POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA V. DEPUTY COMMISSIONER OF INCOME TAX, KOTA

ITA 1120/JPR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8849 (ITAT-JAIPUR)
• Duration Of Justice: 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 28-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VARINDAR MEHTA
• Keywords: Unexplained cash credit; Bogus Share capital; Gift; Revision of order; Business expenditure; Search and seizure; Principle of natural justice; Opportunity of cross examination; Question of law; Tangible material; Block assessment; Onus to prove; Bogus loan; Revised return; Documents seized; Reassessment proceedings; TDS; Set aside
• Section: 271(1)(c); 143(3); 133A; 153A; 14A; 133(6); 139(5); 143(1); 32; 147; 68; 148; 132; 139

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR B ENCHE A JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRA M SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 1120/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2010-11 POOJASHISH INFRASTRUCTURES PVT. LTD., PLOT NO. 6 AND 7, MULTIMETALS CAMPUS, KANSUA ROAD, LARGE INDUSTRIAL AREA, KOTA CUKE VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, ROOM NO. 212, 2 ND FLOOR, C.R. BUILDING, RAWAT BHATA ROAD, KOTA LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AADCP5387R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI VIJAY GOYAL & SHRI GULSHAN AG ARWAL (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI VARINDAR MEHTA (CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 16/01/2019 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 08/04/2019 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)- 2, UDAIPUR DATED 21.08.2018 WHEREIN THE ASSESSEE HA S TAKEN THE FOLLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE ORDER PASSED U/S 153A READ WITH SECTION 14 3(3) OF THE INCOME TAX ACT 1961 IS BAD IN LAW, VOID AB-INITIO, AND DESERVES TO BE ANNULLED AS THE ASSESSMENT FOR THE YEAR UNDER CO NSIDERATION WAS NOT ABATED AS ON THE DATE OF SEARCH AND CIT (A) ERRED IN HOLDING THAT THE CONTENTION OF THE ASSESSEE CANNOT BE ACCEPTED IN ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 2 VIEW OF SLPS ADMITTED IN VARIOUS CASES. THE LD. CIT (A) FURTHER ERRED IN HOLDING THAT THE ADDITIONS ARE TO BE ADJUD ICATED ON MERITS AS PER RELEVANT GROUND OF APPEAL HENCE THE ISSUE RE MAINS FOR ACADEMIC DISCUSSION ONLY. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT (A) ERRED IN NOT DECLARING THE ASSESSME NT ORDER AS BAD IN LAW AND VOID AB INITIO. THE FINDINGS OF 1DCIT(A) IN THIS REGARD ARE PERVERSE AND ERRONEOUS. IT IS CONTENDED THAT THE LD . AO PASSED THE ASSESSMENT ORDER AGAINST THE DOCTRINE OF 'AUDIALTEI MPARTEM', VIOLATING THE PRINCIPLE OF NATURAL JUSTICE AND NOT GIVING THE OPPORTUNITY OF CROSS EXAMINATION OF THE ALLEGED ACC OMMODATION ENTRY PROVIDERS, THEREFORE THE ASSESSMENT ORDER OUG HT TO HELD AS BAD IN LAW AND DESERVES TO BE ANNULLED. 3. THAT THE ORDER OF THE LD CIT (A), CONFIRMING THE ADDITION MADE BY THE AO IS ARBITRARY, WHIMSICAL, CAPRICIOUS, PERV ERSE, BASED ON NO EVIDENCE OR IRRELEVANT MATERIAL OR IRRELEVANT EVIDE NCE, AND AGAINST THE LAW AND FACTS OF THE CASE. THE ADDITION CONFIRM ED BY LD.CIT (A) DESERVES TO BE DELETED. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT (A) ERRED IN CONFIRMING THE ADDITIONS M ADE U/S 68 OF THE INCOME TAX ACT, 1961 BY : - A) SOLELY RELYING ON THE STATEMENTS OF SOME ALLEGED ACCOMMODATION ENTRY PROVIDERS RECORDED BY SOME OTHE R AUTHORITIES IN SOME OTHER CASES/ACTIONS AND THE OPP ORTUNITY TO CROSS EXAMINATION WAS ALSO NOT PROVIDED TO ASSESSEE . ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 3 B) GIVING A CONTRADICTORY FINDING THAT A DOUBT IS R AISED ON THE IDENTITY AND GENUINENESS OF THE COMPANY WHOSE NAME IS MENTIONED IN THE STATEMENT OF ACCOMMODATION ENTRY PROVIDERS A S WELL AS REPORTS OF DDIT (INV.)-KOLKATTA. C) HOLDING THAT THE ASSESSEE HAS NOT ADDUCED ANY EVIDE NCE TO REBUT THE ADVERSE FACTUAL FINDING MADE BY THE AO IN THE ASSESSMENT ORDER THOUGH DETAILED PAPER BOOK FOR RELEVANT AY AN D COMMON PAPER BOOKS HAVE BEEN SUBMITTED, AND D) HOLDING THAT INCRIMINATING MATERIAL HAD BEEN FOU ND DURING THE COURSE OF SEARCH OF ACCOMMODATION ENTRY PROVIDER. F URTHER INCRIMINATING MATERIAL HAD BEEN GATHERED BY ISSUING COMMISSION TO DCIT (INV.) KOLKATTA. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN CONFIRMATION THE ADDITION OF RS . 18,35,000/- MADE BY LD. AO U/S 68 INCOME TAX ACT, 1961 ON ACCOUNT OF SHARE CAPITAL AND PREMIUM THEREON AND UNSECURED LOAN RECEIVED FROM FO LLOWING PARTIES AND ERRONEOUSLY HELD THAT THE IDENTITY, CREDITWORTH INESS AND GENUINENESS OF THE UNDER MENTIONED COMPANY IS DOUBT FUL:- NAME OF T HE COMPANY FROM WHOM LOAN RECEIVED AMOUNT NAME OF ALLEGED ENTRY OPERATOR WHOSE STATEMENT WERE RELIED JALSAGAR COMMERCE PVT. LTD (SHARE CAPITAL AND PREMIUM THEREON) 8,00,000 SHRI ANAND SHARMA JALSAGAR COMMERCE PVT. LTD (UNSECURED LOAN) 10,35,000 SHRI AN AND SHARMA 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN REJECTING THE THEORY OF PEA K CREDIT AND ERRED ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 4 IN NOT ALLOWING THE BENEFIT OF TELESCOPING, RECYCLI NG AND ROTATION OF FUNDS. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE FILED ITS ORIGINAL RETURN OF INCOME ON 19.09.2010 DECLARING B USINESS LOSS OF RS 56,547. THEREAFTER, A SEARCH AND SEIZURE OPERATIONS U/S 132 WAS CARRIED OUT ON 02.07.2015 AT VARIOUS PREMISES OF M/S KOTA DALL MIL L TO WHICH THE ASSESSEE BELONGS. THE NOTICE U/S 153A WAS ISSUED ON 09.01.20 17 AND IN RESPONSE, THE ASSESSEE FILED ITS RETURN OF INCOME U/S 153A ON 23. 01.2017 DECLARING BUSINESS LOSS OF RS. 56,547/- AS PER ORIGINAL RETUR N OF INCOME. THE ASSESSMENT WAS COMPLETED U/S 153A READ WITH SECTION 143(3) WHEREIN THE ASSESSING OFFICER MADE DISALLOWANCE U/S 14A AMOUNTI NG TO RS. 32,194/-, UNCLAIMED LIABILITIES WERE BROUGHT TO TAX U/S 41(1) AMOUNTING TO RS. 5,000,00/- AND AN AMOUNT OF RS. 73,50,000/- WAS BRO UGHT TO TAX AS UNEXPLAINED CREDITS U/S 68 OF THE ACT IN RESPECT OF SHARE CAPITAL AND UNSECURED LOAN RECEIVED BY THE ASSESSEE DURING THE YEAR. 3. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTE R IN APPEAL BEFORE THE LD. CIT(A) WHO HAS DELETED THE ADDITION MADE BY THE AO U/S 68 EXCEPT AN AMOUNT OF RS. 18,35,000/- RECEIVED FROM M/S JALSAGA R COMMERCE PVT LTD TOWARDS SHARE CAPITAL AND UNSECURED LOAN. FURTHER DISALLOWANCE MADE BY THE AO U/S 14A AND ADDITION TOWARDS UNCLAIMED LIABI LITY WERE ALSO DELETED BY THE LD. CIT(A). THE ASSESSEE IS NOW IN APPEAL AGAIN ST THE ADDITION OF RS. 18,35,000/- SUSTAINED BY THE LD. CIT(A) U/S 68 OF THE ACT. 4. AT THE OUTSET, THE LD. AR SUBMITTED THAT THE FACTS AND CIRCUMSTANCES OF THE CASE ARE EXACTLY IDENTICAL TO THAT OF M/S KOTA DAL MILLS CASES AND IS THUS COVERED IN FAVOUR OF THE ASSESSEE COMPANY BY THE DECISION O F THE TRIBUNAL IN CASE OF M/S KOTA DAL MILLS VS DCIT (ITA NO. 997 TO 1002/JP/2018 & 1119/JP/18 DATED 31.12.2018). THE LD AR SUBMITTED THAT THERE IS NO INCRIMINATING MATERIAL ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 5 FOUND DURING THE COURSE OF SEARCH AND SEIZURE ACTIO N. THEREFORE, THE AO IS NOT EMPOWERED TO MAKE ANY ADDITION TO THE TOTAL INC OME OF THE ASSESSEE. IT WAS SUBMITTED THAT THE PROVISIONS OF SECTION 153 A CANNOT BE APPLIED IN RESPECT OF THE ASSESSMENT YEAR WHICH HAS ALREADY BE EN COMPLETED UNLESS SOME INCRIMINATING MATERIAL/INFORMATION COMES INTO THE POSSESSION OR KNOWLEDGE OF THE ASSESSING OFFICER DURING THE COURS E OF SEARCH PROCEEDINGS. IT WAS SUBMITTED THAT SINCE THE ASSESSMENT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION WAS NOT PENDING AS ON THE DATE OF SEA RCH AND THERE IS NO INCRIMINATING MATERIAL FOUND OR SEIZED DURING THE C OURSE OF SEARCH, THE AO IS BOUND TO REASSESS THE TOTAL INCOME AS IT WAS ASSESS ED ON THE ORIGINAL RETURN OF INCOME. IN SUPPORT OF HIS CONTENTIONS, THE LD. A R HAS RELIED UPON THE DECISION OF HONBLE DELHI HIGH COURT IN CASE OF CIT VS. KABUL CHAWLA REPORTED IN 380 ITR 573 AND SUBMITTED THAT THE HONBLE HIGH COURT IN THAT CASE AS HELD THAT IN CASE OF COMPLETED ASSESSMENT NOT ABATE D BY VIRTUE OF SEARCH U/S 132 OF THE ACT, IN ABSENCE OF ANY INCRIMINATING MAT ERIAL, THE COMPLETED ASSESSMENT CAN ONLY BE REITERATED AND THEREFORE NO ADDITION COULD HAVE BEEN MADE TO INCOME ALREADY ASSESSED. THE LD AR HAS FURT HER PLACED RELIANCE ON THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT IN CASE OF JAI STEEL (INDIA) VS. ACIT (2013) 219 TAXMAN 223 AND SUBMITTED THAT THE HONBLE JURISDICTIONAL HIGH COURT HAS HELD THAT THE REQUIREMENT OF ASSESSM ENT OR REASSESSMENT UNDER SECTION 153A HAS TO BE READ IN THE CONTEXT OF SECTI ON 132 OR 132A OF THE IT ACT, IN AS MUCH AS IN CASE NOTHING INCRIMINATING IS FOUND O N ACCOUNT OF SUCH SEARCH OR REQUISITION, THEN THE QUESTION OF REASSESSMENT OF C ONCLUDED ASSESSMENT DOES NOT ARISE, WHICH WOULD REQUIRE MERE REITERATION AND IT IS ONLY IN THE CONTEXT OF ABATED ASSESSMENT UNDER SECOND PROVISO WHICH IS REQUIRED T O BE ASSESSED. THE UNDERLINED PURPOSE OF MAKING ASSESSMENT OF TOTAL INCOME UNDER SECTION 153A OF THE ACT IS, THEREFORE, TO ASSESS INCOME WHICH WAS NOT DISCLOSED OR WOULD NOT HAVE BEEN DISCLOSED. THE ASSESSMENT OR REASSESSMENT PROCEEDI NGS WHICH HAVE ALREADY BEEN COMPLETED AND ASSESSMENT ORDERS HAVE BEEN PASSED DE TERMINING THE ASSESSEES TOTAL INCOME AND, SUCH ORDERS ARE SUBSISTING AT THE TIME WHEN SEARCH OR REQUISITION ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 6 IS MADE, THERE IS NO QUESTION OF ANY ABATED ASSESSM ENT SINCE NO PROCEEDINGS WERE PENDING AND, THEREFORE, THE ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESSED WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL . IN THE ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CA N BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE. THUS THE L D. A/R HAS SUBMITTED THAT THE AO HAS MADE THE ADDITIONS IN THE ASSESSMENT UNDER S ECTION 153A WHEREBY THE COMPLETED ASSESSMENT HAS BEEN DISTURBED WITHOUT EVE N REFERRING TO ANY INCRIMINATING MATERIAL FOUND OR SEIZED DURING THE C OURSE OF SEARCH AND SEIZURE UNDER SECTION 132 OF THE ACT. THE ONLY BASIS OF AD DITION IS THE STATEMENT OF THIRD PARTY RECORDED IN THE SEARCH OF THE THIRD PARTY THA T HAS NO CONNECTION WITH THE SEARCH PROCEEDINGS OF THE ASSESSEE AND, THEREFORE, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND OR SEIZED DURING THE S EARCH OF THE ASSESSEE, NO ADDITION CAN BE MADE IN THE ASSESSMENT FRAMED UNDER SECTION 153A OF THE ACT. 5. ON THE OTHER HAND, THE LD. D/R SUBMITTED THAT TH E ADDITIONS MADE TO THE TOTAL INCOME OF THE ASSESSEE RELATE TO THE UNEXPLAI NED CASH CREDIT IN THE BOOKS OF ACCOUNT INTRODUCED IN THE GARB OF SHARE CAPITAL AND UNSECURED LOANS WHICH IN FACT IS THE RE-ROUTING OF THE ASSESSEES UNDISCLOSED INCOME . IT IS CLEARLY EVIDENT FROM THE INNUMERABLE EVIDENCES WHICH CAME TO THE FORE IN THE NUMEROUS INVESTIGATIONS, ENQUIRIES, SEARCH AND SURVEY ACTIONS CARRIED OUT BY THE INVESTIGATION WING OF THE DEPARTMENT THAT THE AO RECEIVED INFORMATION FROM TH E INVESTIGATION WING KOLKATA REGARDING THE INVOLVEMENT OF KDM GROUP (ASSESSEE) I N OBTAINING ENTRIES OF BOGUS UNSECURED LOANS, PARTNERS CAPITAL, SPECIAL DEPOSIT S ETC. DETECTED IN THE INVESTIGATION CARRIED OUT BY THE INVESTIGATION WING KOLKATA. SUCH INFORMATION WAS RECEIVED PRIOR TO THE INITIATION OF PROCEEDINGS UND ER SECTION 153A AND ALSO DURING THE PENDENCY OF PROCEEDINGS UNDER SECTION 153A. AC CORDINGLY, DURING THE COURSE OF ASSESSMENT PROCEEDINGS UNDER SECTION 153A, THE A O CONDUCTED FURTHER ENQUIRY ABOUT THE GENUINENESS OF THE TRANSACTION OF SHARE C APITAL AND UNSECURED LOANS. THE ASSESSEE WAS DULY CONFRONTED WITH THE RESULTS O F ALL THESE ENQUIRIES AND INFORMATION SHARED BY THE INVESTIGATION WING. IN T HESE CIRCUMSTANCES, IT CANNOT BE A CASE OF ADDITION MADE WITHOUT ANY INCRIMINATING M ATERIAL BUT THE AO WAS HAVING ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 7 SUFFICIENT MATERIAL DISCLOSING THE UNDISCLOSED AND UNEXPLAINED CASH CREDIT INTRODUCED BY THE ASSESSEE IN THE GARB OF UNSECURED LOANS AND SHARE CAPITAL. ONCE THE INSURMOUNTABLE EVIDENCES UNEARTHED BY THE INVES TIGATION WING KOLKATA WHICH IS THE BASIS OF THE ADDITIONS MADE BY THE AO, THE A SSESSEE WAS REQUIRED TO DISCHARGE ITS ONUS BY PRODUCING THE CONTRARY EVIDEN CE OR BY PRODUCING ALLEGED CREDITORS FOR VERIFICATION. THE LD. CIT D/R HAS FU RTHER SUBMITTED THAT THE INFORMATION RECEIVED FROM THE INVESTIGATION WING KO LKATA IS ALSO THE INCRIMINATING MATERIAL FOUND DURING THE SEARCH AND PERTAINS TO TH E ASSESSEE DISCLOSING UNDISCLOSED INCOME. THEREFORE, IT IS NOT A CASE OF REASSESSMENT FRAMED BY THE AO UNDER SECTION 153A WITHOUT ANY INCRIMINATING MATERI AL. THE AO EVEN CONDUCTED FURTHER INVESTIGATION DURING THE COURSE OF ASSESSME NT PROCEEDINGS THROUGH THE INVESTIGATION WING KOLKATA AND, THEREFORE, THE ADDI TION IS FULLY BASED ON THE EVIDENCE IN THE POSSESSION OF THE AO. AS PER THE P ROVISIONS OF SECTION 132 READ WITH SECTION 153A OF THE IT ACT, THE AO HAS TO ASSE SS OR REASSESS THE INCOME OF LAST SIX YEARS AND TOTAL INCOME REFERS TO THE SUM TOTAL OF INCOME IN RESPECT OF WHICH A PERSON IS ASSESSABLE. THE TOTAL INCOME WILL THEREF ORE COVER NOT ONLY THE INCOME EMANATING FROM THE DECLARED SOURCE OR ANY MATERIAL OMISSION BEFORE AO BUT FROM ALL SOURCES INCLUDING UNDISCLOSED ONES OR BASED ON UNPLACED MATERIAL BEFORE THE AO. THE LD. CIT D/R HAS THUS SUBMITTED THAT THE DE CISIONS IN THE CASE OF KABUL CHAWLA (SUPRA) WERE CHALLENGED BEFORE THE HONBLE S UPREME COURT AND THE HONBLE SUPREME COURT HAS ADMITTED THE SLP FOR EXAMINATION OF THE ISSUE. HENCE THE ISSUE IS STILL PENDING ADJUDICATION BEFORE THE HONBLE SU PREME COURT. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. FURTHER, THE L D DR FAIRLY SUBMITTED THAT THE FACTS AND CIRCUMSTANCES OF THE CASE ARE EXACTLY IDE NTICAL TO THAT OF M/S KOTA DAL MILLS CASES AND IS COVERED BY THE DECISION OF THE T RIBUNAL IN CASE OF M/S KOTA DAL MILLS VS DCIT (SUPRA). 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE COMPANY HAS FILED ITS ORIGINA L RETURN OF INCOME ON 19.09.2010 AND THE TIME LIMIT FOR ISSUANCE OF NOTIC E U/S 143(2) HAS EXPIRED ON 30.09.2011. UNDISPUTEDLY, THE ASSESSMENT FOR THE I MPUGNED ASSESSMENT YEAR WAS ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 8 NOT PENDING ON THE DATE OF SEARCH ON 02.07.2015 AND NOT GOT ABATED BY VIRTUE OF SEARCH UNDER SECTION 132 ON THE DATE OF SEARCH. IT IS A SETTLED PROPOSITION OF LAW THAT THE ASSESSMENT OR REASSESSMENT UNDER SECTION 1 53A IN RESPECT OF THE ASSESSMENT YEAR WHICH HAVE ALREADY BEEN COMPLETED, THE ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESSED CAN BE MADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL. IN THE ABSENCE OF ANY INCRIMINATING MATE RIAL THE COMPLETED ASSESSMENT CAN ONLY BE REITERATED. THE MATTER HAS BEEN EXAMIN ED IN DETAIL BY THE TRIBUNAL IN CASE OF M/S KOTA DAL MILL VS DCIT (SUPRA) AND THE R ELEVANT FINDINGS ARE REPRODUCED AS UNDER: 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS THE RELEVANT MATERIAL ON RECORD. UNDISPUTEDLY, THE ASSESSMENTS FOR THE ASSE SSMENT YEARS 2010-11 TO 13-14 WERE NOT PENDING ON THE DATE OF SEARCH ON 2 ND JULY, 2015. EVEN IN SOME OF THE ASSESSMENT YEARS ORDERS UNDER SECTION 143(3) WERE P ASSED AND IN OTHER CASES THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(1) OF TH E ACT. THUS THE ASSESSMENTS FOR THE ASSESSMENT YEARS 2010-11 TO 13-14 WERE NOT GOT ABATED BY VIRTUE OF SEARCH UNDER SECTION 132 ON 2 ND JULY, 2015 AND THE AO WOULD REASSESS THE TOTAL INC OME OF THE ASSESSEE AS PER THE PROVISIONS OF SECTION 153A IN RESPECT OF THESE FOUR ASSESSMENT YEARS I.E. 2010-11 TO 13-14. THE PROCEE DINGS UNDER SECTION 153A IN RESPECT OF THESE FOUR ASSESSMENT YEARS WOULD BE IN THE NATURE OF REASSESSMENT AND NOT IN THE NATURE OF ASSESSMENT AS IN THE CASES OF THE REMAINING TWO ASSESSMENT YEARS I.E. 2014-15 AND 15-16 THOSE WERE GOT ABATED BY VIRTUE OF SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE ACT ON 2 ND JULY, 2015. IT IS A SETTLED PROPOSITION OF LAW THAT THE ASSESSMENT OR REASSESSMENT UNDER SECTI ON 153A IN RESPECT OF THE ASSESSMENT YEARS WHICH HAVE ALREADY BEEN COMPLETED AND ASSESSMENT ORDERS HAVE BEEN PASSED DETERMINING THE ASSESSEES TOTAL INCOME , THE ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESSED CAN BE MADE ONLY ON THE BASIS OF INCRIMINATING ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 9 MATERIAL. IN THE ABSENCE OF ANY INCRIMINATING MATE RIAL THE COMPLETED ASSESSMENT CAN ONLY BE REITERATED. THE PROVISIONS OF SECTION 132 READ WITH SECTION 153A OF THE ACT STIPULATE TWO TYPES OF SITUATIONS ONE WHERE T HE ASSESSMENT OF ANY ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS IS PENDING ON THE DATE OF INITIATION OF SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A OF THE ACT. THEREFORE, THE ASSESSMENT UNDER SECTIO N 153A IN RESPECT OF THOSE ASSESSMENT YEARS WHICH STAND ABATED DUE TO THE REAS ON OF PENDING ON THE DATE OF INITIATION OF SEARCH OR REQUISITION SHALL BE THE OR IGINAL/FIRST ASSESSMENT. IN THE SECOND CATEGORY WHERE THE ASSESSMENT OR REASSESSMEN T HAS ALREADY BEEN COMPLETED ON THE DATE OF INITIATION OF SEARCH OR MA KING OF REQUISITION AS THE CASE MAY BE, THE ASSESSMENT UNDER SECTION 153A WOULD BE IN THE NATURE OF REASSESSMENT. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA WHILE ANALYZING THE PROVISIONS OF SECTION 153A READ WITH SECTION 132 OF THE ACT HAS OBSERVED IN PARA 37 AND 38 AS UNDER :- 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, REA D WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN T HE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UNDER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153 A(1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERS ON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING TH E PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE O F THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WI LL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE AFOREMENTION ED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR E ACH OF THE SIX YEARS. IN OTHER WORDS THERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX'. ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 10 IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITIONS SHOUL D BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH , OR OTHER POST- SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE R ELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT 'CAN BE ARBITRARY OR MADE WIT HOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASS ESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL.' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATABLE TO ABATED PR OCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD 'REASSESS' TO COMP LETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTION 153A ME RGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT O N THE RECORD OF THE AO. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITIO N OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEAR CH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE O F ORIGINAL ASSESSMENT. CONCLUSION 38. THE PRESENT APPEALS CONCERN AYS, 2002-03, 2005-06 AND 2006-07.ON THE DATE OF THE SEARCH THE SAID ASSESSMENTS ALREADY STOOD COMPL ETED. SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEARCH, NO ADDITI ONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. THUS THE HONBLE HIGH COURT HAS HELD THAT IN THE AB SENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CAN BE REITERATE D AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE. THE HONBLE HIGH COUR T HAS ALSO REFERRED THE TERM USED IN SECTION 153A AS ASSESS WHICH IS RELATABLE TO ABATED PROCEEDINGS AND THE WORD REASSESS RELATED TO COMPLETED ASSESSMENT PRO CEEDINGS. THEREFORE, THE COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITIO N OF DOCUMENT OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEAR CH WHICH WERE NOT PRODUCED OR ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 11 NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE O F ORIGINAL ASSESSMENT. THE HONBLE DELHI HIGH COURT HAS REITERATED ITS VIEW IN CASE OF PRINCIPAL CIT VS. KURELE PAPER MILLS (SUPRA) IN PARA 1 TO 3 AS UNDER :- 1. THE REVENUE HAS FILED THE APPEAL AGAINST AN ORDER D ATED 14.11.2014 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL (ITAT) IN 3761/DEL/2011 PERTAINING TO THE ASSESSMENT YEAR 2002-03. THE QUES TION WAS WHETHER THE LEARNED CIT (APPEALS) HAD ERRED IN LAW AND ON THE F ACTS IN DELETING THE ADDITION OF RS. 89 LACS MADE BY THE ASSESSING OFFIC ER UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 ('ACT') ON BOGUS SHARE CAPITAL . BUT, THE ISSUE WAS WHETHER THERE WAS ANY INCRIMINATING MATERIAL WHATSO EVER FOUND DURING THE SEARCH TO JUSTIFY INITIATION OF PROCEEDINGS UNDER S ECTION 153A OF THE ACT. 2. THE COURT FINDS THAT THE ORDER OF THE CIT(APPEALS) REVEALS THAT THERE IS A FACTUAL FINDING THAT 'NO INCRIMINATING EVIDENCE REL ATED TO SHARE CAPITAL ISSUED WAS FOUND DURING THE COURSE OF SEARCH AS IS MANIFEST FROM THE ORDER OF THE AO.' CONSEQUENTLY, IT WAS HELD THAT THE AO WAS NOT JUSTIFIED IN INVOKING SECTION 68 OF THE ACT FOR THE PURPOSES OF MAKING AD DITIONS ON ACCOUNT OF SHARE CAPITAL. 3. AS FAR AS THE ABOVE FACTS ARE CONCERNED, THERE IS N OTHING SHOWN TO THE COURT TO PERSUADE AND HOLD THAT THE ABOVE FACTUAL D ETERMINATION IS PERVERSE. CONSEQUENTLY, AFTER CONSIDERING ALL THE FACTS AND C IRCUMSTANCES OF THE CASE, THE COURT IS OF THE OPINION THAT NO SUBSTANTIAL QUE STION OF LAW ARISES IN THE IMPUGNED ORDER OF THE ITAT WHICH REQUIRES EXAMINATI ON. THE SLP FILED BY THE REVENUE AGAINST THE SAID DECIS ION OF HONBLE DELHI HIGH COURT WAS DISMISSED BY THE HONBLE SUPREME COURT VIDE ORD ER DATED 7 TH DECEMBER, 2015. IN A SUBSEQUENT DECISION, THE HONBLE DELHI HIGH CO URT IN THE CASE OF PRINCIPAL CIT VS. MEETA GUTGUTIA HAS AGAIN ANALYZED THIS ISSUE IN PARA 55 TO 71 AS UNDER :- 55. ON THE LEGAL ASPECT OF INVOCATION OF SECTION 153A IN RELATION TO AYS 2000-01 TO 2003-04, THE CENTRAL PLANK OF THE REVENUE'S SUBMISS ION IS THE DECISION OF THIS COURT IN SMT. DAYAWANTI GUPTA (SUPRA). BEFORE BEGINNING T O EXAMINE THE SAID DECISION, IT IS NECESSARY TO REVISIT THE LEGAL LANDSCAPE IN LIGH T OF THE ELABORATE ARGUMENTS ADVANCED BY THE REVENUE. 56. SECTION 153A OF THE ACT IS TITLED 'ASSESSMENT IN C ASE OF SEARCH OR REQUISITION'. IT IS CONNECTED TO SECTION 132 WHICH DEALS WITH 'SEARC H AND SEIZURE'. BOTH THESE ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 12 PROVISIONS, THEREFORE, HAVE TO BE READ TOGETHER. SE CTION 153A IS INDEED AN EXTREMELY POTENT POWER WHICH ENABLES THE REVENUE TO RE-OPEN A T LEAST SIX YEARS OF ASSESSMENTS EARLIER TO THE YEAR OF SEARCH. IT IS NOT TO BE EXER CISED LIGHTLY. IT IS ONLY IF DURING THE COURSE OF SEARCH UNDER SECTION 132 INCRIMINATING MA TERIAL JUSTIFYING THE RE-OPENING OF THE ASSESSMENTS FOR SIX PREVIOUS YEARS IS FOUND THAT THE INVOCATION OF SECTION 153A QUA EACH OF THE AYS WOULD BE JUSTIFIED. 57. THE QUESTION WHETHER UNEARTHING OF INCRIMINATING M ATERIAL RELATING TO ANY ONE OF THE AYS COULD JUSTIFY THE RE-OPENING OF THE ASSESSM ENT FOR ALL THE EARLIER AYS WAS CONSIDERED BOTH IN ANIL KUMAR BHATIA (SUPRA) AND CH ETAN DAS LACHMAN DAS (SUPRA). INCIDENTALLY, BOTH THESE DECISIONS WERE DISCUSSED T HREADBARE IN THE DECISION OF THIS COURT IN KABUL CHAWLA(SUPRA). AS FAR AS ANIL KUMAR BHATIA (SUPRA) WAS CONCERNED, THE COURT IN PARAGRAPH 24 OF THAT DECISION NOTED TH AT 'WE ARE NOT CONCERNED WITH A CASE WHERE NO INCRIMINATING MATERIAL WAS FOUND DURI NG THE SEARCH CONDUCTED UNDER SECTION 132 OF THE ACT. WE THEREFORE EXPRESS NO OPI NION AS TO WHETHER SECTION 153A CAN BE INVOKED EVEN UNDER SUCH SITUATION'. THAT QUE STION WAS, THEREFORE, LEFT OPEN. AS FAR AS CHETAN DAS LACHMAN DAS (SUPRA) IS CONCERNED, IN PARA 11 OF THE DECISION IT WAS OBSERVED: '11. SECTION 153A (1) (B) PROVIDES FOR THE ASSESSME NT OR REASSESSMENT OF THE TOTAL INCOME OF THE SIX ASSESSMENT YEARS IMMEDIATEL Y PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH THE SEARCH TOOK PLACE. TO REPEAT, THERE IS NO CONDITION IN THIS SECTION TH AT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH OR OTHER POST-SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE ASSESSING OFFICER WHICH CAN BE RELATED TO THE EVIDENCE FOUND. THIS, HOWEVER, DOES NOT MEAN THAT THE ASSESSMENT UNDER SECTION 153A CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATE RIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY O N THE BASIS OF SEIZED MATERIAL.' 58. IN KABUL CHAWLA (SUPRA), THE COURT DISCUSSED THE D ECISION IN FILATEX INDIA LTD. (SUPRA) AS WELL AS THE ABOVE TWO DECISIONS AND OBSERVED AS UNDER: '31. WHAT DISTINGUISHES THE DECISIONS BOTH IN CIT V . CHETAN DAS LACHMAN DAS (SUPRA), AND FILATEX INDIA LTD. V. CIT-IV (SUPR A) IN THEIR APPLICATION TO THE PRESENT CASE IS THAT IN BOTH THE SAID CASES THE RE WAS SOME MATERIAL UNEARTHED DURING THE SEARCH, WHEREAS IN THE PRESENT CASE THERE ADMITTEDLY WAS NONE. SECONDLY, IT IS PLAIN FROM A CAREFUL READ ING OF THE SAID TWO . DECISIONS THAT THEY DO NOT HOLD THAT ADDITIONS CAN BE VALIDLY MADE TO INCOME FORMING THE SUBJECT MATTER OF COMPLETED ASSESSMENTS PRIOR TO THE SEARCH EVEN IF NO INCRIMINATING MATERIAL WHATSOEVER WAS UNEARTH ED DURING THE SEARCH. 32. RECENTLY BY ITS ORDER DATED 6TH JULY 2015 IN IT A NO. 369 OF 2015 (PR. COMMISSIONER OF INCOME TAX V. KURELE PAPER MILLS P. LTD.), THIS COURT DECLINED TO FRAME A QUESTION OF LAW IN A CASE WHERE , IN THE ABSENCE OF ANY INCRIMINATING MATERIAL BEING FOUND DURING THE SEARC H UNDER SECTION 132 OF THE ACT, THE REVENUE SOUGHT TO JUSTIFY INITIATION O F PROCEEDINGS UNDER SECTION 153A OF THE ACT AND MAKE AN ADDITION UNDER SECTION 68 OF THE ACT ON BOGUS SHARE CAPITAL GAIN. THE ORDER OF THE CIT (A), AFFIR MED BY THE ITAT, DELETING THE ADDITION, WAS NOT INTERFERED WITH.' ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 13 59. IN KABUL CHAWLA (SUPRA), THE COURT REFERRED TO THE DECISION OF THE RAJASTHAN HIGH COURT IN JAI STEEL (INDIA) V. ASSTT. CIT [2013] 36 TAXMANN.COM 523/219 TAXMAN 223 . THE SAID PART OF THE DECISION IN KABUL CHAWLA (SUPR A) IN PARAS 33 AND 34 READS AS UNDER: '33. THE DECISION OF THE RAJASTHAN HIGH COURT IN JA I STEEL (INDIA), JODHPUR V. ACIT (SUPRA) INVOLVED A CASE WHERE CERTA IN BOOKS OF ACCOUNTS AND OTHER DOCUMENTS THAT HAD NOT BEEN PRODUCED IN T HE COURSE OF ORIGINAL ASSESSMENT WERE FOUND IN THE COURSE OF SEARCH. IT W AS HELD WHERE UNDISCLOSED INCOME OR UNDISCLOSED PROPERTY HAS BEEN FOUND AS A CONSEQUENCE OF THE SEARCH, THE SAME WOULD ALSO BE T AKEN INTO CONSIDERATION WHILE COMPUTING THE TOTAL INCOME UNDER SECTION 153A OF THE ACT. THE COURT THEN EXPLAINED AS UNDER: '22. IN THE FIRM OPINION OF THIS COURT FROM A PLAIN READING OF THE PROVISION ALONG WITH THE PURPOSE AND PURPORT OF THE SAID PROV ISION, WHICH IS INTRICATELY LINKED WITH SEARCH AND REQUISITION UNDER SECTIONS 1 32 AND 132A OF THE ACT, IT IS APPARENT THAT: ( A ) THE ASSESSMENTS OR REASSESSMENTS, WHICH STAND ABATE D IN TERMS OF II PROVISO TO SECTION 153A OF THE ACT, THE AO ACTS UNDER HIS ORIGINAL JURISDIC TION, FOR WHICH, ASSESSMENTS HAVE TO BE MADE; ( B ) REGARDING OTHER CASES, THE ADDITION TO THE INCOME T HAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT WILL BE MADE ON THE BASIS OF INCRIMINATI NG MATERIAL; AND ( C ) IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE C OMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE.' 34. THE ARGUMENT OF THE REVENUE THAT THE AO WAS FRE E TO DISTURB INCOME DE HORS THE INCRIMINATING MATERIAL WHILE MAKING ASSESS MENT UNDER SECTION 153A OF THE ACT WAS SPECIFICALLY REJECTED BY THE CO URT ON THE GROUND THAT IT WAS 'NOT BORNE OUT FROM THE SCHEME OF THE SAID PROV ISION' WHICH WAS IN THE CONTEXT OF SEARCH AND/OR REQUISITION. THE COURT ALS O EXPLAINED THE PURPORT OF THE WORDS 'ASSESS' AND 'REASSESS', WHICH HAVE BEEN FOUND AT MORE THAN ONE PLACE IN SECTION 153A OF THE ACT AS UNDER: '26. THE PLEA RAISED ON BEHALF OF THE ASSESSEE THAT AS THE FIRST PROVISO PROVIDES FOR ASSESSMENT OR REASSESSMENT OF THE TOTA L INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSESSM ENT YEARS, IS MERELY READING THE SAID PROVISION IN ISOLATION AND NOT IN THE CONTEXT OF THE ENTIRE SECTION. THE WORDS 'ASSESS' OR 'REASSESS'-HAVE BEEN USED AT MORE THAN ONE PLACE IN THE SECTION AND A HARMONIOUS CONSTRUCTION OF THE ENTIRE PROVISION WOULD LEAD TO AN IRRESISTIBLE CONCLUSION THAT THE W ORD ASSESS HAS BEEN USED IN THE CONTEXT OF AN ABATED PROCEEDINGS AND REASSES S HAS BEEN USED FOR COMPLETED ASSESSMENT PROCEEDINGS, WHICH WOULD NOT A BATE AS THEY ARE NOT PENDING ON THE DATE OF INITIATION OF THE SEARCH OR MAKING OF REQUISITION AND WHICH WOULD ALSO NECESSARILY SUPPORT THE INTERPRETA TION THAT FOR THE ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 14 COMPLETED ASSESSMENTS, THE SAME CAN BE TINKERED ONL Y BASED ON THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH OR REQUISITION OF DOCUMENTS.'' 60. IN KABUL CHAWLA (SUPRA), THE COURT ALSO TOOK NOTE OF THE DECISION OF THE BOMBAY HIGH COURT IN CIT V. CONTINENTAL WAREHOUSING CORPN (NHAVA SHEVA) LTD. [2015] 58 TAXMANN.COM 78/232 TAXMAN 270/374 ITR 645 (BOM.) WHICH ACCEPTED THE PLEA THAT IF NO INCRIMINATING MATERIAL WAS FOUND DURING THE C OURSE OF SEARCH IN RESPECT OF AN ISSUE, THEN NO ADDITIONS IN RESPECT OF ANY ISSUE CA N BE MADE TO THE ASSESSMENT UNDER SECTION 153A AND 153C OF THE ACT. THE LEGAL POSITIO N WAS THEREAFTER SUMMARIZED IN KABUL CHAWLA (SUPRA) AS UNDER: '37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN T HE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UNDER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153 A (1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSON SEARCHE D REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE O F THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RE SPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE. AFOREMENTIONED SIX YEARS IN SEPARATE ASSESS MENT ORDERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WILL BE ONLY ON E ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE DISCLOSED AND THE UNDISC LOSED INCOME WOULD BE BROUGHT TO TAX'. IV. ALTHOUGH SECTION 153 A DOES NOT SAY THA T ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH, OR OTHE R POST- SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE E VIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT 'CAN BE ARBI TRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH T HE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UN DER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL.' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED ASSESSMENT CAN BE REITERAT ED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATABLE TO ABATED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD 'REASSESS' TO COMPLETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDIN G ASSESSMENTS ARE CONCERNED, THE JURISDICTION TO MA KE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTION 153A ME RGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS O F THE FINDINGS OF THE SEARCH AND ANY OTHER ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 15 MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE AO. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON THE BASIS OF SOME INCRI MINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITIO N OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DI SCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT.' 61. IT APPEARS THAT A NUMBER OF HIGH COURTS HAVE CONCU RRED WITH THE DECISION OF THIS COURT IN KABUL CHAWLA (SUPRA) BEGINNING WITH THE GU JARAT HIGH COURT IN SAUMYA CONSTRUCTION (P.) LTD. (SUPRA). THERE, A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT ON 7TH OCTOBER, 2009 AND AN ASSESSMENT CAME TO BE F RAMED UNDER SECTION 143(3) READ WITH SECTION 153A(1)(B) IN DETERMINING THE TOTAL IN COME OF THE ASSESSEE OF RS. 14.5 CRORES AGAINST DECLARED INCOME OF RS. 3.44 CRORES. THE ITAT DELETED THE ADDITIONS ON THE GROUND THAT IT WAS NOT BASED ON ANY INCRIMINATI NG MATERIAL FOUND DURING THE COURSE OF THE SEARCH IN RESPECT OF AYS UNDER CONSIDERATION I.E., AY 2006-07. THE GUJARAT HIGH COURT REFERRED TO THE DECISION IN KABUL CHAWLA (SUP RA), OF THE RAJASTHAN HIGH COURT IN JAI STEEL (INDIA) (SUPRA) AND ONE EARLIER DECISI ON OF THE GUJARAT HIGH COURT ITSELF. IT EXPLAINED IN PARA 15 AND 16 AS UNDER: '15. ON A PLAIN READING OF SECTION 153A OF THE ACT, IT IS EVIDENT THAT THE TRIGGER POINT FOR EXERCISE OF POWERS THEREUNDER IS A SEARCH UNDER SECTION 132 OR A REQUISITION UNDER SECTION 132A OF THE ACT. ONCE A S EARCH OR REQUISITION IS MADE, A MANDATE IS CAST UPON THE ASSESSING OFFICER TO ISSUE NOTICE UNDER SECTION 153A OF THE ACT TO THE PERSON, REQUIRING HIM TO FURNISH THE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR I N WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE AND ASSESS OR REAS SESS THE SAME. SINCE THE ASSESSMENT UNDER SECTION 153A OF THE ACT IS LINKED WITH SEARCH AND REQUISITION UNDER SECTIONS 132 AND 132A OF THE ACT, IT IS EVIDE NT THAT THE OBJECT OF THE SECTION IS TO BRING TO TAX THE UNDISCLOSED INCOME WHICH IS FOUND DURING THE COURSE OF OR PURSUANT TO THE SEARCH OR REQUISITION. HOWEVER, INS TEAD OF THE EARLIER REGIME OF BLOCK ASSESSMENT WHEREBY, IT WAS ONLY THE UNDISCLOS ED INCOME OF THE BLOCK PERIOD THAT WAS ASSESSED, SECTION 153A OF THE ACT SEEKS TO ASSESS THE TOTAL INCOME FOR THE ASSESSMENT YEAR, WHICH IS CLEAR FROM THE FIRST PROV ISO THERETO WHICH PROVIDES THAT THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS. THE SECOND PROVISO MAKES THE INTENTION OF THE LEGISLATURE CLEAR AS THE SAME PROVIDES THAT ASSESSMENT OR REASSESSMENT, IF ANY, RELATING TO THE SIX ASSESS MENT YEARS REFERRED TO IN THE SUB- SECTION PENDING ON THE DATE OF INITIATION OF SEARCH UNDER SECTION 132 OR REQUISITION UNDER SECTION 132A, AS THE CASE MAY BE, SHALL ABATE. SUB-SECTION (2) OF SECTION 153A OF THE ACT PROVIDES THAT IF ANY PROCEE DING OR ANY ORDER OF ASSESSMENT OR REASSESSMENT MADE UNDER SUB-SECTION ( 1) IS ANNULLED IN APPEAL OR ANY OTHER LEGAL PROVISION, THEN THE ASSESSMENT OR R EASSESSMENT RELATING TO ANY ASSESSMENT YEAR WHICH HAD ABATED UNDER THE SECOND P ROVISO WOULD STAND REVIVED. THE PROVISO THERETO SAYS THAT SUCH REVIVAL SHALL CE ASE TO HAVE EFFECT IF SUCH ORDER OF ANNULMENT IS SET ASIDE. THUS, ANY PROCEEDING OF ASSESSMENT OR REASSESSMENT FALLING WITHIN THE SIX ASSESSMENT YEARS PRIOR TO TH E SEARCH OR REQUISITION STANDS ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 16 ABATED AND THE TOTAL INCOME OF THE ASSESSEE IS REQU IRED TO BE DETERMINED UNDER SECTION 153A OF THE ACT. SIMILARLY, SUB-SECTION (2) PROVIDES FOR REVIVAL OF ANY ASSESSMENT OR REASSESSMENT WHICH STOOD ABATED, IF A NY PROCEEDING OR ANY ORDER OF ASSESSMENT OR REASSESSMENT MADE UNDER SECTION 15 3A OF THE ACT IS ANNULLED IN APPEAL OR ANY OTHER PROCEEDING. 16. SECTION 153A BEARS THE HEADING 'ASSESSMENT IN C ASE OF SEARCH OR REQUISITION'. IT IS 'WELL SETTLED AS HELD BY THE SUPREME COURT IN A CATENA OF DECISIONS THAT THE HEADING OR THE SECTION CAN BE REGARDED AS A KEY TO THE INTERPRETATION OF THE OPERATIVE PORTION OF THE SECTION AND IF THERE IS NO AMBIGUITY IN THE LANGUAGE OR IF IT IS PLAIN AND CLEAR, THEN THE HEADING USED IN THE SECTION STRENGTHENS THAT MEANING. FROM THE HEADING OF SECTION 153. THE INTEN TION OF THE LEGISLATURE IS CLEAR, VIZ., TO PROVIDE FOR ASSESSMENT IN CASE OF S EARCH AND REQUISITION. WHEN THE VERY PURPOSE OF THE PROVISION IS TO MAKE ASSESSMENT IN CASE OF SEARCH OR REQUISITION, IT GOES WITHOUT SAYING THAT THE ASSESS MENT HAS TO HAVE RELATION TO THE SEARCH OR REQUISITION, IN OTHER WORDS, THE ASSESSME NT SHOULD CONNECTED WITH SOMETHING ROUND DURING THE SEARCH OR REQUISITION VI Z., INCRIMINATING MATERIAL WHICH REVEALS UNDISCLOSED INCOME. THUS, WHILE IN VI EW OF THE MANDATE OF SUB- SECTION (1) OF SECTION 153A OF THE ACT, IN EVERY CA SE WHERE THERE IS A SEARCH OR REQUISITION, THE ASSESSING OFFICER IS OBLIGED TO IS SUE NOTICE TO SUCH PERSON TO FURNISH RETURNS OF INCOME FOR THE SIX YEARS PRECEDI NG THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH IS CONDUCT ED OR REQUISITION IS MADE, ANY ADDITION' OR DISALLOWANCE CAN BE MADE ONLY ON THE B ASIS OF MATERIAL COLLECTED DURING THE SEARCH OR REQUISITION, IN CASE NO INCRIM INATING MATERIAL IS FOUND, AS HELD BY THE RAJASTHAN HIGH COURT IN THE CASE OF JAI STEEL (INDIA) V. ASST. CIT(SUPRA), THE EARLIER ASSESSMENT WOULD HAVE TO BE REITERATED, IN CASE WHERE PENDING ASSESSMENTS HAVE ABATED, THE ASSESSING OFFI CER CAN PASS ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS DETERMINING THE TO TAL INCOME OF THE ASSESSEE WHICH WOULD INCLUDE INCOME DECLARED IN THE RETURNS, IF ANY, FURNISHED BY THE ASSESSEE AS WELL AS UNDISCLOSED INCOME, IF ANY, UNE ARTHED DURING THE SEARCH OR REQUISITION. IN CASE WHERE A PENDING REASSESSMENT U NDER SECTION 147 OF THE ACT HAS ABATED, NEEDLESS TO STATE THAT THE SCOPE AND AM BIT OF THE ASSESSMENT WOULD INCLUDE ANY ORDER WHICH THE ASSESSING OFFICER COULD HAVE PASSED UNDER SECTION 147 OF THE ACT AS WELL AS UNDER SECTION 153A OF THE ACT. ** ** ** 19. ON BEHALF OF THE APPELLANT, IT HAS BEEN CONTEND ED THAT IF ANY INCRIMINATING MATERIAL IS FOUND, NOTWITHSTANDING THAT IN RELATION TO THE YEAR UNDER CONSIDERATION, NO INCRIMINATING MATERIAL IS FOUND, IT WOULD BE PERMISSIBLE TO MAKE ADDITIONS AND DISALLOWANCE IN RESPECT OF AN TH E SIX ASSESSMENT YEARS. IN THE OPINION OF THIS COURT, THE SAID CONTENTION DOES NOT MERIT ACCEPTANCE, INASMUCH AS. THE ASSESSMENT IN RESPECT OF EACH OF THE SIX ASSESS MENT YEARS IS A SEPARATE AND DISTINCT ASSESSMENT. UNDER SECTION 153A OF THE ACT, ASSESSMENT HAS TO BE MADE IN RELATION TO THE SEARCH OR REQUISITION, NAMELY, IN R ELATION TO MATERIAL DISCLOSED DURING THE SEARCH OR REQUISITION. IF IN RELATION TO ANY ASSESSMENT YEAR, NO INCRIMINATING MATERIAL IS FOUND, NO ADDITION OR DIS ALLOWANCE CAN BE MADE IN RELATION TO THAT ASSESSMENT YEAR IN EXERCISE OF POW ERS UNDER SECTION 153A OF THE ACT AND THE EARLIER ASSESSMENT SHALL HAVE TO BE REI TERATED. IN THIS REGARD, THIS ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 17 COURT IS IN COMPLETE AGREEMENT WITH THE VIEW ADOPTE D BY THE RAJASTHAN HIGH COURT IN THE CASE OF JAI STEEL (INDIA) V. ASST. CIT (SUPRA). BESIDES, AS RIGHTLY POINTED OUT BY THE LEARNED COUNSEL FOR THE RESPONDE NT, THE CONTROVERSY INVOLVED IN THE PRESENT CASE STANDS CONCLUDED BY THE DECISION O F THIS COURT IN THE CASE OF CIT V. JAYABEN RATILAL SORATHIA (SUPRA) WHEREIN IT HAS BEEN HELD THAT WHILE IT CANNOT BE DISPUTED THAT CONSIDERING SECTION 153A OF THE ACT, THE ASSESSING OFFICER CAN REOPEN AND/OR ASSESS THE RETURN WITH RESPECT TO SIX PRECEDING YEARS ; HOWEVER, THERE MUST BE SOME INCRIMINATING MATERIAL AVAILABLE WITH THE ASSESSING OFFICER WITH RESPECT TO THE SALE TRANSACTIONS IN TH E PARTICULAR ASSESSMENT YEAR.' 62. SUBSEQUENTLY, IN DEVANGI ALIAS RUPA (SUPRA), ANOTH ER BENCH OF THE GUJARAT HIGH COURT REITERATED THE ABOVE LEGAL POSITION FOLLOWING ITS EARLIER DECISION IN SAUMYA CONSTRUCTION (P.) LTD. (SUPRA) AND OF THIS COURT IN KABUL CHAWLA(SUPRA). AS FAR AS KARNATAKA HIGH COURT IS CONCERNED, IT HAS IN IBC KN OWLEDGE PARK (P.) LTD. (SUPRA) FOLLOWED THE DECISION OF THIS COURT IN KABUL CHAWLA (SUPRA) AND HELD THAT THERE HAD TO BE INCRIMINATING MATERIAL QUA EACH OF THE AYS IN WH ICH ADDITIONS WERE SOUGHT TO BE MADE PURSUANT TO SEARCH AND SEIZURE OPERATION. THE CALCUTTA HIGH COURT IN SALASAR STOCK BROKING LTD. (SUPRA), TOO, FOLLOWED THE DECIS ION OF THIS COURT IN KABUL CHAWLA (SUPRA). IN GURINDER SINGH BAWA(SUPRA), THE BOMBAY HIGH COURT HELD THAT: '6. . . . . . ONCE AN ASSESSMENT HAS ATTAINED FINAL ITY FOR A PARTICULAR YEAR, I.E., IT IS NOT PENDING THEN THE SAME CANNOT BE SUBJECT TO TAX IN PROCEEDINGS UNDER SECTION 153A OF THE ACT. THIS OF COURSE WOULD NOT APPLY IF INCRIMINATING MATERIALS ARE GATHERED IN THE COURSE OF SEARCH OR DURING PROCEEDI NGS UNDER SECTION 153A OF THE ACT WHICH ARE CONTRARY TO AND/OR NOT DISCLOSED DURI NG THE REGULAR ASSESSMENT PROCEEDINGS.' 63. EVEN THIS COURT HAS IN MAHESH KUMAR GUPTA (SUPRA) AND RAM AVTAR VERMA (SUPRA) FOLLOWED THE DECISION IN KABUL CHAWLA (SUPRA). THE DECISION OF THIS COURT IN KURELE PAPER MILLS (P.) LTD. (SUPRA) WHICH WAS REFERRED TO IN KABUL CHAWLA (SUPRA) HAS BEEN AFFIRMED BY THE SUPREME COU RT BY THE DISMISSAL OF THE REVENUE'S SLP ON 7TH DECEMBER, 2015. THE DECISION IN DAYAWANTI GUPTA 64. THAT BRINGS US TO THE DECISION IN SMT. DAYAWANTI G UPTA (SUPRA). AS RIGHTLY POINTED OUT BY MR. KAUSHIK, LEARNED COUNSEL APPEARING FOR T HE RESPONDENT, THAT THERE ARE SEVERAL DISTINGUISHING FEATURES IN THAT CASE WHICH MAKES ITS RATIO INAPPLICABLE TO THE FACTS OF THE PRESENT CASE. IN THE FIRST PLACE, THE ASSESSEES THERE WERE ENGAGED IN THE BUSINESS OF PAN MASALA AND GUTKHA ETC. THE ANSWERS GIVEN TO QUESTIONS POSED TO THE ASSESSEE IN THE COURSE OF SEARCH AND SURVEY PROCEED INGS IN THAT CASE BRING OUT THE POINTS OF DISTINCTION. IN THE FIRST PLACE, IT WAS S TATED THAT THE STATEMENT RECORDED WAS UNDER SECTION 132(4) AND NOT UNDER SECTION 133A. IT WAS A STATEMENT BY THE ASSESSEE HIMSELF. IN RESPONSE TO QUESTION NO. 7 WHETHER ALL THE PURCHASES MADE BY THE FAMILY FIRMS, WERE ENTERED IN THE REGULAR BOOKS OF ACCOUNT , THE ANSWER WAS: 'WE AND OUR FAMILY FIRMS NAMELY M/S. ASSAM SUPARI T RADERS AND M/S. BALAJI PERFUMES GENERALLY TRY TO RECORD THE TRANSACTIONS M ADE IN RESPECT OF PURCHASE, MANUFACTURING AND SALES IN OUR REGULAR BO OKS OF ACCOUNTS BUT IT IS ALSO FACT THAT SOME TIME DUE TO SOME FACTORS LIKE I NABILITY OF ACCOUNTANT, OUR BUSY SCHEDULE AND SOME FAMILY PROBLEMS, VARIOUS PUR CHASES AND SALES OF ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 18 SUPARI, GUTKA AND OTHER ITEMS DEALT BY OUR FIRMS IS NOT ENTERED AND SHOWN IN THE REGULAR BOOKS OF ACCOUNTS MAINTAINED BY OUR FIR MS.' 65. THEREFORE, THERE WAS A CLEAR ADMISSION BY THE ASSE SSEES IN SMT. DAYAWANTI GUPTA (SUPRA) THERE THAT THEY WERE NOT MAINTAINING REGULAR BOOKS OF ACCOUNTS AND THE TRANSACTIONS WERE NOT RECORDED THEREIN. 66. FURTHER, IN ANSWER TO QUESTION NO. 11, THE ASSESSE E IN SMT. DAYAWANTI GUPTA (SUPRA) WAS CONFRONTED WITH CERTAIN DOCUMENTS SEIZED DURING THE SEARCH. THE ANSWER WAS CATEGORICAL AND READS THUS: 'ANS:- I HEREBY ADMIT THAT THESE PAPERS ALSO CONTEN D DETAILS OF VARIOUS TRANSACTIONS INCLUDE PURCHASE/SALES/MANUFACTURING T RADING OF GUTKHA, SUPARI MADE IN CASH OUTSIDE BOOKS OF ACCOUNTS AND T HESE ARE ACTUALLY UNACCOUNTED TRANSACTIONS MADE BY OUR TWO FIRMS NAME LY M/S. ASOM TRADING AND M/S. BALAJI PERFUMES.' 67. BY CONTRAST, THERE IS NO SUCH STATEMENT IN THE PRE SENT CASE WHICH CAN BE SAID TO CONSTITUTE AN ADMISSION BY THE ASSESSEE OF A FAILUR E TO RECORD ANY TRANSACTION IN THE ACCOUNTS OF THE ASSESSEE FOR THE AYS IN QUESTION. O N THE CONTRARY, THE ASSESSEE HEREIN STATED THAT, HE IS REGULARLY MAINTAINING THE BOOKS OF ACCOUNTS. THE DISCLOSURE MADE IN THE SUM OF RS. 1.10 CRORES WAS ONLY FOR THE YEAR OF SEARCH AND NOT FOR THE EARLIER YEARS. AS ALREADY NOTICED, THE BOOKS OF ACC OUNTS MAINTAINED BY THE ASSESSEE IN THE PRESENT CASE HAVE BEEN ACCEPTED BY THE AO. I N RESPONSE TO QUESTION NO. 16 POSED TO MR. PAWAN GADIA, HE STATED THAT THERE WAS NO POSSIBILITY OF MANIPULATION OF THE ACCOUNTS. IN SMT. DAYAWANTI GUPTA(SUPRA), BY CONTRAST, THERE WAS A CHART PREPARED CONFIRMING THAT THERE HAD BEEN A YEAR-WISE NON-RECORDING OF TRANSACTIONS. IN SMT. DAYAWANTI GUPTA (SUPRA), ON THE BASIS OF MA TERIAL RECOVERED DURING SEARCH, THE ADDITIONS WHICH WERE MADE FOR ALL THE YEARS WHE REAS ADDITIONS IN THE PRESENT CASE WERE MADE BY THE AO ONLY FOR AY 2004-05 AND NO T ANY OF THE OTHER YEARS. EVEN THE ADDITIONS MADE FOR AYS 2004-05 WERE SUBSEQUENTL Y DELETED BY THE CIT (A), WHICH ORDER WAS AFFIRMED BY THE ITAT. EVEN THE REVE NUE HAS CHALLENGED ONLY TWO OF SUCH DELETIONS IN ITA NO. 306/2017. 68. IN PARA 23 OF THE DECISION IN SMT. DAYAWANTI GUPTA (SUPRA), IT WAS OBSERVED AS UNDER: '23. THIS COURT IS OF OPINION THAT THE ITAT'S FINDI NGS DO NOT REVEAL ANY FUNDAMENTAL ERROR, CALLING FOR CORRECTION. THE INFE RENCES DRAWN IN RESPECT OF UNDECLARED INCOME WERE PREMISED ON THE MATERIALS FO UND AS WELL AS THE STATEMENTS RECORDED BY THE ASSESSEES. THESE ADDITIO NS THEREFORE WERE NOT BASELESS. GIVEN THAT THE ASSESSING AUTHORITIES IN S UCH CASES HAVE TO DRAW INFERENCES, BECAUSE OF THE NATURE OF THE MATERIALS - SINCE THEY COULD BE SCANTY (AS ONE HABITUALLY CONCEALING INCOME OR INDULGING I N CLANDESTINE OPERATIONS CAN HARDLY BE EXPECTED TO MAINTAIN METICULOUS BOOKS OR RECORDS FOR LONG AND IN ALL PROBABILITY BE ANXIOUS TO DO AWAY WITH SUCH EVIDENCE AT THE SHORTEST POSSIBILITY) THE ELEMENT OF GUESS WORK IS TO HAVE S OME REASONABLE NEXUS WITH THE STATEMENTS RECORDED AND DOCUMENTS SEIZED. IN TI LLS CASE, THE DIFFERENCES OF OPINION BETWEEN THE CIT (A) ON THE ONE HAND AND THE AO AND ITAT ON THE OTHER CANNOT BE THE SOLE BASIS FOR DISAGREEING WITH WHAT IS ESSENTIALLY A FACTUAL SURMISE THAT IS LOGICAL AND PLAUSIBLE. THES E FINDINGS DO NOT CALL FOR ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 19 INTERFERENCE. THE SECOND QUESTION OF LAW IS ANSWERE D AGAIN IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE.' 69. WHAT WEIGHED WITH THE COURT IN THE ABOVE DECISION WAS THE 'HABITUAL CONCEALING OF INCOME AND INDULGING IN CLANDESTINE OPERATIONS' AND THAT A PERSON INDULGING IN SUCH ACTIVITIES 'CAN HARDLY BE ACCEPTED TO MAINTAIN METICULOUS BOOKS OR RECORDS FOR LONG.' THESE FACTORS ARE ABSENT IN THE PRESENT CASE . THERE WAS NO JUSTIFICATION AT ALL FOR THE AO TO PROCEED ON SURMISES AND ESTIMATES WIT HOUT THERE BEING ANY INCRIMINATING MATERIAL QUA THE AY FOR WHICH HE SOUG HT TO MAKE ADDITIONS OF FRANCHISEE COMMISSION. 70. THE ABOVE DISTINGUISHING FACTORS IN SMT. DAYAWANTI GUPTA (SUPRA), THEREFORE, DO NOT DETRACT FROM THE SETTLED LEGAL POSITION IN KABU L CHAWLA (SUPRA) WHICH HAS BEEN FOLLOWED NOT ONLY BY THIS COURT IN ITS SUBSEQUENT D ECISIONS BUT ALSO BY SEVERAL OTHER HIGH COURTS. 71. FOR ALL OF THE AFOREMENTIONED REASONS, THE COURT I S OF THE VIEW THAT THE ITAT WAS JUSTIFIED IN HOLDING THAT THE INVOCATION OF SECTION 153A BY THE REVENUE FOR THE AYS 2000-01 TO 2003-04 WAS WITHOUT ANY LEGAL BASIS AS T HERE WAS NO INCRIMINATING MATERIAL QUA EACH OF THOSE AYS. THE HONBLE DELHI HIGH COURT HAS CONCURRED WITH THE VIEW AS TAKEN IN CASE OF KABUL CHAWLA (SUPRA) AS WELL AS THE DECISION OF HONBLE J URISDICTIONAL HIGH COURT IN THE CASE OF M/S. JAI STEEL INDIA LTD. VS. ACIT (SUPRA). EVEN ON THE ISSUE OF ADDITION MADE BY THE AO IN THE PROCEEDINGS UNDER SECTION 153 A IN RESPECT OF THE ASSESSMENT YEAR WHICH WAS ALREADY COMPLETED ON THE DATE OF SEARCH, THE HONBLE HIGH COURT HAS HELD THAT IN THE ABSENCE OF ANY MATE RIAL WHICH WAS SUBSEQUENTLY UNEARTHED DURING THE SEARCH AND WAS NOT ALREADY AVA ILABLE TO THE AO, THE ADDITIONS MADE BY THE AO ON ACCOUNT OF SECURITY DEPOSITS WERE RIGHTLY DELETED BY THE LD. CIT (A). THE RELEVANT OBSERVATIONS OF THE HONBLE HIGH COURT IN CASE OF PRINCIPAL CIT VS. MEETA GUTGUTIA (SUPRA) ARE IN PARA 53 AS UNDER :- 53. AT THIS STAGE, IT IS ALSO TO BE NOTICED THAT AN EL ABORATE ARGUMENT WAS MADE BY MR. MANCHANDA ON THE ASPECT OF THE SECURITY DEPOSIT S ACCEPTED BY THE ASSESSEE. THESE WERE OF TWO KINDS - ONE WAS OF REFUNDABLE SEC URITY DEPOSITS AND THE OTHER FOR ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 20 NON-REFUNDABLE SECURITY DEPOSITS. AS FAR AS THE REF UNDABLE SECURITY DEPOSITS WERE CONCERNED, THE AO HIMSELF IN HIS REMAND REPORT ACCE PTED THEM AS HAVING BEEN DISCLOSED. THIS HAS BEEN NOTICED BY THE CIT (A) IN PARA 7.2.1 OF HIS ORDER FOR AY 2004-05. AS REGARDS NON-REFUNDABLE SECURITY DEPOSIT , THE CIT (A) ACCEPTED THE AO'S FINDINGS THAT TREATING THE SUM AS 'GOODWILL WRITTEN OFF ON DEFERRED BASIS' WAS NOT CORRECT, HENCE THE ADDITION OF RS. 5,09,343 WAS HEL D TO BE JUSTIFIED AND CORRECT. IT WAS DULY ACCOUNTED FOR UNDER 'LIABILITIES' AND TRAN SFERRED TO INCOME IN A PHASED MANNER. THIS WAS NOT DONE BY MANIPULATING THE ACCOU NT BOOKS OF THE ASSESSEE AS ALLEGED BY THE REVENUE. THIS WOULD HAVE BEEN EVIDEN T HAD THE RETURN BEEN PICKED UP FOR SCRUTINY UNDER SECTION 143(3) OF THE ACT. TH IS, THEREFORE, WAS NOT MATERIAL WHICH WAS SUBSEQUENTLY UNEARTHED DURING THE SEARCH WHICH WAS NOT ALREADY AVAILABLE TO THE AO. CONSEQUENTLY, THE ADDITIONS SO UGHT TO BE MADE BY THE AO ON ACCOUNT OF SECURITY DEPOSITS WERE RIGHTLY DELETED B Y THE CIT (A). THUS THE ESSENTIAL COROLLARY OF THESE DECISIONS IS THAT NO ADDITION CAN BE MADE IN THE PROCEEDINGS UNDER SECTION 153A IN RESPECT OF TH E ASSESSMENTS WHICH WERE COMPLETED PRIOR TO THE DATE OF SEARCH EXCEPT BASED ON SOME INCRIMINATING MATERIAL UNEARTHED DURING THE SEARCH WHICH WAS NOT ALREADY A VAILABLE TO THE AO. IT IS PERTINENT TO NOTE THAT THE SLP FILED BY THE REVENUE AGAINST THE DECISION OF HONBLE DELHI HIGH COURT IN CASE OF PRINCIPAL CIT VS. MEETA GUTGUTIA WAS DISMISSED VIDE ORDER DATED 2 ND JULY, 2018. THERE ARE SERIES OF DECISIONS ON THIS ISSUE INCLUDING THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN CA SE OF M/S. JAI STEEL INDIA VS. ACIT (SUPRA) WHEREIN THE HONBLE HIGH COURT HAS HELD IN PARA 23 TO 30 AS UNDER :- 23. THE RELIANCE PLACED BY THE COUNSEL FOR THE APPELLA NT ON THE CASE OF ANIL KUMAR BHATIA (SUPRA) ALSO DOES NOT HELP THE CASE OF THE ASSESSEE. THE RELEVANT EXTRACT OF THE SAID JUDGMENT READS AS UNDE R: '19. UNDER THE PROVISIONS OF SECTION 153A, AS WE HA VE ALREADY NOTICED, THE ASSESSING OFFICER IS BOUND TO ISSUE NO TICE TO THE ASSESSEE TO FURNISH RETURNS FOR EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 21 ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSME NT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH OR REQUISI TION WAS MADE. ANOTHER SIGNIFICANT FEATURE OF THIS SECTION IS THAT THE ASSESSING OFFICER IS EMPOWERED TO ASSESS OR REASSESS THE 'TOT AL INCOME' OF THE AFORESAID YEARS. THIS IS A SIGNIFICANT DEPARTURE FR OM THE EARLIER BLOCK ASSESSMENT SCHEME IN WHICH THE BLOCK ASSESSMENT ROP ED IN ONLY THE UNDISCLOSED INCOME AND THE REGULAR ASSESSMENT PROCE EDINGS WERE PRESERVED, RESULTING IN MULTIPLE ASSESSMENTS. UNDER SECTION 153A, HOWEVER, THE ASSESSING OFFICER HAS BEEN GIVEN THE P OWER TO ASSESS OR REASSESS THE 'TOTAL INCOME' OF THE SIX ASSESSMENT Y EARS IN QUESTION IN SEPARATE ASSESSMENT ORDERS. THIS MEANS THAT THERE C AN BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX ASSE SSMENT YEARS, IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX. 20. A QUESTION MAY ARISE AS TO HOW THIS IS SOUGHT T O BE ACHIEVED WHERE AN ASSESSMENT ORDER HAD ALREADY BEEN PASSED I N RESPECT 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 A LREADY 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 TO THE UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SE ARCH. FOR THIS 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. 21. NOW THERE CAN BE CASES WHERE AT THE TIME WHEN T HE SEARCH IS INITIATED OR REQUISITION IS MADE, THE ASSESSMENT OR REASSESSMENT PROCEEDINGS RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF THE SIX ASSESSMENT YEARS MENTIONED ABOVE, MAY BE PENDING. IN SUCH A CASE, THE SECOND PROVISO TO SUB-SECTION (1) OF SECTION 153A SAYS THAT SUCH PROCEEDINGS 'SHALL ABATE'. THE REASO N IS NOT FAR TO SEEK. UNDER SECTION 153A, THERE IS NO ROOM FOR MULT IPLE ASSESSMENT ORDERS IN RESPECT OF ANY OF THE SIX ASSESSMENT YEAR S UNDER CONSIDERATION. THAT IS BECAUSE THE ASSESSING OFFICE R HAS TO DETERMINE NOT MERELY THE UNDISCLOSED INCOME OF THE ASSESSEE, BUT ALSO THE 'TOTAL ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 22 INCOME' OF THE ASSESSEE IN WHOSE CASE A SEARCH OR R EQUISITION HAS BEEN INITIATED. OBVIOUSLY THERE CANNOT BE SEVERAL O RDERS FOR THE SAME ASSESSMENT YEAR DETERMINING THE TOTAL INCOME OF THE ASSESSEE. IN ORDER TO ENSURE THIS STATE OF AFFAIRS NAMELY, THAT IN RESPECT OF THE SIX ASSESSMENT YEARS PRECEDING THE ASSESSMENT YEAR RELE VANT TO THE YEAR IN WHICH THE SEARCH TOOK PLACE THERE IS ONLY ONE DE TERMINATION OF THE TOTAL INCOME, IT HAS BEEN PROVIDED IN THE SECOND PR OVISO OF SUB- SECTION (1) OF SECTION 153A THAT ANY PROCEEDINGS FO R ASSESSMENT OR REASSESSMENT OF THE ASSESSEE WHICH ARE PENDING ON T HE DATE OF INITIATION OF THE SEARCH OR MAKING REQUISITION 'SHA LL ABATE'. ONCE THOSE PROCEEDINGS ABATE, THE DECKS ARE CLEARED, FOR THE ASSESSING OFFICER TO PASS ASSESSMENT ORDERS FOR EACH OF THOSE SIX YEARS DETERMINING THE TOTAL INCOME OF THE ASSESSEE WHICH WOULD INCLUDE BOTH THE INCOME DECLARED IN THE RETURNS, IF ANY, FU RNISHED BY THE ASSESSEE AS WELL AS THE UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SEARCH OR REQUISITION. THE POSITION THUS EMERGI NG IS THAT THE SEARCH IS INITIATED OR REQUISITION IS MADE, THEY WI LL ABATE MAKING WAY FOR THE ASSESSING OFFICER TO DETERMINE THE TOTAL IN COME OF THE ASSESSEE IN WHICH THE UNDISCLOSED INCOME WOULD ALSO BE INCLU DED, BUT IN CASE WHERE THE ASSESSMENT OR REASSESSMENT PROCEEDINGS HA VE ALREADY BEEN COMPLETED AND ASSESSMENT ORDERS HAVE BEEN PASSED DE TERMINING THE ASSESSEE'S TOTAL INCOME AND SUCH ORDERS SUBSISTING AT THE TIME WHEN THE SEARCH OR THE REQUISITION IS MADE, THERE IS NO QUESTION OF ANY ABATEMENT SINCE NO PROCEEDINGS ARE PENDING. IN THIS LATTER SITUATION, THE ASSESSING OFFICER WILL REOPEN THE ASSESSMENTS O R REASSESSMENTS ALREADY MADE (WITHOUT HAVING THE NEED TO FOLLOW THE STRICT PROVISIONS OR COMPLYING WITH THE STRICT CONDITIONS OF SECTIONS 147, 148 AND 151) AND DETERMINE THE TOTAL INCOME OF THE ASSESSEE. SUC H DETERMINATION IN THE ORDERS PASSED UNDER SECTION 153A WOULD BE SIMIL AR TO THE ORDERS PASSED IN ANY REASSESSMENT, WHERE THE TOTAL INCOME DETERMINED IN THE ORIGINAL ASSESSMENT ORDER AND THE INCOME THAT ESCAP ED ASSESSMENT ARE CLUBBED TOGETHER AND ASSESSED AS THE TOTAL INCO ME. IN SUCH A CASE, TO REITERATE, THERE IS NO QUESTION OF ANY ABA TEMENT OF THE EARLIER PROCEEDINGS FOR THE SIMPLE REASON THAT NO PROCEEDIN GS FOR ASSESSMENT OR REASSESSMENT WERE PENDING SINCE THEY HAD ALREADY CULMINATED IN ASSESSMENT OR REASSESSMENT ORDERS WHEN THE SEARCH W AS INITIATED OR THE REQUISITION WAS MADE.' (EMPHASIS SUPPLIED) 24. THE SAID JUDGMENT ALSO IN NO UNCERTAIN TERMS HOLDS THAT THE REASSESSMENT OF THE TOTAL INCOME OF THE COMPLETED ASSESSMENTS HA VE TO BE MADE TAKING NOTE OF THE UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SEARCH AND THE INCOME THAT ESCAPED ASSESSMENTS ARE REQUIRED TO BE CLUBBED TOGETHER WITH THE TOTAL INCOME DETERMINED IN THE ORIGINAL ASSESSM ENT AND ASSESSED AS THE TOTAL INCOME. THE OBSERVATIONS MADE IN THE JUDGMENT CONTRASTING THE PROVISIONS OF DETERMINATION OF UNDISCLOSED INCOME U NDER CHAPTER XIVB WITH DETERMINATION OF TOTAL INCOME UNDER SECTIONS 153A T O 153C OF THE ACT HAVE TO BE READ IN THE CONTEXT OF SECOND PROVISO ONLY, W HICH DEALS WITH THE PENDING ASSESSMENT/REASSESSMENT PROCEEDINGS. THE FU RTHER OBSERVATIONS MADE IN THE CONTEXT OF DE NOVO ASSESSMENT PROCEEDIN GS ALSO HAVE TO BE READ IN CONTEXT THAT IRRESPECTIVE OF THE FACT WHETHER AN Y INCRIMINATING MATERIAL IS ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 23 FOUND DURING THE COURSE OF SEARCH, THE NOTICE AND C ONSEQUENTIAL ASSESSMENT UNDER SECTION 153A HAVE TO BE UNDERTAKEN. 