Dy. CIT, Central Circle-3, Hyderabad V. M/s. AMR Constructions Ltd., Hyderabad

CO 6/HYD/2013

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 9070 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 21 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 23-10-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 04-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HARILAL NAYAK
• Assessee Lawyers: A V RAGHURAM; Y R RAO
• Keywords: Depreciation; Search and seizure; Difference of opinion; Documents seized
• Section: 143(3); 153A; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NOS. 1828, 1829, 1830 & 1831/HYD/2012 ASSESSMENT YEARS : 2003-04, 2004-05, 2005-06 & 2006 -07 DY. COMMISSIONER OF INCOME- TAX, CIRCLE - 3, HYDERABAD. VS. AMR INDIA LTD. (FORMERLY KNOWN AS AMR CONSTRUCTIONS LTD.) PAN: AADCA3750D (APPELLANT) (RESPONDENT) AND C.O NOS. 06, 07, 08 & 09/HYD/2013 (IN ITA NOS. 1828, 1829, 1830 & 1831/HYD/2012 ASSESSMENT YEARS : 2003-04, 2004-05, 2005-06 & 2006 -07) AMR INDIA LTD. (FORMERLY KNOWN AS AMR CONSTRUCTIONS LTD.) PAN: AADCA3750D VS. DY. COMMISSIONER OF INCOME- TAX, CIRCLE - 3, HYDERABAD. (CROSS OBJECTOR) (RESPONDENT) REVENUE BY : SHRI HARILAL NAYAK ASSESSEE BY : S/SHRI Y.R. RAO & AV RAGHURAM DATE OF HEARING : 17-10-2013 DATE OF PRONOUNCEMENT : 23-10-2013 O R D E R PER BENCH: REVENUE FILED APPEALS IN THE NAME OF AMR CONSTRUCT IONS LTD. ASSESSEE FILED AN AFFIDAVIT REGARDING CHANGE OF NAM E OF COMPANY TO 2 ITA NOS. 1828 TO 1831/HYD/2012 & C.OS. 06 TO 09/HYD/2013 M/S AMR INDIA LTD. AMR INDIA LTD. ASSESSEE, THEREFORE, REQUESTED THA T THE SAID CHANGED NAME AMR INDIA LTD. MAY BE MENTIONED IN T HE APPEALS OF REVENUE AND IN THE COS FILED BY ASSESSEE WHILE PASS ING ORDER. 2. REVENUE FILED FOUR APPEALS FOR AY 2003-04 TO 200 6-07 AGAINST SEPARATE ORDERS OF CIT(A)-VII, HYDERABAD DATED 08-1 0-2012. ASSESSEE ALSO FILED FOUR CROSS OBJECTIONS FOR THE S AID ASSESSMENT YEARS IN SUPPORT OF THE ORDERS OF THE CIT(A), BUT, ALSO CONTESTED THE ISSUE ON MERITS, WHICH WAS NOT ADJUDICATED BY THE L EARNED CIT(A). SINCE THE ISSUE INVOLVED IN THE APPEALS OF REVENUE AND COS FILED BY ASSESSEE ARE COMMON, THE SAME WERE CLUBBED AND HEAR D TOGETHER AND THEREFORE, FOR THE SAKE OF CONVENIENCE A COMMON ORDER IS PASSED. ITA NOS. 1828 TO 1831/HYD/12 - REVENUE APPEALS 3. TO DISPOSE OF THESE APPEALS, WE REFER TO THE FAC TS IN AY 2003- 04 AND THE GROUNDS RAISED THEREIN, WHICH ARE COMMON IN ALL THE APPEALS, AS UNDER: 1. THE LD. CIT(A) ERRED BOTH IN FACTS AND IN LAW IN DELETING THE ADDITIONS MADE. 2. THE LD. CIT(A) ERRED IN NOT APPRECIATING THE TOT AL FACTS OF THE CASE IN PURELY ALLOWING THE APPEAL ON TECHNICAL GRO UNDS. 3. THE LD. CIT(A) ERRED IN NOT APPRECIATING THE FAC T THAT THE ORDER OF THE SPECIAL BENCH, ITAT, MUMBAI WAS DISTIN GUISHED BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT-VII VS. CHETAN DAS AND LACHMAN DAS. 4. THE LD. CIT(A) ERRED IN NOT APPRECIATING THE DET AILED DISCUSSION MADE BEFORE DISALLOWING SUB-CONTRACT PAY MENTS OF RS. 1,54,00,000/-. 5. THE LEARNED CIT(A) ERRED NOT APPRECIATING THE DE TAILED DISCUSSION MADE BEFORE DISALLOWING THE UNEXPLAINED SHARE APPLICATION MONEY OF RS. 1,75,000/- (WRONGLY MENTIO NED AS RS. 1,75,00,000/-) 3 ITA NOS. 1828 TO 1831/HYD/2012 & C.OS. 06 TO 09/HYD/2013 M/S AMR INDIA LTD. 6. THE LD. CIT(A) ERRED ON FACTS IN NOT CONFIRMING THE DEPRECIATION DISALLOWED OF RS. 43,625/-. 4. BRIEFLY STATED, ASSESSEE COMPANY IS ENGAGED IN T HE BUSINESS OF CIVIL CONTRACTS. A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT ALONG WITH OTHER GROUP CASES ON 16-12-2008. ORIGINALLY AS SESSEE COMPANY FILED ITS RETURN OF INCOME FOR THE AYS UNDER CONSID ERATION AND ASSESSMENTS HAVE BEEN COMPLETED DETERMINING THE TOT AL INCOME AS FOLLOWS: (AMT. IN RS.) AY DATE OF RETURN AMOUNT DECLARED DATE OF ASSESSMENT ORDER AMOUNT ASSESSED 2003-04 31-03-04 14,41,515/- 28-11-2005 30,17,320/- 2004-05 31-10-04 33,28,189/- 18-12-2006 56,75,740/- 2005-06 01-11-05 1,00,60,920/- 27-12-2007 3,08,20,940/- 2006-07 27-11-06 12-02-08 (REVISED) 8,63,72,832/- 6,62,28,697/- (REVISED) 31-03-2008 6,86,63,938/- CONSEQUENT TO THE SEARCH, THE AO ISSUED NOTICES U/S 153A AND IN RESPONSE TO THE SAID NOTICE, ASSESSEE COMPANY FILED ITS RETURNS OF INCOME ON 31-03-2010 DECLARING ASSESSED INCOME AS P ER THE ASSESSMENT ORDER MADE U/S 143(3) IN RESPECT OF THE ASSESSMENT YEARS. SINCE ASSESSEES BOOKS OF ACCOUNT WERE NOT A VAILABLE, THE AO REFERRED THE MATTER FOR SPECIAL AUDIT U/S 142(2A) O F THE ACT AND THE SPECIAL AUDITOR DID NOT SUBMIT ANY REPORT AS NO BOO KS OF ACCOUNT AND DETAILS WERE FURNISHED. THE AO COMPLETED THE ASSESS MENTS BY DISALLOWING MAINLY 50% OF THE SUB-CONTRACT PAYMENTS MADE IN RESPECT OF THE ASSESSMENT YEARS UNDER CONSIDERATION THEREBY MAKING ADDITION FOR AY 2003-04 OF RS. 1,54,00,000/-, FOR AY 2004-05 OF RS. 2,22,00,000/-, FOR AY 2005-06 OF RS. 5,16,00,000/- AND FOR AY 2006- 07 OF RS. 22,00,000/- & RS. 1,86,37,627/- TO BHARA TH INFRASTRUCTURE. IN ADDITION, IN AY 2003-04, THE AO DISALLOWED UNEXP LAINED SHARE APPLICATION MONEY OF RS. 1,75,000/- AND DISALLOWED DEPRECIATION ON CERTAIN ASSETS FOR AN AMOUNT OF RS. 43,625/-, IN A Y 2004-05 RS. 4 ITA NOS. 1828 TO 1831/HYD/2012 & C.OS. 06 TO 09/HYD/2013 M/S AMR INDIA LTD. 1,33,594/-, AND IN AY 2005-06 RS. 2,72,000/-. FOR A Y 2006-07, THE AO ALSO MADE DISALLOWANCE OF RS. 67,010/- U/S 40(A) (IA) OF THE ACT AND DISALLOWANCE OF EXPENDITURE OF RS.4,86,26,000/- IN THE GUISE OF DIVERSION OF FUNDS. 5. ASSESSEE CONTESTED BEFORE THE CIT(A) THAT THE OR DER PASSED BY THE AO U/S 143(3) R.W.S. 153A IS BAD IN LAW AND THE AO CANNOT MAKE ANY ADDITIONS IN THE ABSENCE OF ANY SEIZED MATERIAL . IT WAS FURTHER SUBMITTED THAT SINCE ASSESSMENTS HAVE ORIGINALLY CO MPLETED U/S 143(3), NO REASSESSMENT CAN BE DONE ON UNABATED- C OMPLETED ASSESSMENTS AND, THEREFORE, REASSESSMENT WITHOUT AN Y SEIZED MATERIAL IS NOT SUSTAINABLE IN LAW. IT WAS FURTHER CONTENDED THAT AS THE ORIGINAL ASSESSMENT IS STILL VALIDLY SUBSISTING, RE ASSESSMENT ORDER PASSED IS NOT IN ACCORDANCE WITH THE JUDICIAL PRINC IPLES LAID DOWN AND NO FRESH ADDITION/DISALLOWANCES CAN BE MADE ON THE SAME SET OF FACTS UNLESS CORROBORATED BY MATERIAL EVIDENCE FOUND OR S EIZED. AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE, THE LEARNE D CIT(A) HELD THAT THE VARIOUS ADDITIONS MADE BY THE AO IN THE AS SESSMENT ORDER IS NOT JUSTIFIED AND THE SAME ARE DIRECTED TO BE DELET ED BY OBSERVING VIDE PARAS 6.0 TO 6.13 IN HIS ORDER, AS UNDER: 6.0 I HAVE GONE THROUGH THE FACTS OF THE CASE AND THE SUBMISSIONS OF THE APPELLANT. I FIND THAT APART FROM THE GROUNDS OF APPEAL ON THE MERIT OF THE ADDITIONS MADE BY THE ASSESSING OFFICER, THE APPELLANT HAS RAISED A LEGAL GROUND STATING THAT ADDITION IN THE ASSESSMENT U/S 153A SHOULD BE MADE BASED ON INCRIMINATING AND ADVERSE MATERIAL FOUND DURING THE COURSE OF SEARCH. ACCORDINGLY, I AM DECIDING THE LEGAL GROUND RAISED BY THE APPELLANT BEFORE GOING INTO THE MERIT OF THE CASE. 6.1 AS STATED BY THE APPELLANT, THE ADDITION IN AN ASSESSMENT MADE U/S 153A SHOULD BE CONFINED TO THE MATERIAL FOUND DURING THE COURSE OF SEARCH. DURING THE COURSE OF APPELLATE PROCEEDINGS, THE APPELLANT HAD FILED THE WRITTEN SUBMISSIONS WHEREIN 5 ITA NOS. 1828 TO 1831/HYD/2012 & C.OS. 06 TO 09/HYD/2013 M/S AMR INDIA LTD. HE HAD RELIED ON THE DECISION OF SPECIAL BENCH OF ITAT, MUMBAI, IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD VS DCIT IN ITA NO.5018 TO 5022 AND 5059/M/10, WHEREIN, THE SPECIAL BENCH HAD HELD THAT ONLY THE ASSESSMENTS PENDING AS ON THE DATE OF SEARCH SHALL ABATE AND IN RESPECT OF OTHER CASES, WHICH INCLUDE COMPLETED ASSESSMENTS, THE ASSESSMENTS U/S 153A SHALL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL FOUND AND SEIZED DURING THE COURSE OF SEARCH. THE APPELLANT HAD ALSO ENCLOSED THE COPY OF THE SAID DECISION. 6.2 IT IS A FACT NOT DISPUTED THAT THERE WAS NO SPECIFI C INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH INDICATING ANY UNDISCLOSED INCOME FOR THE AY UNDER CONSIDERATION. THE ASSESSING OFFICER WHILE MAKING THE ASSESSMENT ORDER HAS BASICALLY REFERRED TO A SEIZED DOCUMENT 'PAGES 144 TO 150 OF ANNEXURE AI AMRCL/02 FOUND AND SEIZED DURING THE COURSE OF SEARCH, WHICH HAS BEEN FORMED AS A PART OF THE ASSESSMENT ORDER. I HAVE GONE THROUGH THE SAME AND I FIND THAT THE SAID SEIZED PAPERS RELATING TO CERTAI N ACCOUNTING ADJUSTMENTS FOR THE YEAR 2008. THE ASSESSING OFFICER HAS ALSO REFERRED TO A TABULAR STATEMENT WHICH FORMS PART OF THE ASST. ORDER AS ANNEXURE-II. HOWEVER, THE SAID TABULAR STATEMENT GI VING A LIST OF DIFFERENT PERSONS IS UNDATED AND UNSIGNED . THE ASSESSING OFFICER HAS NOT GIVEN ANY SPECIFIC FINDIN G THAT ANY OF THE ENTRIES IN THE TABULAR STATEMENT AS IN ANNEXURE-II OF THE ASST. ORDER IS FOR THE YEAR 2003 -04. THE ASST. ORDER INDICATES THAT THE ADDITIONS HAVE B EEN MADE BASICALLY RELYING ON THE, FINDINGS OF THE POST - SEARCH INVESTIGATIONS FOR THE AYS 08-09, 09-10 ETC. 6.3 IT IS ALSO NOT DISPUTED THAT THE ASSESSMENT FOR THE AY UNDER CONSIDERATION WAS EARLIER COMPLETED U/S 143(3) OF THE I.T.ACT VIDE ORDER DATED 28.11.2005. IN THE SAID ORDER DATED THE ASSESSING OFFICER HAS CLEA RLY MENTIONED THAT THE AR OF THE ASSESSEE HAD FILED THE INFORMATION CALLED FOR FROM TIME TO TIME. AFTER EXAMINING THE DETAILS, THE THEN ASSESSING OFFICER H AS COMPLETED THE ASSESSMENTS U/S 143(3) AND HAD EVEN MADE CERTAIN DISALLOWANCES OF EXPENDITURE DEBITED T O P&L A/E. THUS, IT CANNOT BE SAID THAT THE APPELLANT HAD NOT MAINTAINED ANY BOOKS OF ACCOUNTS SINCE THE SAME WAS EXAMINED BY THE DEPARTMENT DURING THE EARLIER ASSES SMENT 6 ITA NOS. 1828 TO 1831/HYD/2012 & C.OS. 06 TO 09/HYD/2013 M/S AMR INDIA LTD. PROCEEDINGS. 6.4 THERE ARE A NUMBER OF JUDICIAL DECISIONS WHEREIN, IT HAS BEEN HELD THAT THE ADDITIONS MADE I N COURSE OF ASSESSMENT PROCEEDINGS U/S 153A SHOULD BE DERIVED FROM THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. SOME SUCH DECISIONS ARE MENTIONED HEREUNDER: A) LMJ INTERNATIONAL LTD VS. DCIT (22 SOT 305 ITAT) (B) ABHAY KUMAR SHROFF VS. CIT(290 ITR 114) (JHAR.) (C) CA ABRAHAM VS ITO (41 ITR 425)(SC) (D) MANISH MAHESWARI VS. ACIT(289 ITR 341)(SC) (E) ACIT VS. RUPESH VOLIDAS PATIL (ITA NO.2390 TO2394/AHD/2007) 6.5 IN THE CASE OF LMJ INTERNATIONAL LTD THE HON'BLE ITAT KOLKATA HAS OBSERVED THAT ITEMS OF REGULAR ADDITIONS CANNOT BE TAKEN UP IN THE ASSESSMENT U/S 153A/153C. THE HEAD NOTE IN THE SAID CASE IS REPRODUCED BELOW. 'SECTION 153C, READ WITH SECTION 153A, OF THE INCOME-TAX ACT, 1961 - SEARCH & SEIZURE - ASSESSMENT OF INCOME OT' ANY OTHER PERSON - ASSESSMENT YEAR 1999-00 - WHETHER ITEMS OF REGULAR ASSESSMENT CAN BE ADDED BACK IN PROCEEDINGS UNDER SECTION 153C - HELD, NO - WHETHER ONLY UNDISCLOSED INCOME DETECTED IN COURSE OF SEARCH OF SEARCHED PERSON OR ANY OTHER PERSON CAN BE ADDED AND CHARGED TO TAX UNDER SECTION 153C - HELD, YES' THE HON'BLE ITAT HAVE DISCUSSED VARIOUS LEGAL ASPEC TS OF SECTION 153A/153C AND OBSERVED AT PARA 17 OF THE OR DER THAT THE SCHEME OF THE ACT IS VERY CLEAR THAT THE REGULA R ASSESSMENTS ARE MADE IN TERMS OF SECTIONS 139, 142 AND 143; CONCLUDED ASSESSMENTS CAN BE RE-OPENED AS PER SECTI ONS 147 AND 148 IN CASE THE ASSESSING OFFICER HAS 'REASONS TO BELIEF' THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSES SMENT AND THE PROVISIONS OF SECTIONS 153A TO 153C CAN BE RESORTED TO FOR THE ASSESSMENT OF UNDISCLOSED INCOME IN SEAR CH CASES. ALL THE THREE PROCEDURES OF ASSESSMENT OPERATE IN D IFFERENT 7 ITA NOS. 1828 TO 1831/HYD/2012 & C.OS. 06 TO 09/HYD/2013 M/S AMR INDIA LTD. FIELDS AND HAVE DIFFERENT PURPOSES TO BE FULFILLED ALTOGETHER. THE HON'BLE ITAT AT PARA 18 OF THE ORDER CONCLUDED THAT THE ADDITIONS MADE BY THE ASSESSING OFFICER BEING ALL R ELATING TO REGULAR ITEMS ARE HEREBY DELETED. WHILE DECIDING TH E ISSUE THE HON'BLE TRIBUNAL HAS REFERRED TO THE DECISION OF HO N'BLE JHARKHAND HIGH COURT IN THE CASE OF ABHAY KUMAR SHR OFF AT PARA 16 OF THE ORDER AS BELOW: 16. THE HON'BLE JHARKHAND HIGH COURT IN THE CASE OF ABHAY KUMAR SHROFF (SUPRA), HAS HELD RECENTLY THAT THERE SHALL BE ASSESSMENT OF UNDISCLOSED INCOME OF SIX ASSESSMENT YEARS PRECEDING THAT IN WHICH SEARCH WAS CONDUCTED UNDER THE NEW SCHEME OF ASSESSMENT. [EMPHASIS SUPPLIED]. 6.6 A SIMILAR VIEW WAS ALSO EXPRESSED IN THE CASE OF SUN CITY ALLOYS (ITAT, JODHPUR), WHEREIN IT WAS HEL D THAT THE SUBMISSION OF THE ASSESSEE'S COUNSEL AS TO SCOPE OF SECTION 153A ASSESSMENT BEING DE NOVO IN NATURE IS NOT ACCEPTABLE AND SUBMISSION OF THE LD. DR THAT SCOPE OF SECTION 153A ASSESSMENT IS QUA SUCH MATERIAL DESERVES TO BE ACCEPTED. IT WAS ALSO HELD THAT ISSUANCE OF NOTICE U/S 153A FOR ALL SIX ASSESSMENT YEARS DOES NOT ENTITLE ALTOGETHER A FRES H EXERCISE OF MAKING FRESH ASSESSMENT AND THAT NECESSARILY ONLY UNDISCLOSED INCOME AFTER DEFRAYING EXPENSES FOR EARNING THE SAME IS TAXABLE WHEN INTERPRETED IN SPECIFIC CONTEXT OF SECTION 153A. IT AT AHMADABAD IN THE CASE OF MEGHMANI INDUSTRIES LTD AN D MEGHMANI ORGANICS LTD, WHEREIN THE LD. COUNSEL FOR THE APPELLANT SUBMITTED THAT MAINLY BECAUSE A SEARCH IS CONDUCTED, THE ASSESSMENT WHICH HAS BECOME FINAL CA NNOT BE REAGITATED ON A DIFFERENCE OF OPINION, OBSERVED THAT THE POWER U/S 153A OF THE ACT SHOULD BE WITH REFERENCE TO ASSESSMENT OR REASSESSMENT OF PENDING ASSESSMENTS O R QUA THE MATERIAL FOUND DURING THE SEARCH. SINCE NOTHING WAS FOUND DURING THE SEARCH, THE AO DOES NOT HAVE ANY JURISDICTION FOR FRAMING ASSESSMENT U/S 153A OF THE ACT. RELIANCE WAS PLACED ON THE DECISION OF ITAT, KOLKAT A IN THE CASE OF LMJ INTERNATIONAL LTD VS DCIT. THE HON'BLE ITAT AHMADABAD AFTER DISCUSSING THE ISSUES IN DETAIL OBS ERVED THAT THE ASSESSMENT U/S 153A OF THE ACT SHALL BE WI TH REFERENCE TO THE VALUABLE ARTICLES OR THINGS FOUND OR DOCUMENTS SEIZED DURING THE SEARCH WHICH ARE NOT DI SCLOSED IN THE ORIGINAL ASSESSMENT. 8 ITA NOS. 1828 TO 1831/HYD/2012 & C.OS. 06 TO 09/HYD/2013 M/S AMR INDIA LTD. 6.7 INCIDENTALLY, SIMILAR VIEW HAS BEEN HELD BY HON'BLE ITAT, VISAKHAPATNAM BENCH IN THE CASE OF KGR EXPORTS VS. JCIT, VIZAG IN ITA NO. 494/V /2007. ONE OF THE ISSUES RAISED BEFORE THE HON'BLE TRIBUNAL WA S WHETHER THE AO WAS RIGHT IN MAKING ADDITIONS WHILE COMPLETING THE ASSESSMENT U/S 153A OF THE ACT, WHEN NO INCRIMINATING MATERIAL WAS FOUND DURING THE COUR SE OF SUCH PROCEEDINGS. BEFORE THE ITAT, THE AR OF THE APPELLANT WHILE ARGUING THE CASE HAD RELIED ON THE DECISION OF ITAT, KOLKATA IN THE CASE OF LMJ INTERNATIONAL REFERRED TO ABOVE AS ALSO THE DECISIO N OF JHARKHAND HIGH COURT IN THE CASE OF ABHAY KUMAR SHROFF VS. CIT (290 ITR 114), WHEREIN IT WAS HELD T HAT ONLY UNDISCLOSED INCOME CAN BE ASSESSED U/S 153A OF THE ACT. THE ISSUE WAS DISCUSSED BY HON'BLE TRIBUNA L FROM PARA 9 TO PARA 23 OF THE ORDER. AT PARA 23, TH E HON'BLE ITAT, VIZAG HELD AS UNDER. '23. IN VIEW OF THE FOREGOING, WE ARE OF THE OPINIO N THAT WHEN NO INCRIMINATING MATERIAL IS FOUND DURING THE COURSE OF SEARCH, THE ASSESSING OFFICER CANNOT MAKE ANY ADDITION ON ISSUES WHICH HAVE ALREADY BEEN CONCLUDED EVEN WHEN THE ASSESSMENTS WERE REOPENED BY VIRTUE OF PROVISIONS OF SECTION 153A. IN SUCH CA SES, THE AO HAS TO COMPLETE SUCH ASSESSMENTS WITHOUT MAKING ANY FURTHER ADDITION. HENCE THE SECOND ISSUE URGED BEFORE US IS ANSWERED IN FAVOUR OF THE ASSESS EE. ' IT IS ALSO NOT OUT OF PLACE TO MENTION HERE THAT TH E HON'BLE JURISDICTIONAL TRIBUNAL ITAT HYDERABAD HAS ALSO MAD E SIMILAR OBSERVATIONS IN SOME OF THE RECENT CASES. IN THE CA SE OF ACIT/DCIT, CENTRAL CRICLE-5 VS PLATINA PROPERTIES P ROJECTS LTD IN ITA NO. 1622, 1623, 573 TO 576/HYD/2008, THE HON'BLE ITAT, HYDERABAD B-BENCH AT PARA NO.6 HAS OBSERVED A S UNDER: ' .... THE PRESENT ASSESSMENT IS MADE U/S 143(3) R.W.S. 153A RWS 153C OF THE ACT. THE SECOND PROVISO OF SUB SECTION 1 TO SECTION 153A PROVIDES THAT IF ASSESSMENT FOR ANY OF THE ASSESSMENT YEAR FALLING WITHIN IN A PERIOD 6 YEARS MENTIONED IN CLAUSE (B) OF SECTION 153A (1) IS PENDING ON THE DATE OF SEARCH, IT SHALL ABATE. THE PRESENT ASSESSMENT YEAR IS 1999-2000 WHICH IS FALLING WITHIN THE PERIOD OF 6 YEARS BUT ITS ASSESSMENT IS 9 ITA NOS. 1828 TO 1831/HYD/2012 & C.OS. 06 TO 09/HYD/2013 M/S AMR INDIA LTD. COMPLETE AND HENCE THE PROCEEDINGS DO NOT ABATE. IN OTHER WORDS THE ORIGINAL ASSESSMENT WAS MADE U/S 143(3) HAS BECOME FINAL AND IS NOT AFFECTED BY THE SECOND PROVISO TO SECTION 153A. OF COURSE, THE PRESENT ASSESSMENT IS A CASE FALLING U/S 153C, BUT THEN, AS PER SUB SECTION (2) OF SECTION 153C, THIS ASSESSMENT WAS ALSO TO BE DONE IN THE MANNER PROVIDED IN SECTION 153A. THEREFORE, THE SECOND PROVISO TO SECTION 153A APPLIES EQUALLY TO THE CASES FALLING U/S 153C. WHAT FOLLOWS IS THAT THE ASSESSMENT NOW TO BE DONE IS TO BE CONFINED TO THE MATERIAL FOUND IN THE COURSE OF SEARCH ONLV . THE ADDITIONS/DISALLOWANCES MADE IN THE REGULAR ASSESSMENT CANNOT BE REPEATED IN THE ASSESSMENT TO BE MADE U/S 153C OF THE ACT UNLESS FRESH MATERIAL HAS BEEN UNEARTHED IN COURSE OF SEARCH IN RESPECT OF THOSE DDITIONS/DISALLOWANCES 6.8 SIMILARLY, IN THE CASE YELAMANCHILI FINANCE AND TRADING PVT LTD VS. ACIT, CENTRAL CIRCLE 5 IN ITA NO. 745/HYD/2008 & OTHERS THE HON'BLE ITAT HYDERABAD B-BENCH AT PAGE 6 OF THE ORDER HAVE MADE AN OBSERVATION THAT WHILE MAKING ASSESSMENT U/S 153A OF THE ACT, IT IS ESSENTIAL THAT ONLY SUCH ADDITIONS CAN BE MADE WHICH ARE BASED ON MATERIAL FOUND IN THE COURSE OF SEARCH. 6.9 REFERENCE CAN ALSO BE MADE TO THE LATEST DECISION OF THE SPECIAL BENCH OF ITAT, MUMBAI IN THE CASE OF ALL CARGO LOGISTICS (147 TIJ 513), WHICH IS ALSO RE LIED UPON BY THE APPELLANT. IN THAT CASE, THE HON'BLE SPECIAL BENCH OBSERVED AS UNDER: (A) IN ASSESSMENTS THAT ARE ABATED, THE AO RETAINS THE ORIGINAL JURISDICTION AS WELL AS JURISDICTION CONFE RRED ON HIM U/S 153A FOR WHICH ASSESSMENTS SHALL BE MADE FO R EACH OF THE SIX ASSESSMENT YEARS SEPARATELY; B) IN OTHER CASES, IN ADDITION TO THE INCOME THAT H AS ALREADY BEEN ASSESSED, THE ASSESSMENT U/S 153A WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL, WHICH IN THE CONTEXT OF RELEVANT PROVISIONS MEANS 6.10 IT IS JUST CLEAR FROM THE DECISION OF THE SPECIAL BENCH THAT IN THE ASSESSMENTS U/S 153A, THE ASSESSING OFFICER HAS TO RESTRICT HIMSELF TO TH E INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH, WHERE, THE ASSESSMENTS WERE ALREADY 10 ITA NOS. 1828 TO 1831/HYD/2012 & C.OS. 06 TO 09/HYD/2013 M/S AMR INDIA LTD. COMPLETED EARLIER AND ACCORDINGLY NOT ABATED. ONLY IN ASSESSMENTS WHICH ARE ABATED IN VIEW OF THE FACT THAT THE SAME WERE PENDING AS ON THE DATE OF SEARCH, THE ASSESSING OFFICER CAN MAKE REGULAR ADDITIONS AS ALSO ADDITIONS BASED ON INCRIMINATING MATERIAL. 6.11 THUS, FROM THE ANALYSIS OF ALL THE DECISIONS REFERRED TO ABOVE, IT IS CLEAR THAT THE MAJORITY VI EW OF THE JUDICIAL AUTHORITIES ARE IN FAVOUR OF THE APPELLANT THAT THE ADDITIONS/DISALLOWANCES IN ASSESSMENT UNDER SECTION 153A/153C CAN BE MADE ONLY IN RESPECT OF MATERIAL FOUND DURING THE COURSE OF SEARCH AND IT IS ALSO THE VIEW OF THE JUDICIAL AUTHORITIES THAT ASSESSMENT WHICH ARE ALREADY COMPLETE EARLIER PRIOR TO THE DATE OF SEARCH SHALL NOT ABATE AND WILL NOT BE WITH IN THE PURVIEW OF SECTION 153A OR 153C, UNLESS THERE IS AN Y FRESH MATERIAL FOUND DURING THE SEARCH RELATING TO THOSE YEARS AND IN THAT CASE, ADDITIONS CAN BE RESTRICTED TO SUCH M ATERIAL ONLY. 6.12 IN THE APPEAL BEFORE ME FOR CONSIDERATION, IT IS A FACT NOT DISPUTED THAT THE ASSESSMENTS FOR THE YEAR UNDER CONSIDERATION, WAS ALREADY COMPLETED EARLIER U/S 143(3) VIDE ORDER DATED 28.11.2005. IT IS ALSO A FACT NOT DISPUTED THAT THE AO HAS NOT SPECIFICALLY POINT ED OUT ANY MATERIAL FOUND DURING THE COURSE OF SEARCH BASED ON WHICH THE ADDITIONS HAVE BEEN MADE IN THE ASSESSMEN T YEARS WHICH IS UNDER APPEAL. THIS IS FURTHER STRENG THENED BY THE FACT THAT THERE IS NO REFERENCE TO ANY SPECIFIC SEIZED DOCUMENT WHICH HAS A DIRECT RELEVANCE FOR THE YEAR UNDER CONSIDERATION WHICH MEANS THAT THERE WAS NO INCRIMI NATING MATERIAL AGAINST THE APPELLANT FOR THIS ASSESSMENT YEAR THAT CAN PROMPT THE AO TO RE-AGITATE THE ISSUES WHICH WA S OTHERWISE SETTLED IN THE REGULAR ASSESSMENT COMPLET ED EARLIER. THUS, AS PER THE VIEW HELD BY THE LATEST D ECISION OF THE SPECIAL BENCH, MUMBAI, REFERRED TO SUPRA, THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION WHICH W AS ALREADY COMPLETED SHALL NOT BE SUBJECTED TO ASSESSM ENT AGAIN U/S 153A/153C THUS, RELYING ON THE DECISION O F HON'BLE ITAT, HYDERABAD, B-BENCH IN THE CASES REFER RED TO ABOVE AS ALSO THE PLETHORA OF DECISIONS REFERRED TO EARLIER INCLUDING THE LATEST DECISION OF THE SPECIAL BENCH, I AM OF. THE CONSIDERED OPINION THAT THE ADDITIONS MADE BY T HE AO WITHOUT ANY SPECIFIC REFERENCE TO SEIZED MATERIAL C ANNOT BE HELD TO BE LEGALLY SUSTAINABLE, ESPECIALLY WHEN THE ASSESSMENTS WERE ALREADY COMPLETED PRIOR TO THE DAT E OF SEARCH. 6.13 THUS, CONSIDERING THE LEGAL GROUND RAISED BY THE APPELLANT, I HOLD THAT THE VARIOUS ADDITIONS MADE BY THE AO IN THE ASSESSMENT ORDER FOR THE AY 2003-04 I S NOT JUSTIFIED. THE SAME IS DIRECTED TO BE DELETED. 11 ITA NOS. 1828 TO 1831/HYD/2012 & C.OS. 06 TO 09/HYD/2013 M/S AMR INDIA LTD. 6. REVENUE IS AGGRIEVED AND IS IN APPEAL BEFORE US. 7. THE LEARNED CIT-DR RELIED ON THE ORDERS OF THE A O TO SUBMIT THAT ASSESSEE HAS NOT FURNISHED BOOKS OF ACCOUNT AN D IN THE ABSENCE OF BOOKS OF ACCOUNT, THE AO IS JUSTIFIED IN MAKING DISALLOWANCE 50% OF THE SUB-CONTRACT PAYMENTS MADE AND OTHER ADDITIONS, BUT, THE CIT(A) IS NOT CORRECT IN HOLDING THAT THE AO CANNOT MAKE A NY ADDITIONS. IT WAS SUBMITTED THAT IN THIS CASE THE AO MADE INVESTI GATION AND REFERRED THE MATTER TO SPECIAL AUDIT AND THEN ONLY MADE THE ADDITIONS, THEREFORE, THE OPINION OF THE LEARNED CIT(A) IS NOT CORRECT. FURTHER RELYING ON THE PRINCIPLES LAID DOWN BY THE DECISION OF THE HONBLE HIGH COURT IN THE CASE OF GOPAL LAL BHADRUKA VS. DCIT [2 012] 346 ITR 106 (AP) AND CIT VS CHETAN DAS LACHMAN DAS IN ITA 2045/ 2010 AND OTHERS DT. 14-05-2012, THE LEARNED CIT-DR SUBMITTED THAT ASSESSMENTS CAN BE MADE IN OTHER YEARS IF THERE IS SEIZED MATERIAL FOUND EVEN IN ONE YEAR. 8. THE LEARNED COUNSEL SUBMITTED THAT NO INCRIMINAT ING MATERIAL WAS FOUND IN ANY OF THE YEARS UNDER CONSIDERATION A ND REFERRED TO THE DOCUMENTS EXTRACTED BY THE AO IN PAGE 4 OF ASSESSME NT ORDER TO SUBMIT THAT CERTAIN ACCOUNTING ADJUSTMENT MADE FOR THE AY 2008-09 CANNOT BE CONSIDERED AS INCRIMINATING MATERIAL AS A T THE TIME OF TRIAL BALANCE WHAT ARE THE EXPENDITURE ADJUSTMENTS TO BE MADE ARE ONLY LISTED OUT AND IN FACT AFTER CARRYING OUT THESE ADJ USTMENTS, INCOME HAS GONE UP AND HAS NOT COME DOWN, THEREFORE, THE SEIZE D PAPER CANNOT BE CONSIDERED AS BOGUS ENTRIES FOR CLAIM OF SUB-CON TRACT EXPENSES AND FURTHER IT WAS SUBMITTED THAT THIS DOCUMENT ONL Y PERTAINS TO AY 2008-09 AND IN NOWHERE IT REFERS TO THE YEARS UNDER CONSIDERATION. REFERRING TO CASE LAW RELIED UPON BY THE LEARNED DR , THE LEARNED COUNSEL SUBMITTED THAT THEY ARE DISTINGUISHABLE ON FACTS OF THE CASE OF ASSESSEE ON THE REASON THAT IN THOSE CASES THERE IS INCRIMINATING MATERIAL FOR SOME OF THE YEARS FOR INTERIM PERIOD A ND THERE WAS ADMISSION BY THE PARTIES THAT THEY WERE FOLLOWING S IMILAR MODUS- 12 ITA NOS. 1828 TO 1831/HYD/2012 & C.OS. 06 TO 09/HYD/2013 M/S AMR INDIA LTD. OPERANDI IN OTHER YEARS AND ON THOSE FACTS, THE HON BLE HIGH COURT HAVE AGREED THAT ADDITIONS CAN BE EXTENDED TO THE O THER PERIOD. WHEREAS IN ASSESSEES CASE, THERE IS NO INCRIMINATI NG MATERIAL FOR ANY OF THE IMPUGNED ASSESSMENT YEARS AND FURTHER IN THE ABSENCE OF INCRIMINATING MATERIAL COMPLETED ASSESSMENTS CANNOT BE RE-AGITATED. HE RELIED ON VARIOUS CASE LAW, ON WHICH RELIANCE WA S PLACED BY THE LEARNED CIT(A) TO CONTEND THAT ASSESSMENTS PASSED B Y THE AO IS BAD IN LAW. 9. AFTER CONSIDERING RIVAL CONTENTIONS AND EXAMININ G THE RECORD, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORD ER OF LEARNED CIT(A) ON LEGAL PRINCIPLES. IN FACT, IN ALL THE FOUR YEARS , THE ASSESSMENTS HAVE BEEN COMPLETED U/S 143(3) AFTER EXAMINING THE BOOKS OF ACCOUNT. SINCE THE ISSUES HAVE BEEN CRYSTALLIZED IN THE RESPECTIVE ASSESSMENT YEARS, NO APPEALS WERE FILED IN THOSE CA SES, THEREFORE, THE ORDERS WOULD NOT GET ABATED. THE HONBLE SPECIA L BENCH OF ITAT, MUMBAI IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LT D. VS. DCIT, 147 TTJ 513 HAS HELD THAT IN THE ASSESSMENTS THAT ARE P ENDING, THE AO RETAINS ORIGINAL JURISDICTION AS WELL AS JURISDICTI ON CONFERRED ON HIM U/S 153A FOR WHICH ASSESSMENTS SHALL BE MADE FOR EACH O F THESE ASSESSMENT YEARS SEPARATELY. IN RESPECT OF OTHER CA SES, IN ADDITION TO INCOME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSME NT U/S 153A WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL, WHI CH IN THE CONTEXT OF RELEVANT PROVISIONS MEANS, A) BOOKS OF ACCOUNT, OTH ER DOCUMENTS FOUND IN THE COURSE OF SEARCH WHICH WERE NOT PRODUC ED IN THE COURSE OF ORIGINAL ASSESSMENT AND B) UNDISCLOSED INCOME OR PROPERTY DISCLOSURE IN THE COURSE OF SEARCH. IN THE PRESENT CASE, AS ALREADY STATED, THERE IS NO INCRIMINATING MATERIAL WHATSOEV ER CONSEQUENT TO THE SEARCH AND ACCORDINGLY, THE AO CANNOT HAVE JURI SDICTION TO RE- AGITATE THE ASSESSMENTS, WHICH WERE ALREADY COMPLET ED AND SUBSISTING. THE AO CANNOT MAKE ANY OTHER REGULAR AD DITIONS AS DONE IN THE ORIGINAL ASSESSMENT IN THE COURSE OF REASSES SMENT U/S 153A UNLESS THERE IS FRESH MATERIAL FOUND DURING THE COU RSE OF SEARCH 13 ITA NOS. 1828 TO 1831/HYD/2012 & C.OS. 06 TO 09/HYD/2013 M/S AMR INDIA LTD. RELEVANT TO THE ASSESSMENT YEARS UNDER CONSIDERATIO N. IN VIEW OF THE ABOVE, WE UPHOLD THE ORDERS OF THE CIT(A) ON LEGAL PRINCIPLES IN ALL THE YEARS UNDER CONSIDERATION. SINCE THE ISSUE IS C ONTESTED ON THE LEGAL PRINCIPLES AND AS RIGHTLY HELD BY THE CIT(A) THERE IS NO NEED TO ADJUDICATE OTHER ADDITIONS MADE IN THE ASSESSMENT Y EARS BY DISALLOWING VARIOUS EXPENDITURES. THEREFORE, SINCE THESE GROUNDS ARE ACADEMIC IN NATURE, EVEN THOUGH REVENUE RAISED THES E GROUNDS, THESE DO NOT CALL FOR ANY ADJUDICATION. ACCORDINGLY , THE GROUNDS RAISED BY REVENUE IN ALL THE APPEALS ARE DISMISSED. C.O. NOS. 06 TO 09/HYD/2013 BY ASSESSEE 10. ASSESSEE HAS RAISED THE FOLLOWING COMMON GROUND IN ITS COS.: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LD. CIT(A) ERRED IN NOT ADJUDICATING THE OTHER GROUNDS OF APPEAL RAISED BEFORE HIM. 11. SINCE REVENUE APPEALS ARE DISMISSED UPHOLDING T HE ORDERS OF CIT(A), AS OPINED THEREIN THERE IS NO NEED TO ADJUD ICATE THE OTHER GROUNDS OF APPEAL RAISED BY ASSESSEE BEFORE THE CIT (A) AND, THEREFORE, SINCE THE COS RAISED BY ASSESSEE ARE IN SUPPORT OF ORDERS OF CIT(A), THE COS BECOME ACADEMIC IN NATURE AND CO NSEQUENTLY BECOME INFRUCTUOUS. ACCORDINGLY, THE SAME ARE DISMI SSED AS INFRUCTUOUS. 12. IN THE RESULT, APPEALS OF REVENUE AND COS OF AS SESSEE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 23 RD DAY OF OCTOBER, 2013. SD/- SD/- (SAKTIJIT DEY) (B. R AMAKOTAIAH) JUDICIAL MEMBER ACCOUNT ANT MEMBER HYDERABAD, DATED: 23 RD OCTOBER, 2013. 14 ITA NOS. 1828 TO 1831/HYD/2012 & C.OS. 06 TO 09/HYD/2013 M/S AMR INDIA LTD. KV COPY TO:- 1) M/S AMR INDIA LTD., 8-3-833, PLOT NO. 3 7 & 38, PHASE 3, KAMALAPURI COLONY, HYDERABAD 500 073. 2) DCIT, CENTRAL CIRCLE 3, HYDERABAD . 3) CIT(A)-VII, HYDERABAD. 4) CIT(CENTRAL), HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A .T., HYDERABAD. 15 ITA NOS. 1828 TO 1831/HYD/2012 & C.OS. 06 TO 09/HYD/2013 M/S AMR INDIA LTD.