DAMODAR DAS AGARWAL, Jaipur V. ACIT, Jaipur

ITA 152/JPR/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5354 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 18-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Opportunity of being heard; Onus to prove
• Section: 143(3); 153A; 15

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA- @ ITA NOS. 152 TO 155/JP/2015 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2004-05, 2005-06, 2007-08 & 2009-10 DAMODAR DAS AGARWAL, D-32, SUBHASH MARG, C-SCHEME, JAIPUR. CUKE VS. A.C.I.T., CENTRAL CIRCLE-1, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO.: AASPA 6446 N VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT VK;DJ VIHY LA- @ ITA NOS. 156 & 157/JP/2015 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2004-05 & 2007-08 NIRMAL KUMAR AGARWAL, 304, 3 RD FLOOR, RIDHI SIDHI APARTMENT, AHINSA CIRCLE, C-SCHEME, JAIPUR. CUKE VS. A.C.I.T., CENTRAL CIRCLE-1, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO.: ABIPA 1098 B VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI MANISH AGARWAL (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI M.S. MEENA (CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 09/03/2016 MN?KKS'K .KK DH RKJH[ K @ DATE OF PRONOUNCEMENT : 18/03/2016 ITA 152 TO 155/JP/2015 & 156 & 157/JP/2015_ DAMODAR DAS AGARWAL & NIRMAL KR AGARWAL VS. ACIT 2 VKNS'K @ ORDER PER: BENCH. THESE ARE TWO SETS OF APPEALS FILED BY THE TWO DIFFER ENT ASSESSEES, 1 ST SET OF APPEALS OF DAMODAR DAS AGARWAL ARISE AGAINST THE ORDER DATED 08/12/2014 PASSED BY THE LD CIT(A)-4, J AIPUR FOR A.Y. 2004-05, 2005-06, 2007-08 AND 2009-10 AND 2 ND SET OF APPEALS OF NIRMAL KUMAR AGARWAL ARISE AGAINST THE ORDER DATED 0 3/12/2014 PASSED BY THE LD CIT(A)-4, JAIPUR FOR A.Y. 2004-05 & 2007- 08. THE EFFECTIVE GROUND OF ONE OF THE APPEAL IS AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE ACTION OF LD. A.O. OF COMPLETING THE ASSESSMENT U/S 153A OF T HE IT ACT, 1961 WHEN NO INCRIMINATING PAPER WHATSOEVER WAS FOUND AS A RESULT OF SEARCH PERTAINING TO THE ASSESSMENT YEAR UNDER APPEAL AND THE ADDITIONS/DISALLOWANCES MADE BY LD A.O. WITHOUT REFERRING TO ANY SINGLE MATERIAL FOUND DURING THE SEARCH THUS CONSEQUENT ORDER PASSED DESERVES TO BE QUASHED. 1.1 THAT THE LD CIT(A) HAS FURTHER ERRED IN UPHOLDIN G THE ADDITIONS MADE U/S 143(3) R.W.S. 153A TO THE RETURNED INCOME OF ASSESSEE WITHOUT REFERRING TO A SINGLE PAPER/INCRIMINATING MATERIAL SEIZED DURING T HE COURSE OF PARTICULARLY WHEN NO ASSESSMENT PROCEEDINGS WERE PENDING BEFORE THE LD A.O. AS ON THE DATE OF SEARCH, THEREFORE THE ORDER OF LD CIT(A) DESERVES TO BE HELD BAD IN LAW AND THE CONSEQUENT ADDITIONS DESERVES TO BE DELETED. ITA 152 TO 155/JP/2015 & 156 & 157/JP/2015_ DAMODAR DAS AGARWAL & NIRMAL KR AGARWAL VS. ACIT 3 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE DISALLOWANCE OF RS. 64,235/- BEING EXCESS OF INTERES T PAID OVER THE INTEREST RECEIVED BY THE ASSESSEE WITHOUT IN ANY MANNER APPRECIATING THE NATURE OF BUSINESS IN WHICH THE APPELLANT IS ENGAGED, THUS THE EXPENSES OF RS. 64,235/- DESERVES TO BE ALLOWED AS CLAIMED. THE EFFECTIVE GROUND OF ASSESSEES APPEAL FOR A.Y. 2009-10. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE DISALLOWANCE OF RS. 43,065/- BEING EXCESS OF INTERES T PAID OVER THE INTEREST RECEIVED BY THE ASSESSEE WITHOUT IN ANY MANNER APPRECIATING THE NATURE OF BUSINESS IN WHICH THE APPELLANT IS ENGAGED, THUS THE EXPENSES OF RS. 43,065/- DESERVES TO BE ALLOWED AS CLAIMED. 2. IN OTHER APPEALS OF BOTH THE ASSESSEES, SIMILAR IDENTICAL GROUNDS HAVE BEEN TAKEN IN ALL THE YEARS. 3. ALL THE APPEALS FILED BY THE ASSESSEES HAVE BEEN HEARD TOGETHER AND ISSUE IN ALL THE APPEALS ARE IDENTICAL, THEREFO RE, FOR SAKE FOR CONVENIENCE, COMMON ORDER IS PASSED IN BOTH THE CAS ES OF ASSESSEES. 4. THE LD ASSESSING OFFICER OBSERVED THAT THE ASSESS EES ARE HAVING INCOME FROM FINANCE BROKERAGE. A SEARCH SEIZURE OPE RATION WAS CARRIED OUT U/S 132(1) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) ON 24/08/2009 AT THE BUSINESS AND RESIDENTIAL PREMISES OF THE ASSESSEE ITA 152 TO 155/JP/2015 & 156 & 157/JP/2015_ DAMODAR DAS AGARWAL & NIRMAL KR AGARWAL VS. ACIT 4 GROUP. DURING THE COURSE OF SEARCH AND SEIZURE OPER ATION, INCRIMINATING DOCUMENTS HAVE BEEN SEIZED. THEREFORE, NOTICE U/S 15 3A IN BOTH THE CASES FOR A.Y. 2004-05, 2005-06 AND 2007-08 IN THE CASE OF DAMODAR DAS AGARWAL AND IN THE CASE OF NIRMAL KUMAR AGARWAL I N A.Y. 2004-05 AND 2007-08 WERE ISSUED BY THE ASSESSING OFFICER. I N RESPONSE TO THIS NOTICE, THE ASSESSEE SUBMITTED VARIOUS DETAILS/INFO RMATION DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THEY ALSO PRODUCE D BOOKS OF ACCOUNT, WHICH HAVE BEEN EXAMINED BY THE ASSESSING O FFICER. THE LD ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD PA ID FOLLOWING INTEREST IN THE CASE OF DAMODAR DAS AGARWAL. S.NO. A.Y. AMOUNT PAID AMOUNT RECEIVED 1. 2004-05 82,500/- 18,265/- 2. 2005-06 3,51,405/- 1,96,409/- 3. 2007-08 5,56,513/- 4,15,773/- 4. 2009-10 71,847/- 28,782/- THE ASSESSEE HAD PAID FOLLOWING INTEREST IN THE CASE OF NIRMAL KUMAR AGARWAL. S.NO. A.Y. AMOUNT PAID AMOUNT RECEIVED 1. 2004-05 1,45,301/- 51,733/- 2. 2007-08 43,234/- 30,450 + 3,333/- ITA 152 TO 155/JP/2015 & 156 & 157/JP/2015_ DAMODAR DAS AGARWAL & NIRMAL KR AGARWAL VS. ACIT 5 THE LD ASSESSING OFFICER HELD THAT ON VERIFICATION O F THE BALANCE SHEET OF THE ASSESSEE, IT WAS FOUND THAT THE ASSESSEE HAD MA DE INVESTMENT IN SHARES OF VARIOUS PRIVATE LIMITED COMPANIES, PPF ET C. ON WHICH INCOME GENERATED BY THE ASSESSEE IS EXEMPTED, AS SUCH INTE REST BEARING LOAN HAD BEEN UTILIZED BY THE ASSESSEE ON SHARES AND PPF . HE GAVE REASONABLE OPPORTUNITY OF BEING HEARD IN ALL THE YE ARS IN ALL THE CASES. BOTH THE ASSESSEES CLAIMED BEFORE THE ASSESSING OFF ICER THAT WHATEVER UNSECURED LOAN TAKEN WERE WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF EXPANDING BUSINESS ACTIVITY AND HAS LEGITIMATELY CL AIMED THE INTEREST EXPENDITURE IN THE RETURN OF INCOME. AFTER CONSIDER ING THE ASSESSEES REPLY, IT HAS BEEN HELD THAT THERE IS NO DIRECT NEX US HAS BEEN ESTABLISHED BY THE ASSESSEE THAT BORROWED FUND ON I NTEREST HAS BEEN UTILIZED FOR THE BUSINESS PURPOSES. THUS, HE DISALLO WED INTEREST OF RS. 64,235/- IN A.Y. 2004-05, RS. 1,54,996/- IN A.Y. 20 05-06, RS. 1,40,740/- IN A.Y. 2007-08 AND RS. 43,065/- IN A.Y. 2009-10 IN THE CASE OF DAMODAR DAS AGARWAL, JAIPUR AND RS. 93,568/- IN A.Y. 2004-05 AND RS. 1,09,450/- IN A.Y. 2007-08 IN THE CASE OF NIRMAL KU MAR AGARWAL. 5. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, BOTH THE ASSESSEES CHALLENGED THE ORDER BEFORE THE LD CIT(A), WHO HAD CONFIRMED THE DISALLOWANCES BY OBSERVING THAT THE AS SESSING OFFICER HAD ITA 152 TO 155/JP/2015 & 156 & 157/JP/2015_ DAMODAR DAS AGARWAL & NIRMAL KR AGARWAL VS. ACIT 6 GIVEN A CATEGORICAL FINDING THAT THE APPELLANT WAS N OT ABLE TO ESTABLISH THE BUSINESS INTEREST BEING SERVED BY THESE INTERES T FREE LOANS. DURING THE APPELLATE PROCEEDINGS ALSO, NO SPECIFIC DETAILS HAD BEEN BROUGHT ON RECORD TO ESTABLISH THE INTER UNIT BUSINESS TRANSAC TIONS TO PROVE THAT THESE INTEREST FREE ADVANCES WERE FOR BUSINESS INTER EST OF THE APPELLANT AND ALSO THE ASSESSEE HAS NOT ABLE TO DEMONSTRATE T HAT INTEREST FREE FUND AVAILABLE WITH THE ASSESSEE IN FORM OF RESERVE OR CAPITAL FUND FOR ADVANCING INTEREST FREE TO THE OTHER PERSON. WHERE MIXED FUND USED FOR BOTH THE PURPOSES I.E. FOR BUSINESS AND INTEREST FR EE ADVANCES, THE ASSESSEE CAN BE AVAILED THE EXEMPTION OF DISALLOWANC E OF INTEREST UP TO RESERVE AND CASH SURPLUS AVAILABLE AND CAPITAL EMPL OYED BUT NO DETAILS HAVE BEEN SUBMITTED BY THE ASSESSEE. FURTHER HE REL IED ON THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF ABHISHEK INDUSTRIES LTD. (2006) 286 ITR WHEREIN IT HAS BEEN HE LD THAT THE ASSESSEE WILL NOT BE ENTITLED TO CLAIM DEDUCTION OF INTEREST ON THE BORROWINGS TO THE EXTENT THOSE BORROWINGS ARE DIRECT ED TO THE SISTER CONCERNS OR OTHERS WITHOUT INTEREST. THEREFORE, HE CO NFIRMED THE ADDITION IN BOTH THE CASES. 6. NOW THE ASSESSEES ARE IN APPEALS BEFORE US. THE LD AR OF THE ASSESSEES HAS SUBMITTED THAT THE ASSESSEE HAD FILED HIS RETURN OF ITA 152 TO 155/JP/2015 & 156 & 157/JP/2015_ DAMODAR DAS AGARWAL & NIRMAL KR AGARWAL VS. ACIT 7 INCOME U/S 139(1) OF THE ACT, WHICH WERE PROCESSED U/ S 143(1)(A) OF THE ACT AND INCOME AS DECLARED BY THE ASSESSEE IN T HE RESPECTIVE RETURN STOOD ACCEPTED AS NO NOTICE U/S 143(2) WERE ISSUED I N ALL THE YEARS TILL THE EXPIRY OF PERIOD PROVIDED THEREUNDER. THEREAFTER , A SEARCH U/S 132(1) OF THE ACT WAS CARRIED OUT ON 24/8/2009 AT T HE BUSINESS AND RESIDENTIAL PREMISES OF THE GROUP TO WHICH ASSESSEE BELONGS. SUBSEQUENTLY, NOTICES U/S 153A WAS ISSUED ON 15/01/2 010 IN ALL THE CASES EXCEPT A.Y. 2009-10 IN CASE OF DAMODAR DAS AG ARWAL. HE HAS FURTHER DRAWN OUR ATTENTION ON CHART TO DEMONSTRATE THAT DUE DATE OF ISSUE OF NOTICE U/S 143(2) HAD ALREADY BEEN EXPIRED . THE CHART IN THE CASE OF DAMODAR DAS AGARWAL IS AS UNDER:- A.Y. DATE OF RETURN U/S 139(1) LAST DATE FOR NOTICE U/S 143(2) DATE OF SEARCH DATE OF NOTICE U/S 153A DATE OF SERVICE OF NOTICE U/S 153A DATE OF FILING OF RETURN U/S 153A 2004-05 27/10/2004 31/10/2005 24/08/2009 15/01/2010 21/01/2010 23/02/2010 2005-06 31/07/2005 31/07/2006 24/08/2009 15/01/2010 21/01/2010 23/02/2010 2007-08 31/08/2007 31/08/2008 24/08/2009 15/01/2010 21/01/2010 23/02/2010 2009-10 - - 24/08/2009 15/01/2010 21/01/2010 31/03/2010 THE CHART IN THE CASE OF NIRMAL KUMAR AGARWAL IS AS U NDER:- A.Y. DATE OF RETURN U/S 139(1) LAST DATE FOR NOTICE U/S 143(2) DATE OF SEARCH DATE OF NOTICE U/S 153A DATE OF SERVICE OF NOTICE U/S 153A DATE OF FILING OF RETURN U/S 153A 2004-05 29/10/2004 31/10/2005 24/08/2009 15/01/2010 21/01/2010 23/02/2010 2007-08 31/08/2007 31/08/2008 24/08/2009 15/01/2010 21/01/2010 23/02/2010 SINCE NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH PERTAINED TO THE YEAR UNDER APPEAL. NO ADDITIONAL I NCOME WAS ADMITTED ITA 152 TO 155/JP/2015 & 156 & 157/JP/2015_ DAMODAR DAS AGARWAL & NIRMAL KR AGARWAL VS. ACIT 8 OFFERED BY THE ASSESSEE IN THE RETURN OF INCOME FIL ED U/S 153A. AS PER RULE, THE ASSESSEES CASE WAS SCRUTINIZED U/S 153A R EAD WITH SECTION 143(3) OF THE ACT AND A LUMP SUM DISALLOWANCE OUT OF GENERAL AND INTEREST EXPENSES CLAIMED BY THE ASSESSEE HAD BEEN MADE BY THE ASSESSING OFFICER. THIS ACTION ON THE PART OF ASSESS ING OFFICER IS SQUARELY OUT OF JURISDICTION AS SECTION 153A DOES N OT AUTHORIZE TO HIM TO COMPLETE THE ASSESSMENT UNDER THE SECTION WITHOUT RE FERRING TO ANY SEIZED MATERIAL. THE ASSESSEE PREFERRED APPEAL BEFOR E THE LD CIT(A), WHO HAD ALLOWED THE APPEAL PARTLY BUT CONFIRMED THE D ISALLOWANCE OF INTEREST EXPENSES. THE ASSESSEE ALSO TAKEN LEGAL GR OUND BEFORE THE LD CIT(A) AND HAD CHALLENGED THE PROCEEDING INITIATED U/S 153A READ WITH SECTION 143(3) IN ABSENCE OF ANY MATERIAL BEING FOU ND DURING THE COURSE OF SEARCH. BY COMPLETELY IGNORING THE SETTLE D LAW THAT NO ASSESSMENT U/S 153A READ WITH SECTION 143(3) CAN BE MADE WITHOUT REFERRING TO ANY MATERIAL FOUND DURING THE COURSE O F SEARCH. IT IS FURTHER SUBMITTED THAT NO MATERIAL WHATSOEVER, WHICH CAN BE T ERMED TO BE ON INCRIMINATING NATURE AND INDICATING ANY UNDISCLOSED INCOME PERTAINING TO RELEVANT YEAR WERE FOUND DURING THE COURSE OF SEA RCH. THEREFORE, ORDER OF THE ASSESSING OFFICER SUFFERS FROM SERIOUS ERRORS AND WHICH IS ALSO CONTRARY TO THE SETTLED LAW. THESE DISALLOWANCES CAN BE MADE IN ITA 152 TO 155/JP/2015 & 156 & 157/JP/2015_ DAMODAR DAS AGARWAL & NIRMAL KR AGARWAL VS. ACIT 9 THE REGULAR ASSESSMENT BY THE ASSESSING OFFICER. TH E TIME FOR SCRUTINIZING THE CASE AS MENTIONED IN THE CHART HAS ALREADY BEEN EXPIRED AS THE ASSESSEES CASES WERE NOT PICKED UP FO R SCRUTINY BY THE DEPARTMENT. THEREFORE, HE PRAYED TO QUASH THE PROCEE DINGS INITIATED BY THE ASSESSING OFFICER U/S 153A OF THE ACT. HE FURTH ER RELIED ON THE DECISION OF HONBLE SPECIAL BENCH OF ITAT, MUMBAI IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. VS DCIT (2012) 18 ITR (TR IB) 106 (MUM) (SB) WHEREIN IT HAS BEEN HELD THAT RETURNED INCOME HAS BEEN ACCEPTED AND NO ASSESSMENT WAS PENDING BEFORE THE ASSESSING O FFICER. THE QUESTION OF ABATING THEREOF WOULD NOT ARISE AND THER EFORE, THE LD ASSESSING OFFICER SHALL HAVE NO POWER TO COMPLETE AS SESSMENT U/S 153A WITHOUT REFERRING TO ANY SEIZED MATERIAL. HE FURTHER RELIED ON THE DECISION IN THE CASE OF GURINDER SINGH BAWA VS. DCIT (2012) 28 TAXMANN.COM 328 (MUM TRIB) WHEREIN SIMILAR VIEW HAS BE EN UPHELD BY THE HONBLE ITAT, MUMBAI BENCH. IN THE CASE OF JAI S TEEL INDIA VS ACIT 259 CTR 282 WHEREIN THE HONBLE JURISDICTIONAL HIGH COURT HAS HELD THAT IN SECTION 153A WORD ASSESS HAS BEEN USED THE CONT EXT OF ABATED PROCEEDINGS AND REASSESS HAS BEEN USED FOR COMPLE TED ASSESSMENT PROCEEDINGS WHICH DO NOT ABATE AS THEY ARE NOT PENDI NG ON THE DATE OF INITIATION OF THE SEARCH OR MAKING OF REQUISITION A ND CAN BE TINKERED ONLY ITA 152 TO 155/JP/2015 & 156 & 157/JP/2015_ DAMODAR DAS AGARWAL & NIRMAL KR AGARWAL VS. ACIT 10 ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH, THEREFORE, IT IS NOT OPEN TO THE ASSESSEE TO SEEK D EDUCTION OR CLAIM RELIEF NOT CLAIMED ON IT IN THE ORIGINAL ASSESSMENT , WHICH ALREADY STANDS COMPLETED IN ASSESSMENT U/S 153A MADE IN PURSUANCE OF A SEARCH OR REQUISITION. HE FURTHER RELIED ON THE FOLLOWING CASE LAWS:- (I) KUSUM GUPTA VS DCIT, ITA NOS. 4873/DEL/2009, (20 05- 06) 2510 (A.Y. 2003-04), 3312 (A.Y. 2004-05) 2833/DEL/2011(A.Y. 2006-07). (II) MFG AUTOMOBILES LTD. VS ACIT, ITA NOS. 4212 & 4213/DEL/2011. (III) TARANNUM ZAFAR KHAN VS ACIT, ITA NOS. 5888 TO 5890/MUM/2009. (IV) VEE GEE INDUSTRIAL ENTERPRISES VS. ACIT, ITA NO . 1/DEL/2011 & ITA NO. 2/DEL/2011. (V) ACIT VS SHRI MANOJ NARAIN AGGARWAL, ITA NOS. 5518 TO 5524/DEL/2012. (VI) MIR MAZHARUDIN ITA NOS. 1153 TO 1159 TO 1159/H YD/2012, ORDER DATED 24/1/2013 (VII) ASHA KATARIA, ITA NOS. 3105, 3106 & 3107/DEL/ 2011, ORDER DATED 20/5/2013. THUS, IT IS CLEAR FROM THE ABOVE LEGAL POSITION SETT LED BY THE VARIOUS ITATS AND COURTS THAT NO ADDITION CAN BE MADE IN THE PROCEEDINGS U/S 153A WITHOUT REFERRING TO ANY SEIZED MATERIAL. THE LD CIT(A) HAS CONSIDERED THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT IN THE CASE ITA 152 TO 155/JP/2015 & 156 & 157/JP/2015_ DAMODAR DAS AGARWAL & NIRMAL KR AGARWAL VS. ACIT 11 OF CANARA HOUSING DEVELOPMENT CO. VS DCIT DATED 09/8 /2014 WHICH HAS BEEN RECONSIDERED BY THE HONBLE DELHI HIGH COU RT IN THE CASE OF CIT VS KABUL CHAWLA 234 TAXMAN 300 (DELHI) WHEREIN IT HAS BEEN HELD THAT IN CASE OF CANARA HOUSING DEVELOPMENT CO. VS D CIT, INCRIMINATING DOCUMENTS WERE FOUND DURING THE COURSE OF SEARCH. THE REFORE, EVEN THE HONBLE KARNATAKA HIGH COURT DECISION IS ALSO IN FA VOUR OF THE ASSESSEE. IT IS ALSO A TRITE LAW THAT WHEN THERE IS TWO OPINION ON THE ISSUE BY THE JURISDICTIONAL HIGH COURT AS WELL AS OTHER HIGH COUR T, THE JURISDICTIONAL HIGH COURT VIEW WILL PREVAIL ON THE CASE OF ASSESSEE. HE FURTHER RELIED ON THE DECISION OF HONBLE ITAT, JAIPUR BENCH IN THE CASE OF M/S JADAU JEWELLERS VS. ACIT ITA NO. 686/JP/2014 VIDE ORDER DAT ED 14/12/2015. 6.1 ON MERIT ALSO, IT WAS SUBMITTED THAT THE ASSESS EE WAS HAVING SUFFICIENT FUND OF HIS OWN TO MAKE INVESTMENT/GIVE A DVANCES, WHICH WAS DULY APPEARING IN THE BALANCE SHEET IN RESPECT O F ASSESSMENT YEAR UNDER APPEAL. THUS WHEN THE ASSESSEE WAS HAVING HIS O WN INTEREST FREE FUND THEN THE NATURAL PRESUMPTION TO BE TAKEN IS TH AT ANY ADVANCE/INVESTMENT HAVE BEEN MADE OUT OF OWN FUND A ND NOT OUT OF THE BORROWED FUND AS HELD BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS RELIANCE UTILITIES & POWER LTD. 313 ITR 340 (BOM). THE BURDEN OF PROOF IS ON THE REVENUE TO ESTABLISH THAT INTEREST BEARING FUND ITA 152 TO 155/JP/2015 & 156 & 157/JP/2015_ DAMODAR DAS AGARWAL & NIRMAL KR AGARWAL VS. ACIT 12 HAD BEEN ADVANCED BY THE ASSESSEE TO THE INTEREST F REE ADVANCES. THE LD ASSESSING OFFICER FAILED TO ESTABLISH THE ONUS C AST UPON HIM. HE SIMPLY MADE ADDITION IN SURMISES AND CONJECTURE. HE FURTHER RELIED ON THE FOLLOWING DECISIONS: (I) 298 ITR 298 MUNJAL SALES CORPORATION VS. CIT & O RS (SC) (II) CIT VS HOTEL SAVERA 239 ITR 795 (MAD). (III) 142 TAXMAN 681 (ALL) CIT VS RADICO KHAITAN LTD . (IV) 114 TTJ 124 COMET HANDICRAFTS VS. ACIT (ITAT DELH I BENCH) IT IS FURTHER SUBMITTED THAT THE ASSESSEE HAD BORRO WED THE FUND WHOLLY AND EXCLUSIVELY FOR THE BUSINESS PURPOSES. FURTHER THE BUSINESS EXPEDIENCY HAS TO BE JUDGED FROM THE PERSPECTIVE OF THE ASSESSEE AND THE LD ASSESSING OFFICER CANNOT STEP INTO SHOES OF THE BUSINESSMAN TO EXAMINE THE EXPEDIENCY OF ANY INVESTMENT MADE BY TH E ASSESSEE. FOR WHICH HE RELIED ON THE DECISION IN THE CASE OF S.A. BUILDERS LTD. VS CIT(A) 288 ITR 1 (SC) AND EMPIRE JUTE CO. LTD. VS. C IT 124 ITR 1 (SC). THEREFORE, HE PRAYED TO DELETE THE ADDITION CONFIRME D BY THE LD CIT(A). 7. AT THE OUTSET, THE LD DR HAS VEHEMENTLY SUPPORTE D THE ORDER OF THE LD CIT(A) AND ARGUED THAT A DETAILED FINDINGS HA S BEEN GIVEN BY THE ITA 152 TO 155/JP/2015 & 156 & 157/JP/2015_ DAMODAR DAS AGARWAL & NIRMAL KR AGARWAL VS. ACIT 13 LD CIT(A) IN RESPECTIVE ASSESSMENT YEARS, THEREFORE, HE PRAYED TO CONFIRM THE ORDER OF THE LD CIT(A). 8. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IT IS UNDISPUTED FACT THAT THERE WAS A SEARCH SEIZURE OPERATION AT THE BUSINESS AS WELL AS RESIDENTIAL PREMISES OF THE ASSESSEE. DURING THE CO URSE OF SEARCH, NO INCRIMINATING DOCUMENTS WERE FOUND AS REVEALED FROM THE ORDER OF THE ASSESSING OFFICER. EVEN DURING THE COURSE OF ASSESS MENT PROCEEDINGS, THE LD CIT(A) AND BEFORE US THE LD DR HAD NOT BROUGH T OUR NOTICE THAT SOME INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED D URING THE COURSE OF SEARCH. THE CASE LAWS RELIED BY THE LD CIT(A) I.E. CANARA HOUSING DEVELOPMENT CO. VS DCIT (SUPRA), WHICH WAS CONSIDERED BY THE HONBLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA (SUPRA) HAS HELD THAT THERE WAS INCRIMINATING DOCUMENTS FOUND DURING THE C ASE OF CANARA HOUSING DEVELOPMENT CO. VS DCIT (SUPRA), WHICH HAS BE EN CONSIDERED BY THE HONBLE DELHI HIGH COURT. IT IS ALSO UNDISPU TED FACT THAT TIME LIMIT FOR ISSUE OF NOTICE U/S 143(2) IN A.Y. 2004-05, 200 5-06 AND 2007-08 IN CASE OF DAMODAR DAS AARWAL AND FOR A.Y. 2004-05 AND 2007-08 IN THE CASE OF NIRMAL KUMAR AGARWAL HAS ALREADY EXPIRED. THE LAST DATE OF ISSUE OF NOTICE U/S 143(2) WAS ON 31/8/2008 WHEREAS S EARCH WAS ITA 152 TO 155/JP/2015 & 156 & 157/JP/2015_ DAMODAR DAS AGARWAL & NIRMAL KR AGARWAL VS. ACIT 14 CARRIED OU 24/8/2009. THE NOTICES U/S 153A WERE ISSUE D ON 15/1/2010 IN ALL THE YEARS. EVEN FOR A.Y. 2007-08 IN BOTH THE CASES, NO NOTICE U/S 143(2) WAS ISSUED ON OR BEFORE 31/8/2008. IT IS SETT LED LAW WHEN NO ASSESSMENT PROCEEDINGS ARE ABATED ON THE DATE OF SE ARCH, NO NOTICE CAN BE SENT U/S 153A OF THE ACT TO THE ASSESSEE IN THE CASE OF NO INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED DURING THE COURSE OF SEARCH. THEREFORE, WE HAVE CONSIDERED VIEW THAT NOTIC E ISSUED BY THE ASSESSING OFFICER U/S 153A FOR A.Y. 2004-05, 2005-0 6 AND 2007-08 IN THE CASE OF DAMODAR DAS AGARWAL AND FOR A.Y. 2004-05 AND 2007-08 IN THE CASE OF NIRMAL KUMAR AGARWAL ARE OUT OF JURISDIC TION, ACCORDINGLY WE QUASH THE ORDER OF THE ASSESSING OFFICER AND CONFIR MED BY THE LD CIT(A). WE DO NOT FIND ANY REASON TO MAKE DISALLOWANC E OF INTEREST U/S 36 OF THE ACT FOR A.Y. 2009-10 IN THE CASE OF DAMOD AR DAS AGARWAL AS THE ASSESSEE HAS CAPITAL RS. 1.72 CRORES AGAINST TH E INVESTMENT OF RS. 1.26 CRORES AND LOAN AND ADVANCES OF RS. 42.36 LACS . CAPITAL IS MORE THAN INVESTMENT MADE AND LOAN ADVANCE GIVEN. THE DEC ISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. RELIANCE UT ILITIES & POWER LTD. (SUPRA) IS SQUARELY APPLICABLE IN THE CASE OF ASSES SEE. FURTHER THE LD ASSESSING OFFICER HAS NOT ESTABLISHED THE NEXUS BET WEEN THE INTEREST ITA 152 TO 155/JP/2015 & 156 & 157/JP/2015_ DAMODAR DAS AGARWAL & NIRMAL KR AGARWAL VS. ACIT 15 BEARING LOAN WITH INTEREST FREE ADVANCES GIVEN, THER EFORE, WE ALSO DELETE THE ADDITION MADE IN THE A.Y. 2009-10 IN REG ULAR ASSESSMENT. 9. IN THE RESULT, APPEALS OF BOTH THE ASSESSEES FOR ALL THE ASSESSMENT YEARS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18/03/2016. SD/- SD/- VKJ-IH-RKSYKUH VH-VKJ-EHUK (R.P.TOLANI) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ @ JAIPUR FNUKAD @ DATED:- 18 TH MARCH, 2016 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI DAMODAR DAS AGARWAL/ NIRMAL KUMAR AGARWAL, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE ACIT, CENTRAL CIRCLE-1, JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NOS. 152 TO 155/JP/2015 & 156 & 157/JP/2015) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR