M/s.GMR Energy Limited, Bangalore V. Dy. Commissioner of Income-Tax, Bangalore

ITA 1917/BANG/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7297 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 15-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BISWARANJAN SASMAL
• Assessee Lawyers: SUNIL JAIN
• Keywords: Transfer pricing; Search and seizure; Opportunity of being heard; Commercial expediency
• Section: 143(3); 153A; 14A; 115JB; 132; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBERAN D SHRI LALIET KUMAR, JUDICIAL MEMBER IT A NOS. 1917 & 1918/BANG/2016 ASSESSMENT YEAR S : 2007 - 08 & 2008 - 09 M/S. GMR ENERGY LTD., 25/1, SKIP HOUSE, MUSEUM ROAD, BANGALORE 560 025. PAN: AAACT 8420A VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(2), BANGALORE. APPELLANT RESPONDENT IT A NO. 1987/BANG/2016 ASSESSMENT YEAR : 20 07 - 08 THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2(2), BANGALORE. VS. M/S. GMR ENERGY LTD., 25/1, SKIP HOUSE, MUSEUM ROAD, BANGALORE 560 025. PAN: AAACT 8420A APPELLANT RESPONDENT ASSESSEE BY : SHRI SUNIL JAIN, CA REVENUE BY : SHRI BISWARANJANSASMAL, CIT (DR) DATE OF HEARING : 1 4 . 1 1 .201 7 DATE OF PRONOUNCEMENT : 21 .1 1 .2017 O R D E R PER BENCH: OUT OF THESE THREE APPEALS, THERE ARE TWO CROSS APP EALS OF THE ASSESSEE AND REVENUE FOR ASSESSMENT YEAR 2007-08 WHICH ARE DIREC TED AGAINST THE ORDER OF CIT (A)-11, BANGALORE DATED 29.08.2016 AND THE REMA INING THIRD APPEAL IS FOR ASSESSMENT YEAR 2008-09 WHICH IS FILED BY THE ASSES SEE AND THIS IS DIRECTED AGAINST A SEPARATE ORDER OF CIT (A)-11 DATED 29.08. 2016. 2. ALL THESE APPEALS WERE HEARD TOGETHER AND ARE BE ING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NOS. 1917, 1918 & 1987/BANG/2016 PAGE 2 OF 9 3. THE GROUNDS RAISED BY THE ASSESSEE IN ASSESSMENT YEAR 2007-08 IN ITA NO. 1917/BANG/2016 ARE AS UNDER. GROUND 1: ORDER PASSED UNDER SECTION 143(3) R.W.S. 153A IS LIABLE TO BE QUASHED 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT IN CASE A NOTICE U NDER SECTION 153A IS ISSUED THE ASSESSING OFFICER IS BOUND TO ASSESS AND REASSESS THE TOTAL INCOME OF THE APPELLANT. 2. THE JOINT COMMISSIONER OF INCOME-TAX, CIRCLE-2(3 ), HYDERABAD HAS COMPLETED THE ASSESSMENT OF THE APPELLANT VIDE ORDE R DATED JULY 31, 2008 PASSED UNDER SECTION 143(3) AND IN THE COURSE OF SUCH ASSESSMENT PROCEEDINGS FULL SCRUTINY AND EXAMINATIO N WAS MADE. A SEARCH AND SEIZURE OPERATION UNDER SECTION 132 WAS CONDUCTED ON OCTOBER 11, 2012 AND DURING THE COURSE OF SEARCH NO INCRIMINATING DOCUMENTS OR UNDISCLOSED INCOME WAS FOUND. 3. THE CIT(A) HAS ERRED IN NOT CONSIDERING THAT HAV ING REGARD TO THE SECOND PROVISO TO SECTION 153A, THE COMPLETED ASSES SMENT CANNOT BE DISTURBED EXCEPT ONLY IN THE CASE WHERE THERE IS AN Y UNDISCLOSED INCOME FOUND IN THE COURSE OF SEARCH OR ANY INCRIMI NATING DOCUMENTS POINTING TOWARDS SUCH UNDISCLOSED INCOME IS FOUND I N THE COURSE OF SEARCH OR IN THE COURSE OF ASSESSMENT PROCEEDINGS U NDER SECTION 153A OF THE INCOME-TAX ACT. 4. THE APPELLANT THEREFORE PRAYS THAT THE ORDER PAS SED BY THE ASSESSING OFFICER IS CONTRARY TO THE PROVISIONS OF LAW AND LIABLE TO BE QUASHED SINCE NO UNDISCLOSED INCOME IS FOUND IN THE COURSE OF SEARCH OR IN THE COURSE OF PROCEEDINGS UNDER SECTION 153A. WITHOUT PREJUDICE TO THE ABOVE GROUND 2: DISALLOWANCE UNDER SECTION 14A 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT (A) HAS ERRED IN HOLDING THAT DISALLOWANCE UNDE R SECTION 14A TO BE MADE AT 1.50% OF DIVIDEND INCOME OF RS.5,04, 74, 862/- TOWARDS INDIRECT EXPENSES INCURRED FOR EARNING THE DIVIDEND INCOME OVER AND ABOVE THE EXPENSES CONSIDERED BY THE APPELLANT FOR DISALLOWANCE UNDER SECTION 14A OF RS.57,756/-. THE AMOUNT OF DIS ALLOWANCE UNDER SECTION 14A AS PER THE LEARNED CIT(A) WORKS OUT TO RS.8,14,879/- [RS.7,57,123 (1.50% OF DIVIDEND INCOME) + RS.57,756 ]. 2. THE ADDITIONAL AMOUNT OF DISALLOWANCE WORKED OUT AT RS. 7,57, 123/- IN NO CASE CAN BE CONSIDERED AS THE AMOUNT IN CURRED TO EARN EXEMPTED INCOME FOR THE PURPOSE OF SECTION 14A. ITA NOS. 1917, 1918 & 1987/BANG/2016 PAGE 3 OF 9 3. THE APPELLANT THEREFORE PRAYS THAT THE ASSESSING OFFICER BE DIRECTED TO DELETE THE DISALLOWANCE OF RS. 7,57,123/- MADE U NDER SECTION 14A. GROUND 3: COMPUTATION OF BOOK PROFIT UNDER SECTION 115JB 1. THE LEARNED CIT(A) FAILED TO APPRECIATE AND OUGH T TO HAVE HELD THAT FOR THE PURPOSE OF COMPUTATION OF BOOK PROFIT UNDER SECTION 115JB, THE ACTUAL AMOUNT INCURRED FOR EARNING EXEMPTED INC OME HAVING REGARD TO BOOKS OF ACCOUNT IS TO BE CONSIDERED AND NOT 1.50% OF DIVIDEND INCOME EARNED. 2. THE APPELLANT THEREFORE PRAYS THAT THE ASSESSING OFFICER BE DIRECTED TO CONSIDER THE AMOUNT FOR ADD BACK TO THE AMOUNT O F NET PROFIT AS IS BEING INCURRED TO EARN EXEMPTED INCOME HAVING REGAR D TO THE BOOKS OF ACCOUNT. GROUND 4: DEDUCTION UNDER SECTION 80IA 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) HAS ERRED IN UPHOLDING THE ACTION OF THE ASS ESSING OFFICER THAT INTEREST INCOME ON DEPOSITS WITH BANKS PLACED AS PE R TRUST AND RETENTION ACCOUNT AGREEMENT OF RS.7,56,42,184/- IS NOT DERIVED FROM THE BUSINESS OF POWER GENERATION AND CONSEQUENTLY N OT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA. 2. THE APPELLANT HAS AVAILED LOANS FOR SETTING UP O F POWER PLANT. IT HAS ENTERED INTO TRUST AND RETENTION ACCOUNT (TRA) AGREEMENT DATED MARCH 21, 2001 AT THE INSTANCE OF LENDERS TO ENSURE THAT A CERTAIN MINIMUM AMOUNT OF LIQUIDITY IS MAINTAINED FOR THE P URPOSES OF MEETING VARIOUS OBLIGATION OF THE COMPANY. TILL TH E TIME THE ACTUAL PAYMENTS ARE MADE THE PROJECT COMPANY IS ALLOWED UN DER THE TRA AGREEMENT, TO PARK THESE FUNDS IN CERTAIN PERMITTED CATEGORIES OF INVESTMENTS. 3. THE APPELLANT THEREFORE PRAYS THAT THE ASSESSING OFFICER BE DIRECTED TO TREAT THE INTEREST INCOME ON DEPOSITS WITH BANKS AS PER TRA AGREEMENT AS DERIVED FROM THE BUSINESS OF POWER GEN ERATION AND ACCORDINGLY ELIGIBLE DEDUCTION U/S.80IA ON THE SAME . GROUND 5: THE APPELLANT CRAVES LEAVE TO ADD, ALTER AND/OR AME ND ALL OR ANY OF THE FOREGOING GROUNDS OF APPEAL. 4. THE GROUNDS RAISED BY THE REVENUE IN THIS YEAR I N ITA NO. 1987/BANG/2016 ARE AS UNDER. 1. WHETHER CIT(A) WAS RIGHT IN HOLDING THE MARGIN M ONEY DEPOSITS WITH BANKS FOR BANK GUARANTEE & INCOME FROM FOREIGN EXCHANGE GAIN NOT TREATING AS THE INCOME FROM OTHER SOURCES. ITA NOS. 1917, 1918 & 1987/BANG/2016 PAGE 4 OF 9 5. THE GROUNDS RAISED BY THE ASSESSEE IN ASSESSMENT YEAR 2008-09 IN ITA NO. 1918/BANG/2016 ARE AS UNDER. GROUND 1: ADJUSTMENT TOWARDS INTEREST-FREE FINANCIA L ASSISTANCE PROVIDED TO THEASSOCIATED ENTERPRISE 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) HAS ERRED IN UPHOLDING THE ACTION OF THE ASS ESSING OFFICER THAT INTEREST IS TO BE CHARGED UNDER SECTION 92 ON THE A MOUNT OF INTEREST- FREE FINANCIAL ASSISTANCE PROVIDED TO GMR ENERGY MA URITIUS LIMITED, ASSOCIATED ENTERPRISE (AE). THE LEARNED CIT(A) HAS HELD THAT ADJUSTMENT IS TO BE MADE AT LLBOR PLUS ADDITIONAL C HARGE AS AGAINST ANNUALIZED AVERAGE YIELD ON 5 YEARS BB RATED BOND ( 17.27%) CONSIDERED BY THE ASSESSING OFFICER. 2. THE APPELLANT HAS PROVIDED FINANCIAL ASSISTANCE OF USD 2.50 MN TO GMR ENERGY MAURITIUS LIMITED (AE) FOR MEETING THE B USINESS DEVELOPMENT ACTIVITIES AND HAS NOT CHARGED INTEREST AS A MEASURE OF COMMERCIAL EXPEDIENCY. THE APPELLANT HAS NOT DERIVE D ANY INCOME AND IN THE ABSENCE OF WHICH, THE TRANSFER PRICING R EGULATIONS ARE NOT APPLICABLE. 3. THE APPELLANT THEREFORE PRAYS THAT THE ASSESSING OFFICER BE DIRECTED TO DELETE THE ADJUSTMENT MADE TOWARDS INTEREST-FREE FINANCIAL ASSISTANCE PROVIDED TO ASSOCIATED ENTERPRISE. GROUND 2: DISALLOWANCE UNDER SECTION 14A 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) HAS ERRED IN UPHOLDING THE ACTION OF THE ASS ESSING OFFICER IN MAKING DISALLOWANCE UNDER SECTION 14A AT RS.3,03,27 ,000/- BEING 0.50% OF AVERAGE EXEMPT INVESTMENTS. 2. THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT A F RESH GROUND ON A SETTLED ISSUE BY ITAT CANNOT BE ALLOWED IN SEARCH P ROCEEDINGS AS THE APPELLANT FAILED TO TAKE PLEA DURING THE ASSESSMENT PROCEEDINGS OR APPELLATE PROCEEDINGS. THE APPELLANT DURING THE COU RSE OF ORIGINAL ASSESSMENT PROCEEDINGS AND APPELLATE PROCEEDINGS HA S TAKEN UP THE ISSUE OF DISALLOWANCE U/S.14A AND IT IS NOT A FRESH GROUND. 3. THE LEARNED CIT(A) FAILED TO APPRECIATE AND OUGH T TO HAVE HELD THAT THE APPELLANT HAS INVESTED IN THE SUBSIDIARY COMPAN IES TO HOLD STRATEGIC INVESTMENT IN SUBSIDIARIES AND THEREFORE THE SAID INVESTMENTS COULD NOT BE CONSIDERED FOR DISALLOWANCE UNDER SECT ION 14A OF THE ACT. 4. THE ADDITIONAL AMOUNT OF DISALLOWANCE WORKED OUT AT RS.3,03,27,000/-BASED ON FORMULA PRESCRIBED IN RULE 8D(2)(III) IN NO CASE CAN BE CONSIDERED AS THE AMOUNT INCURRED TO EA RN EXEMPTED INCOME FOR THE PURPOSE OF SECTION 14A. ITA NOS. 1917, 1918 & 1987/BANG/2016 PAGE 5 OF 9 5. THE APPELLANT THEREFORE PRAYS THAT THE ASSESSING OFFICER BE DIRECTED TO DELETE THE DISALLOWANCE OF RS.3,03,27,000/-MADE UNDER SECTION 14A READ WITH RULE 8D(2)(III). GROUND 3: COMPUTATION OF BOOK PROFIT UNDER SECTION 115JB 1. THE LEARNED CIT(A) FAILED TO APPRECIATE AND OUGH T TO HAVE HELD THAT FOR THE PURPOSE OF COMPUTATION OF BOOK PROFIT UNDER SECTION 115JB, THE ACTUAL AMOUNT INCURRED FOR EARNING EXEMPTED INC OME HAVING REGARD TO BOOKS OF ACCOUNT IS TO BE CONSIDERED AND NOT THE AMOUNT WORKED OUT BASED ON FORMULA PRESCRIBED IN RULE 8D(2 )(III). 2. THE APPELLANT THEREFORE PRAYS THAT THE ASSESSING OFFICER BE DIRECTED TO CONSIDER THE AMOUNT FOR ADD BACK TO THE AMOUNT O F NET PROFIT AS IS BEING INCURRED TO EARN EXEMPTED INCOME HAVING REGAR D TO THE BOOKS OF ACCOUNT. GROUND 4: THE APPELLANT CRAVES LEAVE TO ADD, ALTER AND/OR AME ND ALL OR ANY OF THE FOREGOING GROUNDS OF APPEAL. 6. THE ASSESSEE HAS RAISED SOME ADDITIONAL GROUNDS ALSO IN THIS YEAR WHICH READ AS UNDER. ORDER PASSED UNDER SECTION 143(3) R.W.S. 153A AND 1 44C IS LIABLE TO BE QUASHED 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LEARNED CIT(A) HAS ERRED IN HOLDING THAT IN CASE A NOTICE U NDER SECTION 153A IS ISSUED THE ASSESSING OFFICER IS BOUND TO ASSESS AND REASSESS THE TOTAL INCOME OF THE APPELLANT. 2. THE ADDITIONAL COMMISSIONER OF INCOME-TAX, RANGE - 11, BANGALORE HAS COMPLETED THE ASSESSMENT OF THE APPEL LANT VIDE ORDER DATED DECEMBER 27, 2010 PASSED UNDER SECTION 143(3) AND IN THE COURSE OF SUCH ASSESSMENT PROCEEDINGS FULL SCRUTINY AND EXAMINATION WAS MADE. A SEARCH AND SEIZURE OPERATION UNDER SECT ION 132 WAS CONDUCTED ON OCTOBER 11, 2012 AND DURING THE COURSE OF SEARCH NO INCRIMINATING DOCUMENTS OR UNDISCLOSED INCOME WAS FOUND. 3. THE CIT(A) HAS ERRED IN NOT CONSIDERING THAT HAV ING REGARD TO THE SECOND PROVISO TO SECTION 153A, THE COMPLETED ASSES SMENT CANNOT BE DISTURBED EXCEPT ONLY IN THE CASE WHERE THERE IS AN Y UNDISCLOSED INCOME FOUND IN THE COURSE OF SEARCH OR ANY INCRIMI NATING DOCUMENTS POINTING TOWARDS SUCH UNDISCLOSED INCOME IS FOUND I N THE COURSE OF ITA NOS. 1917, 1918 & 1987/BANG/2016 PAGE 6 OF 9 SEARCH OR IN THE COURSE OF ASSESSMENT PROCEEDINGS U NDER SECTION 153A OF THE INCOME-TAX ACT. 4. THE APPELLANT THEREFORE PRAYS THAT THE ORDER PAS SED BY THE ASSESSING OFFICER IS CONTRARY TO THE PROVISIONS OF LAW AND LIABLE TO BE QUASHED SINCE NO UNDISCLOSED INCOME IS FOUND IN THE COURSE OF SEARCH OR IN THE COURSE OF PROCEEDINGS UNDER SECTION 153A. 7. AT THE VERY OUTSET, IT WAS SUBMITTED BY LD. AR O F ASSESSEE THAT THIS ISSUE WAS RAISED BY THE ASSESSEE BEFORE THE CIT (A) ALSO AS P ER GROUND NO. 3 IN ASSESSMENT YEAR 2007-08 THAT IN A CASE, WHERE THERE IS NO INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH AND THE ASSE SSMENT HAS NOT ABATED AS PER THE SECOND PROVISO TO SECTION 153A, INVOKING OF THE PROVISIONS OF SECTION 153A IS NOT JUSTIFIED. HE SUBMITTED THAT IN ASSESS MENT YEAR 2008-09 ALSO, SIMILAR GROUND WAS RAISED BEFORE CIT (A) IN GROUND NO. 3 IN THAT YEAR ALSO. HE SUBMITTED THAT IN BOTH THE YEARS, THIS ISSUE IS COV ERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT REN DERED IN THE CASE OF CIT VS. LANCY CONSTRUCTIONS AS REPORTED IN 383 ITR 168 (KARNATAKA) BUT THIS JUDGMENT WAS NOT AVAILABLE AT A TIME WHEN THE IMPUG NED ORDERS WERE PASSED BY THE CIT(A) AND THEREFORE, THE CIT(A) HAS FOLLOWE D ANOTHER JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE O F CANARA HOUSING DEVELOPMENT COMPANY VS. DCIT AS REPORTED IN 274 CTR 122 (KARNATAKA). HE SUBMITTED A COPY OF THE TRIBUNAL ORDER RENDERED IN THE CASE OF ACIT VS. CORNERSTONE PROPERTIES PVT. LTD. IN ITA NOS. 1714 T O 1717/BANG/2013 AND C.O. NOS. 62 TO 65/BANG/2014 DATED 08.09.2017 AND POINTE D OUT THAT IN THIS CASE, THE TRIBUNAL HAS CONSIDERED BOTH THESE JUDGMENTS OF HON'BLE KARNATAKA HIGH COURT AND IT WAS HELD BY TRIBUNAL IN THIS CASE THAT IN RESPECT OF THIS ISSUE AS TO WHETHER THE INVOCATION OF SECTION 153A IS VALID OR NOT IN A CASE WHERE NO INCRIMINATING MATERIAL WAS FOUND, THE JUDGMENT OF H ON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF CIT VS. LANCY CONSTRU CTIONS (SUPRA) IS TO BE FOLLOWED AND THE EARLIER JUDGMENT RENDERED IN THE C ASE OF CANARA HOUSING DEVELOPMENT COMPANY VS. DCIT (SUPRA) IS NOT RELEVAN T FOR DECIDING THIS ISSUE. AT THIS JUNCTURE, THIS WAS OBSERVED BY THE BENCH TH AT IN ORDER TO DECIDE THE ISSUE IN DISPUTE BY FOLLOWING THIS JUDGMENT OF HON' BLE KARNATAKA HIGH COURT, IT HAS TO BE SEEN AS TO WHETHER ANY INCRIMINATING MATE RIAL WAS FOUND IN THE COURSE OF SEARCH OR NOT AND THEREFORE, THE BENCH WA NTED TO KNOW AS TO WHETHER ITA NOS. 1917, 1918 & 1987/BANG/2016 PAGE 7 OF 9 THE COPY OF PANCHANAMA ETC. HAS BEEN MADE AVAILABLE BY THE ASSESSEE BEFORE THE TRIBUNAL IN THE PAPER BOOK AND WHETHER THERE IS ANY FINDING OF AUTHORITIES BELOW ON THIS ASPECT. IN REPLY, IT WAS SUBMITTED B Y LD. AR OF ASSESSEE THAT THE RELEVANT MATERIAL IS NOT READILY AVAILABLE AND THER EFORE, THE MATTER MAY BE RESTORED BACK TO THE FILE OF AO/CIT (A) FOR FRESH D ECISION IN THE LIGHT OF THIS LATER JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED I N THE CASE OF CIT VS. LANCY CONSTRUCTIONS (SUPRA) AFTER EXAMINING THE FAC TUAL ASPECT. THE LD. DR OF REVENUE SUPPORTED THE ASSESSMENT ORDER IN BOTH YEAR S. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT THIS ISSUE WAS VERY MUCH RAISED BY THE ASSESSEE BEFORE THE CIT (A) AS T O WHETHER THE INVOCATION OF THE PROVISIONS OF SECTION 153A IS VALID OR NOT IN T HE FACTS OF THE PRESENT CASE BUT THIS ISSUE WAS DECIDED BY CIT (A) BY FOLLOWING THE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF CANARA HOUSING DEVELOPMENT COMPANY VS. DCIT (SUPRA). THE CIT(A) HAS ALSO REFE RRED TO THE LATER JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CAS E OF CIT VS. LANCY CONSTRUCTIONS (SUPRA) BUT HE HAD DECLINED TO FOLLOW THIS LATER JUDGMENT BY OBSERVING ON PAGE NO. 12 OF ITS ORDER THAT IN THE L ATER JUDGMENT, THE EARLIER JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED I N THE CASE OF CANARA HOUSING DEVELOPMENT COMPANY VS. DCIT (SUPRA) WAS NO T CONSIDERED AND THEREFORE, THE EARLIER JUDGMENT RENDERED IN THE CAS E OF CANARA HOUSING DEVELOPMENT COMPANY VS. DCIT (SUPRA) STILL HOLDS GO OD. WE FIND THAT IN THE TRIBUNAL ORDER RENDERED IN THE CASE OFACIT VS. CORN ERSTONE PROPERTIES PVT. LTD. (SUPRA), BOTH THE JUDGMENTS WERE CONSIDERED AND IT WAS HELD THAT EARLIER JUDGEMENT RENDERED IN THE CASE OF CANARA HOUSING DE VELOPMENT COMPANY VS. DCIT (SUPRA) IS NOT RELEVANT BECAUSE IN THAT CASE, THIS WAS ADMITTED POSITION OF FACT THAT INCRIMINATING MATERIAL WAS FOUND DURING T HE COURSE OF SEARCH. BUT IN THE LATER CASE RENDERED IN THE CASE OF CIT VS. LANC Y CONSTRUCTIONS (SUPRA), IT WAS NOTED THAT NO INCRIMINATING MATERIAL WAS FOUND IN THE COURSE OF SEARCH AND IT WAS HELD THAT IN THE ABSENCE OF INCRIMINATING MA TERIAL HAVING BEEN FOUND IN THE COURSE OF SEARCH, THE REVENUE CANNOT GET A SECO ND OPPORTUNITY TO REOPEN THE CONCLUDED ASSESSMENT. BUT TO CONSIDER THE APPL ICABILITY OF THIS JUDGEMENT IN THE PRESENT CASE, IT IS ESSENTIAL TO EXAMINE THE FACT AS TO WHETHER ANY ITA NOS. 1917, 1918 & 1987/BANG/2016 PAGE 8 OF 9 INCRIMINATING MATERIAL WAS FOUND IN THE COURSE OF S EARCH OR NOT. NEITHER IN THE ASSESSMENT ORDER NOR IN THE ORDER OF CIT (A), THERE IS ANY DISCUSSION ON THIS ASPECT OF THE MATTER. THE RELEVANT PANCHANAMA IS A LSO NOT MADE AVAILABLE BEFORE US BY ANY SIDE IN THE PAPER BOOK. UNDER THE SE FACTS, WE FEEL IT PROPER TO RESTORE THE ENTIRE MATTER BACK TO THE FILE OF CIT ( A) FOR FRESH DECISION IN THE LIGHT OF THIS LATER JUDGMENT OF HON'BLE KARNATAKA HIGH CO URT RENDERED IN THE CASE OF CIT VS. LANCY CONSTRUCTIONS (SUPRA) AFTER EXAMINING THIS FACTUAL ASPECT OF THE MATTER AS TO WHETHER ANY INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH OR NOT. IF REQUIRED, THE CIT (A) MAY OBTAIN REMAND REPORT FORM AO ON THIS ASPECT I.E. FINDING OF INCRIMINATING MATERIAL IN THE COURSE OF SEARCH AND THEREAFTER, HE SHOULD PASS NECESSARY ORDER AS PER L AW IN BOTH YEARS AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BO TH SIDES. 9. IN VIEW OF OUR DECISION ON THIS TECHNICAL ASPECT IN BOTH YEARS, OTHER GROUNDS ON MERIT RAISED IN ALL THESE APPEALS DO NOT REQUIRE AN Y ADJUDICATION AT THIS STAGE BECAUSE THE TECHNICAL ISSUE SHOULD BE DECIDED FIRST AND THEREAFTER ONLY, THE ISSUE ON MERIT SHOULD BE DECIDED. WE THEREFORE, HO LD THAT AFTER DECIDING TECHNICAL ASPECT, CIT (A) SHOULD DECIDE THE ENTIRE ASPECT ON MERIT IN BOTH YEARS AFRESH. 10. IN THE RESULT, ALL THE THREE APPEALS INCLUDING TWO APPEALS OF THE ASSESSEE AND ONE OF REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (LALIET KUMAR) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 21 ST NOVEMBER, 2017. /MS/ ITA NOS. 1917, 1918 & 1987/BANG/2016 PAGE 9 OF 9 COPY TO: 1. APP ELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.