DY. C.I.T. CENTRAL CIR2(2), Nagpur V. M/S SHREE AGRAWAL COAL INDIA PVT. LTD., Nagpur

ITA 20/NAG/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9672 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 19-02-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Assessee Lawyers: J M RANADE
• Keywords: Search and seizure; Bad and doubtful debts; Documents seized; Reassessment proceedings
• Section: 143(3); 153A; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR BEFORE SHRI P.K. BANSAL, VICE PRESIDENT AND SHRI AMARJIT SINGH, JUDICIAL MEMBER ITA NO. 20/NAG./2016 ( ASSESSMENT YEAR : 200506 ) DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE2(2), NAGPUR APPELLANT V/S SHREE AGRAWAL COAL INDIA PVT. LTD. 216, DEVI KRIPA SOCIETY WARDHMAN NAGAR, NAGPUR PAN AAFCS6709L .... RESPONDENT ITA NO. 21/NAG./2016 ( ASSESSMENT YEAR : 200607 ) DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE2(2), NAGPUR APPELLANT V/S SHREE AGRAWAL COAL INDIA PVT. LTD. 216, DEVI KRIPA SOCIETY WARDHMAN NAGAR, NAGPUR PAN AAFCS6709L .... RESPONDENT ITA NO. 22/NAG./2016 ( ASSESSMENT YEAR : 200708 ) DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE2(2), NAGPUR APPELLANT V/S SHREE AGRAWAL COAL INDIA PVT. LTD. 216, DEVI KRIPA SOCIETY, WARDHMAN NAGAR, NAGPUR PAN AAFCS6709L .... RESPONDENT REVENUE BY : SHRI A.R. NINAWE ASSESSEE BY : SHRI J.M. RANADE DATE OF HEARING 19.06.2017 DATE OF ORDER 21.0 6.2017 2 SHREE AGRAWAL COAL INDIA PVT. LTD. O R D E R PER AMARJIT SINGH, J.M. THE PRESENT APPEALS FILED BY THE REVENUE ARE DIRECT ED AGAINST THE IMPUGNED COMMON ORDER DATED 22 ND DECEMBER 2015, PASSED BY THE LEARNED COMMISSIONER (APPEALS)3, NAGPUR, FOR THE ASSESSMENT YEARS 200506, 200607 AND 200708 RESPECTIVELY, TH E FINDINGS OF WHICH WILL APPLY TO THE REMAINING APPEALS ALSO. 2. SINCE ALL THE THREE APPEALS PERTAIN TO THE SAME ASS ESSEE INVOLVING COMMON ISSUE ARISING OUT OF IDENTICAL SET OF FACTS AND CIRCUMSTANCES, EXCEPT VARIATION IN FIGURES, THEREFO RE, AS A MATTER OF CONVENIENCE, THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY WAY OF THIS CONSOLIDATED ORDER. HOW EVER, IN ORDER TO UNDERSTAND THE IMPLICATION, IT WOULD BE NECESSARY T O TAKE NOTE OF THE FACTS OF ONE APPEAL. WE ARE, ACCORDINGLY, NARRATING THE FACTS, AS THEY APPEAR IN THE APPEAL IN ITA NO.20/NAG./2016, FOR AS SESSMENT YEAR 200506. 3. GROUNDS RAISED BY THE REVENUE FOR THE ASSESSMENT YE AR 200506 ARE REPRODUCED BELOW: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) ERRED IN HOLDING THAT THE NOTICE AND ACTION U/S 153A OF THE I.T. ACT WAS BAD IN LAW, EVEN THOUGH THE ASSESSING OFFICER HAD RECORDED HIS SATISFACTION THAT THE DOCUMENTS SEIZED FROM VARIOUS PREMISES, BELONGED TO THE ASSESSEE, WHICH IS THE ON LY PRE- 3 SHREE AGRAWAL COAL INDIA PVT. LTD. CONDITION FOR ISSUE OF NOTICE UNDER SECTION 153A OF THE INCOME-TAX ACT, 1961? 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION MADE ON A CCOUNT OF UNSECURED LOANS AMOUNTING TO RS. 76,32,827/-. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION MADE ON A CCOUNT OF DISALLOWANCE OF EXPENSES OF RS. 13,96,415/- OUT OF EXPENSES CLAIMED ON ACCOUNT OF REBATE AND REMISSION AND SIX OTHER HEADS. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION MADE ON A CCOUNT OF DISALLOWANCE OF EXPENSES ON ACCOUNT OF BAD DEBTS AN D EXCHANGE FLUCTUATION CHARGES OF RS. 3,46,714/-. 4. BRIEF FACTS OF THE CASE ARE, THE ASSESSEE FILED ITS RETURN OF INCOME UNDER SECTION 139(1) OF THE INCOME TAX ACT, 1961 (F OR SHORT THE ACT ) ON 30 TH OCTOBER 2005, DECLARING TOTAL INCOME TO THE TUNE O F ` 30,13,900. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF TRADING AND LIAISONING O F COAL AND WIND POWER. A SEARCH AND SEIZURE OPERATION WAS CONDUCTED AT THE OFFICE PREMISES AS WELL AS RESIDENTIAL PREMISES OF THE DIR ECTORS AND THEIR FAMILY MEMBERS IN THE GROUP CASES OF SHREE AGRAWAL COAL INDIA PVT. LTD., NAGPUR, INCLUDING THE ASSESSEE COMPANY ON 16 TH MARCH 2011. DURING THE COURSE OF SEARCH, BOOKS OF ACCOUNT AND O THER DOCUMENTS OF ASSESSEE COMPANY WERE FOUND AND SEIZED. THEREAFTER, NOTICE UNDER SECTION 153A, WAS ISSUED ON 3 RD APRIL 2012 AND SERVED UPON THE ASSESSEE ON 7 TH APRIL 2012. SUBSEQUENTLY, NOTICE UNDER SECTION 142 (1) ALONG WITH QUESTIONNAIRE WAS ISSUED ON 20 TH NOVEMBER 2012 WHICH 4 SHREE AGRAWAL COAL INDIA PVT. LTD. WAS SERVED UPON ASSESSEE ON 23 RD NOVEMBER 2012. THE ASSESSEE, IN RESPONSE TO THE NOTICE UNDER SECTION 153A, FILED IT S RETURN OF INCOME DECLARING TOTAL INCOME TO THE TUNE OF ` 30,13,900 ALONG WITH COPY OF AUDITED PROFIT & LOSS ACCOUNT AND BALANCE SHEET ON 2 6 TH NOVEMBER 2012. THE ASSESSING OFFICER NOTICED THAT THE ASSESS EE DURING THE YEAR HAS ACCEPTED NEW LOAN OF ` 76,32,827. THE ASSESSING OFFICER STATED THAT THE ASSESSEE HAS NOT PRODUCED THE BOOKS OF ACC OUNT AND HAS ALSO NOT FURNISHED THE NECESSARY DETAILS SUCH AS PAN DET AILS, ADDRESS, IDENTITY OF THE CREDITOR, DETAILS OF TRANSACTIONS A ND CREDITWORTHINESS OF THE CREDITORS TO ENABLE THE ASSESSEE TO EXPLAIN THE GENUINENESS OF THIS LOAN. THE ASSESSING OFFICER, THEREFORE, ADDED THE S AID AMOUNT OF ` 76,32,827 TO THE TOTAL INCOME OF THE ASSESSEE. DURI NG THE FIRST APPELLATE AUTHORITY, THE LEARNED COMMISSIONER (APPE ALS) ALLOWED THE CLAIM OF THE ASSESSEE FOR ALL THE ASSESSMENT UNDER CONSIDERATION. BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US FOR THE ALL THE IMPUGNED ASSESSMENT YEARS. ISSUE NO.1 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS ARGUED BEFORE US THAT THE ASSESSING OFFICER HAS RIGHTLY INVOKED THE PROVISIONS OF SECTION 132 OF THE ACT AND ISSUED NOTICE UNDER SECTION 153A . HE SUBMITTED THAT THE ASSESSING OFFICER HAS RIGHTLY ASSESSED THE UNEXPLAINED RECEIPT 5 SHREE AGRAWAL COAL INDIA PVT. LTD. TO THE TUNE OF ` 76,32,827. THE LEARNED COMMISSIONER (APPEALS) HAS WRONGLY SET ASIDE THE ASSESSMENT UNDER SECTION 153A OF THE ACT. THEREFORE, THE ORDER PASSED BY THE LEARNED COMMISSI ONER (APPEALS) IS NOT JUSTIFIABLE AND IS LIABLE TO BE SET ASIDE. 6. THE LEARNED COUNSEL FOR ASSESSEE ON THE OTHER HAND ARGUED THAT THE CASE OF THE ASSESSEE IS DULY COVERED BY THE DEC ISION OF THE TRIBUNAL, NAGPUR BENCH, RENDERED IN DCIT V/S SHRI DH ARAMPAL R. AGRAWAL, VIDE ORDER DATED 19 TH DECEMBER 2016. THEREFORE, THE LEARNED COMMISSIONER (APPEALS) HAS RIGHTLY DECIDED THE ORDE R IN QUESTION AND, HENCE, THE APPEAL OF THE REVENUE IS LIABLE TO BE DI SMISSED. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE PROCEEDING FURTHER, IT I S NECESSARY TO ADVERT THE FINDINGS OF THE LEARNED COMMISSIONER (AP PEALS) ON THIS ISSUE. ACCORDINGLY, THE OBSERVATIONS OF THE LEARNED COMMISSIONER (APPEALS) ON THIS ISSUE ARE REPRODUCED BELOW FOR BE TTER APPRECIATION OF FACTS: 13. SINCE THE ADDITIONAL GROUND RAISED BY THE ASSE SSEE RAISED LEGAL ISSUES, THE SAME IS DEALT WITH FIRST. THE ADDITIONA L GROUND RAISED BY THE ASSESSEE CONCERNS THE ASSESSMENT MADE U/S 153A OF THE I.T. ACT R.W.S. 143(3). THE JUDGMENT IN THE CASE OF CIT VS. CONTINENTAL WAREHOUSING CORPORATION (BOMBAY HIGH COURT) (APPEAL NO. 523 OF 2013) & CIT VS. MURLI AGRO PRODUCTS LTD. (NAGPUR BE NCH OF BOMBAY HIGH COURT) (APPEAL NO.36 OF 2009),RELIED UPON BY T HE ASSESSEE, THE COURTS HAVE HELD THAT THE AC CANNOT MAKE AN ASS ESSMENT ORDER OR THE ADDITIONS THEREIN WHICH ARE NOT BASED ON THE 6 SHREE AGRAWAL COAL INDIA PVT. LTD. INCRIMINATING MATERIAL FOUND OR SEIZED DURING SEARC H FOR THE ASSESSMENT YEARS FOR WHICH THE ASSESSMENT PROCEEDIN GS HAVE BECOME FINAL. AN EXCEPTION HAS BEEN MADE FOR THOSE ASSESSMENT YEARS IN WHICH THE ASSESSMENT PROCEEDINGS HAVE NOT BECOME FINAL OR FOR WHICH THE ASSESSMENTS HAVE BEEN ABATED. IN CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA ) LTD. (SUPRA), THE BOMBAY HIGH COURT ANSWERED THE QUESTIO N FRAMED BY IT AS UNDER: A. IN ASSESSMENTS THAT ARE ABATED, THE A.O. RETAIN S 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; B. IN OTHER CASES, IN ADDITION TO THE INCOME THAT H AS ALREADY BEEN ASSESSED, THE ASSESSMENT U/S 153A WILL BE MADE ON T HE BASIS OF INCRIMINATING MATERIAL, WHICH IN THE CONTEXT OF REL EVANT PROVISIONS MEANS - (I) BOOKS OF ACCOUNT, OTHER DOCUMENTS, FOUN D IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINA L ASSESSMENT, AND (II) UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH.' THE HON'BLE HIGH COURT REFERRED TO THE DECISIONS OF HON'BLE NAGPUR BENCH OF BOMBAY HIGH COURT IN THE CASE OF MURLI AGR O PRODUCTS LTD. AND OF SPECIAL BENCH OF ITAT, MUMBAI IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. 14. FOR AY 2008-09, THE TIME FOR ISSUE OF NOTICE U/ S 143(2) IS OVER. THE HON'BLE ITAT, MUMBAI HAS HELD IN THE CASE OF GU RINDER SINGH BAWA VS DCIT AS UNDER: 'THE SPECIAL BENCH IN THE CASE OF ALCARGO GLOBAL LO GISTICS LTD. (SUPRA), HAS HELD THAT PROVISIONS OF SECTION 153A C OME INTO OPERATION IF A SEARCH OR REQUISITION IS INITIATED A FTER 31.5.2003 AND ON SATISFACTION OF THIS CONDITION, THE AO IS UNDER OBLIGATION TO ISSUE NOTICE TO THE PERSON REQUIRING HIM TO FURNISH THE R ETURN OF INCOME FOR SIX YEARS IMMEDIATELY PRECEDING THE YEAR OF SEA RCH. THE SPECIAL BENCH FURTHER HELD THAT IN CASE ASSESSMENT HAS ABAT ED, THE AO RETAINS THE ORIGINAL JURISDICTION AS WELL AS JURISD ICTION UNDER SECTION 153A FOR WHICH ASSESSMENT SHALL BE MADE FOR EACH AS SESSMENT YEAR SEPARATELY. THUS IN CASE WHERE ASSESSMENT HAS ABATED THE AO CAN MAKE ADDITIONS IN THE ASSESSMENT, EVEN IF NO IN CRIMINATING MATERIAL HAS BEEN FOUND. BUT IN OTHER CASES THE SPE CIAL BENCH HELD THAT THE ASSESSMENT UNDER SECTION 153A CAN BE MADE ON THE BASIS OF INCRIMINATING MATERIAL WHICH IN THE CONTEXT OF R ELEVANT PROVISIONS MEANS BOOKS OF ACCOUNT AND OTHER DOCUMENTS FOUND IN THE COURSE 7 SHREE AGRAWAL COAL INDIA PVT. LTD. OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINA L ASSESSMENT AND UNDISCLOSED INCOME OR PROPERTY DISCLOSED DURING THE COURSE OF SEARCH. IN THE PRESENT CASE, THE ASSESSMENT HAD BEE N COMPLETED UNDER SUMMARY SCHEME UNDER SECTION 143(1) AND TIME LIMIT FOR ISSUE OF NOTICE UNDER SECTION 143(2) HAD EXPIRED ON THE DATE OF SEARCH. THEREFORE, THERE WAS NO ASSESSMENT PENDING IN THIS CASE AND IN SUCH A CASE THERE WAS NO QUESTION OF ABATEME NT. THEREFORE, ADDITION COULD BE MADE ONLY ON THE BASIS OF INCRIMI NATING MATERIAL FOUND DURING SEARCH...' THE JUDGMENT FOLLOWS THE RATIO LAID DOWN BY THE HON HIGH COURT IN THE CASE OF CIT VS. CONTINENTAL WAREHOUSING CORPORA TION (BOMBAY HIGH COURT) (APPEAL NO, 523 OF 2013) & CIT VS. MURL I AGRO PRODUCTS LTD. (NAGPUR BENCH OF BOMBAY HIGH COURT) (APPEAL NO .36 OF 2009) THE HON'BLE ITAT HAS HELD IN THE CASE REFERRED ABOV E THAT IF THE DATE OF ISSUE OF NOTICE U/S 143(2) HAD EXPIRED FOR A CERTAIN ASSESSMENT YEAR AND NOTICE U/S 143(2) WAS NOT ISSUE D AS ON THE DATE OF SEARCH, NO ASSESSMENT WAS PENDING AND THERE WAS NO QUESTION OF ABATEMENT. 15. THE ASSESSEE ALSO RELIED ON THE DECISION OF RAJ ASTHAN HIGH COURT IN THE CASE OF JAI STEEL (INDIA) VS. ACIT (20 13) 259 CTR 0281 (RAJ) . IT WAS HELD BY HON'BLE RAJASTHAN HIGH COURT IN PARA 21 AS UNDER: '21. NOW THERE CAN BE CASES WHERE AT THE TIME WHEN THE SEARCH IS INITIATED OR REQUISITION IS MADE, THE ASSESSMENT OR REASSESSMENT PROCEEDINGS RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF THE SIX ASSESSMENT YEARS MENTIONED ABOVE, MAY BE PENDING. IN SUCH A CASE, THE SECOND PROVISO TO SUB SECTION (1) OF SECTION 153A SAYS THAT SUCH PROCEEDINGS 'SHALL ABAT E'. THE REASON IS NOT FAR TO SEEK. UNDER SECTION 153A, THERE IS NO ROOM FOR MULTIPLE ASSESSMENT ORDERS IN RESPECT OF ANY OF THE SIX ASSESSMENT YEARS UNDER CONSIDERATION. THAT IS BECAUSE THE ASSE SSING OFFICER HAS TO DETERMINE NOT MERELY THE UNDISCLOSED INCOME OF THE ASSESSEE, BUT ALSO THE 'TOTAL INCOME' OF THE ASSESS EE IN WHOSE CASE A SEARCH OR REQUISITION HAS BEEN INITIATED. OBVIOUS LY THERE CANNOT BE SEVERAL ORDERS FOR THE SAME ASSESSMENT YEAR DETE RMINING THE TOTAL INCOME OF THE ASSESSEE. IN ORDER TO ENSURE TH IS STATE OF AFFAIRS NAMELY, THAT IN RESPECT OF THE SIX ASSESSMENT YEARS PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE YEAR IN WHICH THE S EARCH TOOK PLACE THERE IS ONLY ONE DETERMINATION OF THE TOTAL INCOME, IT HAS BEEN PROVIDED IN THE SECOND PROVISO OF SUB 'SECTION (1) OF SECTION 153A THAT ANY PROCEEDINGS FOR )ASSESSMENT OR REASSE SSMENT OF THE ASSESSEE WHICH ARE PENDING ON THE DATE OF INITIATIO N OF THE SEARCH OR MAKING REQUISITION 'SHALL ABATE'. ONCE THOSE PRO CEEDINGS ABATE, THE DECKS ARE CLEARED, FOR THE ASSESSING OFFICER TO PASS ASSESSMENT 8 SHREE AGRAWAL COAL INDIA PVT. LTD. ORDERS FOR EACH OF THOSE SIX YEARS DETERMINING THE TOTAL INCOME OF THE ASSESSEE WHICH COULD INCLUDE BOTH THE INCOME DE CLARED IN THE RETURNS, IF ANY, FURNISHED BY THE ASSESSEE AS WELL AS THE UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SE ARCH OR REQUISITION. THE POSITION THUS EMERGING IS THAT THE SEARCH IS INITIATED OR REQUISITION IS MADE, THEY WILL ABATE M AKING WAY FOR THE ASSESSING OFFICER TO DETERMINE THE TOTAL INCOME OF THE ASSESSEE IN WHICH THE UNDISCLOSED INCOME WOULD ALSO BE INCLUDED , BUT IN CASE WHERE THE ASSESSMENT OR REASSESSMENT PROCEEDINGS HA VE ALREADY BEEN COMPLETED AND ASSESSMENT ORDERS HAVE BEEN PASS ED DETERMINING THE ASSESSEE'S TOTAL INCOME AND SUCH OR DERS SUBSISTING AT THE TIME WHEN THE SEARCH OR THE REQUISITION IS M ADE, THERE IS NO QUESTION OF ANY ABATEMENT SINCE NO PROCEEDINGS ARE PENDING. IN THIS LATTER SITUATION, THE ASSESSING OFFICER WILL R EOPEN THE ASSESSMENTS OR REASSESSMENTS ALREADY MADE (WITHOUT HAVING THE NEED TO FOLLOW THE STRICT PROVISIONS OR COMPLYING W ITH THE STRICT CONDITIONS OF SECTIONS 147, 148 AND 151) AND DETERM INE THE TOTAL INCOME OF THE ASSESSEE. SUCH DETERMINATION IN THE O RDERS PASSED UNDER SECTION 153A WOULD BE SIMILAR TO THE ORDERS P ASSED IN ANY REASSESSMENT, WHERE THE TOTAL INCOME DETERMINED IN THE ORIGINAL ASSESSMENT ORDER AND THE INCOME THAT ESCAPED ASSESS MENT ARE CLUBBED TOGETHER AND ASSESSED AS THE TOTAL INCOME. IN SUCH A CASE, TO REITERATE, THERE IS NO QUESTION OF ANY ABATEMENT OF THE EARLIER PROCEEDINGS FOR THE SIMPLE REASON THAT NO PROCEEDIN GS FOR ASSESSMENT OR REASSESSMENT WERE PENDING SINCE THEY HAD ALREADY CULMINATED IN ASSESSMENT OR REASSESSMENT ORDERS WHE N THE SEARCH WAS INITIATED OR THE REQUISITION WAS MADE.' 16. ASSESSEE FURTHER RELIED ON ORDER OF MUMBAI TRIB UNAL IN CASE OF ATUL BAROT VS. DCIT (2014) 65 SOT 0083 (MUMBAI) (UR O. IN PARA 9 OF THIS ORDER THE ITAT HAS DISCUSSED AS UNDER: 9. WE AGREE WITH THE VIEW TAKEN BY THE CO-ORDINATE BT4NCH OF THE TRIBUNAL IN THE CASE OF SHRI JAYENDRA P. JHAVERI (S UPRA) AND ALSO FOR THE SAKE OF CONSISTENCY, FOLLOWING THE ABOVE DECISI ON, REASSESSMENTS MADE BY AO U/S 153A IN THE ABOVE CASE S IN WHICH THE ASSESSMENTS HAVE ALREADY BEEN CONCLUDED, WITHOU T ANY INCRIMINATING MATERIAL BEING FOUND DURING THE SEARC H ACTION CONDUCTED U/S 132 OF THE ACT, ARE HEREBY SET ASIDE. CONSEQUENTLY, THE ADDITIONS MADE BY THE AO IN ASSESSMENTS PROCEED INGS U/S 153A DO NOT SURVIVE AND THEREFORE ORDERED TO BE DEL ETED.' 17. ASSESSEE FURTHER RELIED ON ORDER OF MUMBAI ITAT IN CASE OF NATWAR PAREKH & CO. PVT. LTD. VS. DCIT, ITA NO.2143 /45/ MUM/ 2009. IN PARA 12 OF THIS ORDER THE ITAT HAS OBSERVE D AS UNDER: '12. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED T HE FINDINGS OF .1 9 SHREE AGRAWAL COAL INDIA PVT. LTD. THE AUTHORITIES BELOW WITH REFERENCE TO THE LEGAL I SSUE RAISED IN THE ADDITIONAL GROUND OF APPEAL AS WELL AS THE MATERIAL AVAILABLE ON RECORD. THE RETURNS OF INCOME FOR THE ASSESSMENT YE AR 2003 - 04 AND 2004 - 05 WERE FILED UNDER SECTION 139, WHICH W ERE SUBJECTED TO ASSESSMENT UNDER SECTION 143(3), WHEREAS, THE RE TURN OF INCOME FOR THE ASSESSMENT YEAR 2005 - 06 WAS SUBJECT TO TH E ASSESSMENT UNDER SECTION 143(1). ALL THESE ASSESSMENTS WERE CO MPLETED MUCH BEFORE THE DATE OF SEARCH. ON THE DATE OF ISSUANCE OF NOTICE UNDER SECTION 153A, NO ASSESSMENT WAS PENDING AND THE ASS ESSMENT SO COMPLETED EARLIER HAD ATTAINED FINALITY. FROM A PLA IN READING OF THE PROVISIONS OF SECTION 153A, IT IS EVIDENT THAT IF A SEARCH HAS BEEN INITIATED UNDER SECTION 132(1) OR REQUISITION HAS B EEN MADE UNDER SECTION 132A, THEN THE ASSESSING OFFICER IS OBLIGED TO ISSUE NOTICE UNDER SECTION 153A, REQUIRING SUCH PERSON TO FURNIS H RETURN OF INCOME OF SIX YEARS IN THE PRESCRIBED FORM FOR THE IMMEDIATELY PRECEDING THE YEAR OF SEARCH. THE ASSESSING OFFICER IS LEGALLY REQUIRED TO ASSESS OR RE-ASSESS THE TOTAL INCOME OF SIX NATVAR PARIKH & CO. PVT. LTD. ASSESSMENT YEAR IMMEDIATELY PRECEDING TO THE YEAR OF SEARCH. THE SECOND PROVISO TO SECTION 1 53A PROVIDES THAT IF THE ASSESSMENT OR RE-ASSESSMENT OF ANY OF T HE ASSESSMENT YEAR, FALLING WITHIN THE PERIOD OF SIX YEARS IS PEN DING ON THE DATE OF SEARCH, THEN THE SAME SHALL GET ABATED. IN THE PRES ENT CASE, FOR THE YEARS UNDER APPEAL, THE ASSESSMENTS WERE NOT PENDIN G AND HAD ATTAINED FINALITY, THEREFORE, THE ASSESSMENTS COMPL ETED IN THE IMPUGNED ASSESSMENT YEARS WILL NOT GET ABATED. ONCE THAT IS SO, THE LEGAL POSITION AS OF NOW IS THAT THE ADDITIONS OVER AND ABOVE THE ASSESSED INCOME CANNOT BE MADE DEHORS THE INCRI MINATING MATERIAL FOUND AT THE TIME OF SEARCH WHILE COMPLETI NG THE ASSESSMENT UNDER SECTION 153A. THIS, INTER-ALIA, ME ANS THAT IF THERE IS NO INCRIMINATING MATERIAL, THEN THE ORIGIN AL ASSESSMENT MADE CAN BE REITERATED AND NO FURTHER ADDITION IS C ALLED FOR. THIS HAS BEEN HELD SO BY THE TRIBUNAL, MUMBAI SPECIAL BE NCH, IN ALL CARGO GLOBAL LOGISTICS (SUPRA) AND ALSO BY THE DECI SION OF THE HON'BLE RAJASTHAN HIGH COURT IN JAI STEEL, JODHPUR (SUPRA). . THUS, THE LAW AS ENVISAGED BY THE HIGH COURT IS THAT, IF NO INCRIMINATING MATERIAL HAS BEEN FOUND, THEN NO ADDI TION CAN BE MADE IN THE ASSESSMENT COMPLETED UNDER SECTION 153A WHICH HAS NOT BEEN ABATED. .......THUS, RESPECTFULLY FOLLOWING THE RATIO AND T HE PRINCIPLE LAID DOWN BY THE HON'BLE RAJASTHAN HIGH COURT THAT ONCE THERE IS NO INCRIMINATING MATERIAL FOUND AT THE LIME OF SEARCH, THEN NO ADDITION CAN BE MADE ON THE ASSESSMENTS WHICH ARE NOT PENDIN G AND HAVE ATTAINED FINALITY. ACCORDINGLY, ON THE LEGAL GROUND ITSELF, THE ADDITIONS MADE BY THE ASSESSING OFFICER IN ALL THE YEARS UNDER APPEAL I.E. A. Y. 2003-04, 2004-05 AND 200506 ARE CANCELLED.' 10 SHREE AGRAWAL COAL INDIA PVT. LTD. 18. VARIOUS TRIBUNALS AND HIGH COURTS HAVE HELD THA T THE ASSESSMENTS WHICH HAVE ALREADY CONCLUDED, WITHOUT A NY INCRIMINATING MATERIAL BEING FOUND DURING THE SEARC H, THE ADDITIONS MADE BY AG IN ASSESSMENTS PROCEEDINGS U/S 153A DO N OT SURVIVE AND THEREFORE ORDERED TO BE DELETED. IN CASE WHERE ASSESSMENT OR REASSESSMENT PROCEEDINGS HAVE ALREADY BEEN COMPLETE D AND ASSESSMENT ORDERS HAVE BEEN PASSED DETERMINING ASSE SSEES TOTAL INCOME AND SUCH ORDERS SUBSISTING AT THE TIME WHEN THE SEARCH OR THE REQUISITION IS MADE, THERE IS NO QUESTION OF AN Y ABATEMENT SINCE NO PROCEEDINGS ARE PENDING. IN THE PRESENT CA SE, THE ASSESSMENT HAD BEEN COMPLETED U/S 143(3) OF THE I.T . ACT AS REPORTED BY THE AG IN REMAND REPORT DATED 10.12.201 5. THE AO HAS STATED AS UNDER IN HIS REPORT DATED 10.12.2015 FOR THE AGRAWAL GROUP OF CASES:- 'AS REGARDS THE CASES IN WHICH THE ASSESSMENTS WERE ABATED AS A RESULT OF SEARCH U/S 132 AND NOTICE U/S 153A OR 153 C, IT IS TO INFORM THAT AS PER THE RECORDS, EXCEPT IN THE CASE OF M/S. SHREE AGRAWAL COAL INDIA PVT. LTD. FOR THE A.Y. 200910, THERE IS NO CASE IN WHICH ASSESSMENT WAS SO ABATED. IT IS ALSO SUBMI TTED THAT IN FOLLOWING CASES THE ASSESSMENTS WERE DONE U/S 143(3 ) OF THE ACT, PRIOR TO THE SEARCH 1. N/S. SHREE AGRAWAL COAL INDIA PVT.LTD. : AY 2005-06 , 2006-07, 2007-08 & 2008-09. 2. SHRI DARPAN DHARAMPAL AGRAWAL: AY 2008-09.' THEREFORE, IT IS SEEN THAT THERE WAS NO ASSESSMENT PENDING IN THIS CASE AND IN SUCH A CASE THIS NO QUESTION OF ABATEME NT. 19. CONSIDERING THE DECISIONS DISCUSSED ABOVE AND R ELYING UPON THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT VS CONTINENTAL WAREHOUSING (BOMBAY HIGH COURT) (APPEAL NO. 523 OF 2013) & CIT VS. MURLI AGRO PRODUCTS LTD(NAGPUR BENC H OF BOMBAY HIGH COURT) (APPEAL NO.36 OF 2009), THE 'ADDITIONAL GROUND' RAISED BY THE ASSESSEE IS ALLOWED. THE AO HAS MADE ALL THE ADDITIONS IN THE ASSESSMENT ORDER WITHOUT REFERENCE TO ANY MATERIAL SEIZED DURING SEARCH. 20. THEREFORE, THE ASSESSMENT ORDER MADE BY THE AO IS CANCELLED. IN VIEW OF THE ALLOWANCE OF THE ADDITIONAL GROUND T HERE IS NO NEED TO DISCUSS THE MERITS OF THE CASE IN RESPECT OF ADD ITIONS CHALLENGED IN GROUND OF APPEAL NO.2. 11 SHREE AGRAWAL COAL INDIA PVT. LTD. THE FOLLOWING ADDITIONS MADE BY THE A.O. ARE DELETE D: I) UNSECURED LOANS AS AT 31.3.2005 ` 76,32,827 II) ADHOC DISALLOWANCE AT 20% FROM EXPENSES ` 13,96,415 III) DISALLOWANCE OF BAD DEBTS AND EXCHANGE FLUCTUATION CHARGES ` 3,46,714 TOTAL: ` 93,75,956 8. ON A PERUSAL OF THE AFORESAID FINDING, WE NOTICED T HAT THE CASE OF THE ASSESSEE HAS BEEN DECIDED ON THE BASIS OF FINDI NGS GIVEN BY THE HONBLE JURISDICTIONAL HIGH COURT IN CIT V/S CONTIN ENTAL WAREHOUSING CORPORATION, [2015] 58 TAXMANN.COM 78 (BOM.). NO DOU BT, THE OTHER LAW HAS ALSO BEEN MENTIONED BY THE LEARNED COMMISSI ONER (APPEALS) WHILE DECIDING THE ISSUE. IN THE INSTANT CASE ALSO, THE ASSESSMENT HAS BEEN CONCLUDED AND NO NEW MATERIAL WAS FOUND AGAINS T THE ASSESSEE. THE ASSESSEE HAS ALREADY SHOWN THE LOAN RECEIVED TO THE TUNE OF ` 76,32,827. PROVISIONS UNDER SECTION 153A WERE INVOK ED ONLY TO VERIFY THE GENUINENESS OF THE LOAN. SIMILAR ISSUE HAS ALSO BEEN DECIDED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN DCIT V/S SHR I DHARAMPAL R. AGRAWAL, ITA NO.290 & 291/NAG./2016, DATED 19 TH DECEMBER 2016, FOR THE ASSESSMENT YEAR 200506 AND 200607, WHEREIN TH E APPEALS FILED BY THE REVENUE IN CONNECTION WITH THE SAME CONTROVE RSY HAS BEEN ORDERED TO BE DISMISSED. SINCE THE ISSUE INVOLVED I N THE PRESENT CASE IS SIMILAR TO THE ISSUE DECIDED BY THE TRIBUNAL CIT ED SUPRA, THEREFORE, IN VIEW OF THE SAID FACTS AND CIRCUMSTANCES, WE ARE OF THE CONSIDERED 12 SHREE AGRAWAL COAL INDIA PVT. LTD. OPINION THAT THE LEARNED COMMISSIONER (APPEALS) HAS PASSED THE ORDER JUDICIALLY AND CORRECTLY AND NO INTERFERENCE IS REQ UIRED AT THIS APPELLATE STAGE. CONSEQUENTLY, WE UPHOLD THE ORDERS PASSED BY THE LEARNED COMMISSIONER (APPEALS) FOR THE YEARS UNDER CONSIDER ATION I.E., ASSESSMENT YEAR 200506. ISSUE NO.1 TO 3 9. INSOFAR AS ISSUES NO.1 TO 3 ON MERIT ARE CONCERNED, WE ARE OF THE VIEW THAT WHEN THE LEGAL ISSUE HAS ALREADY BEEN DEC IDED IN FAVOUR OF THE ASSESSEE, HENCE, THERE IS NO NEED TO DECIDE THE SAME BECAUSE IT WOULD ONLY BE ACADEMIC IN NATURE. 10. SINCE THE MATTER OF CONTROVERSY IN THE APPEAL FOR T HE ASSESSMENT YEAR 200607 AND 200708 IS THE SAME, THEREFORE, TH E SAID APPEALS ARE ALSO HEREBY ORDERED TO BE DISMISSED IN VIEW OF THE ABOVE STATED TERMS. 11. IN THE RESULT, REVENUES APPEAL FOR ASSESSMENT YEAR 200506, 200607 AND 200708 ARE HEREBY ORDERED TO BE DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 21.06.2017 SD/ - P.K. BANSAL VICE PRESIDENT SD/ - AMARJIT SINGH JUDICIAL MEMBER NAGPUR, DATED: 21.06.2017 13 SHREE AGRAWAL COAL INDIA PVT. LTD. COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, NAGPUR CITY CONCERNED; (5) THE DR, ITAT, NAGPUR; (6) GUARD FILE. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (DY./ASSTT. REGISTRAR) ITAT, NAGPUR