25. THE ARGUMENT OF THE LEARNED COUNSEL THAT THE AO IS ALSO FREE TO DISTURB INCOME, EXPENDITURE OR DEDUCTION DE HORS THE INCRIM INATING MATERIAL, WHILE MAKING ASSESSMENT UNDER SECTION 153A OF THE ACT IS ALSO NOT BORNE OUT FROM THE SCHEME OF THE SAID PROVISION WHICH AS NOTICED A BOVE IS ESSENTIALLY IN CONTEXT OF SEARCH AND/OR REQUISITION. THE PROVISION S OF SECTIONS 153A TO 153C CANNOT BE INTERPRETED TO BE A FURTHER INNINGS FOR THE AO AND/OR ASSESSEE BEYOND PROVISIONS OF SECTIONS 139 (RETURN OF INCOME), 139(5) (REVISED RETURN OF INCOME), 147 (INCOME ESCAPING AS SESSMENT) AND 263 (REVISION OF ORDERS) OF THE ACT. 26. THE PLEA RAISED ON BEHALF OF THE ASSESSEE THAT AS THE FIRST PROVISO PROVIDES FOR ASSESSMENT OR REASSESSMENT OF THE TOTA L INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSESSM ENT YEARS, IS MERELY READING THE SAID PROVISION IN ISOLATION AND NOT IN THE CONTEXT OF THE ENTIRE SECTION. THE WORDS 'ASSESS' OR 'REASSESS' HAVE BEEN USED AT MORE THAN ONE PLACE IN THE SECTION AND A HARMONIOUS CONSTRUCTION OF THE ENTIRE PROVISION WOULD LEAD TO AN IRRESISTIBLE CONCLUSION THAT THE W ORD 'ASSESS' HAS BEEN USED IN THE CONTEXT OF AN ABATED PROCEEDINGS AND REASSES S HAS BEEN USED FOR COMPLETED ASSESSMENT PROCEEDINGS, WHICH WOULD NOT A BATE AS THEY ARE NOT PENDING ON THE DATE OF INITIATION OF THE SEARCH OR MAKING OF REQUISITION AND WHICH WOULD ALSO NECESSARILY SUPPORT THE INTERPRETA TION THAT FOR THE COMPLETED ASSESSMENTS, THE SAME CAN BE TINKERED ONL Y BASED ON THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH OR REQUISITION OF DOCUMENTS. 27. THE ALLAHABAD HIGH COURT IN SMT. SHAILA AGARWAL'S (SUPRA) HAS HELD AS UNDER: '19. THE SECOND PROVISO TO SECTION 153A OF THE ACT, REFERS TO ABATEMENT OF THE PENDING ASSESSMENT OR RE-ASSESSMEN T PROCEEDINGS. THE WORD 'PENDING' DOES NOT OPERATE ANY SUCH INTERP RETATION, THAT WHEREVER THE APPEAL AGAINST SUCH ASSESSMENT OR REAS SESSMENT IS PENDING, THE SAME ALONG WITH ASSESSMENT OR REASSESS MENT PROCEEDINGS IS LIABLE TO BE ABATED. THE PRINCIPLES OF INTERPRETATION OF TAXING STATUTES DO NOT PERMIT THE COURT TO INTERPRE T THE SECOND PROVISO TO SECTION 153A IN A MANNER THAT WHERE THE ASSESSMENT OR REASSESSMENT PROCEEDINGS ARE COMPLETE, AND THE MATT ER IS PENDING IN APPEAL IN THE TRIBUNAL, THE ENTIRE PROCEEDINGS WILL ABATE. 20. THERE IS ANOTHER ASPECT TO THE MATTER, NAMELY T HAT THE ABATEMENT OF ANY PROCEEDINGS HAS SERIOUS CAUSES AND EFFECT IN AS MUCH AS THE ABATEMENT OF THE PROCEEDINGS, TAKES AWAY ALL THE CO NSEQUENCES THAT ARISE THEREAFTER. IN THE PRESENT CASE AFTER DEDUCTI NG BOGUS GIFTS IN THE REGULAR ASSESSMENT PROCEEDINGS, THE PROCEEDINGS FOR PENALTY WERE DRAWN UNDER SECTION 271(1)(C) OF THE ACT. THE MATER IAL FOUND IN THE SEARCH MAY BE A GROUND FOR NOTICE AND ASSESSMENT UN DER SECTION 153A OF THE ACT BUT THAT WOULD NOT EFFACE OR TERMIN ATE ALL THE CONSEQUENCE, WHICH HAS ARISEN OUT OF THE REGULAR AS SESSMENT OR ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 24 REASSESSMENT RESULTING INTO THE DEMAND OR PROCEEDIN GS OF PENALTY.' (EMPHASIS SUPPLIED) THE SAID JUDGMENT WHICH ESSENTIALLY DEALS WITH SECO ND PROVISO TO SECTION 153A OF THE ACT ALSO SUPPORTS THE CONCLUSION, WHICH WE HAVE REACHED HEREINBEFORE. 28. IT HAS BEEN OBSERVED BY THE HON'BLE SUPREME COURT IN K.P. VARGHESE V. ITO [1981] 131 ITR 597/7 TAXMAN 13 THAT 'IT IS WELL RECOGNIZED RULE OF CONSTRUCTION THAT A STATUTORY PROVISION MUS T BE SO CONSTRUED, IF POSSIBLE THAT ABSURDITY AND MISCHIEF MAY BE AVOIDED .' 29. THE ARGUMENT OF THE COUNSEL FOR THE APPELLANT IF T AKEN TO ITS LOGICAL END WOULD MEAN THAT EVEN IN CASES WHERE THE APPEAL ARIS ING OUT OF THE COMPLETED ASSESSMENT HAS BEEN DECIDED BY THE CIT(A), ITAT AND THE HIGH COURT, ON A NOTICE ISSUED UNDER SECTION 153A OF THE ACT, THE AO WOULD HAVE POWER TO UNDO WHAT HAS BEEN CONCLUDED UP TO THE HIGH COURT. ANY INTERPRETATION WHICH LEADS TO SUCH CONCLUSION HAS TO BE REPELLED A ND/OR AVOIDED AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF K.P. VARGH ESE (SUPRA). 30. CONSEQUENTLY, IT IS HELD THAT IT IS NOT OPEN FOR T HE ASSESSEE TO SEEK DEDUCTION OR CLAIM EXPENDITURE WHICH HAS NOT BEEN C LAIMED IN THE ORIGINAL ASSESSMENT, WHICH ASSESSMENT ALREADY STANDS COMPLET ED, ONLY BECAUSE A ASSESSMENT UNDER SECTION 153A OF THE ACT IN PURSUAN CE OF SEARCH OR REQUISITION IS REQUIRED TO BE MADE. IN THE CASE IN HAND, THE TRANSACTIONS OF UNSECURED LOANS AS WELL AS INTRODUCTION OF CAPITAL BY THE PARTNERS WERE DULY RECORDED IN THE B OOKS OF ACCOUNT AND AVAILABLE WITH THE AO. FURTHER, DURING THE COURSE OF SEARCH UNDER SECTION 132 OF THE ACT ON 2 ND JULY 2015 NO MATERIAL MUCH LESS INCRIMINATING MATE RIAL WAS EITHER FOUND OR SEIZED TO DISCLOSE ANY UNDISCLOSED INCOME ON ACCOUN T OF UNSECURED LOANS OR PARTNERS CAPITAL RECEIVED BY THE ASSESSEE FIRM. T HE AO HAS PROPOSED TO MAKE THE ADDITION ON ACCOUNT OF UNSECURED LOANS AND PARTNERS CAPITAL UNDER SECTION 68 BEING UNEXPLAINED CASH CREDIT SOLELY ON THE BASIS O F THE INFORMATION RECEIVED FROM INVESTIGATION WING KOLKATA. IT IS PERTINENT TO NO TE THAT THE SAID INFORMATION WAS AVAILABLE WITH THE AO PRIOR TO THE SEARCH CONDUCTED UNDER SECTION 132 OF THE ACT IN CASE OF THE ASSESSEE ON 2 ND JULY, 2015. THEREFORE, EVEN THE SOLE BASIS OF ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 25 ASSESSMENTS FRAMED UNDER SECTION 153A OF THE ACT IS THE INFORMATION RECEIVED FROM INVESTIGATION WING KOLKATA AND STATEMENT OF ONE SHR I ANAND SHARMA, WHO IS STATED TO BE AN ENTRY OPERATOR AND MANAGED VARIOUS CONCERN S/COMPANIES INCLUDING M/S.ROYAL CRYSTAL DEALERS, ONE OF THE LOAN CREDITOR S OF THE ASSESSEE. EXCEPT THE SAID STATEMENT AND REPORT OF THE INVESTIGATION WING KOLKATA, THE AO HAS NEITHER REFERRED TO OR WAS HAVING IN POSSESSION OF ANY MATE RIAL TO INDICATE THAT THE UNSECURED LOANS SHOWN IN THE BOOKS OF ACCOUNTS AS W ELL AS PARTNERS CAPITAL RECEIVED BY THE ASSESSEE ARE NOTHING BUT ASSESSEES OWN UNACCOUNTED AND UNDISCLOSED INCOME ROUTED BACK IN THE GARB OF UNSEC URED LOANS AND PARTNERS CAPITAL. THERE IS NO DISPUTE THAT THESE TRANSACTIO NS OF UNSECURED LOANS AND PARTNERS CAPITAL CONTRIBUTION ARE DULY RECORDED IN THE BOOKS OF ACCOUNTS AND DISCLOSED IN THE RETURN OF INCOME WHICH WERE ALREAD Y COMPLETED AS THE ASSESSMENTS FOR THESE FOUR ASSESSMENT YEARS WERE NO T PENDING ON THE DATE OF SEARCH, THEREFORE, IT IS MANIFEST FROM THE RECORD T HAT DURING THE COURSE OF SEARCH AND SEIZURE UNDER SECTION 132 OF THE ACT IN THE CAS E OF THE ASSESSEE NO MATERIAL MUCH LESS THE INCRIMINATING MATERIAL WAS UNEARTHED OR ANY UNDISCLOSED INCOME WHICH WAS NOT DISCLOSED IN THE BOOKS OF ACCOUNTS WA S DETECTED OR FOUND. THE ONLY INCRIMINATING MATERIAL WHICH WAS REFERRED BY THE AO IS PAGES 21 TO 26 OF ANNEXURE AS-1 IN RESPECT OF LONG TERM CAPITAL GAIN EARNED B Y SHRI RAJENDRA AGARWAL AND HIS FAMILY MEMBERS. THE SAID LONG TERM CAPITAL GAIN WA S DISCLOSED BY SHRI RAJENDRA AGARWAL IN HIS STATEMENT UNDER SECTION 132(4) AND, THEREFORE, IT WAS SURRENDERED AND OFFERED TO TAX BY SHRI RAJENDRA AGARWAL AND HIS FAMILY MEMBERS IN THE YEAR OF SEARCH. THE AO HIMSELF HAS NOT MADE ANY ADDITION I N THE HAND OF THE ASSESSEE ON ACCOUNT OF LONG TERM CAPITAL GAIN WHICH WAS FOUND D URING THE COURSE OF SEARCH AND ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 26 SEIZURE. THUS, EXCEPT THE MATERIAL DISCLOSING THE LONG TERM CAPITAL GAIN IN THE HAND OF SHRI RAJENDRA AGARWAL, NO OTHER INCRIMINATING MA TERIAL EITHER FOUND OR REFERRED OR IS THE BASIS OF THE ADDITION MADE BY THE AO WHIL E FRAMING THE ASSESSMENT UNDER SECTION 153A OF THE ACT FOR THE ASSESSMENT YEARS 20 10-11 TO 13-14. IT IS APPROPRIATE TO REFER RELEVANT PART OF THE ASSESSMEN T ORDER IN PARA 12 PAGES 48 TO 50, PARA 19 PAGE 83 AND PARA 22 PAGE 86 AS UNDER :- 12. SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE FI RM HAVE BEEN DULY CONSIDERED. HOWEVER, EVEN THE VERY ELABORATE A ND CASE LAWS LOADED SUBMISSIONS OF THE ASSESSEE ARE TOTALLY OFF THE MARK. AGAINST THE SELF-SPEAKING FACTS OF THE VERY NATURE OF THE A CTIVITIES OF THE SO CALLED PARTNERS PROVIDING HUGE PARTNERS CAPITAL I N THE MOST UNINTERESTED MANNER AND PROVIDING HUGE UNSECURED LO ANS WITHOUT ANY COLLATERAL OR OTHER SECURITY, THE EMPHASIS OF THE A SSESSEE FIRM IN ITS SUBMISSIONS HAS BEEN ON SEEKING PROTECTION UNDER VA RIOUS JUDICIAL DECISIONS EVEN WITHOUT HAVING ANY FACT COHERENCE. T HE SUBMISSIONS MADE BY THE ASSESSEE ARE COMPLETELY DEVOID OF MERIT IN THE LIGHT OF THE FOLLOWING FACTS AND CIRCUMSTANCES; A. THE DEPARTMENT HAS VERY SOUND BASIS TO TREAT, THE R ECEIPTS OF UNSECURED LOAN AND PARTNERS CAPITAL FROM THE ABOVE MENTIONED COMPANIES AS BOGUS AND IN GENUINE. THE FINDINGS OF THIS OFFICE AND INVESTIGATION REPORT OF THE INVESTIGATION DIREC TORATE KOLKATA ARE NOT BASED ON ANY PRESUMPTION, ASSUMPTION, GUESS OR BARE SUSPICION. WHERE THE NATURE AND SOURCE OF A RECEIPT , WHETHER IT BE OF MONEY OR OTHER PROPERTY, CANNOT BE SATISFACTORIL Y EXPLAINED BY THE ASSESSEE, IT IS OPEN FOR THE REVENUE TO HOLD TH AT IT IS THE INCOME OF THE ASSESSEE AND NO FURTHER BURDEN LIES O N THE REVENUE TO SHOW THAT THE INCOME IS FROM ANY PARTICULAR SOUR CE AS ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 27 ENUMERATED THE HONBLE SUPREME COURT IN THE CASE OF ROSHAN DI HATTI V. CIT (1977) 107 ITR 938 (SC) AND KALE KHAN MOHAMMAD HANIF V. CIT (1963) 50 ITR 1 (SC). PRIMA FACIE ONUS IS ALWAYS ON THE ASSESSEE TO PROVE THE CASH CREDIT ENTRY FOUND IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. IN LAND MARK CASES LIKE KALE KHAN MOHAMMAD HANIF V CIT (1963) 50 ITR 1 (SC), ROSHAN DI HATTI V CIT (1977) 107 ITR (SC) IT HAS BEEN HELD THAT THE LAW IS WELL SETTLED THAT THE ONUS OF PROVING TH E SOURCE OF A SUM OF MONEY FOUND TO HAVE BEEN RECEIVE D BY AN ASSESSEE, IS ON HIM. WHERE THE NATURE AND SOU RCE THEREOF CANNOT BE EXPLAINED SATISFACTORILY, IT IS O PEN TO THE REVENUE TO HOLD THAT IT IS THE INCOME OF THE AS SESSEE AND NO FURTHER BURDEN IS ON THE REVENUE TO SHOW THA T THE INCOME IS FROM ANY PARTICULAR SOURCE. IT MAY AL SO BE POINTED OUT THAT THE BURDEN OF PROOF IS FLUID FOR T HE PURPOSES OF SECTION 68. ONCE ASSESSEE HAS SUBMITTED BASIC DOCUMENTS RELATING TO IDENTITY, GENUINENESS O F TRANSACTION AND CREDITWORTHINESS THEN AO MUST DO SO ME INQUIRY TO CALL FOR MORE DETAILS TO INVOKE SECTION 68. B. THE ASSESSEE FIRM HAS FILED CONFIRMATION LETTERS AN D THIS OFFICE HAS CARRIED OUT FURTHER ENQUIRY TO EXAMINE THE REALITY OF THE TRANSACTIONS. AN ENQUIRY WAS SENT TO THE INVESTIGA TION DIRECTORATE KOLKATA AND IT HAS BEEN ESTABLISHED THAT THESE INVE STOR OR LENDER COMPANIES ARE CONTROLLED BY THE ENTRY OPERATORS. T HE STATEMENTS OF VARIOUS ENTRY OPERATORS ARE SUFFICIENT EVIDE4NCE S TO SHOW THAT THE UNSECURED LOAN AND PARTNERS CAPITAL ARE ASSESS EES OWN UNDISCLOSED INCOME BROUGHT INTO THE BOOKS OF THE AS SESSEE UNDER THE GARB OF UNSECURED LOAN AND PARTNERS CAPITAL. C. THE DEPARTMENT HAS CARRIED OUT SEARCH OVER THE ASSE SSEE GROUP AND DURING THE COURSE OF SEARCH ACTION U/S 132 OF T HE I.T. ACT, 1961, THE INCRIMINATING DOCUMENTS SEIZED DURING SEA RCH PROCEEDINGS VIDE PG NO. 21 TO 26 OF ANNEXURE AS-1 O F PARTY B-1, WHEREIN THE DETAILS OF YEAR-WISE LTCG EARNED BY SHR I RAJENDRA AGRAWAL AND HIS FAMILY MEMBERS, IS MAINTAINED, WHIC H DURING ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 28 SEARCH ACTION HAS BEEN ACCEPTED TO BE BOGUS BY ALL FAMILY MEMBERS IN THEIR RESPECTIVE STATEMENTS. 19. IN VIEW OF ABOVE FACTS OF THE CASE AND IN THE LIGHT OF ABOVE JUDICIAL DECISION, IT IS ESTABLISHED THAT GENUINENE SS OF THE TRANSACTION HAS NOT BEEN PROVED. SECTION 68 OF THE I.T. ACT PRO VIDES FOR CHARGING TO INCOME TAX ON ANY SUM CREDITED IN THE BOOKS OF T HE ASSESSEE MAINTAINED FOR ANY PREVIOUS YEAR IF THE ASSESSEE OF FERS NO EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR THE EXPLANAT ION OFFERED IS NOT, IN THE OPINION OF THE ASSESSING OFFICER, SATISFACTO RY. IT PLACES NO DUTY UPON THE ASSESSING OFFICER TO POINT TO THE SOURCE F ROM WHICH THE MONEY WAS RECEIVED BY THE ASSESSEE. WHERE AN ASSES SEE FAILS TO PROVE SATISFACTORILY THE SOURCE AND THE NATURE OF C ERTAIN AMOUNT OF CREDIT DURING THE ACCOUNTING YEAR, THE INCOME-TAX O FFICER IS ENTITLED TO DRAW THE INFERENCE THAT THE RECEIPT ARE OF AN ASSES SABLE NATURE. THUS, THE ASSESSEE IS UNABLE TO DISCHARGE ITS BURDEN OF P ROOF BY FAILING TO ESTABLISH LENDERS IDENTITY, FORGET THE GENUINENESS OF TRANSACTIONS AND CREDITWORTHINESS OF THE LENDER. HENCE, THE UNSECUR ED LOANS AND PARTNERS CAPITAL SHOWN TO HAVE BEEN RECEIVED FROM VARIOUS KOLKATA BASED COMPANIES AND OTHER COMPANIES REMAINED UNEXPL AINED. IN THE CIRCUMSTANCES, I AM LEFT WITH NO OPTION THAN TO TAX THE ENTIRE UNEXPLAINED CREDITS BY WAY OF PARTNERS CAPITAL AND UNSECURED LOANS RECEIVED FROM THE PERSONS MENTIONED IN PARA 5 ABOVE AS UNEXPLAINED CASH CREDITS U/S 68 OF THE INCOME TAX ACT, CHARGEAB LE TO TAX AS INCOME OF THE ASSESSEE FIRM FOR THE RESPECTIVE ASSE SSMENT YEARS. 22. AFTER EXAMINATION OF THE INFORMATION AND DETA ILS PLACED ON RECORD AND DISCUSSION WITH THE ASSESSEE, THE TOTAL INCOME OF THE ASSESSEE IS COMPUTED AS UNDER :- RETURNED INCOME AS PER ITR U/S 153A OF RS. 2,82,83,460/- ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 29 THE ACT. ADDITIONS | UNEXPLAINED CASH CREDITS U/S | 68 OF THE ACT IN THE FORM OF | UNSECURED LOAN AND PARTNERS | CAPITAL RS. 67,20,14,999/- ASSESSED INCOME RS. 70,02,98,459/- R/O RS. 70,02,98,459/- THE TOTAL INCOME OF THE ASSESSEE IN THE STATUS OF F IRM FOR ASSESSMENT YEAR 2010-11 RELEVANT TO PREVIOUS YEAR 2009-10 IS A SSESSED AT RS. 70,02,98,459/- U/S 153A READ WITH SECTION 143(3) OF I.T. ACT, 1961. THE FORM ITNS-150 SHOWING CALCULATION OF TAX AND IN TEREST CHARGEABLE, IF ANY, IS ATTACHED HEREWITH AND FORMS A PART OF THIS ORDER. A NOTICE OF DEMAND U/S 156 OF THE ACT AND C HALLAN FOR PAYMENT OF TAX, IF PAYABLE, IS HEREBY ISSUED. PENAL TY NOTICE U/S 274 RWS 271(1)(C) IS ISSUED SEPARATELY. THE ENTIRE FINDING OF THE AO IS BASED ON THE INFORM ATION RECEIVED FROM THE INVESTIGATION WING KOLKATA AND STATEMENT OF SHRI AN AND SHARMA. THE LD. CIT (A) THOUGH HAS NOT DISPUTED THE LEGAL PROPOSITION ON TH IS ISSUE, HOWEVER, THE CONTENTION OF THE ASSESSEE WAS TURNED DOWN MERELY O N THE GROUND THAT THE SLPS FILED BY THE REVENUE IN THE CASES OF KABUL CHAWLA ( SUPRA) AND M/S. ALL CARGO GLOBAL LOGISTICS (SUPRA) ETC. HAVE BEEN ADMITTED FOR DECIS ION BY THE HONBLE SUPREME COURT. THE RELEVANT PART OF THE FINDING OF THE LD. CIT (A) IN PARA 3.2.2 AND 3.2.4 AT PAGES 35 AND 36 ARE AS UNDER :- ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 30 3.2.2 AS PER THE PROVISIONS OF THIS SECTION WHERE A SEARCH IS INITIATED U/S 132 OF THE ACT, THE A.O SHALL ISSUE A NOTICE RE QUIRING THE PERSON SEARCHED TO FURNISH HIS RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS IMMEDIATEL Y PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE. ONCE SUCH RETURNS ARE FILED, THE AO HAS TO ASSESS OR REASSESS THE TOTAL INCOME OF SUCH SIX ASSESSMENT YEARS. (EMPHASIS SUPPLIED BY ME). (THE DECISIVE WORDS USED IN THE PROVISIONS ARE TO 'ASSESSEE OR REASSESS THE TOTAL INCOME'). THE A.O. IS THUS DUTY BOUND TO DETERMINE THE 'TOTAL INCOME' OF THE ASSESSEE FOR SUCH SIX ASS ESSMENT YEARS AND IT IS OBVIOUS THAT 'TOTAL INCOME' REFERS TO THE SUM TOTAL OF INCOME IN RESPECT OF WHICH A PERSON IS ASSESSABLE. THE TOTAL INCOME T HEREFORE WILL COVER NOT ONLY THE INCOME EMANATING FROM DECLARED SOURCES OR ANY MATERIAL PLACED BEFORE THE ASSESSING OFFICER BUT FROM ALL SO URCES INCLUDING THE UNDISCLOSED ONES, OR BASED ON THE UNPLACED MATERIAL BEFORE THE AO. 3.2.3 THE CONCEPT OF ASSESS OR REASSESS AND SHAL L ABATE AS CONTEMPLATED U/S 153A IS UNDER HOT JUDICIAL DEBATE. I FIND THAT LEGALLY, THIS ISSUE IS VERY CONTENTIOUS IN VIEW OF THE DIVER GENT VIEWS OF THE VARIOUS AUTHORITIES. THE APPELLANT HAS TRIED TO HIG HLIGHT MOST OF THEM. HOWEVER, IT IS EQUALLY PERTINENT TO MENTION HERE TH AT THE DEPARTMENT HAS NOT ACCEPTED THE DECISIONS OF HON'BLE MUMBAI HI GH COURT IN THE CASE OF M/S ALL CARGO GLOBAL LOGISTICS AS WELL AS C ONTINENTAL WAREHOUSING (NHAVA SHEVA) LTD., AND SLP HAS BEEN FI LED BEFORE THE HON'BLE SUPREME COURT. THE HON'BLE SUPREME COURT HA S GRANTED LEAVE VIDE ORDER DATED 12.10.2015 AS REPORTED IN 64 TAXMANN.COM 34 (S.C.). SIMILARLY, IN THE CASE OF KABUL CHAWLA SLP HAS ALSO BEEN FILED. 3.2.4 IN VIEW OF SLPS ADMITTED IN CASE OF KABUL CHA WLA, M/S ALL CARGO GLOBAL LOGISTICS AS WELL AS CONTINENTAL WAREH OUSING (NHAVA SHEVA) LTD., (SUPRA), ASSESSEES CONTENTION CANNOT BE ACCEPTED. MOREOVER, IN ANY CASE, THE ADDITIONS ARE TO BE ADJUDICATED ON MERITS ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 31 AS PER RELEVANT GROUND OF APPEAL, THE ISSUE RAISED IN THIS GROUND FOR PRESENT REMAINS FOR ACADEMIC DISCUSSION ONLY. ACCOR DINGLY, ISSUE RAISED IN GROUND NO. 12 IS DISMISSED. THEREFORE, NEITHER IN THE ASSESSMENT ORDER NOR IN T HE ORDER OF THE LD. CIT (A) THERE IS ANY MENTION OR FINDING THAT THE ADDITIONS HAVE B EEN MADE BY THE AO ON THE BASIS OF ANY INCRIMINATING MATERIAL FOUND DURING TH E COURSE OF SEARCH AND SEIZURE IN THE CASE OF THE ASSESSEE. THE AO HAS SOLELY RELIED UPON THE REPORT OF THE INVESTIGATION WING KOLKATA AND STATEMENT OF ONE SHR I ANAND SHARMA RECORDED BY THE INVESTIGATION WING DURING THE SURVEY UNDER SECT ION 133A OF THE ACT. THEREFORE, EVEN IF THE INFORMATION/REPORT OF THE INVESTIGATION WING KOLKATA IS CONSIDERED AS A RELEVANT EVIDENCE, THE SAME CANNOT BE REGARDED AS I NCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH AND SEIZURE U NDER SECTION 132 OF THE IT ACT IN CASE OF THE ASSESSEE. THE REQUIREMENT FOR MAKIN G THE ADDITION UNDER SECTION 153A IN THE ASSESSMENT YEARS WHERE THE ASSESSMENT W AS NOT PENDING ON THE DATE OF SEARCH AND THE PROCEEDINGS ARE IN THE NATURE OF REASSESSMENT IS ESSENTIALLY THE INCRIMINATING MATERIAL DISCLOSING UNDISCLOSED INCOM E WHICH WAS NOT DISCLOSED BY THE ASSESSEE. IN THE CASE IN HAND, THE AO HIMSELF HAS NOT CLAIMED ANY INCRIMINATING MATERIAL FOUND DURING THE SEARCH AND SEIZURE IN THE CASE OF THE ASSESSEE. ACCORDINGLY, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN VIEW OF THE BINDING PRECEDENTS ON THIS ISSUE IN WHICH THE SLP FILED BY THE REVENUE WAS ALSO DISMISSED BY THE HONBLE SUPREME COURT, THE ADDITIONS MADE BY THE AO WHILE PASSING THE ASSESSMENT ORDERS UNDER SECTION 153A FOR THE ASSESS MENT YEARS 2010-11 TO 13-14 ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 32 ARE NOT SUSTAINABLE AND ACCORDINGLY THE SAME ARE LI ABLE TO BE DELETED. WE ORDER ACCORDINGLY. 7. IN THE INSTANT CASE AS WELL, THE AO HAS SOLELY RELIED UPON THE REPORT OF THE INVESTIGATION WING KOLKATA AND STATEMENT OF ONE SHR I ANAND SHARMA RECORDED BY THE INVESTIGATION WING DURING THE SURVEY UNDER SECT ION 133A OF THE ACT. THEREFORE, EVEN IF THE INFORMATION/REPORT OF THE INVESTIGATION WING KOLKATA IS CONSIDERED AS A RELEVANT EVIDENCE, THE SAME CANNOT BE REGARDED AS I NCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH AND SEIZURE U NDER SECTION 132 OF THE IT ACT IN CASE OF THE ASSESSEE. THE REQUIREMENT FOR MAKIN G THE ADDITION UNDER SECTION 153A IN THE ASSESSMENT YEAR WHERE THE ASSESSMENT WA S NOT PENDING ON THE DATE OF SEARCH AND THE PROCEEDINGS ARE IN THE NATURE OF REASSESSMENT IS ESSENTIALLY THE INCRIMINATING MATERIAL DISCLOSING UNDISCLOSED INCOM E WHICH WAS NOT DISCLOSED BY THE ASSESSEE. IN THE CASE IN HAND, THE AO HIMSELF HAS N OT CLAIMED ANY INCRIMINATING MATERIAL FOUND DURING THE SEARCH AND SEIZURE IN THE CASE OF THE ASSESSEE. ACCORDINGLY, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN VIEW OF THE BINDING PRECEDENTS ON THIS ISSUE IN WHICH THE SLP FILED BY THE REVENUE WAS ALSO DISMISSED BY THE HONBLE SUPREME COURT AND FOLLOWING THE EARL IER DECISION IN CASE OF KDM (SUPRA), THE ADDITIONS MADE BY THE AO WHILE PASSING THE ASSESSMENT ORDER UNDER SECTION 153A FOR THE IMPUGNED ASSESSMENT YEAR CANNO T BE SUSTAINED AND LIABLE TO BE SET-ASIDE. 8. NOW, COMING TO THE MERITS OF THE ADDITIONS SUS TAINED BY THE LD CIT(A) U/S 68 OF THE ACT, IT IS NOTED THAT THE ASSESSEE COMPAN Y HAS RECEIVED SHARE APPLICATION MONEY OF RS 8 LACS AND RS 10.35 LACS AS UNSECURED L OAN FROM M/S JALSAGAR COMMERCE PVT LTD DURING THE FINANCIAL YEAR RELEVANT TO IMPUGNED ASSESSMENT YEAR. IN THIS REGARD, WE HAVE HEARD THE CONTENTIONS OF BO TH THE PARTIES AND FIND THAT SIMILAR ISSUE HAS BEEN EXAMINED AT LENGTH BY THE TR IBUNAL IN CASE OF M/S KOTA DAL MILL(SUPRA) WHEREIN THE TRANSACTIONS WITH M/S JALSA GAR COMMERCE PVT LTD WERE EXAMINED AT LENGTH AND THE RELEVANT FINDINGS ARE RE PRODUCED AS UNDER: ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 33 THUS THE ADDITION WAS CONFIRMED BASED ON THE REPOR T OF THE DDIT (INV.) KOLKATA. WE FIND THAT THE REPORT OF THE DDIT (INV.) KOLKATA IS ALSO BASED ON THE STATEMENTS OF VARIOUS PERSONS RECORDED DURING THEIR INVESTIGAT ION AND THE STATEMENT OF SHRI ANAND SHARMA WAS ALSO SENT ALONG WITH THE REPORT OF THE AO. THE LD. CIT (A) HAS CONFIRMED THE ADDITION BECAUSE OF THE REASON THAT T HE STATEMENT OF SHRI ANAND SHARMA WAS VERY MUCH IN THE POSSESSION OF THE AO WH O HAS ADMITTED IN HIS STATEMENT THAT M/S. JALSAGAR COMMERCE PVT. LTD. WAS ENGAGED IN THE ACTIVITY OF PROVIDING ACCOMMODATION ENTRY. HOWEVER, WE FIND TH AT M/S. JALSAGAR COMMERCE PVT. LTD IS NOT MANAGED OR CONTROLLED BY SHRI ANAND SHARMA, RATHER THE COMPANY M/S. ROYAL CRYSTAL DEALERS PVT. LTD. WAS STATED TO HAVE BEEN OWNED BY SHRI ANAND SHARMA AND IN HIS STATEMENT DATED 6 TH FEBRUARY, 2014 SHRI ANAND SHARMA HAS STATED TO HAVE BEEN PROVIDING ENTRIES FROM M/S. ROY AL CRYSTAL DEALERS PVT. LTD. TO M/S. JALSAGAR COMMERCE PVT. LTD. THEREFORE, THERE IS NO ALLEGATION OR ANY ADMISSION IN THE STATEMENT OF SHRI ANAND SHARMA THA T HE HAS PROVIDED BOGUS LOAN ENTRY TO THE ASSESSEE OR ANY GROUP CONCERNS OF THE ASSESSEE. SINCE THE NAME OF M/S. JALSAGAR COMMERCE WAS CREPTED IN HIS STATEMENT , THE AO HAS PRESUMED THAT THE LOAN PROVIDED BY M/S. JALSAGAR COMMERCE PVT LTD IS NOTHING BUT THE BOGUS ACCOMMODATION ENTRY PROVIDED BY SHRI ANAND SHARMA T HROUGH M/S. ROYAL CRYSTAL DEALERS PVT. LTD. THE AO HAS TRIED TO ESTABLISH TH E NEXUS OF THE LOAN RECEIVED BY THE ASSESSEE THROUGH THE STATEMENT OF SHRI ANAND SH ARMA WHERE HE HAS PURPORTED TO HAVE PROVIDED THE ALLEGED ENTRY. SINCE THERE IS NO DIRECT ALLEGATION OR ADMISSION OF PROVIDING LOAN BY SHRI ANAND SHARMA TO THE ASSES SEE THROUGH M/S.ROYAL CRYSTAL DEALERS PVT. LTD., THEN EVEN IF THERE IS A POSSIBIL ITY OF BOGUS ACCOMMODATION ENTRY ROUTED THROUGH ANOTHER INTERMEDIARY COMPANY M/S.JAL SAGAR COMMERCE PVT. LTD., IT ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 34 REQUIRES A DEFINITE LINK OF THE TRANSACTIONS FROM M /S.ROYAL CRYSTAL DEALERS PVT. LTD. TO M/S.JALSAGAR COMMERCE PVT. LTD. AND THEN THE LOA N TO THE ASSESSEE. ONCE THE CHAIN OF TRANSACTIONS AND FLOW OF MONEY FROM ONE EN TITY TO ANOTHER ENTITY AND FINALLY TO THE ASSESSEE HAS NOT BEEN ESTABLISHED, T HEN THE ADDITION MADE MERELY ON SUSPICION, HOW SO STRONG IT MAY BE, IS NOT SUSTAINA BLE. ON THE CONTRARY, WHEN THE ASSESSEE PRODUCED ALL THE RELEVANT RECORD WHICH CON TAINS THEIR FINANCIAL STATEMENTS, BANK ACCOUNTS STATEMENT OF LOAN CREDITOR, RETURN OF INCOME, ASSESSMENT ORDERS FRAMED UNDER SECTION 143(3), CONFIRMATION OF THE LO AN CREDITOR, THEN A PROPER EXAMINATION COULD HAVE VERY WELL ESTABLISHED THE LI NK, IF ANY, IN PROVIDING THE ACCOMMODATION ENTRY FROM ONE ENTITY TO ANOTHER AND FINALLY TO THE ASSESSEE. HOWEVER, NO SUCH LINK WAS FOUND IN THE DOCUMENTS AN D FINANCIAL STATEMENTS OF THESE COMPANIES, RATHER IN THE BANK ACCOUNT STATEME NT OF LOAN CREDITOR M/S. JALSAGAR COMMERCE PVT. LTD. THERE WAS NO SUSPICIOUS TRANSACTION OF RECEIVING ANY ENTRY OR ANY DEPOSIT OF AN EQUAL AMOUNT PRIOR TO GI VING THE LOAN TO THE ASSESSEE. THE ASSESSEE HAS PAID INTEREST TO THE CREDITOR, WHI CH WAS DULY ACCEPTED BY THE AO AS BUSINESS EXPENDITURE. UNDISPUTEDLY, THE ASSESSE E HAS PRODUCED THE INCOME-TAX RECORD OF THE LOAN CREDITOR, BANK STATEMENT, FINANC IAL STATEMENTS INCLUDING BALANCE SHEET, COPY OF ROC MASTER DATA SHOWING THE STATUS O F LOAN CREDITOR COMPANY AS ACTIVE, CONFIRMATION OF LOAN GIVEN TO THE ASSESSE E. FURTHER, THE AO ISSUED SUMMONS AND ALSO GOT THE SUMMONS SERVED THROUGH DDI T KOLKATA UNDER SECTION 131 OF THE IT ACT WHICH WERE DULY RESPONDED BY THE LOAN CREDITOR. EXCEPT THE STATEMENT OF SHRI ANAND SHARMA AND THE REPORT OF TH E INVESTIGATION WING KOLKATA, THE AO HAS NOT BROUGHT ON RECORD ANY OTHER MATERIAL TO CONTROVERT OR DISPROVE THE DOCUMENTARY EVIDENCE PRODUCED BY THE ASSESSEE. IT IS PERTINENT TO NOTE THAT THE ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 35 LOAN CREDITOR WAS ASSESSED TO TAX AND THE AO COMPLE TED THE ASSESSMENT UNDER SECTION 143 (3) FOR VARIOUS ASSESSMENT YEARS WHICH ARE RELEVANT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THE AO IN CASE OF LOAN CREDITOR HAS NOT DISTURBED THE TRANSACTIONS OF LOAN GIVEN BY THIS COMPANY TO THE A SSESSEE. FROM THE FINANCIAL STATEMENTS OF THE LOAN CREDITOR IT IS APPARENT THAT THE LOAN CREDITOR WAS HAVING SUFFICIENT FUNDS TO ADVANCE THE LOAN AMOUNT TO THE ASSESSEE AND ONCE THE SAID FINANCIAL STATEMENTS WERE NOT DISTURBED, THEN THE C REDITWORTHINESS OF THE LOAN CREDITOR CANNOT BE DOUBTED WHEN IT WAS ACCEPTED IN THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE IT ACT. WE FURTHER NOT E THAT THE AO INSISTED THE ASSESSEE TO PRODUCE THE DIRECTORS OF THE LOAN PROVI DER COMPANY. THE ASSESEE PRODUCED THE AFFIDAVIT, AND THE NOTICES ISSUED BY T HE AO UNDER SECTION 131 AND 133(6) OF THE ACT WERE DULY COMPLIED WITH BY THE CR EDITOR. THE STATEMENT OF THE DIRECTOR OF M/S. ROYAL CRYSTAL DEALERS PVT. LTD. WA S ALSO RECORDED BY THE AO WHEREIN THE DIRECTOR HAS CONFIRMED THE TRANSACTION OF LOAN. THERE ARE VARIOUS REPORTS OF THE DDIT KOLKATA WHICH ARE PLACED AT PAG ES 406 TO 422 OF THE PAPER BOOK. WE FIND THAT ALL THESE REPORTS ARE BASED ON THE STATEMENTS RECORDED DURING THE INVESTIGATION BUT NO DOCUMENTARY EVIDENCE WAS E ITHER GATHERED OR HAS BEEN REFERRED IN THESE REPORTS. THEREFORE, EVEN IF THES E REPORTS ARE TO BE TAKEN INTO CONSIDERATION, THESE ARE NOTHING BUT NARRATION OF T HE STATEMENTS OF VARIOUS PERSONS TAKEN DURING THE INVESTIGATION. IT IS WELL SETTLED PRINCIPLE AS WELL AS THE DIRECTIONS OF THE CBDT ISSUED UNDER THE CIRCULARS THAT DURING THE COURSE OF INVESTIGATION, THE DEPARTMENT SHOULD CONCENTRATE AND FOCUS ON COLLECTI NG DOCUMENTARY EVIDENCE DISCLOSING UNDISCLOSED INCOME INSTEAD OF OBTAINING THE STATEMENT AND THEN SUPPORT OF THEIR CLAIM MERELY ON THE BASIS OF THE STATEMENT . THEREFORE, THE STATEMENTS ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 36 RECORDED BY THE DDIT KOLKATA ARE ALSO NOT BASED ON ANY DOCUMENTARY EVIDENCE SO AS TO HAVE AN EVIDENTIARY VALUE FOR SUSTAINING THE ADDITIONS MADE BY THE AO. THE ENTIRE REPORT OF THE INVESTIGATION WING IS BASED ON STATEMENTS RECORDED DURING SURVEY AND SEARCH. ONCE THE ASSESSEE HAS PRODUCED THE DOCUMENTARY EVIDENCE AND PARTICULARLY THE FINANCIAL STATEMENTS OF THE LO AN CREDITORS, THEIR BANK ACCOUNT STATEMENT, THEN IN THE ABSENCE OF ANY DISCREPANCY O R FAULT IN THESE FINANCIAL STATEMENTS OR IN THE BANK ACCOUNT STATEMENT TO REFL ECT THAT THE TRANSACTIONS IN QUESTION ARE NOTHING BUT BOGUS ACCOMMODATION ENTRIE S, THE ADDITION MADE BY THE AO IS NOT SUSTAINABLE AS IT IS MERELY ON THE BASIS OF SURMISES AND CONJECTURES AND NOT ON ANY TANGIBLE MATERIAL DISCLOSING THE NON-GEN UINENESS OF THE TRANSACTIONS. THE AO HAS NOT DISPUTED THE TRANSACTIONS ROUTED THR OUGH BANKING CHANNEL HAVING SUFFICIENT FUNDS WHICH IS ALSO SUPPORTED BY THE FIN ANCIAL STATEMENTS AND FURTHER THE ASSESSMENTS OF THE LOAN CREDITOR WERE COMPLETED UND ER SECTION 143(3). THE DETAILS OF LOANS TAKEN FROM M/S. JALSAGAR COMMERCE PVT. LTD ., INTERESTS CREDITED/PAID AND REPAYMENT OF LOAN AMOUNT AS WELL AS CLOSING BALANCE ARE AS UNDER :- NAME OF COMPANY AY OPENING BALANCE LOAN TAKEN DURING THE YEAR INTEREST CREDITED IN LOAN A/C DURING THE YEAR INTEREST CREDITED IN INTEREST PAID /PAYABLE A/C LOAN REPAYMENT/ TDS/TRANSFER IN PARTNER CAPITAL DURING THE YEAR CLOSING BALANCE JALSAGAR COMMERCE PRIVATE LTD 10-11 41,298 34,70,40,000 13,96,176 12,56,558 34,21 ,15,916 51,05,000 JALSAGAR COMMERCE PRIVATE LTD 11-12 51,05,000 77,18,70,000 16,71,599 15,04,439 77 ,18,37,160 53,05,000 JALSAGAR COMMERCE PRIVATE LTD 12-13 53,05,000 78,95,00,000 1,07,08,434 96,37,591 31,72,80,655 47,85,95,188 JALSAGAR COMMERCE PRIVATE LTD 13-14 47,85,95,188 2,76,31,50,000 0 0 2,97,53,40,00 0 26,64,05,188 JALSAGAR COMMERCE PRIVATE LTD 14-15 26,64,05,188 97,34,50,000 0 0 1,24,03,55,188 (5,00,000) JALSAGAR COMMERCE PRIVATE LTD 15-16 0 1,34,89,00,000 49,00,600 44,10,540 1,34,93, 90,060 0 JALSAGAR COMMERCE PRIVATE LTD 16-17 0 87,11,00,000 1,67,23,178 1,50,50,86 0 87,27,72,318 0 ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 37 ALL THESE DETAILS WERE BEFORE THE AO AS ALL THESE A SSESSMENT YEARS WERE PASSED BY THE AO PURSUANT TO THE SEARCH AND SEIZURE ACTION UN DER SECTION 132 OF THE IT ACT. THUS IT IS CLEAR THAT FOR THE ASSESSMENT YEAR 2015- 16 THERE WAS NIL BALANCE ON ACCOUNT OF LOAN TAKEN FROM M/S. JALSAGAR COMMERCE P VT. LTD. AND THE ENTIRE LOAN WAS ALREADY REPAID BY THE ASSESSEE. WE FURTHER NOT E THAT IT IS NOT THE CASE OF REPAYMENT OF LOAN AFTER THE SEARCH ACTION ON 2 ND JULY, 2015 BUT THERE IS A REGULAR REPAYMENT OF LOAN FOR EACH YEAR AS IT IS EVIDENT FR OM THE DETAILS REPRODUCED ABOVE. THEREFORE, THE TRANSACTIONS OF TAKING LOAN AND REPA YMENT CANNOT BE TREATED AS BOGUS ONCE THE ASSESSEE HAS BEEN REGULARLY REPAYING THE LOAN AMOUNT AND SMALL BALANCE WAS THERE AT THE END OF THE YEAR. ONCE THE RE WAS NO BALANCE AT THE END OF THE YEAR ON THE LOAN ACCOUNT, THEN THE ADDITION CAN NOT BE MADE BY TREATING THE LOAN TAKEN AND REPAID AS BOGUS TRANSACTION. APART FROM THESE FACTS, THE ASSESSEE HAS ALSO MADE THE PAYMENT OF INTEREST WHICH WAS ALS O SUBJECTED TO TDS. THIS SHOWS THE GENUINENESS OF THE TRANSACTIONS AND ALL T HESE TRANSACTIONS HAVE TAKEN PLACE PRIOR TO THE DATE OF SEARCH AND DULY RECORDED IN THE BOOKS OF ACCOUNTS AND ALSO SUBJECTED TO ASSESSMENT UNDER SECTION 143(3) F OR SOME OF THE ASSESSMENT YEARS. THEREFORE, EVEN AS PER THE EVIDENCE PRODUCE D BY THE ASSESSEE, THE ALLEGED SUSPICION OF THE AO WAS GOT DISPELLED AND IN THE AB SENCE OF ANY CONTRARY EVIDENCE EXCEPT THE STATEMENT WHICH IS NOT EVEN A CONCLUSIVE PROOF OF TRANSACTION OF BOGUS ENTRY TO THE ASSESSEE, THE ADDITIONS MADE BY THE AO ARE NOT SUSTAINABLE. ITA NO. 1120/JP/2018 POOJASHISH INFRASTRUCTURES PVT. LTD., KOTA VS.THE DCIT, KOTA 38 FOLLOWING THE ABOVE DECISION, THE ADDITION MADE U/S 68 TOWARDS SHARE APPLICATION MONEY AND UNSECURED LOAN FROM M/S JALSAGAR COMMERCE PVT LTD IS HEREBY DIRECTED TO BE DELETED. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 08/04/2019. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 08/04/2019 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- POOJASHISH INFRASTRUCTURES PVT. LTD. , KOTA 2. IZR;FKHZ@ THE RESPONDENT- THE DCIT, CENTRAL CIRCLE, KOTA 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 1120/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR