TAKEN BY ASSE SSEE IS DISMISSED. 12. HOWEVER IN GROUND NO.3, THE ASSESSEE HAS FURTHE R RAISED AN OBJECTION THAT NO INCRIMINATING MATERIAL WAS FOUND DURING SEA RCH AND, THEREFORE, NO ADDITION CAN BE MADE IN THE ABSENCE OF SUCH INCRIMI NATING MATERIAL. HONBLE DELHI HIGH COURT IN THE CASE OF ANIL KUMAR BHATIA H AS THOUGH HELD THAT PROVISIONS OF SECTION 153A ARE MANDATORY AND IN THE COURSE OF NON PENDING ASSESSMENTS, THE ADDITION CAN BE MADE EVEN WITHOUT FINDING ANY INCRIMINATING MATERIAL. HOWEVER, IN THE CASE OF PE NDING ASSESSMENTS, THE HONBLE COURT HAS LEFT OPEN THE ANSWER TO THE QUEST ION AS TO WHETHER IN CASE OF COMPLETED ASSESSMENTS, THE ADDITION CAN BE MADE IN THE ABSENCE OF INCRIMINATING MATERIAL. THIS CAN BE SEEN FROM THE FOLLOWING OBSERVATIONS OF HON'BLE HIGH COURT: WE ARE NOT CONCERNED WITH A CASE WHERE NO INCRIMIN ATING MATERIAL WAS FOUND DURING THE SEARCH CONDUCTED UNDER SECTION 132 OF THE ACT. WE, THEREFORE, EXPRESS NO OPINION AS TO WHETHER SEC TION 153A CAN BE ITA NO.2140,2141/DEL/2008 C.O.159 AND 239/DEL/2009 16 INVOKED EVEN IN SUCH A SITUATION. THAT QUESTION IS , THEREFORE, LEFT OPEN. 13. AS IS APPARENT, IN THIS YEAR, NO INCRIMINATING MATERIAL WAS FOUND DURING SEARCH, THOUGH IN RESPECT OF EARLIER YEAR, I NCRIMINATING MATERIAL WAS FOUND AND ON THE BASIS OF SUCH INCRIMINATING MATERI AL, ITAT IN THE CASE OF ASSESSEE, HAD CONFIRMED THE ADDITION BUT FROM THE A SSESSMENT ORDER, WE DO NOT FIND THAT ANY INCRIMINATING MATERIAL WAS FOUND DURING SEARCH RELATING TO THIS YEAR. NOR LD. D.R. BROUGHT TO OUR NOTICE ANY INCRIMINATING MATERIAL FOR THIS YEAR. SHE ARGUED THAT IN EARLIER YEAR, THERE WAS INCRIMINATING MATERIAL AND THE NECESSITY OF HAVING FOUND INCRIMINATING MAT ERIAL IN EACH YEAR WAS NOT REQUIRED AND IN THIS RESPECT, SHE HAD PLACED HE R RELIANCE ON THE CASE LAW OF APOORVA EXTRUSION LTD. IN I.T. A.NO. 3308/DEL/2 001. HOWEVER, WE FIND THAT IN THAT CASE, THE HONBLE TRIBUNAL HAD HELD TH AT UNDER THE PROVISIONS OF SECTION 153A, THE INITIATION OF ASSESSMENT OR REASS ESSMENT FOR ALL THE 6 ASSESSMENT YEARS IN THE CASE OF PERSON SEARCHED IS NOT DEPENDENT ON FINDINGS OF ANY INCRIMINATING MATERIAL. WE DO NOT HAVE ANY CONTRARY VIEW IN THIS REGARD AS WE HAVE ALREADY HELD THAT PROVISIONS OF SECTION153A ARE MANDATORY AND SINCE A PERSON IS SEARCHED, THE PROCE EDINGS U/S 153A HAS TO BE COMPLETED BY PASSING A FRESH ASSESSMENT ORDER. THE QUESTION IS AS TO WHETHER ANY ADDITION CAN BE MADE IF THERE IS NO INC RIMINATING MATERIAL FOUND DURING SEARCH, WHICH IN OUR OPINION, IS NOT AS THE ONLY PURPOSE OF SEARCH IS TO UNEARTH THE UNDISCLOSED INCOME AND IF DURING SEARCH , NO INCRIMINATING MATERIAL LEADING TO EXISTENCE OF UNDISCLOSED INCOME IS FOUND, THEN COMPLETED ASSESSMENTS CANNOT BE DISTURBED AND THIS VIEW HAS B EEN TAKEN IN VARIOUS CASE LAWS AS RELIED UPON BY LD. A.R. LD. D.R. HAS ALSO RELIED UPON THE CASE LAW OF FILATEX INDIA LTD. IN I.T.A. NO. 269/2014 FOR TH E PROPOSITION THAT ADDITION ITA NO.2140,2141/DEL/2008 C.O.159 AND 239/DEL/2009 17 U/S 153A CAN BE MADE EVEN IN THE ABSENCE OF MATERIA L FOUND DURING SEARCH. HOWEVER, IF WE READ THE COMPLETE ORDER IN THE CASE OF FILATEX, IT IS APPARENT THAT THERE WAS INCRIMINATING MATERIAL FOUND DURING SEARCH IN THAT CASE. IN THE CASE OF CANARA HOUSING DEVELOPMENT CO. IN I.T.A.NO. 38/. DECIDED BY HON'BLE HIGH COURT OF KARNATAKA, THE HONBLE COURT HAS DEALT THE ISSUE VIDE PARA 11 AS UNDER: THE TRIBUNAL HAS PROCEEDED ON THE ASSUMPTION BY VI RTUE OF THE JUDGEMENT OF THE SPECIAL BENCH OF THE MUMBAI, THE S COPE OF ENQUIRY UNDER SECTION I53A IS TO BE CONFIRMED ONLY TO THE U NDISCLOSED INCOME UNEARTHED DURING SEARCH AND IF THERE IS ANY OTHER I NCOME WHICH IS NOT THE SUBJECT MATTER OF SEARCH, THE SAME CANNOT BE TA KEN INTO CONSIDERATION. THEREFORE, THE REVISIONAL AUTHORITY CAN EXERCISE THE POWER UNDER SECTION 263. IN THE ENTIRE SCHEME OF 15 3A OF THE ACT, THERE IS NO PROHIBITION FOR THE ASSESSING AUTHORITY TO TAKE NOTE OF SUCH INCOME. ON THE CONTRARY, IT IS EXPRESSLY PROVIDED U NDER SECTION 153A OF THE ACT THE ASSESSING OFFICER SHALL ASSESSEE OR REASSESS THE 'TOTAL INCOME' OF SIX ASSESSMENT YEARS WHICH MEANS THE SAI D TOTAL INCOME INCLUDES INCOME WHICH WAS RETURNED IN THE EARLIER R ETURN, THE INCOME WHICH WAS UNEARTHED DURING SEARCH AND INCOME WHICH IS NOT THE SUBJECT MATTER OF AFORESAID TWO INCOME. ' 14. FROM THE ABOVE ORDERS OF HONBLE KARNATAKA HIGH COURT, WE FIND THAT HON'BLE HIGH COURT HAS HELD THAT DURING ASSESSMENT PROCEEDINGS U/S 153A, ADDITION CAN ALSO BE MADE IN RESPECT OF SUCH INCOME NOT FORMING PART OF DECLARED INCOME OR UNDECLARED INCOME. THEREFORE, T HIS DECISION IS IN FAVOUR OF REVENUE. 15. HONBLE RAJASTHAN HIGH COURT IN THE CASE OF JAI STEELS (SUPRA) HAS BEEN PLEASED TO HOLD THAT ASSESSEE WAS NOT ELIGIBLE TO CLAIM DEDUCTION FOR AN EXPENDITURE DURING ASSESSMENT PROCEEDINGS U/S 153A IF THE CLAIM WAS NOT MADE IN ORIGINAL ASSESSMENT PROCEEDINGS AND WHICH S TOOD COMPLETED. THEREFORE, HONBLE RAJASTHAN HIGH COURT HAS HELD TH AT IN THE CASE OF ITA NO.2140,2141/DEL/2008 C.O.159 AND 239/DEL/2009 18 COMPLETED ASSESSMENT, THE SAME CAN BE TINKERED ONLY BASED UPON INCRIMINATING MATERIAL FOUND DURING SEARCH. 16. SIMILARLY, HONBLE BOMBAY HIGH COURT IN A RECEN T CASE DECIDED ON 21.04.2015 HAS CONFIRMED THE SPECIAL BENCH DECISION IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. WHEREIN IT WAS HELD THA T IN THE ABSENCE OF INCRIMINATING DOCUMENTS, NO ADDITION CAN BE MADE. 17. THE HONBLE COURT ON AN APPEAL FILED BY REVENUE HAD FRAMED THE FOLLOWING QUESTIONS OF LAW IN RESPECT OF ADDITIONS TO BE MADE U/S 153A: '(I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE HON'BLE ITAT IS CORRECT IN NARROWING DOWN THE SCOPE OF ASSESSMENT U/S 153A IN RESPECT OF COMPLETED ASSESSM ENTS BY HOLDING THAT ONLY UNDISCLOSED INCOME AND UNDISCLOSED ASSETS DETECTED DURING SEARCH COULD BE BROUGHT TO TAX ? (II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE, THE HON'BLE ITAT IS CORRECT IN LAW IN HOLDING THAT THE SCOPE OF SECTION 153A IS LIMITED TO ASSESSING ONLY SEARCH R ELATED INCOME, THEREBY DENYING REVENUE THE OPPORTUNITY OF TAXING O THER ESCAPED INCOME, THAT COMES TO THE NOTICE OF THE AO? (III) WHETHER ON THE FACTS AND IN THE CIRCUMSTANC ES OF THE CASE, THE HON'BLE !TAT WAS RIGHT IN LIMITING THE S COPE OF SECTION 153A ONLY TO UNDISCLOSED INCOME WHEN AS PER THE SEC TION THE A.O. HAS TO ASSESS THE TOTAL INCOME OF THE SIX ASSESSMENT YE ARS. 18. THE FINDINGS ON THESE QUESTIONS OF LAW ARE CONT AINED IN PARA 18 WHICH ARE REPRODUCED BELOW: 18. MR. DASTUR WOULD SUBMIT THAT THE REVENUE IS P ROTECTED COMPLETELY IN THIS CASE. THE POWER IS OF DRASTIC NA TURE AND HAS TO BE EXERCISED WITHIN CONSTITUTIONAL PARAMETERS. HOWEVER , THOUGH THE SECOND PROVISO TO SUB-SECTION (1) OF SECTION 153A W OULD NOT APPLY IN THE FIRST THREE YEARS OF THIS CASE, YET, AS FAR AS THE SECOND THREE YEAR PERIOD IS CONCERNED, THE ASSESSMENTS WERE PENDING. THE PROCEEDINGS IN RELATION THERETO ABATE. NOW THE ENTIRE ASSESSMEN T IN RELATION TO THE SECOND PHASE OF THREE YEARS CAN BE MADE BUT THE FOU NDATION FOR ALL THIS AND THE ACTION UNDER SECTION 153A IS A SEARCH UNDER SECTION 132 ITA NO.2140,2141/DEL/2008 C.O.159 AND 239/DEL/2009 19 OR REQUISITION OF BOOKS OF ACCOUNT AND OTHER ASSETS UNDER SECTION 132A. IN THE PRESENT CASE, THE NOTICE UNDER SECTION 153A IS FOUNDED ON SEARCH. IF THERE IS NO INCRIMINATING MATERIAL FOUND DURING THE SEARCH, THEN, THE SPECIAL BENCH WAS RIGHT IN HOLDING THAT T HE POWER UNDER SECTION 153A BEING NOT EXPECTED TO BE EXERCISED ROU TINELY, SHOULD BE EXERCISED IF THE SEARCH REVEALS ANY INCRIMINATING M ATERIAL. IF THAT IS NOT FOUND, THEN, IN RELATION TO THE SECOND PHASE OF THREE YEARS, THERE IS NO WARRANT FOR MAKING AN ORDER WITHIN THE MEANING O F THIS PROVISION. IN ANY EVENT, THE ISSUE STANDS CONCLUDED BY A DIVIS ION BENCH JUDGMENT OF THIS COURT RENDERED IN THE CASE OF COMM ISSIONER OF INCOME TAX APPEAL NO.36 OF 2009 DECIDED ON 29TH OCT OBER, 2010. IT IS, THEREFORE, APPARENT THAT THE LAW LAID DOWN BY T HIS COURT IS BINDING ON THE REVENUE. IF THAT IS 'BINDING THEN THE QUESTI ONS OF LAW AND WITH REGARD TO APPLICABILITY OF SECTION 153A NEED TO BE ANSWERED AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE.' 19. THEREFORE, THERE ARE DIFFERENT VIEWS OF DIFFERE NT HIGH COURTS IN THIS RESPECT AND IN SUCH A SITUATION; THE VIEW FAVOURABL E TO THE ASSESSEE IS TO BE FOLLOWED. 20. AS REGARDS ARGUMENT OF LD. D.R. THAT EXISTENCE OF INCRIMINATING MATERIAL IN ALL YEARS IS NOT NECESSARY AND IT IS SU FFICIENT IF INCRIMINATING MATERIAL IS FOUND FOR ANY OF THE YEARS, WE DO NOT F IND FORCE IN THIS ARGUMENT AS EVERY YEAR IS A SEPARATE YEAR AND EXISTENCE OF I NCRIMINATING MATERIAL IN ONE YEAR CANNOT BE APPLIED TO ANOTHER YEAR. 21. SIMILARLY, WE DO NOT FIND ANY FORCE IN THE ARGU MENT OF LD. D.R. THAT QUESTION OF JURISDICTION CAN ONLY BE RAISED WITHIN ONE MONTH FROM THE DATE OF SERVICE OF NOTICE U/S 153A AS LD. D.R. HAD RELIED O N THE CASE LAW OF CIT VS KAPIL JAIN 50 DTR 342 AS WE FIND THAT IN THAT CASE THE QUESTION WAS DECIDED WITH REFERENCE TO SECTION 124 OF THE ACT AND NOT WI TH REFERENCE TO SECTION 153A OF THE ACT. ITA NO.2140,2141/DEL/2008 C.O.159 AND 239/DEL/2009 20 22. IN VIEW OF THE ABOVE, C.O. 159/DEL/2009 IS ALLO WED. SINCE WE HAVE DECIDED THE LEGAL ISSUE IN FAVOUR OF ASSESSEE, THE REVENUES APPEAL IN I.T.A. NO. 2140 HAS BECOME ACADEMIC AND IS DISMISSED AS IN FRUCTUOUS. 23. C.O. NO.239/DEL/2009 BEING DELAYED AND IN THE A BSENCE OF NO APPLICATION FOR CONDONATION OF DELAY, THE SAME IS D ISMISSED. 24. I.T.A. NO. 2141/DEL/2008 FILED BY REVENUE HAS A LSO BECOME INFRUCTUOUS IN VIEW OF THE FACT THAT THE REVENUE IN THIS YEAR WAS AGGRIEVED ONLY WITH THE DIRECTIONS OF LD. CIT(A) WHEREBY HE H AD ALLOWED CARRY FORWARD OF LOSS ON ACCOUNT OF CAPITAL LOSS FROM ASS ESSMENT YEAR 1998-99 BUT SINCE WE HAVE ALLOWED C.O. IN THAT YEAR WHEREBY WE HAVE HELD THE ADDITION ILLEGAL, THEREFORE, QUESTION OF CARRY FORW ARD OF LOSS WILL NOT ARRIVE. THEREFORE, I.T.A. NO. 2141/DEL/2008 IS DISMISSED AS INFRUCTUOUS. 25. IN NUTSHELL, APPEALS OF REVENUE ARE DISMISSED A S INFRUCTUOUS WHEREAS C.O. 159/DEL/2009 IS ALLOWED AND C.O. 239/DEL/2009 IS DISMISSED. 26. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH MAY, 2015. SD./- SD./- ( G. C. GUPTA) (T.S. KAPOOR ) VICE PRESIDENT ACCOUNTANT MEMBER DATE: 29 TH MAY, 2015 SP COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI). ITA NO.2140,2141/DEL/2008 C.O.159 AND 239/DEL/2009 21 S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 26/5 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 26,27,28 SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS 29/5/15 SR. PS/PS 6 KEPT FOR PRONOUNCEMENT 29/5 SR. PS/PS 7 FILE SENT TO BENCH CLERK 29/05 SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER