M/s. Parivar Properties Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 1012/DEL/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69671 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 16-12-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 19-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMESH CHANDER
• Assessee Lawyers: ABHISHEK VERMA S
• Keywords: Search and seizure; Opportunity of being heard; Block assessment; Documents seized
• Section: 143(3); 153A; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH SMC SMC SMC SMC : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI BEFORE SHRI BEFORE SHRI BEFORE SHRI B.R. MITTAL, JUDICIAL MEMBER B.R. MITTAL, JUDICIAL MEMBER B.R. MITTAL, JUDICIAL MEMBER B.R. MITTAL, JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NOS SS S. .. .1011/DEL/2013 TO 1015/DEL/2013 1011/DEL/2013 TO 1015/DEL/2013 1011/DEL/2013 TO 1015/DEL/2013 1011/DEL/2013 TO 1015/DEL/2013 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEARS SS S : : : : 2003 2003 2003 2003- -- -04 TO 2007 04 TO 2007 04 TO 2007 04 TO 2007- -- -08 0808 08 M/S PARIVAR PROPERTIES M/S PARIVAR PROPERTIES M/S PARIVAR PROPERTIES M/S PARIVAR PROPERTIES PVT.LTD., PVT.LTD., PVT.LTD., PVT.LTD., 13 1313 13- -- -B, 3 B, 3 B, 3 B, 3 RD RDRD RD FLOOR, FLOOR, FLOOR, FLOOR, NETAJI SUBHASH NETAJI SUBHASH NETAJI SUBHASH NETAJI SUBHASH MARG, MARG, MARG, MARG, DARYAGANJ, DARYAGANJ, DARYAGANJ, DARYAGANJ, NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 002. 110 002. 110 002. 110 002. PAN : PAN : PAN : PAN : AAACP7755Q. AAACP7755Q. AAACP7755Q. AAACP7755Q. VS. VS. VS. VS. DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF DEPUTY COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE- -- -12, 12, 12, 12, ROOM NO.330, 3 ROOM NO.330, 3 ROOM NO.330, 3 ROOM NO.330, 3 RD RDRD RD FLOOR, FLOOR, FLOOR, FLOOR, ARA CENTRE, ARA CENTRE, ARA CENTRE, ARA CENTRE, JHANDEWALAN EXT., JHANDEWALAN EXT., JHANDEWALAN EXT., JHANDEWALAN EXT., NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 055. 110 055. 110 055. 110 055. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJIV SAXENA AND SHRI ABHISHEK VERMA, ADVOCATES. RESPONDENT BY : SHRI RAMESH CHANDER, CIT-DR. ORDER ORDER ORDER ORDER THE ASSESSEE HAS FILED ALL THESE APPEALS FOR ASSES SMENT YEARS 2003-04 TO 2007-08 AGAINST SEPARATE ORDERS OF LEARN ED CIT(A), ALL DATED 24 TH DECEMBER, 2012 ON COMMON GROUNDS (SAVE AND EXCEPT THE AMOUNT DISALLOWED BY THE AUTHORITIES BELOW VARIES). 2. SINCE THE FACTS AND THE ISSUE INVOLVED IN ALL TH ESE APPEALS ARE COMMON, I HEARD ALL THESE APPEALS TOGETHER AND DISP OSE THEM OF BY A COMMON ORDER FOR THE SAKE OF CONVENIENCE. 3. I CONSIDER IT RELEVANT TO STATE THE GROUNDS OF A PPEAL TAKEN BY THE ASSESSEE FOR AY 2003-04 WHICH ARE AS UNDER:- 1. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE WHETHER THE LD. CIT(A)-XXXI IS CORRECT IN DISMISSIN G THE GROUNDS OF APPEAL THAT THE ASSESSMENT HAS NOT BEEN FRAMED ON THE MATERIAL SEIZED PURSUANT TO AN ACTION TAKEN U/S 132 OF THE ACT BUT THE REASSESSMENT HAS BEEN MA DE ITA-1011 TO 1015/D/2013 2 NOT BASED ON SEARCH MATERIAL FOUND IN THE ACTION TA KEN BY THE DEPARTMENT WHICH IS ILLEGAL IN LAW IN VIEW OF T HE DECISION OF HONBLE ITAT IN THE MATTER OF ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT ITA NO.5018 TO 5022 AND 5059/M/2010. 2. THAT ON FACTS AND IN CIRCUMSTANCES OF THE CASE T HE LD.CIT(A) XXXI HAS ERRED IN DISALLOWING THE CAPITAL IZATION OF EXPENSES OF RS.1,37,153/- IN THE COST OF FIXED ASSE TS ILLEGALLY AND THEREFORE IS LIABLE TO BE QUASHED. 4. THE RELEVANT FACTS GIVING RISE TO THESE APPEALS ARE THERE WAS A SEARCH AND SEIZURE OPERATION UNDER SECTION 132 OF T HE INCOME-TAX ACT, 1961 IN RAJDARBAR GROUP OF CASES ON 31 ST JULY, 2008. IT IS STATED THAT DURING SEARCH OPERATION, CERTAIN DOCUMENTS WERE SEI ZED WHICH BELONGED TO THE ASSESSEE COMPANY. IN VIEW OF THE A BOVE, THE PROCEEDINGS WERE INITIATED AGAINST THE ASSESSEE COM PANY BY ISSUING NOTICE UNDER SECTION 153C OF THE ACT DATED 23 RD JULY, 2010 FOR THE SIX ASSESSMENT YEARS PRECEDING THE ASSESSMENT YEAR IN W HICH THE SEARCH HAD TAKEN PLACE. THE ASSESSEE FILED THE RETURN FOR ALL THE ASSESSMENT YEARS UNDER CONSIDERATION PURSUANT TO THE NOTICE IS SUED UNDER SECTION 153C OF THE ACT. 5. IT IS RELEVANT TO STATE THAT THE ASSESSEE COMPAN Y IS ENGAGED IN THE BUSINESS OF CONSTRUCTION, PURCHASE AND SALE OF PROPERTIES. THE ASSESSEE PURCHASED THE OLD CONSTRUCTED PROPERTY (JU BILEE CINEMA) AT KORIA POOL, DELHI FOR FY 1999-2000 AND SHOWN THE SA ME AS FIXED ASSETS. THE ASSESSEE STATED THAT DURING THE YEARS UNDER CON SIDERATION, NO BUSINESS ACTIVITY WAS CARRIED OUT BY THE ASSESSEE C OMPANY. IT IS RELEVANT TO STATE THAT FOR ALL THE ASSESSMENT YEARS UNDER CONSIDERATION, NO BUSINESS ACTIVITY WAS CARRIED OUT BY THE ASSESSE E COMPANY. IT IS RELEVANT TO STATE THAT FOR THE ALL THE ASSESSMENT Y EARS UNDER CONSIDERATION, THE ASSESSEE FILED THE RETURNS UNDER SECTION 139 OF THE ACT AS UNDER:- ITA-1011 TO 1015/D/2013 3 (I) FOR AY 2003-04 ON 18.10.2003 (II) FOR AY 2004-05 ON 19.01.2005 (III) FOR AY 2005-06 ON 19.12.2005 (IV) FOR AY 2006-07 ON 24.10.2006 (V) FOR AY 2007-08 ON 27.10.2007 6. FOR ALL THE ABOVE ASSESSMENT YEARS, THE RETURNS FILED DECLARED NIL INCOME. IT IS OBSERVED THAT ALL THE RETURNS WERE A CCEPTED UNDER SECTION 143(1) OF THE ACT. 7. PURSUANT TO THE NOTICE ISSUED UNDER SECTION 153C OF THE INCOME- TAX ACT, THE RETURNS FILED BY THE ASSESSEE FOR ALL THE ASSESSMENT YEARS UNDER CONSIDERATION DECLARED NIL INCOME. HOWEVER, THE ASSESSEE INCURRED THE EXPENSES COMPRISING MAINLY SECURITY EX PENSES, LEGAL AND PROFESSIONAL EXPENSES, INTEREST PAID, TELEPHONE EXP ENSES AND ELECTRICITY EXPENSES. FOR ALL THE ASSESSMENT YEARS UNDER CONSIDERATION, THE ASSESSEE CAPITALIZED THE SAID EXPENSES IN THE V ALUE OF FIXED ASSETS AND SHOWN THE SAME IN THE ORIGINAL RETURNS FILED UN DER SECTION 139 OF THE ACT FOR ALL THE ASSESSMENT YEARS UNDER CONSIDER ATION. THE ASSESSEE ALSO STATED THAT DURING ALL THE ASSESSMENT YEARS UNDER CONSIDERATION, NO BUSINESS ACTIVITY WAS CARRIED OUT BY THE ASSESSEE COMPANY. 8. HOWEVER, THE ASSESSING OFFICER, WHILE MAKING THE ASSESSMENTS FOR THE ASSESSMENT YEARS UNDER CONSIDERATION, DISAL LOWED THE EXPENSES ON THE GROUND THAT THE NATURE OF EXPENSES CAPITALIZ ED IN THE COST OF ABOVE BUILDING WERE MEANT FOR KEEPING THE COMPANY O R ASSETS IN EXISTENCE AND ACCORDINGLY COMPLETED THE ASSESSMENT. BEING AGGRIEVED, THE ASSESSEE FILED APPEALS BEFORE THE FI RST APPELLATE AUTHORITY. ONE OF THE LEGAL GROUNDS TAKEN BY THE A SSESSEE WAS THAT THE ASSESSMENTS FRAMED BY THE ASSESSING OFFICER ARE BAD IN LAW AS THE ITA-1011 TO 1015/D/2013 4 ASSESSMENTS HAVE NOT BEEN FRAMED ON THE MATERIAL SE IZED PURSUANT TO SEARCH ACTION TAKEN UNDER SECTION 132 OF THE ACT. 9. THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMIS SIONS OF THE ASSESSEE, HAS HELD THAT AS PER SECTION 153A/153C OF THE IT ACT, THE ASSESSING OFFICER IS DUTY BOUND TO ISSUE NOTICE REQ UESTING FOR FILING RETURNS SEPARATELY FOR EACH OF THE ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVI OUS YEAR IN WHICH SEARCH HAS BEEN CONDUCTED OR REQUISITIONED UNDER SE CTION 132A HAS BEEN MADE. THAT THERE IS A MANDATE IN THE SECTION TO ASSESS OR REASSESS THE INCOME FOR ALL SUCH ASSESSMENT YEARS. THUS, THE ASSESSING OFFICER IS REQUIRED TO ASSESS THE INCOME AFRESH. THAT THE LEGISLATURE IN THEIR WISDOM HAVE DEEMED IT FIT NOT TO RESTRICT THE ASSESSMENT UNDER SECTION 153A/153C TO UNDISCLOSED I NCOME FOUND DURING THE SEARCH. THAT THERE IS NO REQUIREMENT TH AT ASSESSMENT CAN BE MADE ONLY IF EVIDENCES RELATING TO UNDISCLOSED I NCOME HAVE BEEN SEIZED. THERE IS ALSO NO REQUIREMENT THAT ASSESSME NTS NEED TO BE BASED ONLY ON THE EVIDENCES GATHERED IN THE COURSE OF ACTION UNDER SECTION 132 OR REQUISITIONED UNDER SECTION 132A. T HE LEARNED CIT(A) FURTHER STATED THAT ASSESSMENT UNDER SECTION 153A/1 53C IS NOT COMPARABLE TO THE BLOCK ASSESSMENT UNDER SECTION XI V-B, WHERE THERE WAS A CONCEPT OF ASSESSMENT OF UNDISCLOSED INCOME F OR THE BLOCK PERIOD AS A WHOLE. IN VIEW THEREOF, THE LEARNED CI T(A) REJECTED THE CONTENTION OF THE ASSESSEE REGARDING VALIDITY OF AS SESSMENT UNDER SECTION 153C. IT MAY ALSO BE STATED THAT THE LEARN ED CIT(A) ALSO CONFIRMED THE ACTION OF THE ASSESSING OFFICER TO RE JECT THE CONTENTION OF THE ASSESSEE TO CAPITALIZE THE EXPENSES INCURRED, T HE NATURE OF THE EXPENSES HAS ALREADY BEEN MENTIONED HEREINABOVE. T HE LEARNED CIT(A) STATED THAT THE SECURITY CHARGES PAID BY THE ASSESSEE COMPANY IS MEANT FOR KEEPING THE COMPANY OR ASSETS IN EXIST ENCE AND HAS NO RELATION EITHER TO ACQUISITION OR ITS IMPROVEMENT O F THE FIXED ASSET IN QUESTION. HENCE, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. ITA-1011 TO 1015/D/2013 5 THE FACTS FOR ALL THE ASSESSMENT YEARS I.E. AY 2004 -05 TO 2007-08 ARE IDENTICAL. 10. THE LEARNED AR SUBMITTED THAT NO INCRIMINATING MATERIAL AGAINST THE ASSESSEE WAS FOUND DURING THE COURSE OF SEARCH AND SEIZURE OPERATION FOR ALL THE ASSESSMENT YEARS UNDER CONSID ERATION AND, THEREFORE, THE ASSESSMENT MADE BY THE ASSESSING OFF ICER BY DISALLOWING THE EXPENSES WHICH WERE CAPITALIZED BY THE ASSESSEE ARE NOT VALID. HE SUBMITTED THAT NO ASSESSMENT FOR THE ASSESSMENT YEARS UNDER CONSIDERATION WAS PENDING ON THE DATE OF SEAR CH. HE FURTHER SUBMITTED THAT THE EXPENSES WHICH THE ASSESSEE CAPI TALIZED WERE SHOWN IN THE BALANCE SHEET AND IT WAS ALSO STATED T HAT THE EXPENSES HAD BEEN CAPITALIZED BY THE ASSESSEE AT THE TIME OF FILING OF THE RETURNS UNDER SECTION 139 OF THE ACT AND, THEREFORE, THE SA ID EXPENSES WHICH WERE CAPITALIZED CANNOT BE DISALLOWED WHILE MAKING THE ASSESSMENTS UNDER SECTION 153C READ WITH SECTION 143(3) OF THE ACT. THE LEARNED AR REFERRED TO THE DECISION OF THE HON'BLE DELHI HI GH COURT DATED 29 TH MARCH, 2012 IN WPC NO.309/2011 IN THE CASE OF SSP A VIATION LTD. VS. DCIT AND SUBMITTED THAT THE HONBLE HIGH COURT IN P ARAGRAPH 17 OBSERVED THAT IF THE RETURNS FILED BY THE OTHER PER SONS FOR THE PERIOD OF SIX YEARS DO NOT SHOW THAT THE INCOME REFLECTED IN THE DOCUMENT HAS BEEN ACCOUNT FOR, ADDITION WILL BE ACCORDINGLY MADE AFTER FOLLOWING THE PROCEDURE PRESCRIBED BY LAW AND AFTER GIVING ADEQUA TE OPPORTUNITY OF BEING HEARD. HOWEVER, IF THERE IS NO SUCH MATERIAL FOUND, THE PROCEEDINGS HAVE TO BE CLOSED IRRESPECTIVE OF THE F ACT THAT THE ASSESSING OFFICER IS BOUND TO OBTAIN THE RETURNS FR OM SUCH OTHER PERSON FOR SIX ASSESSMENT YEARS AS PER PROVISIONS OF SECTI ON 153A OF THE IT ACT. THE LEARNED AR SUBMITTED THAT NO SUCH INCRIMI NATING MATERIAL WAS FOUND NOR ANY INCRIMINATING MATERIAL WAS SEIZED DUR ING THE COURSE OF SEARCH, AND THE ASSESSING OFFICER HAS ALSO NOT MADE ANY ADDITIONS ON THE BASIS OF DOCUMENTS SEIZED OR INCRIMINATING MATE RIAL FOUND, THE ADDITIONS MADE ARE NOT JUSTIFIED AND THE ASSESSMENT S, THUS MADE HAVE ITA-1011 TO 1015/D/2013 6 TO BE HELD NOT VALID. THE LEARNED AR, TO SUBSTANTI ATE HIS SUBMISSIONS, ALSO REFERRED TO THE DECISIONS OF ITAT, DELHI BENCH AS UNDER:- (I) ACIT VS. PACL INDIA LTD. ORDER DATED 20 TH JUNE, 2013 IN ITA NO.2637/DEL/2010. (II) MGF AUTOMOBILES LTD. VS. ACIT ORDER DATED 28 TH JUNE, 2013 IN ITA NO.4212 & 4213/DEL/2011. (III) KUSUM GUPTA VS. DCIT ORDER DATED 28 TH MARCH, 2013 IN ITA NO.4873/DEL/2009 & OTHERS. 11. THE LEARNED AR ALSO SUBMITTED THAT SIMILAR ISSU E WAS ALSO CONSIDERED BY THE SPECIAL BENCH OF ITAT IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT [2012] 137 ITD 287 (MUMBA I)(SB) WHEREIN IT WAS HELD THAT WHERE THE PROCEEDINGS HAVE REACHED FI NALITY BEFORE THE DATE OF SEARCH AND IN CASE WHERE NO INCRIMINATING M ATERIAL HAS BEEN FOUND INDICATING UNDISCLOSED INCOME AND IN THAT CAS E ASSESSING OFFICER WOULD NOT BE JUSTIFIED TO MAKE THE ADDITIONS BY MAK ING THE DISALLOWANCES WHICH HAD ALREADY BEEN DISCLOSED BY T HE ASSESSEE. THE SPECIAL BENCH HELD THAT THE ASSESSING OFFICER, AS P ER THE SCHEME OF THE ACT AND AS PER SECTION 153A OF THE ACT, NO DOUBT SH ALL INITIATE THE ASSESSMENT FOR ALL THE SIX YEARS PRIOR TO THE ASSES SMENT YEAR IN WHICH THE SEARCH HAD TAKEN PLACE. HE WILL GET THE FREE H AND ONLY IN RESPECT OF THOSE ASSESSMENTS WHICH HAD NOT ATTAINED FINALIT Y ON THE DATE OF SEARCH. IN THOSE CASES, THE PENDING ASSESSMENTS WI LL ABATE AND THE ASSESSING OFFICER WHILE FRAMING THE ASSESSMENT UNDE R SECTION 153A/153C OF THE ACT WILL GET FREE HAND THROUGH ABA TEMENT AND WILL FRAME THE ASSESSMENT AFRESH. BUT, IN A CASE OR IN CIRCUMSTANCES WHERE THE PROCEEDINGS HAVE REACHED FINALITY, THE ASSESSME NT UNDER SECTION 153A READ WITH SECTION 143(3) HAS TO BE MADE AS WAS ORIGINALLY MADE/ASSESSED AND IN A CASE WHERE CERTAIN INCRIMINA TING DOCUMENTS HAVE BEEN FOUND INDICATING UNDISCLOSED INCOME, THEN THE ADDITION WAS ONLY TO BE RESTRICTED TO THOSE DOCUMENTS/INCRIMINATING MATERIAL AND ITA-1011 TO 1015/D/2013 7 CLUBBED ONLY TO THE ASSESSMENT FRAMED ORIGINALLY AS THE LAW DOES NOT PERMIT THE ASSESSING OFFICER TO DISTURB THE ALREADY CONCLUDED ISSUES. THE LEARNED AR SUBMITTED THAT SINCE NO INCRIMINATIN G MATERIAL OR SEIZED MATERIAL WAS FOUND AGAINST THE ASSESSEE IN R ESPECT OF WHICH THE ADDITIONS HAVE BEEN MADE FOR THE ASSESSMENTS WHICH HAVE ALREADY BEEN COMPLETED AS THEY WERE NOT PENDING ON THE DATE OF SEARCH, THE ADDITIONS MADE BY THE ASSESSING OFFICER WHICH ARE N OT BASED ON THE SEARCHED MATERIAL HAVE TO BE DELETED. 12. ON THE OTHER HAND, THE LEARNED DR STRONGLY SUPP ORTED THE ORDERS OF THE ASSESSING OFFICER. HE REFERRED TO THE PROVI SIONS OF SECTION 153A OF THE IT ACT AND SUBMITTED THAT THERE IS NO REQUIR EMENT IN LAW THAT ADDITION SHOULD BE MADE ONLY ON SEIZED MATERIAL OR INCRIMINATING MATERIAL IN RESPECT OF THE ASSESSMENT YEARS WHICH H AVE BEEN SUBJECTED TO ASSESSMENT AS PER SECTION153A OF THE A CT I.E. SIX PRECEDING ASSESSMENT YEARS PRIOR TO THE ASSESSMENT YEAR IN WHICH THE SEARCH HAD TAKEN PLACE AND THE ADDITION COULD BE MA DE AS IF THE ASSESSING OFFICER IS MAKING FRESH ASSESSMENT. TO S UBSTANTIATE HIS SUBMISSION, THE LEARNED DR REFERRED TO THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANIL KUMAR BHATIA [2012] 24 TAXMANN.COM 98 AND SPECIFICALLY REFERRED TO PARAGRA PH 23 WHICH READS AS UNDER:- 23. WE ARE NOT CONCERNED WITH A CASE WHERE NO INCRIMINATING MATERIAL WAS FOUND DURING THE SEARCH CONDUCTED UNDER SECTION 132 OF THE ACT. WE, THEREF ORE, EXPRESS NO OPINION AS TO WHETHER SECTION 153A CAN B E INVOKED EVEN IN SUCH A SITUATION. THAT QUESTION IS THEREFORE LEFT OPEN. 13. THE LEARNED DR ALSO FILED A NOTE FROM THE BOOK OF DR. RAKESH GUPTA ON PAGE 473 AND SUBMITTED THAT IN SECTION 153 A, THE WORD USED IS THE ASSESSING OFFICER SHALL ISSUE NOTICE AND I T MAKES IT MANDATORY ON THE PART OF THE ASSESSING OFFICER TO ISSUE NOTIC E AND MAKE ITA-1011 TO 1015/D/2013 8 ASSESSMENT/REASSESSMENT FOR THE PREVIOUS SIX YEARS IN ALL CASES WHERE SEARCH HAD BEEN INITIATED. THAT THE ASSESSMENT/REA SSESSMENT UNDER SECTION 153A ARE NOT ASSESSMENTS FOR UNDISCLOSED IN COME ONLY. THE REQUIREMENT OF MAKING ASSESSMENT/REASSESSMENT UNDER SECTION 153A HAS NO RELATION WITH THE NATURE OF INCRIMINATING MA TERIAL FOUND OR NOT FOUND IN THE COURSE OF SEARCH. EVEN IF THERE IS NO INCRIMINATING MATERIAL RELATING TO THE PERSON SEARCHED FOUND OR T HE INCRIMINATING MATERIAL FOUND IS RELATING TO SOME OTHER PERSON AND WITH RESPECT TO SUCH OTHER INCRIMINATING MATERIAL, SUCH OTHER PERSO N SHALL BE REQUIRED TO BE ASSESSED UNDER SECTION 153C, STILL THE PERSON SEARCHED SHALL BE REQUIRED TO BE ASSESSED OR REASSESSED FOR PRECEDING SIX YEARS UNDER SECTION 153A. THE LEARNED DR FURTHER SUBMITTED THA T THE CASE OF HON'BLE DELHI HIGH COURT DATED 23 RD MARCH, 2012 (SUPRA) HAS ALSO STATED IN PARAGRAPH 17 THAT ONCE THE SATISFACTION N OTE IS RECORDED BY THE ASSESSING OFFICER OF THE SEARCHED PERSON IN RES PECT OF THE OTHER PERSON AND THE PROVISIONS OF SECTION 153C ARE SET I N MOTION GIVING THE FINDING THAT SUCH SEIZED DOCUMENT OR BOOKS OF ACCOU NT OR SOME MATERIAL REPRESENTS THE UNDISCLOSED INCOME OF THE O THER PERSON, THE ASSESSING OFFICER HAS TO MAKE THE ASSESSMENT FOR SI X ASSESSMENT YEARS. THE LEARNED DR SUBMITTED THAT THE RELIANCE BY THE LEARNED AR ON THE DECISIONS OF ITAT IN THE CASE OF PACL INDIA LTD. (SUPRA), MGF AUTOMOBILE LTD. (SUPRA) AND KUSUM GUPTA (SUPRA) ARE NOT BE CONSIDERED AS THOSE CASES HAVE NOT BEEN CORRECTLY D ECIDED BY NOT CONSIDERING THE RATIO OF THE HON'BLE DELHI HIGH COU RT IN THE CASE OF ANIL KUMAR BHATIA (SUPRA) PROPERLY AND, THEREFORE, THE S AID CASES SHOULD NOT BE RELIED UPON. THE LEARNED DR ALSO SUBMITTED THAT THE SPECIAL BENCH DECISION IN THE CASE OF ALL CARGO GLOBAL LOGI STICS LTD. (SUPRA) ALSO HAS NO RELEVANCE PARTICULARLY WHEN THE HON'BLE DELHI HIGH COURT HAS HELD THAT WHILE MAKING THE ASSESSMENT UNDER SEC TION 153A/153C OF THE ACT AND ALSO THE PROVISIONS OF THE ACT PROVI DE THAT THERE IS NO REQUIREMENT THAT THE ADDITION SHOULD BE BASED ONLY ON SEIZED MATERIAL OR INCRIMINATING MATERIAL. THE LEARNED DR FILED A DETAILED NOTE AND ITA-1011 TO 1015/D/2013 9 WHILE RELYING ON THE DECISION OF HONBLE APEX COURT IN THE CASE OF DISTRIBUTORS BARODA P. LTD. VS. UNION OF INDIA 15 5 ITR 120 (SC) STATED THAT THE TRIBUNAL CAN APPLY ITS MIND AFRESH TO THE MATTER IRRESPECTIVE OF THE EARLIER DECISION BECAUSE TO PERPETUATE THE MIST AKE IS NO HEROISM. LEARNED DR ALSO IN THE SAID NOTE REFERRED TO THE DE CISION OF HONBLE APEX COURT IN THE CASE OF OMAR SALAY MOHMED SAIT 37 ITR 151 (SC) AND THE DECISION REPORTED IN 66 ITR 710 AND STATED THAT FOR THE CAUSE OF SUBSTANTIAL JUSTICE, EVEN IF THE ISSUES ARE ALRE ADY COVERED BY THE TRIBUNALS OWN DECISIONS, THE SAME COULD BE RE-EXAM INED IF THEY HAVE NOT BEEN CONSIDERED PROPERLY. THE LEARNED DR ALSO REFERRED TO THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. CHETAN DASS LACHHMAN DASS 25 TAXMANN.COM 227 AND SUBMITTED TH AT THE HONBLE HIGH COURT ALSO STATED THAT WHILE MAKING THE ASSESS MENT UNDER SECTION 153A, THERE IS NO CONDITION IN THE SECTION THAT ADD ITION SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF SEARCH OR OTHER POST SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE ASSESSING OFFICER WHICH CAN BE RELATED TO THE EVIDENCE FOUND. THE LEARNED DR SUBMITTED THAT THE ASSESSMENTS FOR THE ASSESSMENT Y EARS UNDER CONSIDERATION HAVE BEEN VALIDLY MADE AND THE ADDITI ON SHOULD BE SUSTAINED IRRESPECTIVE OF THE FACT THAT THE SAID AD DITIONS ARE NOT BASED UPON THE SEARCH MATERIAL OR INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. 14. I HAVE CAREFULLY CONSIDERED THE ORDERS OF AUTHO RITIES BELOW AND THE SUBMISSIONS OF THE LEARNED REPRESENTATIVES OF T HE PARTIES. I HAVE ALSO GONE THROUGH THE CASES CITED BY THE LEARNED RE PRESENTATIVES OF THE PARTIES AND HAVE ALSO CAREFULLY CONSIDERED THE WRITTEN SUBMISSION/NOTE FILED BY THE LEARNED DR WHICH COMPR ISES OF FIVE PAGES. I MAY STATE THAT THE LEARNED DR HAS STRONGLY SUBSTA NTIATED HIS SUBMISSION TO JUSTIFY THE ORDERS OF THE FIRST APPEL LATE AUTHORITY THAT FOR THE PURPOSE OF MAKING THE ASSESSMENT UNDER SECTION 153A/153C OF THE IT ACT FOR EACH OF THE SIX ASSESSMENT YEARS IMMEDIA TELY PRECEDING ITA-1011 TO 1015/D/2013 10 ASSESSMENT YEAR, THE ASSESSING OFFICER HAS TO MAKE THE ASSESSMENT AFRESH AND WITHOUT RESTRICTING HIMSELF TO THE SEARC H MATERIAL OR INCRIMINATING MATERIAL FOUND EVEN IN RESPECT OF THO SE ASSESSMENT YEARS WHICH HAD ATTAINED FINALITY PRIOR TO THE DATE OF SEARCH. I OBSERVED THAT THE LEARNED DR HAS SUBSTANTIATED HIS ABOVE SUBMISSION GIVING STRESS ON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF ANIL KUMAR BHATIA (SUPRA) AND CHETAN DASS LACHHMAN DASS (SUPRA). HOWEVER, I AM UNABLE TO AGREE WITH THE CONCLUSION D RAWN BY THE LEARNED DR FOR THE REASON THAT IN THE CASE OF ANIL KUMAR BHATIA (SUPRA), THE HON'BLE DELHI HIGH COURT ITSELF HAS STATED IN P ARAGRAPH 23 (WHICH HAS ALREADY BEEN REPRODUCED) THAT IN A CASE WHERE N O INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH COND UCTED UNDER SECTION 132 OF THE ACT, THEIR LORDSHIPS STATED THAT THEY EXPRESSED NO OPINION AS TO WHETHER SECTION 153A CAN BE INVOKED A ND LEFT THE SAID ISSUE OPEN. IT IS ALSO RELEVANT TO STATE THAT IN T HE SAID CASE, THE ASSESSMENT WAS MADE FOR ALL THE SIX ASSESSMENT YEAR S PRECEDING THE ASSESSMENT YEAR IN WHICH SEARCH HAD TAKEN PLACE BEC AUSE DURING THE COURSE OF SEARCH, THE DOCUMENTS WERE FOUND AND IN T HAT CONTEXT, THEIR LORDSHIPS DISCUSSED THE SCHEME OF THE SECTION STATI NG THAT PURSUANT TO THE SEARCH, THE ASSESSING OFFICER IS EMPOWERED TO R EOPEN THE ASSESSMENT FOR SIX ASSESSMENT YEARS PRECEDING THE A SSESSMENT YEAR IN WHICH THE SEARCH HAD TAKEN PLACE. I ALSO OBSERVED THAT THE TRIBUNAL WHILE DECIDING THE CASE OF PACL LTD. (SUPRA) HAD AL SO CONSIDERED AT LENGTH THE SAID DECISION OF HON'BLE DELHI HIGH COUR T IN THE CASE OF ANIL KUMAR BHATIA (SUPRA). IN THE SAID CASE, IT WAS OBS ERVED THAT WHERE AN ASSESSMENT FOR ANY ASSESSMENT YEAR IS PENDING RELAT ING TO SIX ASSESSMENT YEARS PRECEDING THE ASSESSMENT YEAR IN W HICH THE SEARCH HAD TAKEN PLACE, THE PROCEEDINGS SHALL ABATE AND TH E ASSESSING OFFICER WILL MAKE THE ASSESSMENT NOT BASED ON INCRIMINATING MATERIAL BUT WILL HAVE THE POWER TO GO OUTSIDE THE SCOPE OF INCRIMINA TING MATERIALS. THAT IS THE SCOPE OF ASSESSMENT WILL COVER THE ISSU ES WHICH CAN ARISE FROM THE ORIGINAL PENDING PROCEEDINGS. I OBSERVED THAT THE CASE OF ITA-1011 TO 1015/D/2013 11 CHETAN DASS LACHHMAN DASS (SUPRA) RELIED UPON BY TH E LEARNED DR HAS ALSO NO RELEVANCE TO THE FACTS OF THE CASE OF THE A SSESSEE BEFORE ME BECAUSE, IN THAT CASE, THE SEIZED MATERIAL WAS FOUN D AND ON THE BASIS OF THE SEIZED MATERIAL, THEIR LORDSHIPS HELD THAT A N INFERENCE CAN BE DRAWN THAT THERE COULD BE SIMILAR TRANSACTIONS THRO UGHOUT THE PERIOD OF SIX YEARS COVERED BY SECTION 153A OF THE ACT AND AC CORDINGLY THE ADDITIONS MADE BY THE ASSESSING OFFICER FOR THE PRE CEDING SIX YEARS RELEVANT TO ASSESSMENT YEAR IN WHICH SEARCH HAD TAK EN PLACE WAS HELD TO BE JUSTIFIED. ON THE OTHER HAND, IN THE CASE OF SSP AVIATION LTD. (SUPRA), HON'BLE DELHI HIGH COURT, AFTER DISCUSSING THE SCHEME AND SCOPE OF MAKING THE ASSESSMENT FOR THE SIX ASSESSME NT YEARS PRECEDING THE ASSESSMENT YEAR IN WHICH THE SEARCH H AD TAKEN PLACE, VIDE PARAGRAPH 14 TO 17, HAVE HELD THAT WHEN THE AS SESSING OFFICER OF THE SEARCHED PERSON IS SATISFIED THAT SOME DOCUMENT S OR VALUABLE ASSETS OR BOOKS OF ACCOUNT BELONGED TO THE OTHER PE RSON, IN WHOSE CASE SEARCH IS NOT CONDUCTED, THE ASSESSING OFFICER OF THE SEARCHED PERSON AFTER RECORDING A SATISFACTORY NOTE WILL PRO VIDE THE BOOKS OF ACCOUNT OR OTHER VALUABLE ARTICLE OR DOCUMENT BELON GING TO THE OTHER PERSON TO THE ASSESSING OFFICER OF THE OTHER PERSON AND THEREAFTER, THE ASSESSING OFFICER OF THE OTHER PERSON WILL HAVE THE JURISDICTION TO PROCEED AGAINST HIM AND ISSUE NOTICE TO THAT PERSON IN ORDER TO ASSESS OR REASSESS THE INCOME OF SUCH OTHER PERSON IN THE MANNER CONTEMPLATED BY THE PROVISIONS OF SECTION 153A. TH EIR LORDSHIPS HAVE STATED THAT A QUESTION MAY ARISE AS TO THE APPLICAB ILITY OF THE SECOND PROVISO TO SECTION 153A IN THE CASE OF SUCH OTHER P ERSON IN ORDER TO EXAMINE THE PENDING PROCEEDINGS WHICH HAVE TO ABATE . THEIR LORDSHIPS HAVE STATED THAT IN THE CASE OF THE OTHER PERSON, SUCH DATE WILL BE THE DATE OF RECEIVING THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFF ICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND, THEREFORE, THE QUESTION OF PENDENCY AND ABATEMENT OF PROCEEDINGS OF ASSESSMENT OR REASSESSMENT TO THE SIX ASSESSMENT YEARS WILL BE EX AMINED WITH ITA-1011 TO 1015/D/2013 12 REFERENCE TO SUCH DATE. THEIR LORDSHIPS HAVE FURTH ER HELD THAT THERE IS NO REQUIREMENT IN SECTION 153C(1) THAT THE ASSESSIN G OFFICER SHOULD ALSO BE SATISFIED THAT SUCH VALUABLE ARTICLES OR BO OKS OF ACCOUNT OR DOCUMENTS BELONGING TO THE OTHER PERSON MUST BE SHO WN TO SHOW TO CONCLUSIVELY REFLECT OR DISCLOSE ANY UNDISCLOSED IN COME. IN PARAGRAPH 17 OF THE SAID ORDER, THEIR LORDSHIPS HAVE HELD THA T THE ASSESSING OFFICER OF THE OTHER PERSON SHALL OBTAIN THE RETURN S FOR SIX ASSESSMENT YEARS, AND IF HE IS SO SATISFIED AFTER OBTAINING TH E RETURNS FROM SUCH OTHER PERSON FOR THE SIX ASSESSMENT YEARS, THE PROC EEDINGS WILL BE CLOSED. IF THE RETURNS FILED BY THE OTHER PERSON F OR THE PERIOD OF SIX YEARS DO NOT SHOW THAT THE INCOME REFLECTED IN THE DOCUMENT HAS BEEN ACCOUNTED FOR, ADDITION WILL BE ACCORDINGLY MADE AF TER FOLLOWING THE PROCEDURE PRESCRIBED BY LAW AND AFTER GIVING ADEQUA TE OPPORTUNITY OF BEING HEARD TO SUCH OTHER PERSON. IN VIEW OF THE A BOVE, I DO NOT FIND MERIT IN THE CONTENTION OF THE LEARNED DR THAT IN T HE SAID DECISION, THEIR LORDSHIPS HAVE HELD THAT WHILE FRAMING THE ASSESSME NTS FOR THE SIX ASSESSMENT YEARS, THE ASSESSING OFFICER HAS TO MAKE THE FRESH ASSESSMENT AND CAN MAKE ADDITIONS/DISALLOWANCES EVE N NOT RELATING TO THE SEARCHED DOCUMENTS OR INCRIMINATING MATERIAL FO UND DURING THE COURSE OF SEARCH WHERE THE ASSESSMENT PROCEEDINGS A RE NOT PENDING WITH REFERENCE TO THE DATE WHEN THE ASSESSING OFFIC ER RECEIVED THE REQUISITION FROM THE ASSESSING OFFICER OF THE SEARC HED PERSON TO SET IN MOTION THE PROCEEDINGS UNDER SECTION 153A OF THE AC T. I AM OF THE CONSIDERED VIEW THAT WHERE THE ASSESSMENT FOR ANY O F THE SIX ASSESSMENT YEARS IS NOT PENDING ON THE DATE WHEN TH E PROCEDURE AS PRESCRIBED UNDER SECTION 153A/153C IS SET IN MOTION , THE ASSESSING OFFICER CAN GO BEYOND THE SEARCH MATERIAL OR INCRIM INATING MATERIAL FOUND DURING THE COURSE OF SEARCH TO MAKE THE ASSES SMENT AS IF IT IS A FRESH ASSESSMENT. THE SAME VERY ISSUE HAS BEEN CON SIDERED BY THE ITAT DELHI BENCH IN THE CASE OF PACL LTD. (SUPRA) A ND, THAT TOO, HAVING BEEN DECIDED AFTER CONSIDERING THE DECISION OF HON' BLE DELHI HIGH COURT IN THE CASE OF ANIL KUMAR BHATIA (SUPRA) ON WHICH T HE LEARNED DR HAS ITA-1011 TO 1015/D/2013 13 MADE HIS FORCEFUL SUBMISSIONS TO JUSTIFY THE ACTION OF THE ASSESSING OFFICER AND TO SUPPORT THE ORDER OF THE LEARNED CIT (A) BUT, I HOLD THAT THE SAID DECISION OF HON'BLE DELHI HIGH COURT DOES NOT SUPPORT THE STAND OF THE LEARNED DR AND RATHER SUPPORTS THE SUB MISSION OF THE LEARNED AR THAT ONLY WHERE ORIGINAL ASSESSMENT PROC EEDINGS ARE PENDING ON THE DATE OF THE SEARCH ON THE DATE WHEN THE REFERENCE HAS BEEN RECEIVED BY THE ASSESSING OFFICER OF THE OTHER PERSON FROM THE ASSESSING OFFICER OF THE SEARCHED PERSON, THE ISSUE S OUTSIDE THE SCOPE OF SEARCH MATERIAL CAN BE RAISED AS THOSE ORIGINAL ASSESSMENT PROCEEDINGS STAND MERGED/ABATED IN THE PROCEEDINGS UNDER SECTION 153A/153C OF THE ACT BUT, IN THE CASE WHERE THE ASS ESSMENTS ARE NOT PENDING ON THE DATE OF THE SEARCH OR ON THE DATE OF RECEIPT OF THE REFERENCE BY THE ASSESSING OFFICER OF THE OTHER PER SON, THEN NO ADDITION ON THE ISSUES WHICH PERTAINED TO THE ORIGI NAL ASSESSMENT CAN BE RAISED LIKE THOSE WHICH COULD BE RAISED WHEN SUC H ASSESSMENTS WERE PENDING AND ABATED. I AM OF THE CONSIDERED VI EW THAT THE DECISION OF PACL LTD. (SUPRA) AS ALSO THE DECISION OF ITAT DELHI BENCH IN THE CASE OF KUSUM GUPTA (SUPRA) SQUARELY APPLY TO T HE CASE BEFORE ME. THERE IS NO DISPUTE TO THE FACT THAT IN RESPECT OF ALL THE ASSESSMENT YEARS UNDER CONSIDERATION, THE ASSESSMENTS WERE NOT PENDING ON THE DATE, THE SEARCH HAD TAKEN PLACE, LEAVE ASIDE THE D ATE ON WHICH THE REFERENCE WAS RECEIVED BY THE ASSESSING OFFICER OF THE ASSESSEE FROM THE ASSESSING OFFICER OF THE SEARCHED PERSON, WHICH WAS RECEIVED ONLY ON 25 TH MARCH, 2010, AS STATED BY THE ASSESSING OFFICER AN D, THEREFORE, NO ASSESSMENT WAS PENDING IN THE CASE OF THE ASSESS EE FOR ALL THE ASSESSMENT YEARS UNDER CONSIDERATION. HENCE, I HOL D THAT NO ADDITION CAN BE MADE WHILE MAKING THE ASSESSMENT FOR THE ASS ESSMENT YEARS UNDER CONSIDERATION BY MAKING THE DISALLOWANCES WHI CH IS NOT BASED ON SEIZED MATERIAL OR ANY INCRIMINATING MATERIAL FO UND DURING THE COURSE OF SEARCH. THE ASSESSING OFFICER SHOULD HAV E CLOSED THE ASSESSMENTS WITHOUT MAKING ASSESSMENTS FOR THE ABOV E ASSESSMENT YEARS UNDER CONSIDERATION WHEN NO INCRIMINATING MAT ERIAL OR SEIZED ITA-1011 TO 1015/D/2013 14 MATERIAL WAS FOUND. THEREFORE, I ALLOW THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE FOR ALL THE ASSESSMENT YEARS UNDER CON SIDERATION BY DELETING THE ADDITIONS MADE BY THE ASSESSING OFFICE R AND CONFIRMED BY THE LEARNED CIT(A). 15. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON 20 TH DECEMBER, 2013. SD/- (B.R. MITTAL (B.R. MITTAL (B.R. MITTAL (B.R. MITTAL) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER DATED : 20.12.2013 VK. COPY FORWARDED TO: - 1. APPELLANT : M/S PARIVAR PROPERTIES PVT.LTD., M/S PARIVAR PROPERTIES PVT.LTD., M/S PARIVAR PROPERTIES PVT.LTD., M/S PARIVAR PROPERTIES PVT.LTD., 13 1313 13- -- -B, 3 B, 3 B, 3 B, 3 RD RDRD RD FLOOR, NETAJI SUBHASH MARG, FLOOR, NETAJI SUBHASH MARG, FLOOR, NETAJI SUBHASH MARG, FLOOR, NETAJI SUBHASH MARG, DARYAGANJ, NEW DELHI DARYAGANJ, NEW DELHI DARYAGANJ, NEW DELHI DARYAGANJ, NEW DELHI 110 002. 110 002. 110 002. 110 002. 2. RESPONDENT : DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE CENTRAL CIRCLE- -- -12, ROOM NO.330, 3 12, ROOM NO.330, 3 12, ROOM NO.330, 3 12, ROOM NO.330, 3 RD RDRD RD FLOOR, FLOOR, FLOOR, FLOOR, ARA CENTRE, JHANDEWALAN EXT ARA CENTRE, JHANDEWALAN EXT ARA CENTRE, JHANDEWALAN EXT ARA CENTRE, JHANDEWALAN EXT., .,., ., NEW DELHI NEW DELHI NEW DELHI NEW DELHI 110 055. 110 055. 110 055. 110 055. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR