DCIT, CC-4(1), Kolkata, Kolkata V. M/s. Maan Capital Services Pvt. Ltd. , Kolkata

ITA 1193/KOL/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0148 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 25-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RADHEY SHYAM
• Assessee Lawyers: A K TULSIYAN
• Keywords: Search and seizure; Reason to believe
• Section: 143(3); 142(1); 133A; 153A; 14A; 133(6); 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : KOLKATA [BEFORE HONBLE SHRI S.S.GODARA, JM & HONBLE SHRI M.BALAGANESH, AM] I.T.A NO. 1193/KOL/2017 ASSESSMENT YEAR : 2009-1 0 DCIT,CC-4(1), KOLKATA -VS- M/S MAAN CAPITAL SER VICES PVT. LTD. [PAN: AACCM 0388 G] (APPELLANT) (RESP ONDENT) FOR THE APPELLANT : SHRI RADHEY SHYAM, CIT DR FOR THE RESPONDENT : SHRI A.K. TULSIYAN, FCA DATE OF HEARING : 04.12.2018 DATE OF PRONOUNCEMENT : 07.12.2018 ORDER PER M.BALAGANESH, AM 1. THIS APPEAL BY THE REVENUE ARISES OUT OF THE O RDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-21, KOLKATA [IN SHORT THE LD CI T(A)] IN APPEAL NO.177/CC- 4(1)/CIT(A)-21/KOL/15-16 DATED 23.03.2017 AGAINST THE ORDER PASSED BY DCIT, CC- 4(1), KOLKATA [ IN SHORT THE LD AO] UNDER SECTION 143(3) / 153D / 153A OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 30.03.201 5 FOR THE ASSESSMENT YEAR 2009-10. 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE LD CITA WAS JUSTIFIED IN DELETING THE ADDITION OF RS 1,63,00,000/- TOWARD S SHARE CAPITAL / SHARE APPLICATION 2 ITA NO.1193/KOL/2017 M/S MAAN CAPITAL SERVICES PVT. LTD. A.YR. 2009-10 2 MONEY AND SHARE PREMIUM IN THE SEARCH ASSESSMENT FR AMED U/S 153A OF THE ACT IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH TO THAT EFFECT. 3. THE BRIEF FACTS OF THIS ISSUE IS THAT THERE WAS A SEARCH AND SEIZURE OPERATION CONDUCTED U/S 132 OF THE ACT ON 13.12.2012 IN THE R ESIDENTIAL AND BUSINESS PREMISES OF VARIOUS PERSONS BELONGING TO MAANHERUKA GROUP INCLU DING THE ASSESSEE. IN SOME CASES BELONGING TO THE GROUP, SURVEY OPERATION U/S 133A O F THE ACT WAS ALSO CONDUCTED ON THE SAME DATE AND / OR SUBSEQUENT DATES. THE ASSESSEE COMPANY IS ONE OF THE GROUP COMPANIES OF MAANHERUKA GROUP OF CASES. CONSEQUE NT TO THE SEARCH, NOTICE U/S 153A OF THE ACT WAS ISSUED ON 7.10.2013 AND SERVED ON TH E ASSESSEE ON 8.10.2013. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE FILED A LETT ER DATED 19.11.2013 STATING THAT THE ORIGINAL RETURN FILED U/S 139(1) OF THE ACT ON 30.9 .2009 DECLARING TAXABLE INCOME OF RS 15,32,490/- MAY BE TREATED AS A RETURN IN RESPONSE TO NOTICE ISSUED U/S 153A OF THE ACT. THE ASSESSEE STATED THAT THE TIME LIMIT FOR ISSUANC E OF NOTICE U/S 143(3) OF THE ACT FOR THE ASST YEAR 2009-10 IN RESPECT OF THE ORIGINAL RETURN FILED ON 30.9.2009 HAD EXPIRED ON 30.9.2010 AND HENCE AS ON THE DATE OF SEARCH, THAT YEAR (I.E ASST YEAR 2009-10) WOULD FALL UNDER THE CATEGORY OF UNABATED ASSESSMENT AND HENCE THE INCOME ASSESSED ORIGINALLY THEREON, WHICH IS SAME AS THE RETURNED INCOME, COU LD NOT BE DISTURBED UNLESS THERE IS ANY INCRIMINATING MATERIAL FOUND IN THE COURSE OF S EARCH RELATABLE TO SUCH ASSESSMENT YEAR. IT WAS ARGUED THAT ADMITTEDLY NO INCRIMINATI NG MATERIALS WERE FOUND FOR ASST YEAR 2009-10 IN THE COURSE OF SEARCH WITH REGARD TO SHAR E CAPITAL / SHARE APPLICATION MONEY AND SHARE PREMIUM AND ACCORDINGLY PLEADED NOT TO DI STURB THE ORIGINALLY ASSESSED INCOME. THE LD AO OBSERVED THAT ASSESSEE HAD RECEIV ED SHARE CAPITAL / SHARE APPLICATION MONEY WITH SHARE PREMIUM FROM DICORD COMMODEAL PVT LTD , SILFIX TRADING PVT LTD AND DARKIN DISTIRBUTORS PVT LTD TOTALING TO RS 1,63 ,00,000/- DURING THE YEAR UNDER APPEAL. THE LD AO OBSERVED IN THE ASSESSMENT ORDER THAT THE ASSESSEE DURING THE COURSE OF SCRUTINY PROCEEDINGS, FILED DETAILED LIST OF SHA REHOLDERS , ALONG WITH LEDGER COPIES AND COPY OF FORM NO.2. NOTICE U/S 133(6) OF THE ACT WER E ISSUED TO THE INVESTOR COMPANIES 3 ITA NO.1193/KOL/2017 M/S MAAN CAPITAL SERVICES PVT. LTD. A.YR. 2009-10 3 AND REPLIES RECEIVED FROM THEM WERE EXAMINED IN DET AIL. THE ASSESSEE IN RESPONSE TO SHOW CAUSE NOTICE ISSUED BY THE LD AO STATED THAT S HARE APPLICATION MONEY RECEIVED FROM THE AFORESAID THREE PARITES WERE DULY VERIFIED BY THE LD AO AND THEY HAD ALSO CONFIRMED DIRECTLY BEFORE THE LD AO. 4. THE LD AO HOWEVER DID NOT HEED TO THE CONTENTION S OF THE ASSESSEE AND PROCEEDED TO FRAME THE ASSESSMENTS U/S 153A OF THE ACT BY MAKING AN ADDITION TOWARDS SHARE APPLICATION MONEY U/S 68 OF THE ACT IN THE SUM OF R S 1,63,00,000/- ON THE PLEA THAT THE ASSESSMENTS TO BE FRAMED U/S 153A OF THE ACT CLEARS ALL THE DECKS AND WOULD ENABLE THE LD AO TO ASSESS OR REASSESS THE TOTAL INCOME AS PER THE PROVISIONS OF THE ACT IRRESPECTIVE OF INCRIMINATING MATERIALS FOUND IN THE SEARCH. TH E LD AO COMPLETED THE ASSESSMENT U/S 153A / 143(3) OF THE ACT ON 30.3.2015 DETERMINING T HE TOTAL INCOME AT RS 1,92,11,460/- AFTER MAKING AN ADDITION OF RS. 1,63,00,000/- U/S 6 8 OF THE ACT ON ACCOUNT OF SHARE CAPITAL / SHARE APPLICATION MONEY / SHARE PREMIUM A ND DISALLOWANCE U/S 14A OF THE ACT TO THE TUNE OF RS 9,89,324/-. THE ADDITION MADE T OWARDS SHARE CAPITAL / SHARE APPLICATION MONEY / SHARE PREMIUM WAS BASED ON STAT EMENT RECORDED FROM TWO DIRECTORS U/S 132(4) OF THE ACT WHICH WAS LATER RETRACTED BY THEM. IT WAS ALLEGED THAT SHARE APPLICATION MONEY WAS RAISED BY THE GROUP BY PAYING CASH AND HAD EVENTUALLY CONVERTED THE UNDISCLOSED INCOME INTO LEGAL MONEY. 5. THE LD CITA DELETED THE ADDITION BY OBSERVING AS UNDER:- I HAVE CONSIDERED THE FINDINGS OF THE AO IN THE AS SESSMENT ORDER, DIFFERENT CASE LAWS BROUGHT ON RECORD AND APPEAL ORDERS PASSED BY MY PR EDECESSORS ON THIS LEGAL ISSUE. I FIND FROM THE ASSESSMENT ORDER THAT DURING THAT SEA RCH AND SEIZURE OPERATIONS CONDUCTED U/S 132 OF THE I.T.ACT, 1961, INCRIMINATI NG DOCUMENTS / PAPERS WERE NOT SEIZED. AT LEAST, ADDITIONS MADE BY THE AO IN THE A SSESSMENT ORDER PASSED U/S 153A / 143(3) ARE NOT BASED ON ANY INCRIMINATING DOCUMENTS / PAPERS SEIZED DURING THAT SEARCH OPERATION. IT WOULD ALSO NOT BE OUT OF CONTEXT TO M ENTION HERE THAT IN THIS CASE, ON THE DATE OF SEARCH, NO ASSESSMENT FOR THIS YEAR WAS PEN DING. THEREFORE, KEEPING IN VIEW THE RATIO DECIDED BY THE JURISDICTIONAL BENCH OF KOLKAT A TRIBUNAL IN CASES REFERRED ABOVE AND THE RATIO DECIDED BY THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF VEER PRABHU MARKETING LTD (SUPRA) IN THE LIGHT OF CBDTS DECIS ION OF NOT FILING SLP IN THIS CASE IN 4 ITA NO.1193/KOL/2017 M/S MAAN CAPITAL SERVICES PVT. LTD. A.YR. 2009-10 4 THE SUPREME COURT AND KEEPING IN VIEW THE APEX COUR TS DECISION TO DISMISS SLP ON SIMILAR ISSUE IN THE CASE OF PR. CIT VS. KURELE PAP ER MILLS PVT. LTD. : SLP (C) NO. 34554 OF 2015 DATED 07.12.2015, I AM OF THIS VIEW T HAT IN ORDER TO MAINTAIN JUDICIAL CONTINUITY ON THIS ISSUE AND RESPECTFULLY FOLLOWING THE RATIO DECIDED BY THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF VEER PRABHU MARK ETING LTD. (SUPRA), ASSESSEES APPEAL ON ADDITIONAL GROUND IS ALLOWED AND AS SUCH I AM NOT INCLINED TO ADJUDICATE APPEAL ON GROUND NO. 1 ON MERIT. 8. SINCE THE APPEAL HAS BEEN ALLOWED ON LEGAL GROUN DS AS ABOVE, APPEALS ON GROUNDS NO.2 ARE ALSO COVERED IN IT. FURTHER THEREFORE, I A M NOT INCLINED TO ADJUDICATE APPEAL ON OTHER GROUNDS ON MERIT. 6. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 7. THE LD AR STATED THAT THE ASSESSMENT FOR THE ASS T YEAR 2009-10 WAS ORIGINALLY COMPLETED U/S 143(1) OF THE ACT AS THE CASE WAS NOT SELECTED FOR SCRUTINY BY ISSUANCE OF NOTICE U/S 143(2) OF THE ACT ON OR BEFORE 30.9.2010 . HE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES WITH REGARD TO FRAMING OF ADDITIONS IN SECTION 153A ASSESSMENTS WITHOUT ANY INCRIMINATING MATERIAL FOUN D THEREON. RELIANCE WAS PLACED ON THE FOLLOWING DECISIONS IN SUPPORT OF HIS CONTENTIO NS:- (A) CIT VS VEERPRABHU MARKETING LTD REPORTED IN (20 16) 73 TAXMANN.COM 149 (CAL HC) (B) DECISION OF THIS TRIBUNAL IN THE CASE OF ACIT V S KANCHAN OIL INDUSTRIES LTD IN ITA NO. 725/KOL/2011 DATED 9.12.2015 (C ) CIT VS KABUL CHAWLA REPORTED IN (2016) 380 ITR 573 ( DELHI HC) (D)CIT VS CONTINENTAL WAREHOUSING CORPORATION (NHAV A SHEVA) LTD AND ALL CARGO GLOBAL LOGISTICS LTD REPORTED IN (2015) 374 ITR 645 ( BOM) 8. IN RESPONSE TO THIS, THE LD DR ARGUED THAT THE E XPRESSION INCRIMINATING MATERIAL IS NOT FOUND IN THE PROVISIONS OF THE ACT AND IT IS ON LY THE HONBLE COURTS WHICH HAD IMPORTED THOSE WORDS WHILE RENDERING THE DECISIONS. HE STATED THAT THE HONBLE COURTS ARE DIVIDED ON THIS ISSUE AND PLACED RELIANCE ON TH E DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CANARA HOUSING DEVELOPMEN T CO VS DCIT REPORTED IN (2014) 5 ITA NO.1193/KOL/2017 M/S MAAN CAPITAL SERVICES PVT. LTD. A.YR. 2009-10 5 49 TAXMANN.COM 98 (KAR HC) WHEREIN IT WAS HELD THAT SEARCH ASSESSMENTS COULD BE FRAMED EVEN WITHOUT THE EXISTENCE OF INCRIMINATING MATERIALS FOUND IN THE COURSE OF SEARCH. HE ARGUED THAT THE BASIC FOUNDATION FOR CONDUCTING THE SEARCH IS GOVERNED BY THE PROVISIONS OF SECTION 132 OF THE ACT WHICH HAS TO BE READ HARMONIOUSLY WITH SECTION 153A OF THE ACT. THERE ARE THREE CONDITIONS BASED ON WHICH A SEARCH ACTION COULD BE INITIATED U/S 132 OF THE ACT ON AN ASSESSEE. THEY ARE :- SECTION 132(1) - IF THE CONCERNED AUTHORITY HAS IN CONSEQUENCE OF INFORMATION IN HIS POSSESSION, HAS REASON TO BELIEVE THAT - (A) WHERE A PERSON FAILS TO PRODUCE THE BOOKS OF AC COUNTS AND OTHER DOCUMENTS IN RESPONSE TO NOTICE U/S 142(1) OR SUMMONS ISSUED U/S 131(1) OF THE ACT ; OR (B) WHERE A PERSON FAILS TO COMPLY WITH THE REQUIRE MENTS OF SUMMONS ISSUED U/S 131(1) OF THE ACT ; OR (C ) WHERE A PERSON IS IN POSSESSION OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING AND SUCH ASSETS REPRESENT S EITHER WHOLLY OR PARTLY INCOME OR PROPERTY WHICH HAS NOT BEEN , OR WOULD NOT BE, DISC LOSED FOR THE PURPOSES OF THE ACT (HEREINAFTER REFERRED TO AS THE UNDISCLOSED INCOME OR PROPERTY) ; THEN THE OFFICER , SO AUTHORIZED COULD CONDUCT A SE ARCH AND PROCEED AS PER THE REQUIREMENTS LAID DOWN IN THE SAID SECTION. HE AR GUED THAT THE AFORESAID THREE PRIMARY CONDITIONS FOR INVOKING SEARCH PROCEEDINGS CANNOT B E GIVEN A GO BY WHILE FRAMING SECTION 153A ASSESSMENTS AND THE INSTANT CASE FALLS UNDER SECTION 132(1)(C ) OF THE ACT. THE PROVISIONS OF SECTION 153A OF THE ACT USE THE E XPRESSION ASSESS OR REASSESS TOTAL INCOME AND HENCE THE SEARCH ASSESSMENT COULD BE FR AMED U/S 153A OF THE ACT IRRESPECTIVE OF ANY INCRIMINATING MATERIALS. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND IT WOULD BE NECESSARY TO ADDRESS THE PRELIMINARY ISSUE OF WHETHER THE ADDITION COULD BE FRAMED U/S 153A OF THE ACT IN 6 ITA NO.1193/KOL/2017 M/S MAAN CAPITAL SERVICES PVT. LTD. A.YR. 2009-10 6 RESPECT OF A CONCLUDED PROCEEDING WITHOUT THE EXIST ENCE OF ANY INCRIMINATING MATERIALS FOUND IN THE COURSE OF SEARCH. THE SCHEME OF THE ACT PROVIDES FOR ABATEMENT OF PENDING PROCEEDINGS AS ON THE DATE OF SEARCH. IT I S NOT IN DISPUTE THAT THE ASSESSMENT FOR THE ASST YEAR 2009-10 WAS ORIGINALLY COMPLETED U/S 143(1) OF THE ACT AND THE TIME LIMIT FOR ISSUANCE OF NOTICE U/S 143(2) OF THE ACT HAD EX PIRED AND HENCE IT FALLS UNDER CONCLUDED PROCEEDING , AS ON THE DATE OF SEARCH. W E HOLD THAT THE LEGISLATURE DOES NOT DIFFERENTIATE WHETHER THE ASSESSMENTS ORIGINALLY WE RE FRAMED U/S 143(1) OR 143(3) OR 147 OF THE ACT. HENCE UNLESS THERE IS ANY INCRIMIN ATING MATERIAL FOUND DURING THE COURSE OF SEARCH RELATABLE TO SUCH CONCLUDED YEAR, THE STATUTE DOES NOT CONFER ANY POWER ON THE LD AO TO DISTURB THE FINDINGS GIVEN THEREON AND INCOME DETERMINED THEREON, AS FINALITY HAD ALREADY BEEN REACHED THEREON, AND SUC H PROCEEDING WAS NOT PENDING ON THE DATE OF SEARCH TO GET ITSELF ABATED. THE PROVISION S OF SECTION 153A OF THE ACT ARE REPRODUCED HEREUNDER FOR THE SAKE OF CONVENIENCE :- '[ASSESSMENT IN CASE OF SEARCH OR REQUISITION 153A. [(1)] NOTWITHSTANDING ANYTHING CONTAINED IN S ECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153, IN T HE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER SECTION 132 OR BOOKS OF A CCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER T HE 31ST DAY OF MAY, 2003, THE ASSESSING OFFICER SHALL (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FURNIS H WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETURN OF INCOM E IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS REFERRED TO IN CLAUSE (B), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIB ED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND THE PROVISIONS OF THIS ACT SHAL L, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH R ETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139; (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSESSME NT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVI OUS 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:' 7 ITA NO.1193/KOL/2017 M/S MAAN CAPITAL SERVICES PVT. LTD. A.YR. 2009-10 7 9.1. WE FIND THAT THE CO-ORDINATE BENCH OF DELHI TR IBUNAL IN THE CASE OF DY. CIT V. AGGARWAL ENTERTAINMENT (P.) LTD REPORTED IN [2016] 72 TAXMANN.COM 340 (DELHI - TRIB.) HAD ADDRESSED THIS ASPECT. THE RELEVANT HEADNOTES IS REPRODUCED BELOW: 'SECTION 153A, READ WITH SECTION 143, OF THE INCOME -TAX ACT, 1961-SEARCH AND SEIZURE - ASSESSMENT IN CASE OF (IN CASE OF SECTION 143(1) ASSESSMENT)-ASSESSMENT YEAR 2004-05- WHETHER ASSESSMENT IN RESPECT OF WHIC H RETURN HAS BEEN PROCESSED UNDER SECTION 143(1), CANNOT BE REGARDED AS PENDING FOR PURPOSE OF SECTION 153A AS ASSESSING OFFICER IS NOT REQUIRED TO DO ANYTHING FURTHER ABOUT SUCH A RETURN AND, THUS, SAID ASSESSMENT CANNOT BE REOPENED IN EXERCIS E OF POWER OF SECTION 153A- HELD YES (PARAS 10 AND 12) (IN FAVOUR OF ASSESSEE). ' 9.2. WE FIND THAT THE CO-ORDINATE BENCH OF THIS TRI BUNAL IN THE CASE OF ACIT VS KANCHAN OIL INDUSTRIES LTD IN ITA NO. 725/KOL/2011 DATED 9. 12.2015 REPORTED IN 2016-TIOL- 167-ITAT-KOL HAD EXPLAINED THE AFORESAID PROVISIONS AS BELOW:- '6.4 IN OUR OPINION, THE SCHEME OF ASSESSMENT PROCE EDINGS SHOULD BE UNDERSTOOD IN THE FOLLOWING MANNER PURSUANT TO THE SEARCH CONDUCT ED U/S. 132 OF THE ACT :- (A) NOTICE U/S. 153A OF THE ACT WOULD BE ISSUED ON THE PERSON ON WHOM THE WARRANT OF AUTHORIZATION U/S. 132 OF THE ACT WAS ISSUED FOR TH E SIX ASSESSMENT YEARS PRECEDING THE YEAR OF SEARCH AND ASSESSMENTS THEREON WOULD BE COMPLETED U/S. 153A OF THE ACT FOR THOSE SIX ASSESS MENT YEARS. (B ) IN RESPECT OF THE YEAR OF SEARCH, NOTICE U/S. 14 3(2) OF THE ACT WOULD BE ISSUED AND ASSESSMENT THEREON WOULD BE COMPLETED U/S. 143( 3) OF THE ACT. (C) IN RESPECT OF CONCLUDED ASSESSMENTS PRIOR TO THE YE AR OF SEARCH, NO ADDITION COULD BE MADE IN THE RELEVANT ASSESSMENT YEAR UNLES S ANY INCRIMINATING MATERIAL IS FOUND DURING THE COURSE OF SEARCH WITH RESPECT TO THE RELEVANT ASSESSMENT YEAR. (D) PURSUANT TO THE SEARCH U/S. 132 OF THE ACT, THE PEN DING PROCEEDINGS WOULD GET ABATED. IN RESPECT OF ABATED ASSESSMENTS, THE TOTAL INCOME NEEDS TO BE DETERMIN ED AFRESH IN ACCORDANCE WITH THE PROVISIONS OF SECT ION 153A AND OTHER PROVISIONS OF THE ACT. 6.4.1 THE CONCLUDED ASSESSMENTS FOR THE PURPOSE OF SECTION 153A OF THE ACT SHALL BE - (I) ASSESSMENT YEARS WHERE ASSESSMENTS ARE ALREADY COMP LETED U/S. 143(1) AND 8 ITA NO.1193/KOL/2017 M/S MAAN CAPITAL SERVICES PVT. LTD. A.YR. 2009-10 8 TIME LIMIT FOR ISSUANCE OF NOTICE U/S. 143(2) OF TH E ACT HAS EXPIRED OR; (II) ASSESSMENT YEARS WHERE ASSESSMENTS ARE ALREADY COMP LETED U/S. 143(3) OF THE ACT ; UNLESS THEY ARE REOPENED U/S. 147 OF THE ACT FOR SO ME OTHER PURPOSE IN BOTH THE SCENARIOS STATED ABOVE. 6.4.2 THE SCHEME OF ASSESSMENT PROCEEDINGS CONTEMPL ATED U/S. 153A OF THE ACT ARE TOTALLY DIFFERENT AND DISTINCT FROM THE PROCEEDINGS CONTEMPLATED U/S. 147 OF THE ACT AND THESE PROCEDURES OF ASSESSMENT OPERATE IN DIFFE RENT FIELDS AND HAVE DIFFERENT PURPOSES TO BE FULFILLED ALTOGETHER. 6.4.3 THE EXPRESSION 'ASSESS OR REASSESS' STATED IN SECTION 153A(1)(B) HAS TO BE UNDERSTOOD AS BELOW:- 'ASSESS' MEANS ASSESSMENTS TO BE FRAMED IN RESPECT OF ABATED ASSESSMENT YEARS IRRESPECTIVE OF THE FACT WHETHER THERE ARE ANY INCR IMINATING MATERIALS FOUND DURING THE COURSE OF SEARCH WITH RESPECT TO RELEVANT ASSES SMENT YEARS ; 'REASSESS' MEANS ASSESSMENTS TO BE FRAMED IN RESPEC T OF CONCLUDED ASSESSMENT YEARS WHERE INCRIMINATING MATERIALS WERE FOUND DURING THE COURSE OF SEARCH IN RESPECT OF THE RELEVANT ASSESSMENT YEAR.' 7.3. WE ALSO FIND THAT RECENTLY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS KABUL CHAWLA REPORTED IN (2016) 380 ITR 573 (DEL) HELD 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 THE AFOREM ENTIONED DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UNDER: (I) ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SE CTION 153A(1) WILL HAVE TO BE MANDATORILY ISSUED TO THE P ERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDI NG 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 COMPU TED BY THE LD AOS AS A FRESH EXERCISE. (III) THE LD AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAK ES PLACE. THE LD AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX Y EARS. IN OTHER WORDS THERE 9 ITA NO.1193/KOL/2017 M/S MAAN CAPITAL SERVICES PVT. LTD. A.YR. 2009-10 9 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'. (IV) ALTHOUGH SECTION 153A DOES NOT SAY THAT ADDITIONS S HOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SE ARCH, OR OTHER POST- SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE LD AO WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT 'CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY O N THE BASIS OF SEIZED MATERIAL.' (V) IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMEN T 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 C OMPLETE ASSESSMENT PROCEEDINGS. (VI) INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE J URISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTIO N 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EA CH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXIST ING OR BROUGHT ON THE RECORD OF THE LD AO. (VII) COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY T HE LD AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153A ONLY ON THE BASIS OF SOME INCRIMINATING MATE RIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUI SITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE CO URSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT.' 38. THE PRESENT APPEALS CONCERN AYS 2002-03, 2005-0 6 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. 9.4. WE FIND THAT THE DECISION RELIED UPON BY THE L D DR IN THE CASE OF CIT VS ANIL KUMAR BHATIA REPORTED IN (2013) 352 ITR 493 (DEL) DOES NOT IN ANY MANNER ADVANCE THE CASE OF THE REVENUE AS ADMITTEDLY THE HONBLE DELHI HIGH COURT IN PARA 24 OF ITS ORDER HAD HELD AS UNDER:- 10 ITA NO.1193/KOL/2017 M/S MAAN CAPITAL SERVICES PVT. LTD. A.YR. 2009-10 10 24. WE ARE NOT CONCERNED WITH A CASE WHERE NO INCR IMINATING MATERIAL WAS FOUND DURING THE SEARCH CONDUCTED UNDER SECTION 132 OF THE ACT. WE, THEREFORE, EXPRESS NO OPINION AS TO WHETHER SECTION 153A CAN B E INVOKED EVEN IN SUCH A SITUATION. THAT QUESTION IS THEREFORE LEFT OPEN. 9.5. THE LD DR ALSO RELIED ON THE RECENT DECISION O F THE HONBLE KERALA HIGH COURT IN THE CASE OF E.N.GOPAKUMAR VS CIT REPORTED IN (2016) 75 TAXMANN.COM 215 (KERALA) IN SUPPORT OF HIS CONTENTIONS. WE FIND THAT THE DECI SION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS KABUL CHAWLA REPORTED IN (2016) 380 ITR 573 (DEL) HAD DULY CONSIDERED THE DECISIONS OF CIT VS ANIL KUMAR BHATI A REPORTED IN (2013) 352 ITR 493 (DEL) ; CIT VS CHETAN DAS LACHMAN DAS REPORTED IN (2012) 211 TAXMAN 61 (DEL HC) ; MADUGULA VENU VS DIT REPORTED IN (2013) 215 TAXMAN 298 (DEL HC) ; CANARA HOUSING DEVELOPMENT CO. VS DCIT REPORTED IN (2014) 49 TAXMANN.COM 98 (KAR HC) ; FILATEX INDIA LTD VS CIT REPORTED IN (2014) 229 TAX MAN 555 (DEL HC) ; JAI STEEL (INDIA) VS ACIT REPORTED IN (2013) 219 TAXMAN 223 (DEL HC) ; CIT VS MURLI AGRO PRODUCTS LTD REPORTED IN (2014) 49 TAXMANN.COM 172 (BOM HC) ; CIT VS CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD REPORTED IN (2015) 374 ITR 645 (BOM HC) AND ALL CARGO GLOBAL LOGISTICS LTD VS DCIT REPO RTED IN (2012) 137 ITD 287 (MUM ITAT) (SB). WE ALSO FIND THAT AGAINST THE DECISION OF THE HONB LE DELHI HIGH COURT IN 380 ITR 573 (DEL) , THE REVENUE PREFERRED SPECIAL LEAVE PETITIO N BEFORE THE HONBLE SUPREME COURT AND THE SAME WAS DISMISSED BY THE APEX COURT WHICH IS REPORTED IN 380 ITR (ST.) 4 (SC). HENCE IT COULD BE SAFELY CONCLUDED THAT THE DECISIO N OF HONBLE DELHI HC IN THE CASE OF KABUL CHAWLA SUPRA WOULD HAVE TO BE CONSIDERED ON T HE IMPUGNED ISSUE AND IN ANY CASE, THE HONBLE SUPREME COURT IN THE CASE OF CIT VS VEGETAB LE PRODUCTS LTD REPORTED IN 88 ITR 192 (SC) HAD HELD THAT IF TWO REASONABLE CONSTRUCTIONS OF A TAXING PROVISION ARE POSSIBLE, THAT CONSTRUCTION WHICH FAVOURS THE A SSESSEE MUST BE ADOPTED. 11 ITA NO.1193/KOL/2017 M/S MAAN CAPITAL SERVICES PVT. LTD. A.YR. 2009-10 11 9.6. WE ALSO FIND THAT THE HONBLE JURISDICTIONAL HIGH COURT RECENTLY IN THE C ASE OF PRINCIPAL CIT VS M/S SALASAR STOCK BROKING LTD IN G .A.NO. 1929 OF 2016 ITAT NO. 264 OF 2016 DATED 24.8.2016 HAD ENDORSED THE AFORESAID VIEW OF HONBLE DELHI H IGH COURT IN KABUL CHAWLAS CASE AND ALSO PLACED RELIANCE ON ITS OWN DECISION IN THE CASE OF CIT VS VEERPRABHU MARKETING LTD REPORTED IN (2016) 73 T AXMANN.COM 149 (CAL HC). 9.7. WE FIND THAT THE PROVISIONS OF SECTION 132 OF THE ACT RELIED UPON BY THE LD DR WOULD BE RELEVANT ONLY FOR THE PURPOSE OF CONDUCTIN G THE SEARCH ACTION AND INITIATING PROCEEDINGS U/S 153A OF THE ACT. ONCE THE PROCEEDI NGS U/S 153A OF THE ACT ARE INITIATED, WHICH ARE SPECIAL PROCEEDINGS, THE LEG ISLATURE IN ITS WISDOM BIFURCATES DIFFERENTIAL TREATMENTS FOR ABATED ASSESSMENTS AND UNABATED ASSESSMENTS. AT THE COST OF REPETITION, WE STATE THAT IN RESPECT OF ABATED ASSE SSMENTS (I.E PENDING PROCEEDINGS ON THE DATE OF SEARCH) , FRESH ASSESSMENTS ARE TO BE FRAME D BY THE LD AO U/S 153A OF THE ACT WHICH WOULD HAVE A BEARING ON THE DETERMINATION OF TOTAL INCOME BY CONSIDERING ALL THE ASPECTS, WHEREIN THE EXISTENCE OF INCRIMINATING MAT ERIALS DOES NOT HAVE ANY RELEVANCE. HOWEVER, IN RESPECT OF UNABATED ASSESSMENTS, THE LE GISLATURE HAD CONFERRED POWERS ON THE LD AO TO JUST FOLLOW THE ASSESSMENTS ALREADY C ONCLUDED UNLESS THERE IS AN INCRIMINATING MATERIAL FOUND IN THE SEARCH TO DISTU RB THE SAID CONCLUDED ASSESSMENT. IN OUR CONSIDERED OPINION, THIS WOULD BE THE CORRECT U NDERSTANDING OF THE PROVISIONS OF SECTION 153A OF THE ACT , AS OTHERWISE, THE NECESSI TY OF BIFURCATION OF ABATED AND UNABATED ASSESSMENTS IN SECTION 153A OF THE ACT WOU LD BECOME REDUNDANT AND WOULD LOSE ITS RELEVANCE. HENCE THE ARGUMENTS ADVANCED B Y THE LD DR IN THIS REGARD DESERVES TO BE DISMISSED. 9.8. IN VIEW OF THE AFORESAID FINDINGS AND RESPECTF ULLY FOLLOWING THE JUDICIAL PRECEDENTS RELIED UPON HEREINABOVE, WE HOLD THAT THE ASSESSMEN T FRAMED U/S 143(1) OF THE ACT FOR THE ASST YEAR 2009-10, WHICH WAS UNABATED / CONCLUD ED ASSESSMENT, ON THE DATE OF SEARCH, DESERVES TO BE UNDISTURBED IN THE ABSENCE O F ANY INCRIMINATING MATERIAL FOUND IN 12 ITA NO.1193/KOL/2017 M/S MAAN CAPITAL SERVICES PVT. LTD. A.YR. 2009-10 12 THE COURSE OF SEARCH AND ACCORDINGLY THE ADDITION M ADE ON ACCOUNT OF SHARE APPLICATION MONEY U/S 68 OF THE ACT IS HEREBY DIRECTED TO BE DE LETED. SINCE THE ISSUE IS ADDRESSED ON PRELIMINARY GROUND OF ABSENCE OF INCRIMINATING M ATERIALS, WE REFRAIN TO GIVE OUR FINDINGS ON THE MERITS OF THE ADDITION U/S 68 OF TH E ACT FOR THE ASST YEAR 2009-10. HENCE WE HOLD THAT THE LD CITA HAD RIGHTLY DELETED THE ADDITION WHICH DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN THE COURT ON 07.12.2018 SD/- SD /- [S.S. GODARA] [ M .BALAGANESH ] JUDICIAL MEMBER ACCOUNTANT MEM BER DATED : 07.12.2018 SB, SR. PS COPY OF THE ORDER FORWARDED TO: 1. DCIT,CC-4(1), KOLKATA, AAYAKAR BHAWAN POORVA, 11 0, SHANTIPALLY, 4 TH FLOOR, KOLKATA-700107. 2. M/S MAAN CAPITAL SERVICES PVT. LTD., 58/1, SARAT BOSE ROAD, KOLKATA-700025. 3..C.I.T.(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER A SSISTANT REGISTRAR ITAT , KOLKATA BENCHES 13 ITA NO.1193/KOL/2017 M/S MAAN CAPITAL SERVICES PVT. LTD. A.YR. 2009-10 13