DCIT, New Delhi V. M/s. Aggarwal Plaza Pvt. Ltd., New Delhi

ITA 2288/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91083 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 23-04-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 18-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SYAD NASIN ALLI
• Assessee Lawyers: A K JAIN
• Keywords: Search and seizure; Additional evidence; Onus to prove
• Section: 143(3); 142(1); 153A; 133(6); 68; 145; 263; 63; 132

Judgement Text

ITA NO. 2288/DEL/2013 & CO NO. 245/DEL/2014 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A: NEW DELHI BEFORE SH RI N.K.SAINI, ACCOUNTANT MEMBER AND SHRI A. T. VARKEY, JUDICIAL MEMBER ITA NO. 2288/DEL/2013 (ASSESSMENT YEAR: 2007 - 08) DCIT CENTRAL CIRCLE - 1, ROOM NO.322, IIRD FLOOR, ARA CENTER, JHANDEWALAN EXTN, NEW DELHI VS AGGARWAL PLAZA PVT. LTD., 278, AGGARWAL CITY PLAZA, PLOT NO.17, MANGLAM PLACE, SECTOR - 03, ROHINI, NEW DELHI, PAN:AAFCA7583G APPELLANT RESPONDENT C.O. NO.245/DEL/2014 ITA NO. 2288/DEL/2013 (ASSESSMENT YEAR: 2007 - 08) AGGARWAL PLAZA PVT. LTD., 278, AGGARWAL CITY PLAZA, PLOT NO.17, MANGLAM PLACE, SECTOR - 03, ROHINI, NEW DELHI, PAN:AAFCA7583G VS DCIT CENTRAL CIRCLE - 1, ROOM NO.322, IIRD FLOOR, ARA CENTER, JHANDEWALAN EXTN, NEW DELHI APPELLANT RESPONDENT APPELLANT BY : SH. SYAD NASIN ALLI CIT DR RESPONDENT BY : SH. A .K. JAIN, CA DATE OF HEARING 05.05.2015 DATE OF PRONOUNCEMENT 29 .05.2015 O R D E R PER A. T. VARKEY, JUDICIAL MEMBER TH E APPEAL FILED BY THE REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 11.2.2013 PASSED B Y THE LD. CIT(A) - III , NEW DELHI PERTAINING TO THE ASSESSMENT YEAR 2007 - 08. 2 . THE GROUNDS RAISED IN ITA NO. 2288/DEL/2013 (A.Y. 2007 - 08): - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 26,00,000/ - MADE BY THE AO U/S. 68 OF THE I NCOME T AX ACT, 1961 (HEREIN AFTER REFERRED TO AS ITA NO. 2288/DEL/2013 & CO NO. 245/DEL/2014 2 THE ACT ), SINCE THE CREDITWORTHINESS AND GENUINENESS OF THE ENTITLES FROM WHOM SHARE APPLICATION RECEIVED BY TH E ASSESSEE REMAINED UNVERIFIABLE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED, IN VIOLATION OF RULE 46A OF THE INCOME TAX RULES, 1962 BY NOT FOLLOWING THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF MANISH BUILD WELL PVT. LTD. 204 TAXMAN 106, WHEREIN IT WAS HELD BY THE HONBLE JURISDICTIONAL HIGH COURT TO GIVE TWO STAGE OPPORTUNITY UNDER RULE 46A I.E. FIRST BEFORE ADMISSION OF ADDITIONAL EVIDENCE AND SECOND AFTER ADMISSION OF ADDITIONAL EVIDENCES. 3. THE ORDER OF T HE CIT(A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. 4. THE ASSESSEE CRAVES LEAVE TO ADD, ALTER OR AMEND ANY / ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARING OF THE APPEAL. 3. THE GROUNDS RAISED IN ASSESSEES CROSS OBJE CTION NO. 245/DEL/2014 (A.Y. 2007 - 08) ARE AS UNDER: - 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS IN CONFIRMING THE RECOURSE TO THE PROVISION OF SECTION 153A OF THE I.T. ACT, TAKEN BY THE AO AND THE FAILING TO APPRECIATE THE FACT THAT THERE WAS NO SEARCH AND SEIZURE ACTION INITIATED ON THE ASSESSEE THEREFORE THE ASSESSMENT ORDER PASSED BY THE LD. AO DESERVES TO BE ANNULLED. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE PROCEEDINGS INITIATED UNDER SECTION 153A OF THE I.T. ACT AND ORDER PASSED BY THE LD. AO UNDER SECTION 153A/143(3) OF I.T. ACT, IS WITHOUT JURISDICTION. ITA NO. 2288/DEL/2013 & CO NO. 245/DEL/2014 3 3. THAT ON THE FACTS AND CIRCUMSTANCE OF THE CASE, THE CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS IN CONFIRMING THE PROCEEDIN GS INITIATED UNDER SECTION 153A OF THE I.T. ACT, WHICH IS BAD IN LAW IN THE ABSENCE OF ANY INCRIMINATING MATERIAL BELONGING TO THE ASSESSEE BEING FOUND DURING THE COURSE OF SEARCH. 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS IN CONFIRMING THE VALIDATE OF IMPUGNED ASSESSMENT ORDER DATED 30.12.2011 U/S. 153A OF I.T. ACT AS FRAMED BY THE AO IN RESPECT OF CLOSED ASSESSMENT FOR WHICH NO INCRIMINATING MATERIAL SEIZED DURING THE COURSE OF SEARCH AND SEI ZURE ACTION. 5. THAT ON THE FACTS AND CIRCUMSTANCE OF THE CASE, THE CIT(A) HAS ERRED BOTH IN LAW AND ON FACTS IN CONFIRMING THE ACTION AND PROCEDURE FOLLOWED BY THE AO DURING THE PROCEEDING U/S. 153A OF THE I.T. ACT, WHICH IS INVALID IN EYES OF LAW BEING BASED ON INCORRECT POSTULATE THAT SEARCH ASSESSMENT U/S. 153A IS DENOVO IN NATURE WHEREAS THE SAME IS TO BE BASED AND CONFINED TO INCRIMINATING MATERIAL UNEARTHED DURING SEARCH OPERATIONS. 4. THE FACTS IN BRIEF ARE THAT THE ORIGINAL RETURN IN TH IS CASE WAS FILED ON 26.3.2008 DECLARING NET TAXABLE INCOME RS. 7,670/ - . THE RETURN WAS PROCESSED U/S. 143(1 ) OF THE INCO ME TAX ACT, 1961 (HEREINAFTER T HE ACT) AND LATER ON SCRUTINY ASSESSMENT WAS CARRIED OUT VIDE ORDER DATED 31.03.2009 U/S 143(3) OF T HE ACT . SUBSEQUENTLY, A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT AGAINST THE UNITY GROUP OF COMPANIES (UNITY GROUP) AND INDIVIDUALS ON 20.8.2009. THE ASSESSEE WAS ALSO COVERED IN SEARCH U/S. 132 OF THE ACT. AFTER THE SEARCH, PROCEEDINGS U/S. 153A O F THE ACT WERE INITIATED AND NOTICE U/S. 153A OF THE ACT DATED 23.8.2011 WAS ISSUED TO THE ASSESSEE REQUIRING IT TO FILE THE RETURN OF INCOME. IN RESPONSE THERETO, THE ASSESSEE FILED HIS REPLY DATED 21 .9.2011 AND ITA NO. 2288/DEL/2013 & CO NO. 245/DEL/2014 4 HAS REQUESTED TO TREAT THE ORIGINAL RET URN OF INCOME FILED U/S 139(1) AS THE RETURN FILED U/S. 153 A OF THE ACT. IN THIS CASE REGULAR PROCEEDING S WERE INITIATED AND NOTICE U/S. 143(2) AND 142(1) OF THE ACT, ALONG WITH THE QUESTIONNAIRE WAS ISSUED AND DULY SERVED UPON THE ASSESSEE. 4.1 THE AFORESAID UNITY GROUP IS ENGAGED IN THE REAL ESTATE PROJECTS. THE GROUP IS INVOLVED MAINLY IN BUSINESS OF PROMOTION AND DEVELOPMENT OF DDA APPROVED COMMERCIAL COMPLEXES. DURING THE YEAR, UNDER CONSIDERATION THE COMPANY WAS EXECUTING ONE COMMERCIAL PROJECT FUNCTION MALL WHICH IS SITUATED AT PRASHANT VIHAR, ROHINI, NEW DELHI. AO HAS NOTICED THAT THE ASSESSEE COMPANY HAS RECEIVED SHARE CAPITAL / SHARE APPLICATION MONEY FROM DIFFERENT ENTITIES. HE OBSERVED THAT SOME OF THE APPLICANTS ARE INDIVIDUALS A S WELL AS GROUP COMPANIES RELATED TO THE UNITY GROUP ITSELF AND ARE ASSESSED IN THE SAME CIRCLE. THE AO HIMSELF ACKNOWLEDGES IN PARA 5 OF THE ASSESSMENT ORDER THAT THE SOURCES OF FUND OF THESE PERSONS / COMPANIES HAVE BEEN VERIFIED IN THEIR RESPECTIVE CA SES. AND THEN HE PROCEEDS TO VERIFY THE FRESH SHARE CAPITAL / SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE AND FOR THAT SUMMONS WERE ISSUED U/S. 131(1) OF THE ACT, AND INFORMATION WAS CALLED U/S. 133(6) OF THE ACT. IN THE ASSESSMENT ORDER THE AO OBSERVES THAT THE REQUIREMENT OF SECTION 68 OF THE ACT IS THAT THE ONUS TO PROVE THE CREDIT ENTRY IN THE BOOKS OF ACCOUNTS IS PRIMARILY ON THE ASSESSEE AND NOT ON THE DEPARTMENT. ACCORDING TO HIM, THE ASSESSEE HAS NOT FULLY DISCHARGED ITS ONUS TO PRO VE THE CREDITWORTHINESS OF THE CREDITORS COMPANIES. HE FURTHER OBSERVED THAT MERELY ESTABLISHING THE IDENTITY OF THE CREDITOR IS NOT ENOUGH. IN THIS REGARD, HE PLACED RELIANCE ON VARIOUS JUDICIAL PRONOUNCEMENTS AND HELD THAT THE AMOUNT INTRODUCED BY THE ASSESSEE IS UNDER THE GARB OF SHARE APPLICATION MONEY/ SHARE CAPITAL/ SHARE PREMIUM AND THEREFORE TREATED IT AS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES WITHIN THE MEANING OF SECTION 68 OF THE ACT AND THE ADDITIONS OF RS. 26,00,000/ - WAS MADE WHI LE COMPLETING THE ASSESSMENT U/S. 153A/145(3) OF THE ACT VIDE HIS ORDER DATED 30.12.2011. ITA NO. 2288/DEL/2013 & CO NO. 245/DEL/2014 5 5. AGAINST THE AFORESAID ORDER OF THE ASSESSING OFFICER, ASSESSEE APPEALED BEFORE THE LD. CIT(A), WHO VIDE HIS IMPUGNED ORDER DATED 11.2.2013 HAS PARTLY ALLOW ED THE APPEAL OF THE ASSESSEE AND DELETED THE ADDITION OF RS. 26,00,000/ - MADE BY THE AO U/S. 68 OF THE ACT. 6. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), NOW THE REVENUE IS IN APPEAL AND THE ASSESSEE HAS PREFERRED CROSS - OBJECTION BEFORE THE TRIBUNAL . FIRST OF ALL, WE WILL DEAL WITH REVENUES APPEAL. 7. LD. DR RELIED UPON THE ORDER OF THE AO AND REITERATED THE CONTENTION RAISED IN THE GROUNDS OF APPEAL RAISED BY THE REVENUE. 8. ON THE CONTRARY, LD. AR OF THE ASSESSEE HAS RELIED UPON THE ORDER O F THE LD. CIT(A) AND DEFENDED THAT THE SAME AND DOES NOT WANT US TO INTERFERE IN THE IMPUGNED ORDER. 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RECORDS. IN RESPECT TO DELETION OF RS. 26 LAKHS BY THE LD. CIT(A) AND NON - COMPLIANCE OF RULE 46A, WE FIND THAT AO HAS MADE THE SAID ADDITION BECAUSE, THE SUMMONS ISSUED TO M/S CAPLIN COMMERCIAL PVT. LTD. HAS NOT BEEN RESPONDED OR COMPLIED WITH BY IT . SO THE AO CONCLUDED THAT THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS WERE NOT ESTABLISHED AND HE MADE THE ADDITION. 1 0 . THE ISSUE OF IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE SAID M/S CAPLIN COMMERCIAL PVT. LTD. WAS ADJUDICATED AT LENGTH BY US VIDE ORDER OF THE EVEN DATE IN ITANO.2290/DEL/2013 (AY2006 - 07) , DCIT VS. AGGARWAL ENTERTAINMENT PVT. LTD., WHEREIN ALSO THE LD. CIT(A) DELETED THE ADDITION HOLDING THAT THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE SAID COMPANY WAS PROVED. WE HAVE CONCURRED WITH THE VIEW OF THE LD. CIT(A) AND DISMISSED THE SAID IDENTICAL GROUND OF THE REVENUE. SO THE SAME REASONS WE TOOK FOR UPHOLDING THE VIEW OF THE LD. CIT(A) THAT M/S CAPLIN COMMERCIAL PVT. LTD.S IDENTITY, CREDITWORTHINESS AND GENUINENESS STANDS PROVED IN THE AFORESAID CASE WILL APPLY ITA NO. 2288/DEL/2013 & CO NO. 245/DEL/2014 6 TO THIS CASE ALSO AND THEREFORE WE CO NCUR WITH THE LD. CIT(A) AND DISMISS BOTH THE GROUNDS OF THE REVENUE FOLLOWING OUR FINDING IN ITA NO. 2290/DEL/2013 (AY 2006 - 07) ON BOTH GROUNDS RAISED BEFORE US . 11 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. CROSS OBEJCTION 245/DEL/2014 (AY 2007 - 08) 12 . IN THE CROSS OBJECTION THE ASSESSEE HAS RAISED FIVE GROUNDS, IN WHICH HE HAS NOT PRESSED GROUND NOS.1, 2 AND 3 AND THE SAME STANDS DISMISSED. 13 . COMING TO THE GROUND NOS.4 AND 5 THE LD AR FOR ASSESSEE SHRI A .K. JAIN, HAS VEHEMENTLY ASSAILED THE DECISION OF THE LD CIT(A) IN RESPECT TO CONFIRMING THE IMPUGNED REASSESSMENT ORDER PASSED U/S 153A OF THE INCOME TAX ACT, 1961 (HEREIN AFTER THE ACT). ACCORDING TO HIM, WITHOUT ANY INCRIMINATING MATERIAL SEIZED DURIN G THE COURSE OF SEARCH AND SEIZURE CONDUCTED ON 20.08.2009, THE RE - ASSESSMENT AND THE IMPUGNED ADDITION MADE U/S 153A IS INVALID IN THE EYES OF LAW. THE LD AR CONTENDED THAT FOR THE INSTANT YEAR UNDER CONSIDERATION NO INCRIMINATING MATERIAL WHATSOEVER HAS BEEN SEIZED DURING SEARCH WHICH COULD HAVE BEEN THE BASIS OF ANY ADDITION TO BE MADE U/S 153A OF THE ACT. ACCORDING TO THE LD AR SINCE NO INCRIMINATING MATERIAL WERE SEIZED, THE AO COULD NOT HAVE MADE THE IMPUGNED ADDITION IN REASSESSMENT ORDER WITHOUT ANY INCRIMINATING MATERIAL SEIZED DURING THE SEARCH PROCEEDINGS WHICH TOOK PLACE ON 20.08.2009. IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FROM THE SEARCH IN THE POSSESSION OF THE AO, ACCORDING TO THE LD. AR , HE COULD NOT HAVE FASTENED THE IMPUGNED ADDITION . THE L D AR POINTED OUT THAT ORIGINAL ASSESSMENT FOR THE YEAR UNDER CONSIDERATION I.E. AY 2007 - 08 WAS ITSELF A SCRUTINY ASSESSMENT U/S 143(3) OF THE ACT , AND INVESTIGATION WAS DONE BY THE AO AT THAT TIME AND AFTER SATISFYING HIMSELF OF THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE SHARE TRANSACTIONS MADE A CONSCIOUS DECISION NOT TO MAKE ANY ADDITIONS DURING THE ITA NO. 2288/DEL/2013 & CO NO. 245/DEL/2014 7 ORIGINAL SCRUTINY ASSESSMENT ; AN D NOW THE AO HAS IMPOSED THE IMPUGNED ADDITION BY INVOKING SECTION 153A AND BASED HIS ADDITION ON MATERIALS ALREADY ON RECORD AND THAT TOO WITHOUT ANY S ERIOUS ATTEMPT TO ENQUIRE OR INVESTIGATE ABOUT THE VERACITY OF THE DOCUMENTS PLA CED BEFORE HIM BY THE A SSESSEE, WHICH ACCORDING TO LD. AR IS CLEARLY ILLEGA L IN THE EYES OF LAW. ACCORDING TO THE LD AR , THE ORIGINAL ASSESSMENT WHICH HAS BEEN DONE UNDER SCRUTINY U/S 143(3) OF THE ACT CANNOT BE UNSETTLED WITHOUT INCRIMINATING MATERIALS FOUND DURING THE SEARCH. IN THE CASE IN HAND ACCORDING TO THE LD AR THE AO DID NOT HAVE A SINGLE PIECE OF INCRIMINATING MATERIAL COLLECTED DURING SEARCH TO IMPOSE THE ADDITION, THEREFORE ACCORDING TO HIM, ADDITION THUS MADE WITHOUT INCRIMINATING MATERIAL FOUND DURING SEARCH AND SE IZURE WAS CLEARLY ILLEGAL IN THE EYES OF LAW AND THEREFORE IS INVALID AND CITED THE SPECIAL BENCH DECISION OF THE TRIBUNAL IN AL L CARGO AND ALSO BROUGHT TO OUR NOTICE THE COORDINATE BENCH DECISION IN THE ASSESSEES OWN CASE WHEREIN THE CO OF THE ASSESSEE HAS BEEN ALLOWED. ON THE OTHER HAND, THE LD DR CONTENDED THAT ONCE SEARCH TAKES PLACE IN THE ASSESSEES PREMISES THEN THE AO HAS NO ALTERNATIVE BUT TO INVOKE SECTION 153(A) AND ASSESS OR REASSESS THE ASSESSEE FOR SIX ASSESSMENT YEAR S IMMEDIATELY PRECEDI NG THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH HAS BEEN CONDUCTED. ACCORDING TO THE LD DR SINCE THE ASSESSMENT YEAR IN QUESTION FALLS IN THE AMBIT OF SIX YEARS , THE AO HAS TO ASSESS/ REASSESS THE ASSESSEE EVEN THOUGH THE ORIGINAL ASS ESSMENT WAS CONCLU DED U/S 143(3) OF THE ACT AND PLACED HIS RELIANCE ON THE ORDER OF THE HONBLE DELHI HIGH COURT IN THE CASE OF FILATEX INDIA LTD. IN ITA NO.269/2014AND CM NO.10077/2014 DATED 14.07.2014. AND ALSO RELIED UPON THE DECISION ON THE FOLLOWING ORDERS: - ANIL KUMAR BHATIA 24 TAXMANN.COM 98 DAT ED 07.08.2012 OF HON'BLE DELHI HIGH COURT RAJ KUMAR ARORA, ITA NO. 56/2011 DATED 11.07.2014 OF HON'BLE ALLAHABAD HIGH COURT ITA NO. 2288/DEL/2013 & CO NO. 245/DEL/2014 8 CANARA HOUSING DEVELOPMENT COMPANY, ITA NO. 38/2014 DATED 25.07.2014 OF HON'BLE KARNATAKA HIGH COURT APOORVA EXTRUSION PVT. LTD., ITA NO. 3308/DEL/2010 FOR THE A.Y. 2002 - 03, DATED 09.10.2014 (IT AT, DELHI) SHIVNATH RAI HARNARAIN (INDIA) LTD. V.DCIT 117 ITD 74 DATED 15/02/2008 (ITAT, DELHI) SSP AVIATION LTD. VS. DCIT, WPC NO. 309/2011 DATED 29103/2012 1 4 . WE HAVE HEARD BOTH THE PA RTIES AND HAVE PERUSED THE RECORDS OF THE CASE, AND HAVE GONE THROUGH THE CASE LAWS CITED BEFORE US. BEFORE WE ADJUDICATE THIS ISSUE WE WER E WONDERING WHETHER AN ADDITION CAN BE MADE WITHOUT THE SUPPORT OF ANY MATERIAL LEAVE ALONE INCRIMINATING MATERIAL, W HICH CAN BE TERMED AS THE BASIS OF SUCH AN ADDITION WHETHER IT BE DURING SEC. 143, 147, 153A PROCEEDINGS. EVEN DURING BEST JUDGMENT ASSESSMENT U/S. 144, 145 OF THE ACT, THE AO CANNOT ARBITRARILY MAKE ANY ADDITIONS BASED ON SURMISES AND CONJECTURES. THE RE ARE WELL SETTLED GUIDELINES FOR MAKING EVEN BEST JUDGMENT ASSESSMENTS. SETTLED POSITION OF LAW IS THAT SURMISES AND CONJECTURES CANNOT BE THE BASE OF ANY ADDITIONS WHETHER DURING SCRUTINY ASSESSMENT U/S 143(3), U/S 147/148 OR U/S 153A OF THE ACT. SECT ION 153A, NO DOUBT IS AN OVERRIDING PROVISIONS WHICH TAKES AWAY THE FETTERS FOUND U/S 147/148 OF THE ACT, WHICH AO HAS TO FACE WHILE REOPENING ASSESSMENT IN CASE OF ESCAPEMENT OF INCOME, ETC. HOWEVER THE MOOT QUESTION IS WHETHER THE AO CAN MAKE ADDITIONS B ASED ON NO EVIDENCE, THE ANSWER HAS TO BE IN THE NEGATIVE. BUT THEN THE QUESTION IS WHAT IS THE SCOPE OF ASSESSMENT AND REASSESSMENT ENVISAGED U/S 153A OF THE ACT AND WHAT EVIDENCE CAN BE TAKEN BY THE AO DURING THE 153A PROCEEDINGS. THE AO WHILE EXERCISING HIS JURISDICTION U/S 153A, CAN ASSESS/ REASSESS BASED ON (A) EVIDENCES UNEARTHED DURING THE SEARCH, (B) EVIDENCES ALREADY ON RECORD DURING THE ORIGINAL ASSESSMENT U/S 143(1) OR 143(1)(A) OR 143(3) BUT NOT TAKEN NOTICE BY THE AO FOR WHATEVER REASON OR IF THE VIEW OF THE AO DURING ORIGINAL ASSESSMENT HAS BEEN FOUND TO BE WRONG DUE TO SOME MATERIAL UNEARTHED DURING SEARCH OR HAS COME TO ITA NO. 2288/DEL/2013 & CO NO. 245/DEL/2014 9 THE NOTICE OF THE AO THROUGH ANY OTHER MEANS AND (C) IF ANY FRESH EVIDENCE COMES TO THE NOTICE OF COMMISSIONER U/S 263 OF THE ACT AND HE DIRECTS THE AO TO TAKE THE EVIDENCE INTO CONSIDERATION, THEN THE SAID EVIDENCE CAN BE MADE USE BY THE AO WHILE COMPUTING THE TOTAL INCOME OF THE ASSESSEE FOR THE SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO T HE PREVIOUS YEAR IN WHICH SEARCH HAS BEEN CONDUCTED. THE PARLIAMENT HAS GIVEN A MANDATE TO THE AO, UNBRIDLED BY ANY FETTERS TO COMPUTE THE TOTAL INCOME BASED ON EVIDENCE ON RECORD WHICH HAS ESCAPED NOTICE OF THE AO DURING ORIGINAL ASSESSMENT OR THE EVI DENCE ADDUCED DURING ORIGINAL ASSESSMENT HAS BEEN FOUND TO BE BOGUS BY VIRTUE OF MATERIAL UNEARTHED DURING SEARCH AND THE FRESH EVIDENCE UNEARTHED DURING THE SEARCH PROCEEDINGS ; AND ANY OTHER EVIDENCE WHICH IS BROUGHT TO THE NOTICE OF THE AO BY CIT U/S 2 63 OF THE ACT. HOWEVER THE AO WHILE COMPUTING THE TOTAL INCOME HAS TO DO THAT BASED ON EVIDENCE AS STATED ABOVE ; WITHOUT THE SAME, THE ADDITIONS WILL HAVE NO LEGS TO STAND AND IT HAS TO NECESSARILY FALL. COMING TO THE CASE LAWS CITED BY THE LD. D R , WE WOULD LIKE TO POINT OUT THAT IN ALL THESE CASES DECIDED BY THE HONBLE J URISDICTIONAL HIGH COURT , ON FACTS THERE WAS INCRIMINATING MATERIAL AND THE VIEW OF THE SPECIAL BENCH OF THE TRIBUNAL IN ALL CARGO LOGISTICS LTD. IN WHICH THE SPECIAL BENCH HELD THAT T HE DE - HORS ANY INCRIMINATING MATERIAL, NO ADDITIONS CAN BE SUSTAINED HAS BEEN UPHELD BY THE HONBLE BOMBAY HIGH COURT IN INCOME TAX APPEAL NO. 1969 OF 2013 FILED BY THE REVENUE AGAINST THE SAID DECISION OF THE SPECIAL BENCH I.E. AL L CARGO, WHEREIN THE HON BLE HIGH COURT IN PARA 14 (PAGE 9) HAS SPECIFICALLY ADJUDICATED THE ISSUE RAISED BEFORE THEIR LORDSHIPS THAT TO INTERPRET NOT ONLY THE LEGAL PROVISIONS BUT CONSIDER THE CORRECTNESS OF THE VIEW TAKEN IN THE SPECIAL BENCH DECISION, WE PROCEED TO ADMIT THES E APPEALS ON THE ABOVE QUESTIONS. 1 5 . THE GROUNDS RAISED BY THE REVENUE BEFORE THE HONBLE HIGH COURT OF BOMBAY IN THAT CASE (ALL CARGO) WERE THE FOLLOWING: - ITA NO. 2288/DEL/2013 & CO NO. 245/DEL/2014 10 (I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE HONBLE ITAT IS CORRECT IN NARROWING DOWN THE SCOPE OF ASSESSMENT UNDER SECTION 153A IN RESPECT OF COMPLETED ASSESSMENTS BY HOLDING THAT ONLY UNDISCLOSED INCOME AND UNDISCLOSED ASSETS DETECTED DURING SEARCH COULD BE BROUGHT TO TAX? II) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE HONBLE ITAT IS CORRECT IN LAW IN HOLDING THAT THE SCOPE OF SECTION 153A IS LIMITED TO ASSESSING ONLY SEARCH RELATED INCOME, THEREBY DENYING REVENUE THE OPPORTUNITY OF TAXING OTHER ESCAPED IN COME, THAT COMES TO THE NOTICE OF THE AO? III) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE, THE HONBLE ITAT WAS RIGHT IN LIMITING THE SCOPE OF SECTION 153A ONLY TO UNDISCLOSED INCOME WHEN AS PER THE SECTION THE AO HAS TO ASSESS THE TOTAL INCOME OF THE SIX ASSESSMENT YEARS? IV) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE HONBLE TRIBUNAL ERRED IN HOLDING THAT THE ASSESSEE WAS ENTITLED TO DEDUCTION U/S. 80IA(4) WHICH WAS CONTRARY TO THE CIRCULAR OF THE CBDT NO. 10/2005 AS ALSO CONTRARY TO THE FACT THAT JNPT PORT HAD WITHDRAWN ITS CERTIFICATION OF THE COMPANY? 1 6 . THE HONBLE HIGH COURT OF BOMBAY IN PARA 31 HELD AS FOLLOWS: - WE, THEREFORE, HOLD THAT THE SPECIAL BENCHS UNDERSTANDING OF THE LEGAL PROVISION IS NOT PERVE RSE NOR DOES IT SUFFER FROM ANY ERROR OF LAW APPARENT ON THE FACE OF THE RECORD. ITA NO. 2288/DEL/2013 & CO NO. 245/DEL/2014 11 1 7 . AND FINALLY IN PARA 49 AFTER CONCURRING WITH THE VIEW OF THE HONBLE DELHI HIGH COURT ORDER IN ANIL KUMAR BHATIAS CASE HELD AS FOLLOWS: - WE, THEREFORE, DISMISS THE R EVENUE APPEALS AND ANSWER THE SUBSTANTIAL QUESTIONS OF LAW AGAINST THE REVENUE AND IN FAVOR OF THE ASSESSEE. 1 8 . IN FILATEX INDIA LTD. CASE AND OTHER CASES RELIED AND CITED BY THE LD. DR, WE FIND THAT ON FACTS THERE WAS INCRIMINATING MATERIAL ON RECORD , SO THOSE CASE LAWS CANNOT BE APPLIED TO THE CASE IN HAND, SINCE THERE WAS NO INCRIMINATING MATERIAL FOUND IN THE INSTANT CASE DURING SEARCH OF THE ASSESSEE. IN ANIL KUMAR BHATIAS CASE ALSO THERE WAS INCRIMINATING MATERIAL ON RECORD TO JUSTIFY ADDITIONS , BUT HERE IN THIS CASE THERE WAS NO INCRIMINATING MATERIAL AT ALL. 19 . THEREFORE IN THE FACTS AND CIRCUMSTANCES OF THE CASE WE FIND THAT THE ORIGINAL ASSESSMENT DONE U/S 143(3), WHICH WAS RE - ASSESSED INVOKING 153A AFTER SEARCH U/S 132 OF THE ACT IS VALID, HOWEVER THE ADDITIONS MADE HAS NO BASIS AND IS NOT BASED ON ANY EVIDEN CE TO SUPPORT THE SAME COLLECTED DURING THE SEARCH CONDUCTED AGAINST IT AND SO THE SAME HAS BEEN RIGHTLY DELETED AND SO THE REVENUE APPEAL IS DISMISSED AND THE CO IS PARTLY ALLOWED IN LIGHT OF THE CO - ORDINATE BENCH DECISION IN ASSESSEES OWN CASE PASSED FO R ASSESSMENT YEAR 2008 - 09. 2 0 . WE TA K E NOTE OF THE 'A ' BENCH DECISION OF ITAT , DELHI , IN THE ASSESSEES OWN CASE IN ITA NO. 1605/DEL/2013, AY 2005 - 06, VIDE ORDER DATED 18/07 /2014 CONSIDERED IDENTICAL GROUNDS IN THE CASE OF SANJAY AGGARWAL VS. DCIT IN ITA NO. 3184/DEL/2013, A . Y . 2003 - 04 UNDER SECTION 153 A PROCEEDINGS WHEREIN THE BENCH IN THE ASSESSEES OWN CASE VIDE PARA 14 HELD AS FOLLOWS: '14. SINCE THE SPECIAL BENCH HAS DECIDED THIS ISSUE IN THIS MANNER, IT IS NOT POSSIBLE FOR US TO DEVIATE FROM THE SAME. THERE HAS TO BE SOME CONSISTENCY IN THE VIEW TAKEN BY THE TRIBUNAL. ONCE A SPECIAL BENCH HAS DECIDED A PARTICULAR ISSUE IN A PARTICULAR MANNER, THEN, THAT BECOMES BINDING ON ALL THE DIVISION BENCHES ACROSS THE COUNTRY UNLESS THERE IS A CONTRARY JUDGMENT OF THE HON'BLE SUPREME COURT OR THAT OF SOME HIGH ITA NO. 2288/DEL/2013 & CO NO. 245/DEL/2014 12 COURT. AS THE LD. DR FAILED TO POINT OUT ANY SPECIFIC AND DIRECT JUDGMENT RENDERED BY TH E HON'BLE HIGH COURT ON THE ISSUE WHICH IS OBTAINING IN THE PRESENT APPEAL, WE ARE DISINCLINED TO DEVIATE FROM THE SPECIAL BENCH ORDER IN THE CASE OF ALL CARGO (SUPRA). WE, THEREFORE, HOLD IN PRINCIPLE THAT NO ADDITION CAN BE MADE FOR ANY ASSESSMENT YEAR U /S I53A, THE ASSESSMENT FOR WHICH IS NOT PENDING ON THE DATE OF SEARCH, UNLESS ANY INCRIMINATING MATERIAL IS FOUND IN THE COURSE OF SEARCH.' 21 . CONSISTENT WITH A VIEW TAKEN THEREIN AND TAKING NOTE THAT THE HONBLE BOMBAY HIGH COURT HAS UPHELD THE SPECIA L BENCH DECISION OF THE TRIBUNAL, IN ALL CARGO (SUPRA) WE UPHOLD THE CONTENTION OF THE ASSESSEE THAT NO ADDITION CAN BE MADE FOR THIS ASSESSMENT YEAR U/S 153A SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE COURSE OF SEARCH AND ADMITTEDLY ORIGINAL ASSESSMENT HAS NOT ABATED AS ON DATE OF SEARCH. SO WE ARE INCLINED TO FOLLOW THE VIEW OF THE COORDINATE BENCH AS STATED ABOVE. 2 2 . IN THE RESULT, THE REVENUES APPEAL STANDS DISMISSED AND CROSS OBJECTION FILED BY THE ASSESSEE STANDS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 /05/2015. SD/ - SD/ - [ N.K. SAINI ] [ A.T. VARKEY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 29 / 5 /201 5 AK KEOT /RK COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES DATE OF DICTATION . ITA NO. 2288/DEL/2013 & CO NO. 245/DEL/2014 13 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS.. DATE ON WHICH FAIR ORDER SENT TO MEMBER FOR SIGNATURE DATE ON WHICH THE FAIR ORDER COMES BACK AFTER PRONOUNCEMENT TO THE SR. PS/PS. DATE ON WHICH THE FILE G OES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DESPATCH OF THE ORDER ..