ACIT, New Delhi V. Sh. Nirmal Singh Bhangoo, New Delhi

ITA 2640/DEL/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86689 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 10-12-2013
• Assessment Year: 2000-2001
• Appeal Filed On: 02-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M B REDDY
• Assessee Lawyers: SUDHA GUPTA
• Keywords: Revision of order; Depreciation; Search and seizure; Validity of assessment; Documents seized; Unabsorbed depreciation
• Section: 143(3); 153A; 115JB; 32; 68; 263; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : F : NEW DELHI BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI T.S. KAPOOR , ACCOUNTANT MEMBER ITA NO S . 2640 TO 2644 /DEL / 2010 ASSESSMENT YEAR S : 2000 - 01 TO 2004 - 05 ASSTT. COMMISSIONER OF VS. SH. NIRMAL SINGH BHANGOO, INCOME TAX, CENTRAL CIRCLE - 4, 200, AMBIKA VIHAR, PACHIM NEW DELHI VIHAR, NEW DELHI. (PAN: ACTPB6698L) (APPELLANT) (RESPONDENT) WITH ITA NOS. 2645 & 2646 /DEL /2010 ASSESSMENT YEARS: 2000 - 01 & 2004 - 05 ASSTT. COMMISSIONER OF VS. SMT. PREM KAUR, INCOME TAX, CENTRAL CIRCLE - 4, 200, AMBIKA VIHAR, NEW DELHI PACHIM VIHAR, NEW DELHI. (PAN: AKRPK4678H) (APPELLANT) (RESPONDENT) APPELLANT BY : SH. M.B. REDDY, CIT, DR RESPONDEN T BY: MS. SUDHA GUPTA, CA ORDER PER SHRI I.C. SUDHIR, JM : 1. IN ALL THESE APPEALS PREFERRED BY THE REVENUE, THE FIRST APPELLATE ORDER HAS BEEN QUESTION ED ON THE FOLLOWING COMMON GROUNDS: I. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN ANNULLING THE ASSESSING BY HOLDING THAT NO DOCUMENT WAS SEIZED DURING THE SEARCH PERTAINING TO THIS ASSESSMENT YEAR? II. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW IN N OT FOLLOWING THE CIRCULAR NO. 7 OF 2003, DATE D 05.09.2003 ISSUED BY THE CBDT ? 2 ITA NOS. 2640 TO 2644 /DEL /2010 & 2645 & 2646 /DEL /2010 III. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW BY NOT APPRECIATING THE FACT THAT THERE IS NO PRECONDITION THAT DOCUMENTS PERTAINING TO EACH OF THE ASSESSMENT YEAR FALLING UNDER THE PROVISIONS OF SECTION 153C/153A SHOULD BE FOUND? IV. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW BY ADMITTING ADDITION GROUND OF THE ASSESSEE WITHOUT GIVING AN OPPORTUNITY TO THE AO? 2. HEARD AND CONSIDERED THE ARGUMENTS ADVANCED BY THE PARTIES IN VIEW OF THE ORDERS OF THE AUTHORITIES BELOW, MATERIAL AVAILABLE ON RECORD AND THE DECISIONS RELIED UPON. 3. THE RELEVANT FACTS ARE THAT THE ASSESSEE WAS SUBJECTED TO SEARCH AND SE IZURE PROCEDURE UNDER SECTION 132 OF THE INCOME - TAX ACT, 1961 (FOR SHORT THE ACT ) ON 22.09.2005. IN PURSUANCE TO THE NOTICE ISSUED UNDER SECTION 153A , THE ASSESEE FILED ITS RETURN OF INCOME. THE A.O. RAISED SEVERAL QUERIES, WHICH WAS COMPLIED WITH BUT T HE A.O. WAS NOT SATISFIED THEREWITH AND MADE ADDITION MAINLY ON ACCOUNT OF UNEXPLAINED UN SECURED LOANS UNDER SECTION 68 OF ACT. 4. BEING AGGRIEVE D , THE ASSESSEE PREFERRED FIRST APPEAL RAISING THE ADDITIONAL GROUND QUESTIONING THE VALIDITY OF ASSESSMENT FRA MED UNDER SECTION 153A READ WITH SECTION 143(3) OF THE ACT IN THE ABSENCE OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH AND SEIZURE AND THAT ON THE DATE OF SEARCH , ASSESSMENT PROCEEDINGS WERE NOT PENDING. THE ASSESSEE SUCCEEDED ON THE LEGAL ISSUE RAISED IN THIS GROUND. THE LEARNED CIT(A) , FOLLOWING SE VERAL DECISIONS CITED BEFORE IT AND THE CBDT CIRCULAR NO. 7 OF 2003, DATED 15.09.2003 , CAME TO THE CONCLUSION THAT WHERE THE ASSESSMENT IS NOT PENDING ON 3 ITA NOS. 2640 TO 2644 /DEL /2010 & 2645 & 2646 /DEL /2010 THE DATE OF SEARCH AND SEIZURE AND NOTHING INCRIMINATING WAS FOUND DURING THE COURSE OF SEARCH TO SUGGEST THAT ANY INCOME HAS ESCAPED THE ASSESSMENT AND NO BOOKS OF ACCOUNT, DOCUMENTS OR OTHER ASSETS BEING FO U ND OR SEIZED IN THE SEARCH, NO ADDITION CAN BE MADE TO THE INCOME OF THE ASSESSEE UNDER SECTION 153A OF THE ACT WHICH IS NOT BASED ON THE BOOKS OF ACCOUNT, DOCUMENTS OR OTHER ASSETS FOUND AND SEIZED DURING THE SEARCH. 5. IN SUPPORT OF THE GROUND , LEARNED DR PLACED RELIANCE ON THE ASSESSMENT ORDER AND CITED FOLLOWING DECISIONS TO NURTURE HIS VERSION THAT FOR FRAMING ASSESSMENT UNDER SECTION 153A OF THE ACT, THE ONLY REQUIREMENT IS THAT THERE WAS SEARCH CONDUCTED UNDER SECTION 132 OF THE ACT AND THERE IS NO NEED OF FINDING OF ANY INCRIMINATING MATERIAL TO JUSTIFY THE VALIDITY OF ASS ESSMENT FRAMED UNDER SECTION 153A OF THE ACT: I. CIT VS. ELEGANT HOMES PVT. LTD., (2003) 259 ITR 232 (RAJ.) ; II. CIT VS. CHETAN DAS LACHMAN DAS, (2012) 25 TAXMANN.COM 227 (DELHI) ; III. CANARA HOUSING DEVELOPMENT COMPANY VS. DCIT, ITA NO. 38 OF 2014, JUDGMENT DATED 25 .07.2014 (KER. H.C.) ; AND IV. FILATEX INDIA LTD. VS. CIT, ITA NO. 269 OF 2014, JUDGMENT DATED 14.07.2014 (DEL. H.C.) . 6. THE LEARNED AR, ON THE OTHER HAND, TRIED TO JUSTIFY THE FIRST APPELLATE ORDER ON THE ISSUE AND SUBMITTED THAT THE ISSUE RAISED IS FULLY COVERED IN FAVOUR OF THE ASSESSEE BY THE FOLLOWING DECISIONS: I. JAISTEEL (INDIA), JODHPUR VS. ACIT, 259 CTR 281 (RAJ.); II. KUSUM GUPTA VS. DCIT & ORS., ITA NO. 4873/DEL/2009, ORDER DATED 28.03.2013; III. SHRI KABUL CHAWLA VS. ACIT, ITA NO. 783/DEL/2013, ORDER DATED 23.05.2014; 4 ITA NOS. 2640 TO 2644 /DEL /2010 & 2645 & 2646 /DEL /2010 IV. CIT VS. MUSLI AGRO PRODUCTS LTD, ITA NO. 36 OF 2009, DATED 29.10.2010 (BOM. H.C.) AND V. SSP AVIATION LTD. VS. DCIT, (2012) 252 CTR 290 (DEL.). 7. HAVING GONE THROUGH THE ASSESSMENT ORDER AND THE MATERIAL MADE AVAILABLE ON RECORD, WE DO NOT FIN D REFERENCE OF ANY INCRIMINATING MATERIAL RELEVANT TO THE ADDITION MADE UNDER SEC. 68 OF THE ACT WHICH WAS FOUND DURING THE COURSE OF SEARCH PROCEEDINGS TO JUSTIFY THE INITIATION OF PROCEEDINGS UNDER SEC. 153A OF THE ACT AGAINST THE ASSESSEE AND THE ASSESS MENT MADE IN FURTHERANCE THERETO UNDER SEC. 153A READ WITH SECTION 143(3) O F THE ACT. THE FINDINGS OF THE L EARNED CIT(APPEALS) IN THIS REGARD THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH WITH RESPECT TO THE COMPLETED ASSESSMEN T HAS NOT BEEN REBUTTED BY THE REVENUE BEFORE THE ITAT , NOR THE SUBMISSIONS OF THE ASSESSEE IN THIS REGARD MADE BEFORE THE L EARNED CIT(APPEALS) AND REITERATED BEFORE THE ITAT HAS BEEN CONTROVERTED. WE FIND THAT AN IDENTICAL ISSUE HAS BEEN DECIDED IN FAVOUR OF TH E ASSESSEE UNDER ALMOST SIMILAR FACTS AND CIRCUMSTANCES BY THE SPECIAL BENCH OF THE ITAT IN THE CASE OF ALL CARGO GLOBAL LOGISTIC LTD. VS. CIT 137 ITD 287 (MUMBAI) (S.B) . IN PARA NO. 58 THEREOF, THE ISSUE HAS BEEN ANSWERED AS UNDER: 58. THUS, QUESTIO N NO. 1 BEFORE US IS ANSWERED AS UNDER : - (A) IN ASSESSMENTS THAT ARE ABATED, THE AO RETAINS THE ORIGINAL JURISDICTION AS WELL AS JURISDICTION CONFERRED ON HIM U/S 153A FOR WHICH ASSESSMENTS SHALL BE MADE FOR EACH OF THE SIX ASSESSMENT YEAR SEPARATELY : 5 ITA NOS. 2640 TO 2644 /DEL /2010 & 2645 & 2646 /DEL /2010 (B) IN OTHER CASES, IN ADDITION TO THE 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 PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT, AND (II) UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH. 8 . THE ISSUE RAISED BEFORE THE SPECIAL B ENCH WAS AS TO WHETHER SCOPE OF ASSESSMENT U/S 153A E NCOMPASSES ADDITIONS NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH? 9 . IN THE CASE OF KUSUM GUPTA (SUPRA) ALSO THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT AND TIME LIMIT FOR ISSUANCE OF NOTICE U/S 143(2) HAD EXPIRED O N THE DATE OF SEARCH AND IT WAS HELD THAT NO ASSESSMENT WAS PENDING IN THAT CASE AND THUS THERE WAS NO QUESTION OF ABATEMENT OF ASSESSMENT. THEREFORE , THE ADDITION IN THE ASSESSMENT U/S 153A WOULD BE MADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING THE SEARCH. THE DELHI BENCH OF THE TRIBUNAL IN ITS RECENT DECISION ON THE ISSUE IN THE CASE OF SHRI KABUL CHAWLA (SUPRA) AND OTHERS VIDE ORDER DATED 23.5.2014 HAS EXPRESSED THE SIMILAR VIEW. IT HAS ALSO DISCUSSED THE DECISION OF HON BLE JURISDICTIONAL DELHI HIGH COURT IN THE CASE OF CIT VS. ANIL KUMAR BHATIA (2012) 211 TAXMANN 453 (ALL.), WHILE DECIDING THE ISSUE. THE RELEVANT PARA NO. 8 & 9 IN THIS RE GARD IS BEING REPRODUCED AS UNDER : - 8. WE ARE UNABLE TO ACCEPT THE CONTENTION ADVANCED ON BEHALF OF THE REVENUE FOR THE REASON THAT IF BOTH THE PENDING AND COMPLETED ASSESSMENT WERE TO BE TAKEN ON SAME PEDESTAL, THEN THERE WAS NO 6 ITA NOS. 2640 TO 2644 /DEL /2010 & 2645 & 2646 /DEL /2010 NEED TO ENSHRINE SECOND PROVISO TO SEC. 153A( 1) PROVIDING THAT THE PENDING ASSESSMENTS WITHIN THE PERIOD OF SIX ASSESSMENT YEARS SHALL ABATE. THE HON'BLE DELHI HIGH COURT IN THE CASE OF ANIL KUMAR BHATIA (SUPRA) DEALT WITH A SITUATION IN WHICH SOME INCRIMINATING MATERIAL WAS FOU ND IN RESPECT OF A NON - PENDING ASSESSMENT. IT WAS IN THAT BACKGROUND THAT THE HON'BLE HIGH COURT HELD THAT SEC. 153A APPLIES IF INCRIMINATING MATERIAL IS FOUND EVEN IF ASSESSMENTS ARE COMPLETED. THE QUESTION AS TO WHETHER ANY ADDITION CAN BE MADE IN RESPEC T OF COMPLETED ASSESSMENTS WHEN NO INCRIMINATING MATERIAL WAS FOUND, WAS APPARENTLY LEFT OPEN. HOWEVER, WE FIND THAT THERE ARE SUFFICIENT INDIRECT HINTS GIVEN BY THE HON 'BLE DELHI HIGH COURT IN THE CASE OF ANIL KUMAR BHATIA (SUPRA) ABOUT NOT MAKING OF ANY ADDITION IN RESPECT OF AN ASSESSMENT YEAR FOR WHICH THE ASSESSMENT IS ALREADY COMPLETED UNLESS SOME INCRIMINATING MATERIAL IS FOUND DURING THE COURSE OF SEARCH. THIS CAN BE SEEN FROM THE . FOLLOWING OBSERVATIONS OF THE HON'BLE HIGH COURT : - '20. A QUEST ION MAY ARISE AS TO HOW THIS IS SOUGHT TO BE ACHIEVED WHERE AN ASSESSMENT ORDER HAD ALREADY BEEN PASSED IN RESPECT OF ALL OR ANY OF THOSE SIX ASSESSMENT YEARS, EITHER UNDER SECTION 143(1)(A) OR SECTION 143(3) OF THE ACT. IF SUCH AN ORDER IS ALREADY IN EXIS TENCE, HAVING OBVIOUSLY BEEN PASSED PRIOR TO THE INITIATION OF THE SEARCH/REQUISITION, THE ASSESSING OFFICER IS EMPOWERED TO REOPEN THOSE PROCEEDINGS AND REASSESS THE TOTAL INCOME, TAKING NOTE OF THE UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SEARCH. 9. THE ABOVE EXTRACTED OBSERVATIONS OF THE HON'BLE HIGH COURT, WHICH ARE THOUGH OBITER DICTA, MAKE THE POINT CLEAR THAT WHERE AN ASSESSMENT ORDER HAS ALREADY BEEN PASSED FOR A YEAR(S) WITHIN THE RELEVANT SIX ASSESSMENT YEARS, THEN ALSO THE A.O IS DUTY BOUND TO REOPEN THOSE PROCEEDINGS AND REASSESS THE TOTAL INCOME BUT BY 'TAKING NOTE OF THE UNDISCLOSED INCOME IF ANY, UNEARTHED DURING THE SEARCH'. THE EXPRESSION 'UNEARTHED DURING THE SEARCH' IS QUITE SIGNIFICANT TO DENOTE THAT IN RESPECT OF COMPLETED OR NON - PENDING ASSESSMENTS, THE ASSESSING OFFICER IS ALBEIT DUTY BOUND TO ASSESS OR REASSESS THE TOTAL INCOME BUT THERE IS A CAP ON THE SCOPE OF ADDITIONS IN SUCH ASSESSMENT, BEING THE ITEMS OF INCOME 'UNEARTHED DURING THE SEARCH'. IN OTHER WORDS, THE DETERM INATION OF 'TOTAL INCOME' IN RESPECT OF THE ASSESSMENT YEARS FOR WHICH THE ASSESSMENTS ARE ALREADY COMPLETED ON THE DATE OF SEARCH, SHALL NOT 7 ITA NOS. 2640 TO 2644 /DEL /2010 & 2645 & 2646 /DEL /2010 BE INFLUENCED BY THE ITEMS OF INCOME OTHER THAN THOSE BASED ON THE MATERIAL UNEARTHED DURING THE COURSE OF SEARCH. THERE IS NOT AND CANNOT BE ANY QUARREL OVER THE PROPOSITION THAT THE ASSESSING OFFICER HAS NO OPTION BUT TO DETERMINE THE TOTAL INCOME OF THE ASSESSEE IN RESPECT OF THE RELEVANT SIX ASSESSMENT YEARS. HOWEVER, THE SCOPE OF SUCH DETERMINATION OF TOTAL INCOM E IS DIFFERENT IN RESPECT OF THE YEARS FOR WHICH THE ASSESSMENTS ARE PENDING VIS - VIS THE YEARS FOR WHICH ASSESSMENTS ARE NON - PENDING. IN RESPECT TO THE ASSESSMENT YEARS FOR WHICH THE ORIGINAL ASSESSMENTS HAVE ALREADY BEEN COMPLETED ON THE DATE OF SEARCH, T HE TOTAL INCOME SHALL BE DETERMINED BY RESTRICTING ADDITIONS ONLY TO THOSE WHICH FLOW FROM INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. IF NO INCRIMINATING MATERIAL IS FOUND IN RESPECT OF SUCH COMPLETED ASSESSMENT, THEN THE TOTAL INCOME IN THE PROCEEDINGS U/S 153A SHALL BE COMPUTED BY CONSIDERING THE ORIGINALLY DETERMINED INCOME. IF SOME INCRIMINATING MATERIAL IS FOUND IN RESPECT OF SUCH ASSESSMENT YEARS FOR WHICH THE ASSESSMENT IS NOT PENDING, THEN THE 'TOTAL INCOME' WOULD BE DETERMINED BY CON SIDERING THE ORIGINALLY DETERMINED INCOME PLUS INCOME EMANATING FROM THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. IN THE OTHER SCENARIO OF THE ASSESSMENTS PENDING ON THE DATE OF SEARCH WHICH WOULD ABATE IN TERMS OF SECOND PROVISO TO SEC. 1 53A( 1), THE TOTAL INCOME SHALL BE COMPUTED AFRESH UNINFLUENCED BY THE FACT WHETHER OR NOT THERE IS ANY INCRIMINATING MATERIAL. IN FACT, THIS IS THE POSITION WHICH FOLLOWS WHEN WE READ THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT IN ANIL KUMAR BHATIA (SUPR A) IN JUXTAPOSITION TO THE SPECIAL BENCH ORDER IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. (SUPRA). THE OTHER JUDGMENT RELIED BY THE LD. DR IN THE CASE OF MADUGULU VENU (SUPRA) ALSO TALKS ABOUT THE NEED FOR MAKING FRESH ASSESSMENT IN RESPECT OF THE ASSE SSMENT YEARS FOR WHICH THE ASSESSMENTS ARE NOT PENDING ON THE DATE OF SEARCH BUT DOES NOT SET OUT THE SCOPE OF SUCH ASSESSMENT, WHICH IS THE ISSUE BEFORE USE. 10. WE, THUS, FIND THAT THE DECISION OF THE HON BLE JURISDICTIONAL DELHI HIGH COURT IN THE C ASE OF ANIL KR. BHATIA (SUPRA) SUPPORTS THE CASE OF THE ASSESSEE THAT IN ABSENCE OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH AN ADDITION U/S 153A OF THE ACT CANNOT BE MADE IN THE ASSESSMENT FRAMED THEREUNDER. THE DECISIONS RELIED UPON BY T HE LD. CIT, DR 8 ITA NOS. 2640 TO 2644 /DEL /2010 & 2645 & 2646 /DEL /2010 IN THE CASES OF CANARA HOUSING DEVELOPMENT COMPANY VS. DCIT (SUPRA) OF HON BLE KARNATAKA HIGH COURT AND FILATEX INDIA P. LTD. VS. CIT (SUPRA) OF HON BLE DELHI HIGH COURT HAVING DISTINGUISHABLE FACTS ARE NOT APPLICABLE IN THE PRESENT CASE. I N THE CASE OF FILATEX INDIA PVT. LTD. (SUPRA), THE QUESTION RAISED ON THE APPLICABILITY OF P ROVISIONS U/S 153A WAS THAT WHETHER THE TRIBUNAL ERRED ON FACTS AND IN LAW IN NOT HOLDING THAT RE - COMPUTATION OF BOOK PROFIT, DE - HORS ANY MATERIAL FOUND DURING THE COURSE OF SEARCH IN THE ORDER PASSED U/S 153A OF THE ACT WAS WITHOUT JURISDICTION, BEING OUTSIDE THE SCOPE OF PROCEEDINGS UNDER THAT SECTION? THE OTHER QUESTION WAS, WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE TRIBUNAL ERRED IN LAW IN UPHOL DING THE ACTION OF THE AO IN DENYING SET OFF, OF BOOK LOSS UNABSORBED DEPRECIATION RELATABLE TO EARLIER ASSESSMENT YEAR IN TERMS OF CLAUSE (III) OF EXPLANATION 1 TO SECTION 115JB OF THE ACT? THE RELEVANT FACTS OF THAT CASE NOTED IN PARA NO. 2 OF THE DECI SION ARE THAT THE AO IN THE PROCEEDINGS U/S 153A OF THE ACT, HAD MADE SEVERAL ADDITIONS, RELYING UPON THE INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH, WHICH WAS CONDUCTED ON 18.1.2006 AND SUBSEQUENT DATES. IN THIS PARAGRAPH OF THE DECISION IT HAS BEEN PERUSED FROM THE IMPUGNED ORDER OF THE T RIBUNAL THAT INCRIMINATING MATERIAL INCLUDING ST ATEMENT OF SANJAY AGARWAL, GM (M ARKETING ) HAVE RESULTED IN ADDITIONS , WHICH HAVE BEEN UPHELD . THE HON BLE HIGH COURT HAS BEEN PLEASED TO NOTE IN THIS PARAGRAPH AS IT IS NOT THE CASE OF THE APPELLANT ASSESSEE THAT 9 ITA NOS. 2640 TO 2644 /DEL /2010 & 2645 & 2646 /DEL /2010 IN ITIATION OF PROCEEDINGS U/S 153A WAS BAD OR UNWARRANTED IN LAW AS NO INCRIMINATING MATERIAL WAS FOUND DURING THE SEARCH. THE CONTENTION RAISED BY THE APPELLANT ASSESSEE IS THAT THE ADDITION, WHICH IS THE SUBJECT MATTER OF QUESTIONS NO. (II) AND (III), WAS/IS NOT JUSTIFIED IN THE ASSESSMENT ORDER U/S 153, AS NO INCRIMINATING MATERIAL WAS FOUND CONCERNING THE ADDITION U/S 115JB OF THE ACT. THE HON BLE HIGH COURT HAS REJECTED THIS CONTENTION OF THE AS SESSEE WITH THIS FINDING THAT U/S 153A OF THE ACT, THE ADDITIONS NEED NOT TO BE RESTRICTED OR LIMITED TO THE INCRIMINATING MATERIAL, WHICH WAS FOUND DURING THE COURSE OF SEARCH. THUS, IT IS CLEAR FROM THE FACTS OF THIS CASE BEFORE THE HON BLE HIGH COURT T HAT SEVERAL ADDITIONS RELYING UPON THE INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH WERE MADE BY THE AO IN THE ASSESSMENT PROCEEDINGS U/S 153A OF THE ACT AND ADDITION U/S 115JB WAS MADE BY THE AO IN ABSENCE OF INCRIMINAT ING MATERIAL CONCERNING THIS ADDITION. THIS ADDITION WAS QUESTIONED BY THE ASSESSEE ON THE BASIS THAT THERE WAS NO INCRIMINATING MATERIAL FOUND CONCERNING THE ADDITION MADE IN THE ASSESSMENT U/S 153A OF THE ACT , WHICH HA S BEEN REJECTED BY THE HON BLE HIGH COURT WITH THE ABOVE FINDING. IT WAS HELD BY THE HON BLE HIGH COURT THAT THERE CANNOT BE MULTIPLE ASSESSMENTS, ONCE SEC. 153A OF THE ACT IS APPLICABLE. SECTION 153A(1) POSTULATES ONE ASSESSMENT; PUTTING THE TOTAL INCOME OF SI X ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR 10 ITA NOS. 2640 TO 2644 /DEL /2010 & 2645 & 2646 /DEL /2010 RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH WAS CONDUCTED OR REQUISITION WAS MADE. 11. IN PARA NO. 3 OF THE JUDGMENT THE HON BLE DELHI HIGH COURT WHILE DISCUSSING THE CITED DECISIONS IN THE CA SES CIT VS. CHETAN DAS (2012 ) , 254 CTR (DEL) 292 AND CIT VS. ANIL KR. BHATIA (2012 ) , 2010 - 11 TAXMAN 453 (DEL) CITED BY THE LD. AR OF THE ASSESSEE APPELLANT, HAS NOTED CERTAIN OBSERVATIONS MADE AND FINDINGS GIVEN BY THE HON BLE COURT THEREIN. THEREAFTER IN PARA NO. 4 OF THE JUDGMENT, THE HON BLE HIGH COURT HAS HELD AS UNDER: T HE FIRST QUESTION, WE NOTICE WAS NOT RAISED BY THE APPELLANT BEFORE THE AO, CIT(A) AND BEFORE THE TRIBUNAL. THE APPELLANT CLAIMS THAT THE CONTENTION BEING LEGAL CAN BE RAISED AT ANY STAGE. WE HAVE EXAMINE D SEC. 153A OF THE ACT AND FIND THAT THE SUBMISSION/ CONTENTION HAS NO MERIT . 11.1 WHEN WE PERUSE THE FACTS OF THE CASE IN THE CASE OF FILATAX INDIA LTD. AND THE QUESTION RAISED THEREIN IT COMES OUT THAT IN THAT CASE ADMITTEDLY DU RING THE COURSE OF SEARCH INCRIMINATING MATERIAL INCLUDING STATEMENTS WERE FOUND AND RESULTED IN ADDITIONS AND THE ADDITION MADE U/S 115JB OF THE ACT WAS NOT BASED UPON ANY INCRIMINATING MATERIAL. THUS, THE QUESTION RAISED BEFORE THE HON BLE HIGH COURT WA S AS TO WHETHER THE TRIBUNAL HAS ERRED IN LAW IN NOT UPHOLDING THAT R E - COMPUTATION OF BOOK PROFIT, DE - HORS ANY MATERIAL FOUND DURING THE COURSE OF SEARCH IN THE ORDER BASED U/S 153A OF THE ACT WAS WITHOUT JURISDICTION, BEING OUTSIDE THE SCOPE OF PROCEEDING S UNDER 11 ITA NOS. 2640 TO 2644 /DEL /2010 & 2645 & 2646 /DEL /2010 THAT SECTION. THE HON BLE HIGH COUR T AFTER DISCUSSING THE ISSUE IN DETAIL HAS BEEN PLEASED TO DECIDE THE QUESTI ON AGAINST THE ASSESSEE AND HAS UPHELD THE ADDITION MADE U/S 115JB OF THE ACT. THUS, HAVING DISTINGUISHABLE FACTS THIS CITED THE DECISI ON IN THE CASE OF FILATAX INDIA LTD. (SUPRA) IS NOT HELPFUL TO THE REVENUE. 11.2 SO FAR AS, THE DECISION OF HON BLE KARNATAKA HIGH COURT IN THE CASE OF CANARA HOUSING DEVELOPMENT COMPANY (SUPRA) RELIED UPON BY THE LD. CIT DR IS CONCERNED, T HE ISSUE RAISED BEFORE THE HON BLE HIGH COURT WAS REGARDING VALIDITY OF REVISIONAL ORDER PASSED U/S 263 OF THE ACT BY THE LD. CIT PARTLY UPHELD BY THE TRIBUNAL AND DURING THAT COURSE THE HON BLE HIGH COURT HAS ALSO BEEN PLEASED TO DISCUSS THE DECISION IN THE CASES OF ANI L KUMAR BHATIA ( SUPRA) AND THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ALL CARGO GLOBAL LOGISTIC LTD. (SUPRA) . I T HAS BEEN OBSERVED BY THE HON BLE HIGH COURT THAT THE CONDITION PRECEDENT FOR APPLICATION OF SEC. 153A IS THAT THER E SHOULD B E A SEARCH U/S 132 A ND INITIATION OF PROCEEDINGS U/S 153A IS NOT DEPENDENT ON ANY UNDISCLOSED INCOME BEING UNEARTH DURING THE SUCH SEARCH. THE HON BLE RAJASTHAN HIGH COURT IN T HE CASE OF JAI STEEL (SUPRA) HAS BEEN PLEASED TO HO LD THAT IF ANY BOOKS OF ACCO UNTS OR OTHER DOCUMENTS RELEVANT TO THE ASSESSMENT HAD NOT BEEN PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT AND FOUND IN THE COURSE OF SEARCH, SUCH BOOKS OF ACCOUNTS OR OTHER DOCUMENTS HAVE TO BE TAKEN I NTO CONSIDERATION WHILE 12 ITA NOS. 2640 TO 2644 /DEL /2010 & 2645 & 2646 /DEL /2010 ASSESSING OR RE - ASSESSING T HE TOTAL INCOME UNDER THE PROVISIONS OF SEC. 153A OF THE ACT. EVEN ANY UNDISCLOSED INCOME OR UNDISCLOSED PROPERTY HAS BEEN FOUND AFTER THE CONCLUSIONS OF THE SEARCH, SAME WOULD ALSO BE TAKEN INTO CONSIDERATION. THE REQUIREMENT OF ASSESSMENT OR RE - ASSESSME NT UNDER THE SAID SECTION HAS TO BE READ IN THE CONTEXT OF SECTIONS 1 32 OR 132A OF THE ACT, IN MUCH AS, IN CASE NOTHING INCRIMINATING IS FOUND ON ACCOUNT OF SUCH SEARCH OR REQUISITION, THEN THE QUESTION OF RE - ASSESSM ENT OF THE CONCLUDED ASSESSMENT DOES NOT ARISE, WHICH WOULD REQUIRE MORE REITERATION AND IT IS ONLY IN THE CONTEXT OF THE ABA TED ASSESSMENT UNDER SECOND PROVISO WHICH IS REQUIRED TO BE ASSESSED. 12. IN THE CASE OF SSP AVIATION LTD. VS. DCIT (SUPRA) WHERE THE VALIDITY OF ASSESSMENT FRAMED U/S 1 53C WAS CHALLENGED IT WAS HELD THAT IF THE AO IS SATISFIED THAT ANY MONEY, B ULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED IN THE COURSE OF THE SEARCH BELONGS TO A PERSON OTHER THAN THE PERSON WHO WAS SEARCHED, THEN SUCH ASSETS OR BOOKS OF ACCOUNTS OR DOCUMENTS SHALL BE HANDED OVER BY HIM TO THE AO HAVING JURISDICTION OVER SUCH OTHER PERSON. ONCE, THAT IS DONE, THE AO HAVING JURISDICTION OVER SUCH OTHER PERSON SHALL PROCEED AGAINST HIM FOR MAKING AN ASSESSMENT OR REASSESSMENT OF HIS INCOME IN ACCORDANCE WITH THE PROVISIONS OF SEC. 153A. THE PETITIONER THEREIN WAS NOT SEARCH ED U/S 132 OF 13 ITA NOS. 2640 TO 2644 /DEL /2010 & 2645 & 2646 /DEL /2010 THE ACT, HOWEVER, SOME DOCUMENTS BELONGING TO IT WERE FOUND DURING THE SEARCH CARRIED OUT IN THE PREMISES OF PURI GROUP OF COM PANIES. 13. WE, THUS, FIND THAT THE RATIO LAID DOWN BY THE HON BLE DELHI HIGH COURT AND HON BLE RAJASTHAN HIGH COURT IN THE ABOVE CITED AND DISCUSSED DECISIONS SUPPORTS THE CASE OF THE ASSESSEE THAT IN ABSENCE OF INCRIMINATING MATERIAL FOUND DURING THE C OURSE OF SEARCH NO ADDITION CAN BE MADE U /S 153A OF THE ACT W H ERE THE ORIGINAL ASSESSMENT WAS ALREADY FRAMED ON THE DATE OF SEARCH. THE HON BLE KARNATAKA HIGH COURT IN THE CASE OF CANARA HOUSING DEVELOPMENT COMPANY (SUPRA) HAS, HOWEVER, BEEN PLEASED TO EX PRESS DIFFERENT VIEW , HOWEVER , AS PER THE ESTABLISHED PROPOSITION OF LAW, WE ARE BOUND TO FOLLOW THE DECISION OF HON BLE JURISDIC TIONAL DELHI HIGH COURT AND SINCE, THE HON BLE KARNATAKA HIGH COURT AND THE HON BLE RAJASTHAN HIGH COURT HAVE EXPRESSED DIFFERE NT VIEWS ON THE ISSUE, THE VIEW FAVOURABLE TO THE ASSESSEE IS TO BE FOLLOWED. WE, THUS, REITERATE THAT IN ABSENCE OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH NO ADDITION CAN BE MADE IN A CASE WHERE ORIGINAL ASSESSMENT WAS ALREADY FRAMED ON THE DATE WHEN SEARCH TOOK PLACE. 14. WE THUS FIND THAT THE FIRST APPELLATE ORDER ON THE ISSUE IS FULLY SUPPORTED BY THE ABOVE DISCUSSED DECISIONS RELIED UPON BY THE LEARNED AR E SPECIALLY WHEN IT IS UNDISPUTED FACT OF THE PRESENT CASE THAT NO INCRIMINATI NG MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AGAINST THE ASSESSEE AND ON THE 14 ITA NOS. 2640 TO 2644 /DEL /2010 & 2645 & 2646 /DEL /2010 DATE OF SEARCH, NO ASSESSMENT BASED ON THE RETURN OF INCOME ORIGINALLY FILED WAS PENDING. WE, THUS, DO NOT FIND ANY REASON TO INTERFERE WITH THE FIRST APPELLATE ORDER IN THIS REGARD. THE SAME IS UPHELD. 15. THE ISSUE RAISED IN THE GROUNDS REGARDING THE VALIDITY OF ASSESSMENT FRAMED UNDER SECTION 153A READ WITH SECTION 143(3) OF THE ACT IN THE ABSENCE OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH AND PENDENCY OF THE ASSESSMENT PROCEEDINGS ON THE DATE OF SEARCH IS THUS DECIDED IN FAVOUR OF THE ASSESSEE. THE GROUND NOS. 1 TO 3 ARE THUS DECIDED AGAINST THE REVENUE. 16 . IN THE RESULT, ALL THE APPEALS OF THE REVENUE ARE DISMISSED. THE DECISION IS PRONOUNCED IN THE OPEN COURT ON 22 ND JANUARY, 2015. SD/ - SD/ - ( T.S. KAPOOR ) (I.C. SUDHIR) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 22 ND JANUARY, 2015. RK/ - COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI