Grandhi Manoj Kumar (HUF), Visakhapatnam V. THE DCIT, CENTRAL CIRCLE-1, Visakhapatnam

ITA 195/VIZ/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9014 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 11 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 08-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G GURUSAMY
• Keywords: Search and seizure; Block assessment; Revised return
• Section: 143(3); 142(1); 153A; 32; 263; 132

Judgement Text

ITA NOS.194 & 195/VIZAG/2014 GRANDHI MANOJ KUMAR (HUF), VISAKHAPATNAM 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NOS.194&195/VIZAG/2014 ( / ASSESSMENT YEARS: 2004-05 & 2005-06) GRANDHI MANOJ KUMAR (HUF), VISAKHAPATNAM DCIT, CENTRAL CIRCLE - 1, VISAKHAPATNAM [PAN NO. AACHG9592B ] ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI G.V.N. HARI, AR / RESPONDENT BY : SHRI G. GURUSAMY, DR / DATE OF HEARING : 12.04.2017 / DATE OF PRONOUNCEMENT : 21.04.2017 / O R D E R PER SHRI MANJUNATHA, ACCOUNTANT MEMBER: THESE TWO APPEALS FILED BY THE ASSESSEE ARE DIRECT ED AGAINST COMMON ORDER PASSED BY THE CIT(A)-I, HYDERABAD DATE D 17.2.2014 FOR THE ASSESSMENT YEARS 2004-05 & 2005-06. SINCE, THE FACTS ARE IDENTICAL AND ISSUES ARE COMMON, THEY ARE CLUBBED, HEARD TOGE THER AND DISPOSED- OFF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CON VENIENCE. ITA NOS.194 & 195/VIZAG/2014 GRANDHI MANOJ KUMAR (HUF), VISAKHAPATNAM 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HUF IS ENGAGED IN THE JEWELLERY BUSINESS UNDER THE NAME AND STYLE OF M/S. VAIBHAV JEWELLERS, MAIN BAZAAR, ELURU. THE ASSESSEE HAS FI LED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2004-05 & 2005-06 ON 1.11.2004 AND 22.8.2006 ADMITTING TOTAL INCOME OF ` 23,51,190/- AND NET LOSS OF ` 4,77,270/- RESPECTIVELY. THE ASSESSMENT FOR THE AS SESSMENT YEARS 2004-05 & 2005-06 HAS BEEN COMPLETED U/S 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS 'THE ACT') ON 28.1 2.2006 AND 20.12.2007 ACCEPTING INCOME/LOSS RETURNED BY THE ASSESSEE. SU BSEQUENTLY, FOR THE ASSESSMENT YEAR 2004-05, THE COMMISSIONER OF INCOME TAX, RAJAHMUNDRY HAD INITIATED PROCEEDINGS U/S 263 OF TH E ACT AND PASSED AN ORDER U/S 263 OF THE ACT, DATED 23.3.2009, WHERE IN THE CIT, RAJAHMUNDRY SET ASIDE THE ASSESSMENT ORDER PASSED B Y THE A.O. AND DIRECTED THE A.O. TO RE-DO THE ASSESSMENT IN THE LI GHT OF THE DISCUSSION IN HIS ORDER. THE ASSESSEE CHALLENGED THE REVISION ORDER PASSED BY THE COMMISSIONER U/S 263 OF THE ACT, BEFORE THE ITAT, V ISAKHAPATNAM. THE ITAT, IN ITS ORDER IN ITA NO.288/VIZAG/2009 SET ASI DE THE DIRECTION ISSUED BY THE CIT ON THE ISSUE OF CHARGEABILITY ON THE LOANS GIVEN TO OTHERS THOUGH IT PAID INTEREST ON SECURED AND UNSEC URED LOANS AND ON OTHER 3 ISSUES UPHELD THE DIRECTIONS ISSUED BY THE CIT VIDE ORDER U/S 263 OF THE ACT. ITA NOS.194 & 195/VIZAG/2014 GRANDHI MANOJ KUMAR (HUF), VISAKHAPATNAM 3 3. THEREAFTER, A SEARCH AND SEIZURE OPERATION U/S 1 32 OF THE ACT, WAS CONDUCTED ON 9.1.2009 IN THE BUSINESS/RESIDENTIAL P REMISES OF THE ASSESSEE. DURING THE COURSE OF SEARCH, CERTAIN INC RIMINATING DOCUMENTS RELATING TO THE ASSESSEE WERE FOUND AND SEIZED. CO NSEQUENT TO SEARCH, THE CASE HAS BEEN CENTRALIZED TO THE DCIT, CENTRAL CIRCLE-1, VISAKHAPATNAM VIDE PROCEEDINGS OF THE COMMISSIONER OF INCOME TAX, RAJAHMUNDRY IN F.NO.62/JURIS/CIT/RJY/2009-10 DATED 15.6.2009. THE A.O. INITIATED PROCEEDINGS U/S 153C OF THE ACT AND ACCORDINGLY, NOTICES U/S 153C OF THE ACT WERE ISSUED REQUIRING THE ASSES SEE TO FILE RETURN OF INCOME FOR THE ASSESSMENT YEARS 2003-04 TO 2008-09. IN RESPONSE TO NOTICES, THE ASSESSEE HAS FILED RETURN OF INCOME FO R THE ASSESSMENT YEARS 2004-05 AND 2005-06 ON 5.3.2010, DECLARING TH E SAME INCOME AS PER ORIGINAL RETURN FILED U/S 139(1) OF THE ACT, FO R BOTH THE YEARS. 4. THE CASES HAVE BEEN SELECTED FOR SCRUTINY AND AC CORDINGLY, NOTICES U/S 143(2) & 142(1) OF THE ACT, ALONG WITH DETAILED QUESTIONNAIRE WERE ISSUED. IN RESPONSE TO THE NOTICES, THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED FROM TIME TO TOME AND PRODUCED TH E BOOKS OF ACCOUNTS AND FURNISHED NECESSARY INFORMATION AS CAL LED FOR. THE ASSESSMENT FOR THE ASSESSMENT YEARS 2004-05 & 2005- 06 HAVE BEEN COMPLETED U/S 143(3) R.W.S. 153C OF THE ACT, ON 30. 12.2010 DETERMINING TOTAL INCOME OF ` 35,51,190/- AND ` 32,50,661/- RESPECTIVELY. ITA NOS.194 & 195/VIZAG/2014 GRANDHI MANOJ KUMAR (HUF), VISAKHAPATNAM 4 5. AGGRIEVED BY THE ASSESSMENT ORDERS, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE A SSESSEE HAS CHALLENGED ADDITIONS MADE BY THE A.O. TOWARDS DISAL LOWANCE OF CUSTOM DUTY PAID ON IMPORT OF GOLD AND DISALLOWANCE OF INT EREST PAYMENTS ON UNSECURED LOANS U/S 40(A)(IA) OF THE ACT, FOR FAILU RE TO DEDUCT TAX AT SOURCE. THE CIT(A) AFTER CONSIDERING THE EXPLANATI ONS OF THE ASSESSEE, CONFIRMED ADDITIONS MADE BY THE A.O. TOWARDS DISALL OWANCE OF CUSTOM DUTY PAID ON IMPORT OF GOLD FOR THE ASSESSMENT YEAR 2004-05 AND UPHELD DISALLOWANCE OF INTEREST EXPENDITURE U/S 40(A)(IA) OF THE ACT, FOR FAILURE TO DEDUCT TDS U/S 194A OF THE ACT, ON THE GROUND TH AT THE SPECIAL BENCH DECISION OF ITAT VISAKHAPATNAM, RELIED UPON BY THE ASSESSEE HAS BEEN SUSPENDED BY THE HONBLE A.P. HIGH COURT. AGGRIEVE D BY THE CIT(A) ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE ASSESSEE HAS FILED COMMON GROUNDS OF APPEAL FOR BOTH THE ASSESSMENT YEARS. FROM THESE GROUNDS OF APPEAL, TH E ASSESSEE HAS CHALLENGED ADDITIONS MADE BY THE A.O. TOWARDS DISAL LOWANCE OF CUSTOM DUTY PAID ON IMPORT OF GOLD AND DISALLOWANCE OF INT EREST EXPENDITURE U/S 40(A)(IA) OF THE ACT. THE ASSESSEE ALSO FILED A PE TITION FOR ADMISSION OF ADDITIONAL GROUND ON 6.6.2016, RAISING A LEGAL GROU ND CHALLENGING ADDITIONS MADE BY THE A.O. TOWARDS CUSTOM DUTY AND INTEREST ITA NOS.194 & 195/VIZAG/2014 GRANDHI MANOJ KUMAR (HUF), VISAKHAPATNAM 5 EXPENDITURE IN THE CONCLUDED ASSESSMENTS FOR THE AS SESSMENT YEARS 2004-05 & 2005-06, WHICH READS AS FOLLOWS: 1. ASSESSMENT IN THE CE OF T PETITIONER FOR THE A.Y 20 04-05 WAS COMPLETED ON 30.12.2010 U/S 143(3) R.W.S. 153C OF T HE ACT BY DISALLOWING AN AMOUNT OF RS 12,00,000/- CLAIMED TOW ARDS CUSTOMS DUTY PAID ON THE IMPORT OF GOLD THROUGH THE BANK OF NOVA SCOTIA. THEREBY, THE INCOME OF THE APPELLANT WAS DETERMINED AT RS 35,51,190/- AS AGAINST THE RETURNED INCOME OF RS 23 ,51,190/-. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) CO NFIRMED THE ABOVE ADDITION VIDE ORDER DT 17.02.2014. BEING AGGR IEVED, THE PETITIONER PREFERRED AN APPEAL BEFORE THE HON'BLE INCOME TAX A PPELLATE TRIBUNAL, VISAKHAPATNAM. 3. FROM THE FACTS ON RECORD WHICH ARE CLEARLY STATED I N THE ASSESSMENT ORDER, IT IS EVIDENT THAT THE ABOVE ADDI TION MADE WAS NOT BASED ON ANY MATERIAL FOUND DURING THE SEARCH. IT H AS BEEN CONSISTENTLY HELD BY VARIOUS HON'BLE BENCHES OF THE ITAT AND ALSO THE HIGH COURTS (INCLUDING HON'BLE ITAT, VISAKHAPATNAM BENCH IN THE CASE OF L.G. TRINADHA RAO IN ITA NO 306/V/2011 VIDE ORDE R DT 19.04.2016) THAT WITH REGARD TO AN ASSESSMENT YEAR FOR WHICH TH ERE ARE NO PENDING PROCEEDINGS, ADDITIONS CAN BE MADE IN THE ASSESSMEN T U/S 143(3) R.W.S. 153A/153C ONLY AS WITH REFERENCE TO SEIZED M ATERIAL. 4. THE DATE OF SEARCH IN THE CASE OF THE APPELLANT IS 09.01.2009 AND THE APPELLANT FILED THE ORIGINAL RETURN OF INCO ME FOR A.Y. 2004-05 ON 01.11.2004 AND THE ASSESSMENT WAS COMPLETED U/S 143(3) ON 28.12.2006 FOLLOWED BY A REASSESSMENT U/S 143(3) R. W.S. 147 ON 11.12.2007. THEREFORE, AS ON THE DATE OF SEARCH, T HERE ARE NO PENDING PROCEEDINGS FOR THIS ASSESSMENT YEAR. HENCE, THE AS SESSING OFFICER IS PRECLUDED FROM MAKING ANY ADDITION WITHOUT REFERENC E TO SEIZED MATERIAL. 5. HOWEVER, THE ABOVE GROUND WAS NOT RAISED BEFORE THE LOWER AUTHORITIES DUE TO INADVERTENCE. THEREFORE, IT IS R ESPECTFULLY PRAYED THAT THE FOLLOWING ADDITIONAL GROUND OF APPEAL MAY KINDLY BE ADMITTED AND ADJUDICATED, SINCE ALL THE MATERIAL FA CTS RELATING TO THIS GROUND ARE ALREADY ON RECORD AND THE OMISSION TO TA KE THIS GROUND OF APPEAL WAS DUE TO BONA FIDE REASONS. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, WHETHER THE DISALLOWANCE OF RS.12,00,000/- CLAIMED TOWARDS CUSTOMS DUTY PAID ON THE IMPORT OF GOLD THROUGH THE BANK OF NOVA SCOTIA IS OUTSIDE THE SCOPE OF ASS ESSMENT COMPLETED U/S 143(3) R.W.S. 153C OF THE ACT? ITA NOS.194 & 195/VIZAG/2014 GRANDHI MANOJ KUMAR (HUF), VISAKHAPATNAM 6 7. DURING THE COURSE OF HEARING, THE LD. A.R. FOR T HE ASSESSEE SUBMITTED THAT ALL THE MATERIAL FACTS RELEVANT TO T HE LEGAL ISSUE ARE ALREADY ON RECORD AND THE ISSUE AS TO SCOPE OF ADDI TIONS THAT CAN BE MADE IN AN ASSESSMENT U/S 143(3) R.W.S. 153A OF THE ACT, IS PURELY A LEGAL ISSUE, WHICH CAN BE RAISED AT ANY TIME BEFORE THE TRIBUNAL. THEREFORE, REQUESTED TO ADMIT ADDITIONAL GROUND OF APPEAL AND PASS SUCH ORDERS AS MAY BE APPROPRIATE IN THE INTEREST O F RENDERING SUBSTANTIAL JUSTICE. THE LD. D.R., ON THE OTHER HA ND STRONGLY OPPOSED ADMISSION OF ADDITIONAL GROUND RAISED BY THE ASSESS EE. 8. HAVING HEARD BOTH THE SIDES AND CONSIDERED MATE RIAL ON RECORD, WE FIND THAT FACTS WHICH ARE NECESSARY FOR ADJUDICA TION OF LEGAL ISSUE RAISED BY THE ASSESSEE ARE ALREADY ON RECORD AND NO NEW MATERIAL OR EVIDENCE IS RELIED UPON TO CHALLENGE THE LEGAL ISSU E. THEREFORE, WE ARE OF THE VIEW THAT ADDITIONAL GROUND RAISED BY THE AS SESSEE CAN BE ADMITTED FOR ADJUDICATION AND ACCORDINGLY, WE ADMIT ADDITIONAL GROUND RAISED BY THE ASSESSEE AND PROCEED TO DISPOSE OF TH E APPEAL. 9. THE FIRST ISSUE THAT CAME UP FOR OUR CONSIDERATI ON BY WAY OF ADDITIONAL GROUNDS OF APPEAL IS WHETHER ON THE FACT S AND IN THE CIRCUMSTANCES OF THE CASE, THE A.O. IS RIGHT IN MAK ING ADDITIONS TOWARDS DISALLOWANCE OF CUSTOMS DUTY PAID ON IMPORT OF GOLD FOR THE ASSESSMENT ITA NOS.194 & 195/VIZAG/2014 GRANDHI MANOJ KUMAR (HUF), VISAKHAPATNAM 7 YEAR 2004-05 AND DISALLOWANCE OF INTEREST EXPENDITU RE U/S 40(A)(IA) OF THE ACT, FOR FAILURE TO DEDUCT TDS FOR THE ASSESSME NT YEAR 2005-06, WHERE THE ASSESSMENT PROCEEDINGS HAVE BEEN COMPLETE D AS ON THE DATE OF SEARCH AND NO PROCEEDINGS WERE PENDING. THE LD. A.R. FOR THE ASSESSEE SUBMITTED THAT IN THE CASE OF CONCLUDED AS SESSMENTS, THE A.O. HAS NO JURISDICTION TO MAKE ADDITIONS TOWARDS RETUR NED INCOME IN THE ABSENCE OF ANY INCRIMINATING MATERIAL. THE A.R. FU RTHER SUBMITTED THAT IN THE CASE OF ABATED ASSESSMENT AND ASSESSMENTS, W HICH ARE PENDING AS ON THE DATE OF SEARCH, THE A.O. CAN ASSUME JURIS DICTION TO ASSESS/RE- ASSESS TOTAL INCOME WHICH IS FOUND DURING THE COURS E OF SEARCH. IN THE PRESENT CASE ON HAND, THE ASSESSMENT FOR THE ASSESS MENT YEARS 2004-05 & 2005-06 ARE ALREADY CONCLUDED AND NO PROCEEDINGS ARE PENDING AS ON THE DATE OF SEARCH. THE TIME LIMIT FOR ISSUE OF NO TICE U/S 143(2) ALSO COMPLETED AS ON THE DATE OF SEARCH. THEREFORE, THE A.O. IS PRECLUDED FROM MAKING ADDITIONS IN THE ABSENCE OF INCRIMINATI NG MATERIALS FOR THE ASSESSMENT YEARS, WHICH ARE CONCLUDED AS ON THE DAT E OF SEARCH. IN SUPPORT OF HIS ARGUMENTS RELIED UPON THE DECISION O F ITAT, VISAKHAPATNAM BENCH IN THE CASE OF L. SURYAKANTHAM VS. ACIT IN ITA NOS.300 TO 305/VIZAG/2012. ITA NOS.194 & 195/VIZAG/2014 GRANDHI MANOJ KUMAR (HUF), VISAKHAPATNAM 8 10. THE LD. D.R., ON THE OTHER HAND SUBMITTED THAT ONCE A SEARCH IS TAKEN PLACE, THE ASSESSMENT FOR 6 ASSESSMENT YEARS GETS RE-OPENED AND THE A.O. WILL GET JURISDICTION TO ASSESS/RE-ASSESS TOTAL INCOME OF THOSE 6 ASSESSMENTS YEARS WHETHER OR NOT ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. THE D.R. FURTHER ARGU ED THAT THE PROVISIONS OF SECTION 153A OF THE ACT, SHALL BE ATT RACTED UPON INITIATION OF SEARCH PROCEEDINGS U/S 132 OF THE ACT IN WHICH C ASE, THE CONCLUDED ASSESSMENT WILL BE RE-OPENED AS PER THE PROVISIONS OF SECTION 153A OF THE ACT, AND SUCH RE-OPENING IS NOT DEPENDING UPON EXISTENCE OR OTHERWISE OF ANY UNDISCLOSED INCOME. THE LD. D.R. REFERRING TO THE DECISION OF HONBLE KARNATAKA HIGH COURT, IN THE CA SE OF M/S. CANARA HOUSING DEVELOPMENT COMPANY VS. DCIT IN ITA NO.38 O F 2014 DATED 25.7.2014, SUBMITTED THAT U/S 153A OF THE ACT, THE ASSESSING OFFICER HAS BEEN GIVEN THE POWER TO ASSESS OR RE-ASSESS THE TOT AL INCOME OF THE 6 ASSESSMENT YEARS IN QUESTION IN SEPARATE ASSESSMENT ORDERS. THE A.O. IS EMPOWERED TO RE-OPEN THOSE PROCEEDINGS AND RE-AS SESS THE TOTAL INCOME, TAKING NOTE OF THE UNDISCLOSED INCOME, IF A NY, UN-EARTHED DURING THE SEARCH. WHEN, ONCE THE PROCEEDINGS ARE INITIATED U/S 153A OF THE ACT, THE LEGAL EFFECT IS THAT, EVEN IN THE C ASE WHERE THE ASSESSMENT ORDER IS PASSED IT STANDS RE-OPENED AND IN THE EYES OF LAW, THERE IS NO ORDER OF ASSESSMENT. ONCE THE ASSESSME NT IS RE-OPENED, THE ITA NOS.194 & 195/VIZAG/2014 GRANDHI MANOJ KUMAR (HUF), VISAKHAPATNAM 9 ASSESSING AUTHORITY CAN TAKE NOTE OF THE INCOME DIS CLOSED IN THE EARLIER RETURN, ANY UNDISCLOSED INCOME FOUND DURING THE SEA RCH OR AND ALSO ANY OTHER INCOME, WHICH IS NOT DISCLOSED IN THE EARLIER RETURN OR WHICH IS NOT UNEARTHED DURING THE SEARCH, IN ORDER TO FIND OUT W HAT IS THE TOTAL INCOME OF EACH YEAR AND THEN PASS THE ASSESSMENT OR DER. THEREFORE, THERE IS NO MERITS IN THE CONTENTION OF THE ASSESSE E THAT THE A.O. IS HAVING NO JURISDICTION TO MAKE ADDITIONS IN THE CON CLUDED ASSESSMENTS. IN SUPPORT OF HIS ARGUMENTS, RELIED UPON THE DECISI ON OF HONBLE A.P. HIGH COURT IN THE CASE OF GOPAL LAL BHADRUKA VS. DC IT (2012) 346 ITR 106 AND CIT VS. SMT. GODAVARI DEVI SARAF (1978) 113 ITR 589. 11. THE D.R. FURTHER SUBMITTED THAT AS REGARDS, THE CLAIM OF ASSESSEE, THAT THE ASSESSMENT FOR A.Y. 2004-05 WAS CONCLUDED AS ON SEARCH, THE FACTS ARE ENTIRELY DIFFERENT FROM THE FACTS OF THE CASE RELIED UPON BY THE ASSESSEE. IN THIS CASE, THE ASSESSMENT FOR THE ASS ESSMENT YEAR 2004- 05 HAS BEEN ABATED AS ON THE DATE OF SEARCH, AS THE A.O. HAS ISSUED A NOTICE U/S 143(2) OF THE ACT, ON 30.3.2009 IN PURSU ANCE TO A DIRECTION ISSUED BY THE CIT U/S 263 OF THE ACT. THE D.R. FUR THER SUBMITTED THAT THE CIT, HAD INITIATED PROCEEDINGS U/S 263 OF THE A CT, AND HAS PASSED ORDER U/S 263 OF THE ACT ON 23.3.2009, SETTING ASID E THE ORDER PASSED BY THE A.O. WITH CERTAIN DIRECTIONS. THE A.O. HAS ISS UED NOTICE U/S 143(2) OF THE ACT, IN PURSUANCE TO DIRECTIONS OF CIT AND T HEREFORE, THE ITA NOS.194 & 195/VIZAG/2014 GRANDHI MANOJ KUMAR (HUF), VISAKHAPATNAM 10 ASSESSMENT FOR THE ASSESSMENT YEAR 2004-05 HAS BEEN ABATED AND ACCORDINGLY, THE A.O. HAS JURISDICTION TO ASSESS OR RE-ASSESS TOTAL INCOME OF THOSE 6 ASSESSMENT YEARS, WHICH ARE PENDING AS O N THE DATE OF SEARCH. 12. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE ONLY ISSUE THAT ARISES FOR OUR CONSIDERATION IS WHE THER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE A.O. IS RIGHT IN MAKING ADDITIONS, IN RESPECT OF ASSESSMENT YEAR FOR WHICH THE ASSESSMENT PROCEEDINGS HAS BEEN CONCLUDED AS ON THE DATE OF SEARCH, IN THE ABS ENCE OF INCRIMINATING MATERIALS. THE LD. A.R. FOR THE ASSE SSEE, SUBMITTED THAT THE ISSUE HAS BEEN ALREADY CONSIDERED BY THE COORDI NATE BENCH OF VISAKHAPATNAM ITAT, IN THE CASE OF L. SURYAKANTHAM VS. ACIT IN ITA NOS.300 TO 305/VIZAG/2012, WHEREIN IT HAS BEEN OBSE RVED THAT THE A.O. HAS NO JURISDICTION TO MAKE ADDITIONS U/S 153A OF T HE ACT FOR THE ASSESSMENTS, WHICH ARE NOT PENDING AS ON THE DATE O F SEARCH. THE RELEVANT PORTION OF THE ORDER IS EXTRACTED BELOW: 19. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MAT ERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE FACTUAL MATRIX OF THE CASE IS THAT THERE WAS A SEARCH ACTION U/S 132 OF THE ACT. DURING THE COURSE OF SEARCH, INCRIMINATING DOCUMENTS FOUND REVEALS THAT THE ASSESSEE HAS INFLATED LABOUR CHARG ES FOR THE ASSESSMENT YEARS 2008-09 & 2009-10. BASED ON THE DOCUMENTS FO UND DURING SEARCH, THE ASSESSEE HAS ACCEPTED THAT HE HAS INFLATED 10% LABOUR CHARGES AND WHICH IS COMMON IN THIS LINE OF BUSINESS. CONSEQUE NT TO SEARCH ACTION U/S 132 OF THE ACT, THE ASSESSEE CASE HAS BEEN CENTRALI ZED AND ACCORDINGLY ITA NOS.194 & 195/VIZAG/2014 GRANDHI MANOJ KUMAR (HUF), VISAKHAPATNAM 11 FRESH ASSESSMENT PROCEEDINGS HAVE BEEN INITIATED BY ISSUING NOTICE U/S 153A/153C OF THE ACT FOR THE SIX ASSESSMENT YEARS I MMEDIATELY PRECEDING THE ASSESSMENT YEAR IN WHICH SEARCH WAS CONDUCTED. THE ASSESSEE HAS FILED REVISED RETURNS IN RESPONSE TO NOTICE U/S 153 A OF THE ACT AND ADMITTED THE ADDITIONAL INCOME DISCLOSED DURING THE COURSE OF SEARCH. THE CASE HAS BEEN SELECTED FOR SCRUTINY. DURING TH E COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO PRODUCE BOOK S OF ACCOUNTS AND RELEVANT BILLS & VOUCHERS IN SUPPORT OF EXPENDITURE CLAIMED. IN RESPONSE, THE ASSESSEE FILED WRITTEN SUBMISSION AND STATED TH AT THE BOOKS OF ACCOUNTS ARE NOT AVAILABLE AND HENCE CANNOT BE FURN ISHED. THEREFORE, THE A.O. ISSUED A SHOW CAUSE NOTICE AND ASKED TO EXPLAI N WHY THE NET PROFIT FROM THE BUSINESS SHALL NOT BE ESTIMATED. IN RESPON SE TO SHOW CAUSE NOTICE, THE ASSESSEE HAS FILED A WRITTEN REPLY AND CONTENDED THAT THE INCOME FOR THE ASSESSMENT YEAR 2004-05, 2005-06 AND 2007-08 CANNOT BE TINKERED WITH, AS THERE WAS NO INCRIMINATING MATERI AL FOUND DURING THE COURSE OF SEARCH FOR THE ABOVE ASSESSMENT YEARS AND AS SUCH NO ADDITIONS CAN BE MADE TO THE RETURNED INCOME. IT IS FURTHER S UBMITTED THAT AS PER SEC. 153A OF THE ACT, DE-NOVO ASSESSMENT CAN BE MAD E ONLY IN RESPECT OF THE ASSESSMENT YEAR FOR WHICH THE ASSESSMENT PROCEE DINGS HAD BEEN ABATED AND THAT IN RESPECT OF ASSESSMENT YEARS FOR WHICH THE ASSESSMENT HAD ALREADY BEEN REACHED A FINALITY, SUCH ASSESSMEN T COULD NOT BE MADE U/S 153A OF THE ACT UNLESS THERE WAS SEIZED MATERIA LS. 20. THE A.O. HAS PASSED REASSESSMENT ORDERS U/S 153 A/153C OF THE ACT FOR ALL THE SIX ASSESSMENT YEARS IMMEDIATELY PRECED ING THE YEAR IN WHICH SEARCH WAS CONDUCTED. ACCORDING TO THE A.O., AS PE R THE PROVISIONS OF SECTION 153A OF THE ACT, THERE IS NO LIMITATION OR RESTRICTION PROVIDED IN THE NEW PROCEDURE OF SEARCH ASSESSMENTS ON THE POWERS O F A.O. FOR MAKING ASSESSMENT/REASSESSMENT AND THE A.O. IS NOT REQUIRE D TO CONFINE HIS ASSESSMENTS ON THE MATERIAL FOUND DURING THE COURSE OF SEARCH AS WAS THE CASE IN THE OLD PROCEDURE OF BLOCK ASSESSMENTS. TH E NEW PROCEDURE OF BLOCK ASSESSMENT WAS EXPLAINED BY WAY OF PROVISIONS OF SECTION 153A OF THE ACT. AS PER SECTION 153A OF THE ACT, THE A.O. SHALL ASSESS OR REASSESS THE TOTAL INCOME OF THE SPECIFIED SIX ASSESSMENT YE ARS IRRESPECTIVE OF THE FACT THAT THE ASSESSMENT OF THE SAID YEARS WERE COM PLETED OR PENDING AS ON THE DATE OF SEARCH. THEREFORE, THE A.O. HAS REA SSESSED THE INCOME OF SIX ASSESSMENT YEARS AND RECOMPUTED THE PROFITS AFR ESH AFTER CONSIDERING THE RELEVANT FACTS AVAILABLE ON RECORD. IT WAS THE CONTENTION OF THE ASSESSEE THAT THE A.O. CANNOT DISTURB THE COMPLETED ASSESSMENTS UNLESS THERE WAS A SEIZED MATERIAL. THE ASSESSEE FURTHER C ONTENDED THAT WHERE ASSESSMENTS ARE NOT PENDING AS ON THE DATE OF SEARC H AND TIME LIMIT FOR ISSUE OF NOTICES U/S 143(2) OF THE ACT HAS BEEN EXP IRED, IRRESPECTIVE OF THE FACT THAT THOSE ASSESSMENTS HAVE BEEN COMPLETED U/S 143(1) OR 143(3) OF THE ACT, THEN THE A.O. HAS NO POWER TO REASSESS THE INCOME OF THOSE COMPLETED ASSESSMENT YEARS. 21. WE FIND FORCE IN THE ARGUMENTS OF THE ASSESSEE FOR THE REASON THAT THE ISSUE NO LONGER RES INTEGRA, AS THE ISSUE HAS B EEN ALREADY DECIDED BY THE ITAT, SPECIAL BENCH AND HELD THAT WHERE THE ASS ESSMENTS ARE NOT PENDING AS ON THE DATE OF SEARCH, THE A.O. LOSSES J URISDICTION U/S 153A OF ITA NOS.194 & 195/VIZAG/2014 GRANDHI MANOJ KUMAR (HUF), VISAKHAPATNAM 12 THE ACT TO REASSESS THE INCOME OF THOSE COMPLETED A SSESSMENTS. THOUGH THE PROVISIONS OF SECTION 153A OF THE ACT DOES NOT SPECIFY ABATED AND COMPLETED ASSESSMENTS, THE NATURAL MEANING ASSIGNED TO IT SHOULD BE GIVEN TO INTERPRET THE PROVISIONS IN SUCH A WAY THA T WHICH SHALL NOT CAUSE UNDUE HARDSHIP TO THE TAX PAYERS. THE PROVISIONS OF SECTION 153A OF THE ACT EXPLAINED THE PROCEDURE OF ASSESSMENTS, ABATED ASSESSMENTS AND THE MANNER IN WHICH THE ASSESSMENT SHOULD BE FRAMED, WH ICH WAS FURTHER SUPPORTED BY CIRCULAR NO.7 OF 2003 ISSUED BY THE CB DT. WHEN THE LAW HAS EXPLAINED THE POSITION OF ABATED ASSESSMENTS, THEN THE SAME WAY THE COMPLETED ASSESSMENT SHOULD BE TREATED SO AS TO UND ERSTAND THAT THOSE ASSESSMENTS ARE REACHED FINALITY AND WHICH CANNOT B E TINKERED WITH UNLESS THERE WAS A SEIZED DOCUMENT. THEREFORE, WE ARE OF T HE CONSIDERED OPINION THAT WHERE SEARCH IS INITIATED, ALL PENDING ASSESSM ENTS ARE MERGE INTO ONE AND ONLY ONE ASSESSMENT FOR EACH ASSESSMENT YEAR SH ALL BE MADE SEPARATELY ON THE BASIS OF FINDINGS OF SEARCH AND O THER MATERIAL EXISTING OR BROUGHT ON RECORD BY THE A.O. IN RESPECT OF NON ABA TED OR COMPLETED ASSESSMENTS, THE ASSESSMENT WILL BE MADE ON THE BAS IS OF BOOKS OF ACCOUNTS OR OTHER RELEVANT DOCUMENTS FOUND DURING T HE COURSE OF SEARCH, BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSME NT. 22. IN THE PRESENT CASE ON HAND, ON PERUSAL OF THE D OCUMENT AVAILABLE ON RECORD, WE FIND THAT THE ASSESSMENT FOR THE ASSE SSMENT YEAR 2004-05 TO 2007-08 WERE NOT PENDING AS ON THE DATE OF SEARC H. THE FACT THAT THE ASSESSMENT HAS BEEN COMPLETED U/S 143(1) & 143(3) O F THE ACT ARE NOT MATERIAL. THE TIME LIMIT FOR ISSUE OF NOTICE U/S 14 3(2) OF THE ACT HAS BEEN EXPIRED. ON FURTHER VERIFICATION OF THE DOCUMENTS A VAILABLE ON RECORD, WE FIND THAT THERE WAS NO INCRIMINATING DOCUMENTS FOUN D DURING THE COURSE OF SEARCH IN RESPECT OF ASSESSMENT YEAR 2004-05 TO 200 7-08. THEREFORE, WE ARE OF THE OPINION THAT THE A.O. WAS NOT CORRECT IN REASSESSING THE TOTAL INCOME OF THE ASSESSMENT YEAR 2004-05 TO 2007-08 IN THE ABSENCE OF ANY SEIZED MATERIALS. ACCORDINGLY, WE DIRECT THE A.O. TO DELETE THE ADDITIONS MADE FOR THE ASSESSMENT YEAR 2004-05, 2005-06 & 200 7-08. 23. IT IS PERTINENT TO DISCUSS HEREIN THE CASE LAWS RELIED UPON BY THE ASSESSEE. THE ASSESSEE HAS RELIED UPON THE ITAT, S PECIAL BENCH DECISION IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT (2012) 137 ITD 287. THE COORDINATE BENCH OF THIS TRIBUNAL, WHILE DECIDI NG THE ISSUE IN FAVOUR OF THE ASSESSEE HELD AS UNDER: IN ASSESSMENTS THAT ARE ABATED, THE AO ARETAINS THE ORIGINAL JURISDICTION AS WELL AS JURISDICTION CONFERRED ON H IM U/S 153A FOR WHICH ASSESSMENTS SHALL BE MADE FOR EACH OF THE SIX ASSESSMENT YEARS SEPARATELY. IN OTHER CASES, IN ADDITION TO T HE INCOME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT U/S 153A WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL, WHICH IN THE CONTEXT OF RELEVANT PROVISIONS MEANS (I) BOOKS OF ACCOUNT , OTHER DOCUMENTS, FOUND IN THE COURSE OF SEARCH BUT NOT PR ODUCED IN THE COURSE OF ORIGINAL ASSESSMENT, AND (II) UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH. ITA NOS.194 & 195/VIZAG/2014 GRANDHI MANOJ KUMAR (HUF), VISAKHAPATNAM 13 24. THE ASSESSEE RELIED UPON, A.P. HIGH COURT DECIS ION IN THE CASE OF CIT VS. M/S. AMR INDIA LTD. IN ITTA NO.354 OF 2014 D ATED 12.6.2014. THE HONBLE HIGH COURT HELD THAT THE A.O. HAS NO JURISD ICTION TO RE-AGITATE THE ASSESSMENTS WHICH WERE ALREADY COMPLETED AND SUBSID ING. THE RELEVANT PORTION IS EXTRACTED BELOW: WE HAVE HEARD SRI J.V. PRASAD, LEARNED COUNSEL FOR THE APPELLANT, AND GONE THROUGH THE IMPUGNED JUDGEMENT AND ORDER O F THE LEARNED TRIBUNAL. IT APPEARS THAT THE LEARNED TRIBUNAL FOUND ON FACT T HAT AFTER COMPLETION OF ASSESSMENT PROCEEDINGS AND AFTER REAC HING FINALITY THEREON, THE ASSESSING OFFICER TRIED TO REAGITATE T HE ASSESSMENTS. ACCORDING TO US, THE LEARNED TRIBUNAL HAS RIGHTLY H ELD THAT THE ASSESSING OFFICER HAS NO JURISDICTION TO REAGITATE THE ASSESSMENTS WHICH WERE ALREADY COMPLETED AND SUBSISTING. WE TH EREFORE DO NOT FIND ANY ELEMENT OF LAW TO BE DECIDED IN THIS APPEA L. HENCE, THE APPEAL IS DISMISSED. THERE WILL BE NO O RDER AS TO COSTS. 25. THE ASSESSEE HAS RELIED UPON THE COORDINATE BEN CH DECISION OF ITAT, VISAKHAPATNAM IN THE CASE OF A.T. RAYUDU IN I TA NO.373 TO 379/VIZAG/2014. THE COORDINATE BENCH, UNDER SIMILAR CIRCUMSTANCES HELD THE ISSUE IN FAVOUR OF THE ASSESSEE. THE RELEVANT PORTION IS REPRODUCED HEREUNDER: 22. IN THIS REGARD, IT IS ALSO PERTINENT TO REFER TO THE FOLLOWING OBSERVATIONS MADE BY THE SPECIAL BENCH IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD (SUPRA):- 57 (F) IN THE CASE OF PARASHURAM POTTERY WORKS CO. LTD VS. ITO (106 JTR 57)(SC), IT HAS BEEN MENTIONED IN THE LAST PARAGRAP H OF THE JUDGMENT THAT THE COURT HAS TO BEAR IN MIND THAT THE POLICY OF LA W IS THAT THERE MUST BE A POINT OF FINALITY IN ALL LEGAL PROCEEDINGS, THAT ST ALE ISSUES SHOULD NOT BE REACTIVATED BEYOND A PARTICULAR STAGE AND THAT LAPS E OF TIME MUST INDUCE REPOSE IN AND SET AT REST JUDICIAL AND QUASI JUDICI AL CONTROVERSIES AS IT MUST IN OTHER SPHERES OF HUMAN ACTIVITY. OUR DECISION IS IN CONSONANCE WITH THIS OBSERVATION. THE DECISION RENDERED BY THE SPECIAL BENCH THAT THE ASSESSING OFFICER CAN MAKE ADDITIONS IN THE CASE OF CONCLUDED ASSESSM ENTS ON THE BASIS OF INCRIMINATING MATERIALS IS ALSO BASED UPON THE DECI SION RENDERED BY HONBLE SUPREME COURT IN THE CASE OF PARASHURAM POTTERY WOR KS CO. LTD (SUPRA). 23. WE HAVE EARLIER NOTICED THAT THE HON'BLE JURIS DICTIONAL ANDHRA PRADESH HIGH COURT HAS ALSO UPHELD BY THE ORDERS PASSED BY THE TRIBUNAL BY FOLLOWING THE DECISION RENDERED BY THE SPECIAL BENCH IN THE C ASE OF ALL CARGO GLOBAL LOGISTICS LTD (SUPRA) IN THE FOLLOWING CASES: - (A) SREE LALITHA CONSTRUCTIONS (J1TA NO 368 OF 2014) (B) M/S. HYDERABAD HOUSE PVT LTD (ITTA NO.266 OF 2 013) ITA NOS.194 & 195/VIZAG/2014 GRANDHI MANOJ KUMAR (HUF), VISAKHAPATNAM 14 (C)M/S. AMR INDIA LTD (FITA NO.357 /V/2014) FURTHER WE AGREE WITH THE CONTENTIONS OF THE ASSESS EE THAT THE DECISION RENDERED BY THE JURISDICTIONAL HIGH COURT IN THE CA SE OF GOPAL DAS BHADRUKA (SUPRA) HAVE BEEN RENDERED ON THE FACTS PREVAILING IN THOSE CASES, SINCE THE ISSUE RELATING TO CONCLUDED ASSESSMENTS AND PENDING ASSESSMENTS WAS NOT BEFORE THE I1ON'BLE ANDHRA PRADESH HIGH COURT ON TH E CONTRARY, THE ABOVE SAID THREE DECISIONS OF THE JURISDICTIONAL HIGH COU RT COMES TO THE SUPPORT OF THE ASSESSEE'S CONTENTIONS WITH REGARD TO THE LEGAL PROPOSITION AGITATED BEFORE US, BESIDES THE DECISIONS RENDERED BY VARIOU S OTHER HIGH COURTS. ACCORDINGLY, WE ARE OF THE VIEW THAT THE SCOPE OF E NQUIRY IN THE CASE OF UNABATED ASSESSMENTS, I.E., THE ASSESSMENT YEARS IN WHICH PROCEEDINGS ARE NOT PENDING, IS THAT THE UNDISCLOSED INCOME SHOULD BE ASCERTAINED ONLY ON THE BASIS OF MATERIALS FOUND DURING THE COURSE OF S EARCH. IF NO INCRIMINATING MATERIAL SHOWING ANY UNDISCLOSED INCOME WAS FOUND I N THE CASE OF CONCLUDED PROCEEDINGS, THEN THE QUESTION OF MAKING ANY ADDITION DOES NOT ARISE. IN THAT CASE, THE ASSESSING OFFICER SHOULD C OMPLETE THE ASSESSMENT OF THOSE YEARS BY DETERMINING THE VERY SAME TOTAL INCO ME THAT WAS ASSESSED IN THE EARLIER PROCEEDING. 24. IN VIEW OF THE ABOVE, WE ARE UNABLE TO AGREE W ITH THE CONTENTIONS OF LD STANDING COUNSEL THAT THE ASSESSI NG OFFICER WOULD GET UNFETTERED POWERS IN THE CASE OF UNABATED ASSESSMEN TS, ONCE THEY WERE REOPENED US 153A OF THE ACT. IN OUR VIEW, IN THE CA SE OF UNABATED ASSESSMENTS, THE TOTAL INCOME SHOULD BE DETERMINED BY THE ASSESSING OFFICER BY COMBINING THE INCOME ALREADY ASSESSED/DI SCLOSED IN THE RETURN OF INCOME AND THE UNDISCLOSED INCOME, IF ANY, FOUND DURING THE COURSE OF SEARCH PROCEEDING. EVEN OTHERWISE, IT IS SETTLED PR OPOSITION OF LAW THAT THE ASSESSEE IS ENTITLED TO TAKE SUPPORT OF THE DECISIO N IN HIS FAVOUR, WHEN TWO CONTRADICTORY VIEWS HAVE BEEN EXPRESSED BY THE HIGH COURTS. IN THE INSTANT CASE THE HONBLE JURISDICTIONAL HIGH COURT COMES TO THE SUPPORT OF THE ASSESSEE IN RESPECT OF THE LEGAL PROPOSITION IN ADDITION TO THE DECISION RENDERED BY THE HON'BLE BOMBAY HIGH COURT. ACCORDIN GLY, WE FIND MERIT IN THE CONTENTIONS OF THE ASSESSEE ON THE LEGAL ISS UE. 26. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO RESPECTFULLY FOLLOWING THE COORDINATE BENCH DECISIO N IN THE CASE OF ALL CARGO LOGISTICS PVT. LTD. (SUPRA), WE ARE OF THE OP INION THAT THE A.O. HAS MADE REASSESSMENT U/S 153A/153C OF THE ACT ON THE B ASIS OF INFORMATION/MATERIAL AVAILABLE IN THE RETURN OF INC OME, WITHOUT REFERRING TO ANY SEIZED MATERIAL. THEREFORE, FOLLOWING THE SPEC IAL BENCH DECISION (SUPRA) WE HOLD THAT THE A.O. HAD NO JURISDICTION T O MAKE ADDITIONS U/S 153A OF THE ACT FOR THE ASSESSMENTS WHICH ARE NOT P ENDING AS ON THE DATE OF SEARCH. IN THIS CASE, THE SEARCH WAS CONDUCTED ON 14.7.2009. THE ASSESSMENT FOR THE ASSESSMENT YEARS 2004-05 TO 2007 -08, WERE NOT PENDING AS ON THE DATE OF SEARCH. THE TIME LIMIT F OR ISSUE OF NOTICE UNDER SEC. 143(2) HAS BEEN EXPIRED. THEREFORE, THE A.O. H AS NO JURISDICTION TO ITA NOS.194 & 195/VIZAG/2014 GRANDHI MANOJ KUMAR (HUF), VISAKHAPATNAM 15 REASSESS THE INCOME FOR THE ASSESSMENT YEAR 2004-05 TO 2007-08 IN THE ABSENCE OF ANY INCRIMINATING MATERIALS. HENCE, WE DELETE THE ADDITIONS MADE BY THE A.O. FOR THE ASSESSMENT YEAR 2004-05, 2 005-06 & 2007-08. ACCORDINGLY, THE GROUND RAISED BY THE ASSESSEE IS A LLOWED. 13. IN THIS CASE, THE ASSESSMENT FOR THE ASSESSMENT YEAR 2005-06 HAS BEEN CONCLUDED AND NO PROCEEDINGS ARE PENDING AS ON THE DATE OF SEARCH. THE TIME LIMIT FOR ISSUE OF NOTICE U/S 143 (2) OF THE ACT HAS BEEN EXPIRED. THE A.O. HAS MADE ADDITIONS TOWARDS DISAL LOWANCE OF INTEREST EXPENDITURE U/S 40(A)(IA) OF THE ACT, FOR FAILURE T O DEDUCT TDS WITHOUT ANY INCRIMINATING MATERIALS. THE ADDITIONS MADE BY THE A.O. IS BASED ON THE FINANCIAL STATEMENT FILED BY THE ASSESSEE, WHIC H IS ALREADY FILED ALONG WITH ORIGINAL RETURN OF INCOME FILED U/S 139(1) OF THE ACT. THEREFORE, WE ARE OF THE VIEW THAT THE A.O. HAS NO JURISDICTION T O MAKE ADDITIONS TOWARDS DISALLOWANCE OF EXPENDITURE U/S 40(A)(IA) O F THE ACT, IN THE ABSENCE OF ANY INCRIMINATING MATERIALS FOR THE ASSE SSMENT YEARS WHICH ARE CONCLUDED AS ON THE DATE OF SEARCH. THE LD. D. R. RELIED UPON THE DECISION OF HONBLE HIGH COURT OF KARNATAKA, IN THE CASE OF M/S. CANARA HOUSING DEVELOPMENT COMPANY VS. DCIT IN ITA NO.38 O F 2014 DATED 25.7.2014 AND ALSO THE DECISION OF HONBLE KERALA H IGH COURT IN THE CASE OF E.G. GOPAKUMAR VS. CIT (2017) 390 ITR 131. WE H AVE GONE THROUGH THE CASE LAWS RELIED UPON BY THE LD. D.R., IN THE L IGHT OF THE FACTS OF THE PRESENT CASE AND CAME TO THE CONCLUSION THAT THE CA SE LAWS RELIED UPON ITA NOS.194 & 195/VIZAG/2014 GRANDHI MANOJ KUMAR (HUF), VISAKHAPATNAM 16 BY THE REVENUE ARE NOT APPLICABLE TO THE FACTS OF T HE PRESENT CASE, IN VIEW OF THE FACT THAT THE ITAT, SPECIAL BENCH IN TH E CASE OF ALL CARGO GLOBAL LOGISTICS LIMITED VS. DCIT (2012) 137 ITR 28 9 HAS CONSIDERED THE RATIOS OF HIGH COURTS INCLUDING THE DECISION OF HON BLE A.P. HIGH COURT IN THE CASE OF GOPAL LAL BHADRUKA VS. DCIT, WHILE DECI DING THE ISSUE IN FAVOUR OF THE ASSESSEE. THEREFORE, WE DIRECT THE A .O. TO DELETE ADDITIONS MADE FOR THE ASSESSMENT YEAR 2005-06. 14. IN SO FAR AS ASSESSMENT YEAR 2004-05, THE D.R. RAISED AN ARGUMENT TO THE EFFECT THAT THE ASSESSMENT FOR THE ASSESSMENT YEAR 2004-05 WAS NOT CONCLUDED AS ON THE DATE OF SEARCH, AS THE A.O. HAS INITIATED ASSESSMENT PROCEEDINGS BY ISSUING NOTICE U/S 143(2) OF THE ACT, ON 30.3.2009, IN PURSUANCE TO DIRECTIONS OF CIT U/S 263 OF THE ACT. THE D.R. FURTHER ARGUED THAT IN THIS CASE, THE SEARCH I S TAKEN PLACE ON 9.1.2009 AND THE BOOKS OF ACCOUNTS AND OTHER INCRIM INATING MATERIALS BELONGS TO THE ASSESSEE HAS BEEN HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER THE ASSESSEE ON 16.10.2009 . AS ON THE DATE OF INITIATION OF PROCEEDINGS U/S 153C OF THE ACT I.E. ON 16.10.2009, THE ASSESSMENT FOR THE ASSESSMENT YEAR 2004-05 IS PENDI NG AND AS PER THE PROVISO PROVIDED TO SECTION 153A OF THE ACT, ASSESS MENT OR RE- ASSESSMENT, IF ANY, RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF 6 ASSESSMENT YEARS REFERRED TO IN THIS SE CTION PENDING ON THE ITA NOS.194 & 195/VIZAG/2014 GRANDHI MANOJ KUMAR (HUF), VISAKHAPATNAM 17 DATE OF INITIATION OF THE SEARCH U/S 132 OF THE ACT , AS THE CASE MAY BE, SHALL ABATE AND THE A.O. SHALL ASSESS OR RE-ASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SUCH 6 ASSESSMENT YEARS. SINCE, THE ASSESSMENT FOR THE ASSESSMENT YEAR 2004- 05 IS PENDING AS ON THE DATE OF SEARCH, THE A.O. HAS JURISDICTION TO AS SESS OR RE-ASSESS THE TOTAL INCOME INCLUDING THE INCOME, IF ANY FOUND DUR ING THE COURSE OF SEARCH AND HENCE, THERE IS NO MERITS IN THE ARGUMEN TS OF THE ASSESSEE THAT THE ASSESSMENT FOR THE ASSESSMENT YEAR 2004-05 HAS BEEN CONCLUDED AS ON THE DATE OF SEARCH. 15. PER CONTRA, THE LD. A.R. FOR THE ASSESSEE REFER RING TO THE DECISION OF ITAT, MUMBAI TRIBUNAL IN THE CASE OF V.V.F. LIMI TED VS. DCIT (2016) 47 CCH 737 SUBMITTED THAT THE ASSESSING OFFICER OUG HT TO HAVE PASSED A SEPARATE ORDER GIVING EFFECT TO THE ORDER PASSED BY THE COMMISSIONER U/S 263 OF THE ACT, BUT HE CANNOT MAKE ANY ADDITION S IN THE ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 153 OF THE ACT. THE A.R. FURTHER REFERRING TO SECOND PROVISO TO SECTION 153A OF THE ACT, SUBMI TTED THAT THE ORIGINAL ASSESSMENT FOR THE ASSESSMENT YEAR 2004-05 DOES NOT ABATE AND THEREFORE, THE ASSESSING OFFICER COULD NOT HAVE MAD E ADDITIONS IN THE ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 153C OF T HE ACT. ITA NOS.194 & 195/VIZAG/2014 GRANDHI MANOJ KUMAR (HUF), VISAKHAPATNAM 18 16. HAVING HEARD BOTH THE SIDES AND CONSIDERED MATE RIAL ON RECORD, WE FIND MERITS IN THE ARGUMENTS OF THE ASSESSEE FOR THE REASON THAT AS ON THE DATE OF SEARCH I.E. ON 9.1.2009, THE ASSESSM ENT FOR THE ASSESSMENT YEAR 2004-05 WAS CONCLUDED AND NO PROCEE DINGS ARE PENDING. THE CIT HAS PASSED ORDER U/S 263 OF THE A CT ON 23.3.2009. AS PER THE SECOND PROVISO TO SECTION 153A OF THE AC T, THE ASSESSMENT OR RE-ASSESSMENT, IF ANY RELATING TO ANY ASSESSMENT YE AR FALLING WITHIN THE PERIOD OF 6 ASSESSMENT YEARS REFERRED TO IN THIS SE CTION PENDING ON THE DATE OF INITIATION OF THE SEARCH U/S 132 OF THE ACT SHALL ABATE. THEREFORE, WE ARE OF THE VIEW THAT FOR THE PURPOSE OF SECTION 153A OF THE ACT, THE DATE OF INITIATION OF SEARCH IS IMPORTANT RATHER TH AN THE DATE OF HANDING OVER BOOKS OF ACCOUNTS AND OTHER INCRIMINATING MATE RIAL TO THE ASSESSING OFFICER HAVING JURISDICTION OVER THE ASSESSEE. IN THIS CASE, IT IS AN ADMITTED FACT THAT AS ON THE DATE OF SEARCH, NO PRO CEEDINGS ARE PENDING FOR THE ASSESSMENT YEAR 2004-05. THOUGH THE D.R. C LAIMS THAT ASSESSMENT PROCEEDINGS IS PENDING IN VIEW OF REVISI ON ORDER PASSED BY THE CIT U/S 263 OF THE ACT, SUCH ORDER PASSED BY TH E CIT IS AFTER THE DATE OF INITIATION OF SEARCH PROCEEDINGS, WHICH IS NOT RELEVANT IN VIEW OF THE CLEAR PROVISIONS OF THE ACT THAT ANY ASSESSMENT OR RE-ASSESSMENT PENDING AS ON THE DATE OF INITIATION OF PROCEEDINGS U/S 132 OF THE ACT IS ONLY ABATES. THEREFORE, WE ARE OF THE VIEW THAT TH E ASSESSMENT FOR THE ITA NOS.194 & 195/VIZAG/2014 GRANDHI MANOJ KUMAR (HUF), VISAKHAPATNAM 19 ASSESSMENT YEAR 2004-05 WAS ALREADY CONCLUDED AS ON THE DATE OF SEARCH AND NO PROCEEDINGS ARE PENDING. THE A.O. HA S MADE ADDITIONS TO THE RETURNED INCOME WITHOUT ANY INCRIMINATING MA TERIALS. THE ADDITIONS MADE BY THE A.O. IS BASED ON THE FINANCIA L STATEMENTS SUBMITTED BY THE ASSESSEE ALONG WITH ORIGINAL RETUR N OF INCOME FILED U/S 139(1) OF THE ACT. THEREFORE, WE ARE OF THE VIEW T HAT THE A.O. HAS NO JURISDICTION TO MAKE ADDITIONS TOWARDS RETURNED INC OME, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL IN THE CONCLUDED ASSE SSMENTS. ACCORDINGLY, WE DIRECT THE A.O. TO DELETE ADDITIONS MADE TOWARDS DISALLOWANCE OF CUSTOM DUTY PAID ON IMPORT OF GOLD FOR THE ASSESSMENT YEAR 2004-05. 17. IN THE RESULT, THE APPEALS FILED BY THE ASSESSE E FOR THE ASSESSMENT YEARS 2004-05 AND 2005-06 ARE ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT O N 21 ST APR17. SD/- SD/- ( . ) ( . ) (V. DURGA RAO) (G. MANJUNATHA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER # /VISAKHAPATNAM: ' /DATED : 21.04.2017 VG/SPS ITA NOS.194 & 195/VIZAG/2014 GRANDHI MANOJ KUMAR (HUF), VISAKHAPATNAM 20 )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT SRI GRANDHI MANOJ KUMAR (HUF), C /O VAIBHAV EMPIRE (P) LTD., D.NO.47-10-9, V SQUARE BUILDING, DWARAKAN AGAR, VISAKHAPATNAM. 2. / THE RESPONDENT THE DCIT, CENTRAL CIRCLE-1, VIS AKHAPATNAM. 3. + / THE CIT (CENTRAL), HYDERABAD 4. + ( ) / THE CIT (A)-I, HYDERABAD 5. # . , . , # / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY //