Smt. Lakshmi Singh, V. Dy. Commissioner of Income-tax, Cent. Cir-1, Belgaum

ITA 113/PAN/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84798 (ITAT-PANAJI)
• Duration Of Justice: 1 year(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-11-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 25-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RATNAKAR
• Assessee Lawyers: P DINESH
• Keywords: Gift; Condonation of delay; Documents seized
• Section: 143(3); 153A; 68; 132; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI P.K. BANSAL, HONBLE ACCOUNTANT MEMBER AND SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER ITA NO. 113/PNJ/2014 : (ASST. YEAR : 2005 - 06) SMT. LAKSHMI SINGH SVK BUS SERVICE, K.R. ROAD, RANIPET, HOSPET (APPELLANT) PAN : A PJPS3649K VS. DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE - 1, BELGAUM (RESPONDENT) ASSESSEE BY : P. DINESH, ADV. REVENUE BY : RATNAKAR, DR DATE OF HEARING : 11/11/2014 DATE OF PRONOUNCEMENT : 9 /1 2 /2014 O R D E R PER P.K. BANSAL 1. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - VI, BANGALORE DT. 20.8.2013 FOR A.Y 2005 - 06 BY TAK ING THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL : 1. THE LEARNED CIT(A) GROSSLY ERRED IN PASSING THE ORDER IN THE MANNER WHICH HE DID. 2. THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITION MADE BY AO TOWARDS GIFT RECEIVED BY THE APPELLANT FROM SRI HARISH WADVA BY RELYING ON THE RATIO OF THE HON'BLE SUPREME COURT AND HON'BLE HIGH COURT OF KARNATAKA W HICH ARE TOTALLY DISTINGUISHABLE FROM THE FACTS AND CIRCUMSTANCES OF THE APPELLANTS CASE. 3. THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED THAT THE MATERIAL HAVING FILED BEFORE AO AND THE AO HAVING FAILED TO EXAMINE THE SAME. THUS, THE CIT(A) OUGHT TO HA VE DELETED THE SAID ADDITION CONSIDERING THE APPELLANTS SUBMISSION. 2 ITA NO. 113/PNJ/2014 (A.Y : 2005 - 06) 4. THE CIT(A) OUGHT TO HAVE GIVEN SUFFICIENT OPPORTUNITY TO THE APPELLANT TO FURNISH THE DETAILS, THE APPELLANT WOULD HAVE SATISFIED THE SAME. THE CIT(A) OUGHT TO HAVE REFRAINED FROM CO NFIRMING THE ALLEGED ADDITION. 5. THE CIT(A) ERRED IN CONFIRMING THE LEVY OF INTEREST OF THE ACT AND SAME IS ARBITRARY & EXCESSIVE AND SAME IS LIABLE TO BE CANCELLED OR TO BE REDUCED SUBSTANTIALLY. 6. WITHOUT PREJUDICE, THE CIT(A) ERRED IN CONFIRMING THE ADDITION IS ARBITRARY, UNREASONABLE AND LIABLE TO BE CANCELLED. 2. THERE WAS DELAY IN FILING THE APPEAL AND THEREFORE AN AFFIDAVIT WAS ALSO FILED FOR THE CONDONATION OF DELAY OF 19 DAYS STATING THEREIN THAT SHRI B.P. ANAND KUMAR, HUSBAND OF THE ASSESSEE WAS PUT BEHIND THE BARS ON ACCOUNT OF THE MINING SCAM AND THE STAFF WAS PRE - OCCUPIED IN ATTENDING THE LEGAL MATTERS FOR GETTING SHRI B.P. ANAND KUMAR OUT FROM THE PRISON AND DUE TO THIS, DELAY WAS CAUSED. AFTER HEARING BOTH THE PARTIES, WE NOTED THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE TO FILE THE APPEAL WITHIN TIME. WE ACCORDINGLY CONDONE THE DELAY AND ADMIT THE APPEAL. 3. SUBSEQUENTLY THE ASSESSEE VIDE APPLICATION DT. 23.5.2014 RAISED THE FOLLOWING ADDITION AL GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ADDITION OF RS. 90 LAKHS IN THE ASSESSMENT MADE U/S 143(3) R.W.S. 153C OF THE ACT TOWARDS THE GIFT RECEIVED BY THE APPELLANT AS UNDISCLOSED INCOME IS OPPOSED TO LAW, IN THAT THERE WAS NO CAPITAL DETECT ED IN THE COURSE OF SEARCH U/S 132 OF THE ACT WITH REGARD TO THE GIFT. 2. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) OUGHT TO HAVE APPRECIATED THAT THE FACTUM OF GIFT WAS ENQUIRED BY THE ASSESSING AUTHORITY IN THE ORIGINAL ASSESSMENT PROCEEDINGS AND HAVING OBTAINED THE DETAILS AND SATISFIED WITH THE SAME, NO ADDITION WAS MADE IN THE ORIGINAL ASSESSMENT AND CONSEQUENTLY THE IMPUGNED ADDITION AS NOW MADE IN THE ASSESSMENT U/S 143(3) R.W.S. 153C OF THE ACT IS OPPOSED TO LAW AND LIABLE TO BE DELETED. 4 . THE LD. AR BEFORE US VEHEMENTLY CONTENDED THAT THE ADDITIONAL GROUNDS TAKEN BY THE ASSESSEE ARE LEGAL GROUND S AND RELATES TO THE VALIDITY OF THE ADDITION AND NO FURTHER MATERIAL IS REQUIRED TO BE INVESTIGATED. THEREFORE, THESE 3 ITA NO. 113/PNJ/2014 (A.Y : 2005 - 06) GROUNDS BE ADMITTED. RELIANCE WAS PLACED IN THIS REGARD ON THE FOLLOWING DECISIONS : SL. NO. NAME OF THE JUDGEMENT ITR 1 NATIONAL THERMAL POWER CO. LTD. VS. CIT 229 ITR 383 (SC) 2 JUTE CORPORATION OF INDIA LTD. 187 ITR 688 (SC) 3 AHMEDABAD ELECTRICITY CO. VS. CIT 199 ITR 351 (BOM) 4 CIT VS. JAY ENGINEERING WORKS LTD. 233 ITR 433 (DEL) 5 CIT VS. INDIAN OVERSEAS BANK 239 ITR 335 (MAD) 6 CIT VS. COMMONWEALTH TRUST (INDIA) LTD. 221 ITR 474 (KER) 7 CIT VS. MAYUR FOUNDATION 274 ITR 562 (GUJ) 5. THE LD. DR ON THE OTHER HAND AGITATED THE ADMISSION OF THE ADDITIONAL GROUNDS. AFTER HEARING THE RIVAL SUBMISSIONS, WE NOTED THAT THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE ARE LEGAL GROUNDS AND LEGAL GROUNDS CAN BE RAISED BY THE ASSESSEE FOR THE FIRST TIME BEFORE THIS TRIBUNAL IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. CIT , 229 ITR 383 (SC). WE, THEREFORE, ADMIT THE ADDITIONAL GROUNDS. SINCE THE ADDITIONAL GROUNDS RAISED BY THE ASSESSEE ARE LEGAL GROUNDS, THEREFORE, WE DECIDED TO ADJUDICATE THE ADDITIONAL GROUNDS FIRST. 6. THE FACTS RELATING TO THE ADDITIONAL GROUNDS ARE THAT THE ASSESSEE IS ENGAGED IN BUSINESS OF PLYING/HIRING CARRIAGES ON ROUTES ALLOTTED BY GOVERNMENT OF KARNATAKA. SEARC H U/S 132 WAS CARRIED OUT ON 25.3.2008 IN THE GROUP CASES OF B.P. ANANDKUMAR SINGH OF HOSPET. THE AO WAS SATISFIED THAT CERTAIN DOCUMENTS SEIZED BELONGED TO THE ASSESSEE AND ACCORDINGLY, NOTICE U/S 153C DT. 31.10.2008 WAS ISSUED TO THE ASSESSEE. IN RESPO NSE THERETO, THE ASSESSEE FILED HIS RETURN OF INCOME ON 19.12.2008 DECLARING TOTAL INCOME AT RS.10,56,520/ - AT WHICH THE ORIGINAL ASSESSMENT U/S 143(3) WAS COMPLETED IN THE CASE OF THE ASSESSEE ON 6.2.2007 BY THE ASSESSING OFFICER, CIRCLE - 1, BEL LARY. DURI NG THE IMPUGNED ASSESSMENT YEAR THE ASSESSEE RECEIVED RS. 90 LACS GIFT BY WAY OF CHEQUES OF RS. 5 LACS EACH FROM HARISH WAD H AVA OF DUBAI. RS. 45 LACS WAS 4 ITA NO. 113/PNJ/2014 (A.Y : 2005 - 06) RECEIVED ON 10.5.2004 AND WAS INVESTED IN RBI BONDS ON 24.4.2004 AND ANOTHER RS. 45 LACS RECEIVED ON 10.5.2004 WERE WITHDRAWN IN THE SAME MONTH. THE AO REQUIRED THE ASSESSEE TO STATE HER RELATION WITH THE SAID HARISH WADHAVA OR ANY BUSINESS CONNECTION WITH THE SAID PERSON. VIDE LETTER DT. 6.11.2009 THE ASSESSEE CONFIRMED THAT THE SAID MONEY WAS GIFT AND THE SAME WAS CONFIRMED BY THE DONOR VIDE HIS LETTER. THE AO, AS PER PARA 5 AND 6 OF HIS ORDER, TOOK THE VIEW THAT THE SAID GIFTS ARE NOT GENUINE BY TAKING INTO ACCOUNT THE CIRCUMSTANTIAL EVIDENCE AND HUMAN PROBABILITIES WITH A FINDING THAT THE DONOR, AN N RI HAVING ADDRESS AT DELHI, IS NOT A RELATIVE. RELIANCE WAS PLACED BY THE AO ON THE CASE OF SUMATI DAYAL VS. CIT, 214 ITR 801 (SC), CIT VS. KANNAN, 210 ITR 585 (KER) AND MCDOWELL AND CO. LTD. V. CTO , 154 ITR 148 (SC). THE AO THUS MADE ADDITION U/S 68 OF THE INCOME TAX ACT. THE ASSESSEE WENT IN APPEAL BEFORE CIT(A) WHO UPHELD THE ADDITION AND DISMISSED THE APPEAL OF THE ASSESSEE. 7. BEFORE US THE LD. AR VEHEMENTLY CONTENDED THAT THE ASSESSEE HAS DECLARED GIFT IN THE ORIGINAL RETURN AND DURING THE COURSE OF THE ORIGINAL ASSESSMENT INQUIRY WAS CONDUCTED WITH REGARD TO THE GIFTS AND GENUINENESS OF THE SAME AND ASSESSMENT WAS COMPLETED U/S 143(3). DURING THE COURSE OF THE SEARCH NO NEW MATERIAL WAS FOUND TO JUSTIFY THE PROCEEDINGS U/S 153C. THE AO DID NOT RECORD ANY SATISFACTION FOR INITIATING PROCEEDINGS U/S 153C. RELIANCE WAS PLACED IN THIS REGARD ON THE FOLLOWING DECISIONS : SL. NO. NAME OF THE JUDGEMENT ITR 1 CIT VS. GOPI APARTMENT 107 DTR (ALL) 217 2 MANISH MAHESHWARI VS. CIT 289 ITR 341 (SC) 3 CIT VS. CALCUTTA KNITWEARS 267 CTR(SC) 105 4 CIT VS. ANIL KUMAR BHATIA ITA NO.1626/2010 AND OTHERS DT. 7.8.2012 5 CIT VS. RADHEY SHYAM BANSAL & ORS 337 ITR 217 (DEL) 6 P. SATHYANARAYANAN VS. ACIT 50 SOT (CHENNAI) (URO) 168 7 DELHI HIGH COURT JUDGEMENT IN THE CASE 5 ITA NO. 113/PNJ/2014 (A.Y : 2005 - 06) OF SSP AVIATION LTD. VS. DCIT WPC BO. 309/2011 DT. 29.3.2012 8 ORDER OF THE ITAT, DELHI PACL INDIA LTD. VS. DIT, ITA NO. 2637/DEL/2010 DT. 20.6.2013 9 ITAT MUMBAI INGRAM MICRO (INDIA) EXPORTS P. LTD. VS. DDIT ITA NOS. 8133/2010 AND OTHERS DT. 21.12.2012 IT WAS FURTHER SUBMITTED THAT EVEN ON MERIT THE IMPUGNED ADDITION WAS UNCALLED FOR AS THE DONOR WAS IDENTIFIED AND HE HAD CONFIRMED THE GIFTS. TH E GIFTS HAVE BEEN RECEIVED THROUGH BANKING CHANNEL. EVIDENCE FOR THE SAME HAD ALSO BEEN FURNISHED . OUR ATTENTION WAS DRAWN TOWARDS PG. 8, 9 TO 16 OF THE PAPER BOOK. THE AO AFTER SATISFYING THE GENUINENESS OF THE GIFTS ACCEPTED DURING THE COURSE OF THE O RIGINAL ASSESSMENT THAT THE GIFTS WERE GENUINE. 8. THE LD. DR RELIED ON THE ORDER OF THE ASSESSING AUTHORITIES. 9. WE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY CONSIDERED THE SAME ALONGWITH THE ORDER OF THE TAX AUTHORITIES BELOW. WE HAVE GONE THROUG H THE PROVISIONS OF SEC. 153C AS WELL AS THE CASE LAWS AS RELIED BY THE LD. AR. THE DEC ISION OF CIT VS. GOPI APARTMENT, 107 DTR (ALL) 217 ( SUPRA ) IN OUR OPINION WILL NOT ASSIST THE ASSESSEE. THE ISSUE INVOLVED IN THIS CASE WAS WHETHER RECORDING OF SATISF ACTION IS NECESSARY BEFORE ISSUING NOTICE U/S 153C IN A CASE WHERE THE AO OF BOTH THE PERSONS I.E. THE PERSON SEARCHED AND THE THIRD PARTY IN RESPE CT OF WHOM DOCUMENTS WERE FOUND ARE SAME AND NO HANDING OVER OF THE DOCUMENTS WAS REQUIRED, WHETHER RECORDING OF SATISFACTION IS NECESSARY . IN THE IMPUGNED CASE THE QUESTION IS WHETHER ANY ADDITION CAN BE MADE IN THE ASSESSMENT COMPLETED U/S 153C IN RESPECT OF ITEMS WHICH HAVE ALREADY BEEN CONSIDERED IN THE ORIGINAL ASSESSMENT AND FOR WHICH NO INCRIMINATING MATE RIAL WAS FOUND. THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF MANISH MAHESHWARI VS. CIT, 289 ITR 341 (SC) ALSO RELATE TO RECORDING OF SATISFACTION 6 ITA NO. 113/PNJ/2014 (A.Y : 2005 - 06) BUT IN THE CASE OF THE ASSESSEE NO EVIDENCE ABOUT NON - RECORDING OF SATISFACTION WAS PLACED BEFORE US. THE DECISION IN INGRAM MICRO (INDIA) EXPORTS PVT. LTD., ( SUPRA ) ALSO RELATES TO THE MANDATORY REQUIREMENT OF RECORDING OF SATISFACTION WHILE IN THE CASE OF THE ASSESSEE, NO SUCH MATERIAL WAS BROUGHT TO OUR K NOWLEDGE THAT SATISFACTION WAS NOT RECORDED BY THE AO. SIMILAR VIEW HAS BEEN TAKEN BY THE CHENNAI BENCH OF THE TRIBUNAL IN THE CASE OF P. SATHYANARAYANAN VS. ACIT, 50 SOT 168. THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF ANIL KUMAR BHATIA AND SSP AVIATION LTD. WILL BE DEALT WITH BY US WHILE GIVING FINDING WHETHER ANY ADDITION CAN BE MADE IN THE CASE OF THE ASSESSEE IN THE IMPUGNED FACTS OF THE CASE. THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. RADHEY SHYAM BANSAL & O RS., 337 ITR 217 RELATES TO THE PROVISION OF SEC. 158BD AND THEREFORE IS NOT APPLICABLE TO THE CASE OF THE ASSESSEE. IN RESPECT OF THE OTHER DECISION, COPY OF THE DECISION WAS NOT PLACED BEFORE US EVEN THOUGH THE COUNSEL OF THE ASSESSEE WAS SPECIFICALLY A SKED FOR IT. 10. NOW, COMING TO THE ISSUE WHETHER ANY ADDITION CAN BE MADE ON ACCOUNT OF GIFTS RECEIVED BY THE ASSESSEE WHICH HAS ALREADY BEEN SHOWN IN THE REGULAR RETURN FILED BY THE ASSESSEE AND FOR WHICH THE REGULAR ASSESSMENT HAS ALREADY BEEN CO MPLE TED, LET US LOOK INTO THE PROVISIONS OF THE SECTION 153A UNDER CHAPTER 14 UNDER THE TITLE ASSESSMENT IN CASE OF SEARCH OR REQUISITION. THE PROVISIONS OF SECTION 153A, 153B & 153C WERE INSERTED BY THE FINANCE ACT, 2003 W.E.F 1.6.2003. ORIGINALLY SECTION 153A OF THE ACT DID NOT HAVE ANY SUB - SECTION. HOWEVER, SUB - SECTION (2) TO SECTION 153A WAS INSERTED BY THE FINANCE ACT, 2008 W.E.F FROM 1.6.2003. SECTION 153A PROVIDES FOR AN ASSESSMENT IN CASE OF A PERSON IN WHOSE CASE SEARCH IS INITIATED U/S.132 OF TH E ACT OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER THE 31ST DAY OF MAY, 2003. SECTION 153B PROVIDES FOR TIME LIMIT FOR COMPLETION OF ASSESSMENT UNDER SECTION 153A AND SECTION 153C OF THE ACT . 7 ITA NO. 113/PNJ/2014 (A.Y : 2005 - 06) SECTION 153C PROVIDES FOR ASSESSMENT OF INCOME OF PERSON OR OTHER THAN PERSON IN RESPECT OF WHOM WARRANT OR AUTHORISATION IS ISSUED U/S.132 OF THE ACT. 11 . SECTION 153A AND SECTION 153C ARE EXTRACTED BELOW: 153A. ASSESSMENT IN CASE OF SEARCH OR REQUISITION. - (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153, IN THE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQU ISITIONED UNDER SECTION 132A AFTER THE 31ST DAY OF MAY, 2003, THE ASSESSING OFFICER SHALL (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YE AR FALLING WITHIN SIX ASSESSMENT YEARS REFERRED TO IN CLAUSE (B), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCOR DINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139; (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE : PROVIDED THAT THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS: PROVIDED FURTHER THAT ASSESSMENT OR REASSESSMENT, IF ANY, RELATING TO ANY ASSES SMENT YEAR FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS REFERRED TO IN THIS SUB - SECTION PENDING ON THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A, AS THE CASE MAY BE, SHALL ABATE. (2) IF ANY PROCEEDI NG INITIATED OR ANY ORDER OF ASSESSMENT OR REASSESSMENT MADE UNDER SUB - SECTION (1) HAS BEEN ANNULLED IN APPEAL OR ANY OTHER LEGAL PROCEEDING, THEN, NOTWITHSTANDING ANYTHING CONTAINED IN SUB - SECTION (1) OR SECTION 153, THE ASSESSMENT OR REASSESSMENT RELATIN G TO ANY ASSESSMENT YEAR WHICH HAS ABATED UNDER THE SECOND PROVISO TO SUB - SECTION (1), SHALL STAND REVIVED WITH EFFECT FROM THE DATE OF RECEIPT OF THE ORDER OF SUCH ANNULMENT BY THE COMMISSIONER: PROVIDED THAT SUCH REVIVAL SHALL CEASE TO HAVE EFFECT, IF SUCH ORDER OF ANNULMENT IS SET ASIDE. EXPLANATION. FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT, (I) SAVE AS OTHERWISE PROVIDED IN THIS SECTION, SECTION 153B AND SECTION 153C, ALL OTHER PROVISIONS OF THIS ACT SHALL APPLY TO THE ASSESSMENT MADE U NDER THIS SECTION; (II) IN AN ASSESSMENT OR REASSESSMENT MADE IN RESPECT OF AN ASSESSMENT YEAR UNDER THIS SECTION, THE TAX SHALL BE CHARGEABLE AT THE RATE OR RATES AS APPLICABLE TO 8 ITA NO. 113/PNJ/2014 (A.Y : 2005 - 06) SUCH ASSESSMENT YEAR. XX XX XX XX 153C.ASSESSMENT OF INCOME OF ANY OTHER PERSON. - (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153, WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT O R DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A, THEN THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE SUCH OTHER PERSON NOTICE AND ASSESS OR REASSESS INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A : PROVIDED THAT IN CASE O F SUCH OTHER PERSON, THE REFERENCE TO THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A IN THE SECOND PROVISO TO SUB - SECTION (1) OF SECTION 153A SHALL BE CONSTRUED AS REFERENCE TO THE DATE OF RECEIVING THE B OOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON. (2) WHERE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED AS REFERRED TO IN SUB - SECTION (1) HAS OR HAVE BEEN RECEIVED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AFTER THE DUE DATE FOR FURNISHING THE RETURN OF INCOME FOR THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED UNDER SECTION 132 OR REQUISITION IS MADE UNDER SECTION 132A AND IN RESPECT OF SUCH ASSESSMENT YEAR (A) NO RETURN OF INCOME HAS BEEN FURNISHED BY SUCH OTHER PERSON AND NO NOTICE UNDER SUB - SECTION (1) OF SECTION 142 HAS BEEN ISSUED TO HIM, OR (B) A RETURN OF INCOME HAS BEEN FURNISHED BY SUCH OTHER PERSON BUT NO NOTICE UNDER SUB - SECTION (2) OF SECTION 143 HAS BEEN SERVED AND LIMITATION OF SERVING THE NOTICE UNDER SUB - SECTION (2) OF SECTION 143 HAS EXPIRED, OR (C) ASSESSMENT OR REASSESSMENT, IF ANY, HAS BEEN MADE, BEFORE THE DATE OF RECEIVING TH E BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON, SUCH ASSESSING OFFICER SHALL ISSUE THE NOTICE AND ASSESS OR REASSESS TOTAL INCOME OF SUCH OTHER PERSON OF SUCH ASSESSMENT YEAR IN THE MANNER PROVIDED IN SECTION 153A. 12. IN OUR OPINION, THE ASSESSING OFFICER ASSUMED JURISDICTION FOR FRAMING THE ASSESSMENT U/S.153C OF THE ACT WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON IN WHOSE CASE SEARCH IS CONDUCTED U/S.132 OF THE ACT. THEREFORE, FOR 9 ITA NO. 113/PNJ/2014 (A.Y : 2005 - 06) INITIATING ACTION U/S.153C OF THE ACT AND FRAMING ASSESSMENT U/S.153A OF THE ACT, THE PRE - REQUISITE IS THAT THE SATISFACTION OF THE ASSESSING OFFICER THAT THE MONEY, DOCUMENTS AND PAPERS, ETC BELONGS TO A PERSON OTHER THAN THE PERSON IN WHOSE CASE SEARCH IS CONDUCTED U/S.132 OF THE ACT. 13 . IT IS APPARENT FROM THE LANGUAGE OF SECTION THAT THE SECTION DOES NOT REQUIRE THAT THE DOCUMENTS BELONGING TO THE ASSESSEE MUST BE INCRIMINATING DOCUMENTS. SECTION 153C GIVES THE JURISDICTION TO THE ASSESSING OFFICER ONCE THE DOCUMENTS BELONGING TO THE AS SESSEE ARE FOUND IN THE CASE OF THE ASSESSEE IN WHOSE CASE THE SEARCH HAD TAKEN PLACE. 14. WE NOTED THAT ON THE ISSUE WHETHER ANY ADDITION CAN BE MADE IN THE ASSESSMENT MADE U/S.153A, WHEN NO INCRIMINATING DOCUMENTS IS FOUND DURING THE COURSE OF SEARCH, A SPECIAL BENCH WAS CONSTITUTED IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD VS. DCIT, (2012) 137 ITD 287 (SB)(MUM) ON THE FOLLOWING QUESTION: WHETHER, ON THE FACTS AND IN LAW, THE SCOPE OF ASSESSMENT U/S 153A ENCOMPASSES ADDITIONS, NOT BASED ON ANY I NCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH? BEFORE THE SPECIAL BENCH, LD SR. COUNSEL RELIED ON THE DECISION OF LMG INTERNATIONAL LTD (SUPRA) AS IS APPARENT FROM PARA 16 OF THAT ORDER. WE NOTED THAT IN THE SAID JUDGMENT IN PARA 52 OF ITS ORDER, THE TRIBUNAL HAS HELD THAT SECTION 153A COMES INTO OPERATION IF A SEARCH OR REQUISITION IS INITIATED AFTER 31.5.2003. ON THE SATISFACTION OF THIS CONDITION, THE AO IS UNDER OBLIGATION TO ISSUE NOTICE TO THE PERSONS REQUIRING HIM TO FURNI SH THE RETURN OF INCOME OF SIX YEARS IMMEDIATELY PRECEEDING THE YEAR OF SEARCH. THIS FINDING IMPLIED THAT THE PROCEEDINGS U/S.153A IS NOT TO BE RESTRICTED TO THE YEARS FOR WHICH INCRIMINATING MATERIAL IS FOUND DURING THE SEARCH. ULTIMATELY, IN RESPECT OF QUESTION REFERRED TO THE SPECIAL BENCH, THE SPECIAL BENCH IN PARA 58 OF ITS ORDER HELD AS UNDER: 10 ITA NO. 113/PNJ/2014 (A.Y : 2005 - 06) 8. THUS, QUESTION NO.1 BEFORE US IS ANSWERED AS UNDER : A) IN ASSESSMENTS THAT ARE ABATED , THE AO RETAINS THE ORIGINAL JURISDICTION AS WELL AS JURISDI CTION CONFERRED ON HIM U/S 153A FOR WHICH ASSESSMENTS SHALL BE MADE FOR EACH OF THE SIX ASSESSMENT YEARS SEPARATELY. B) IN OTHER CASES, IN ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT U/S 153A WILL BE MADE ON THE BASIS OF I NCRIMINATING MATERIAL, WHICH IN THE CONT EXT OF RELEVANT PROVISIONS MEANS (I) BOOKS OF ACCOUNT, OTHER DOCUMENTS, FOUND IN T HE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT, AND; ( II) UNDISCLOSED INCOME OR PROPERTY DISCOVER ED IN THE COURSE OF SEARCH. 15 . IN VIEW OF THE DECISION OF SPECIAL BENCH IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD(SUPRA), NO DOUBT THE ADDITION IN THE CASE OF THE ASSESSEE CAN BE MADE BY THE ASSESSING OFFICER ONLY ON THE BASIS OF INCRIMINATING MATE RIAL FOUND DURING THE COURSE OF SEARCH BUT THE AO GOT JURISDICTION FOR INITIATING PROCEEDINGS U/S.153C R.W. SECTION 153A AGAINST THE ASSESSEE IN VIEW OF DOCUMENTS ETC, BELONGING TO THE ASSESSEE ARE FOUND IN THE CASE OF THE PERSON IN WHOSE CASE SEARCH HAD T AKEN PLACE. THUS, THIS DECISION WILL HELP THE ASSESSEE. 16 . SIMILAR VIEW HAS BEEN TAKEN IN THE CASES DISCUSSED AS UNDER: 17 . WE NOTED THAT HONBLE DELHI HIGH COURT IN THE CASE OF CHETANDASLAXMANDAS, 254 CTR (DEL) 392 HAS TAKEN SIMILAR VIEW. IN PARA 1 1 OF THIS JUDGEMENT, THE HONBLE HIGH COURT HELD THAT OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF THE SEIZED MATERIAL . EVEN WE NOTED THAT THE HONBLE DELHI HIGH COURT IN THE CASE OF ANIL KUMAR BHATIA, 352 ITR 493 (DEL) , UNDER PARA 20, IT HAS BEEN OBSERVED AS UNDER: EVEN IF ASSESSMENT ORDER HAD ALREADY BEEN PASSED IN RESPECT OF ONE OR ANY OF THE SIXRELEVANTASSESSMENT YEARS EITHER U/S143(1)(A) OR 143(3)PRIOR TO THE INITIATIONOFSEARCH, STILL THE AO IS EMPOWERED TO REOPEN THOSE PROCEEDINGS U/S 153A WITHOUT ANY FETTERS AND REASSESS TOTAL INCOME TAKING NOTE OF UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SEARCH. '20. A QUESTION MAY ARISE AS TO HOW THIS IS SOUGHT TO BE ACHIEVED WHERE AN ASSESSMENT ORDER HAD ALREADY BEEN PASSED IN 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 ALREADY IN EXISTENCE, HAVING OBVIOUSLY BEEN PASSED PRIOR TO THE INITIATION OF THE SEARCH/REQUISITION, THE 11 ITA NO. 113/PNJ/2014 (A.Y : 2005 - 06) ASSESS ING OFFICER IS EMPOWERED TO REOPEN THOSE PROCEEDINGS AND REASSESS THE TOTAL INCOME, TAKING NOTE OF THE UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SEARCH. 18 . THE ABOVE OBSERVATIONS OF HONBLE HIGH COURT, WHICH ARE THOUGH OBITER DICTA, MAKE IT POINT CLEAR THAT WHERE AN ASSESSMENT ORDER HAS ALREADY BEEN PASSED FOR A YEAR OF YEARS WITHIN THE RELEVANT SIX ASSESSMENT YEARS, THEN THE AO IS DULY BOUND TO REOPEN THOSE PROCEEDINGS AND REASSESS THE TOTAL INCOME BUT BY TAKING NOTE OF THE UNDISCLOSED INCOME IF ANY, UNEARTHED DURING THE SEARCH. THE EXPRESSION UNEARTHED DURING THE SEARCH IS QUITE SIGNIFICANT TO DENOTE THAT IN RESPECT OF COMPLETED OR NON - PENDING ASSESSMENT, THE AO IS ALBEIT DUTY BOUND TO ASSESS OR REASSESS THE TOTAL INCOME BUT IF THERE IS SCOP E FOR ADDITIONS IN SUCH ASSESSMENT, ON THE BASIS OF INCOME UNEARTHED DURING THE SEARCH, HE CAN MAKE THE ADDITION. IN OTHER WORDS, THE DETERMINATION OF TOTAL INCOME IN RESPECT OF THE ASSESSMENT YEARS FOR WHICH THE ASSESSMENTS ARE ALREADY COMPLETED ON T HE DATE OF SEARCH, SHALL NOT BE INFLUENCED BY THE ITEMS OF INCOME OTHER THAN THOSE BASED ON THE MATERIAL UNEARTHED DURING THE COURSE OF SEARCH. HOWEVER, THE SCOPE OF SUCH DETERMINATION OF TOTAL INCOME IS DIFFERENT IN RESPECT OF THE YEARS FOR WHICH THE ASS ESSMENTS ARE PENDING VIS - - VIS THE YEARS FOR WHICH ASSESSMENTS ARE NON - PENDING. THE TOTAL INCOME SHALL BE DETERMINED IN RESPECT OF ASSESSMENT YEAR FOR WHICH ORIGINAL ASSESSMENTS HAVE ALREADY BEEN COMPLETED ON THE DATE OF SEARCH BY RESTRICTING ADDITIONS ON LY TO THOSE WHICH FLOW FROM INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. IF NO INCRIMINATING MATERIAL IS FOUND IN RESPECT OF SUCH COMPLETED ASSESSMENT, THEN THE TOTAL INCOME IN THE PROCEEDINGS U/S 153A SHALL BE COMPUTED BY CONSIDERING THE ORIG INALLY DETERMINED INCOME. IF SOME INCRIMINATING MATERIAL IS FOUND IN RESPECT OF SUCH ASSESSMENT YEARS FOR WHICH THE ASSESSMENT IS NOT PENDING, THEN THE TOTAL INCOME WOULD BE DETERMINED BY CONSIDERING THE ORIGINALLY DETERMINED INCOME PLUS INCOME EMANATING FROM THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. IN RESPECT OF ASSESSMENT PENDING ON THE DATE OF SEARCH WHICH GOT ABATE IN TERMS OF SECOND PROVISO TO SECTION 153A(1), THE TOTAL INCOME SHALL BE 12 ITA NO. 113/PNJ/2014 (A.Y : 2005 - 06) COMPUTED AFRESH UNINFLUENCED BY THE FACT WHETHER OR NOT THERE IS ANY INCRIMINATING MATERIAL. THIS POSITION OF LAW WHICH IS PRONOUNCED, IN OUR OPINION, WILL APPLY IN ALL THESE DECISIONS. 19 . WE HAVE ALREADY OBSERVED THAT NO INCRIMINATING MATERIAL HAS BEEN FOUND RELATING TO THE YEAR IN WHICH THE ASSESSEE HAS RECEIVED GIFTS. THEREFORE, IN OUR OPINION, NO ADDITION ON ACCOUNT OF THE GIFTS CAN BE SUSTAINED. ACCORDINGLY, ON THIS BASIS ITSELF, WE DELETE THE ADDITION ON ACCOUNT OF GIFTS. WE ACCORDINGLY ALLOW THE ADDITIONAL GROUNDS. SINCE WE HAVE DELE TED THE ADDITION ON THE BASIS OF THE ADDITIONAL GROUNDS TAKEN BY THE ASSESSEE, THEREFORE, IN OUR OPINION, THE GROUNDS TAKEN BY THE ASSESSEE ON MERIT DOES NOT REQUIRE ADJUDICATION. 20. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 21. ORDER PRONOUNCED IN THE OPEN COURT ON 9 /12/2014. S D / - (D.T.GARASIA) JUDICIAL MEMBER S D / - (P.K. BANSAL) ACCOUNTANT MEMBER PLACE : PANAJI / GOA DATED : 9 /12/ 201 4 *SSL* COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT CONCERNED (4) CIT (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER ,