M/s. Asian Colour Coated Ispat Ltd., New Delhi V. DCIT, Faridabad

ITA 2838/DEL/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3032 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 08-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY VERMA
• Keywords: Documents seized; Reassessment proceedings
• Section: 143(3); 153A; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES D' NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO.2838/DEL/2015 ASSESSMENT YEAR: 2006-07 ITA NO.2839/DEL/2015 ASSESSMENT YEAR: 2007-08 ASIAN COLOUR COATED ISPAT LTD., 403, NIRMAL TOWER, BARAKHAMBA ROAD, NEW DELHI. (PAN: AAFCA1873K) VS DCIT, CENTRAL CIRCLE II, FARIDABAD. (APPELLANT) (RESPONDENT) APPELLANT BY SHRI VED JAIN MS DEVINA SHARMA, ADVOCATE SHRI ASHISH CHADDHA, CA RESPONDENT BY SHRI VIJAY VERMA, SR. DR DATE OF HEARING 23.01.2018 DATE OF PRONOUNCEMENT 19.03.2018 ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER BOTH THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE AND CHALLENGE THE ORDER DATED 27 TH FEBRUARY, 2015 PASSED BY THE LD. CIT (APPEALS). SINCE THE ISSUES INVOLVED IN THESE A PPEALS WERE IDENTICAL, BOTH THE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CO NVENIENCE. ITA NO. 2838./D/2015 ITA NO.2839/D/2015 ASSESSMENT YEAR 2006-07, 2007-08 PAGE | 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF CR STRI PS. IT FILED ITS RETURN OF INCOME FOR A.Y. 2006-07 ON 15 TH DECEMBER, 2006. THIS RETURN WAS ACCEPTED UNDER SECTION 143(1) OF THE INC OME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT). THE RETURN FOR THE ASSESSMENT YEAR 2007-08 WAS FILED ON 13 TH MARCH, 2008. THIS RETURN WAS PICKED UP FOR SCRUTINY AND THE ASSESSMENT WAS FRAME D UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 24 TH DECEMBER, 2009. THEREAFTER, A SEARCH TOOK PLACE UNDER SECTION 132(1 ) OF THE ACT ON 28 TH JANUARY, 2011. CONSEQUENT TO THE SEARCH, THE AO IS SUED NOTICE UNDER SECTION 153A OF THE ACT REQUIRING THE ASSESSEE TO FILE THE RETURN OF INCOME. THE ASSESSEE FILED THE RETURN DECLARING THE SAME INCOME AS WAS ORIGINALLY DECLARED. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE AO RAISED THE ISSUE OF THE SHARE CAPITAL RECEIVED BY THE ASSESSEE COMPANY DURING THE YEAR. NOT BEING SATISFIED WITH THE REPLY AND EVIDENCES SUBMIT TED BY THE ASSESSEE COMPANY, THE AO MADE ADDITION OF THE SHARE CAPITAL RECEIVED BY THE ASSESSEE COMPANY DURING BOTH THE YE ARS. 2.1 AGGRIEVED, THE ASSESSEE APPROACHED THE LD. CIT (A). IT WAS CONTENDED BY THE ASSESSEE BEFORE THE LD. FIRST APPE LLATE ITA NO. 2838./D/2015 ITA NO.2839/D/2015 ASSESSMENT YEAR 2006-07, 2007-08 PAGE | 3 AUTHORITY THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF THE SEARCH AND, THEREFORE, THE AO WAS NOT JUSTIFIED IN MAKING ADDITION/S ON ACCOUNT OF THE SHARE CAPITAL R ECEIVED DURING THE YEAR/S. IT WAS SUBMITTED BEFORE THE LD. CIT (A) THAT THE ASSESSMENT/S FOR THE YEAR/S UNDER CONSIDERATION WERE NOT PENDING AS ON THE DATE OF THE SEARCH AND, THEREFORE , THE SAME HAD NOT ABATED. THE LD. CIT(A) REJECTED THIS CONTEN TION OF THE ASSESSEE COMPANY HOLDING THAT FOR INVOKING THE PROV ISIONS OF SECTION 153A, ALL THAT IS REQUIRED IS A SEARCH IN T HE CASE OF THE ASSESSEE AND THERE IS NO SUCH CONDITION OF INCRIMIN ATING MATERIAL OR UNDISCLOSED INCOME BEING FOUND DURING THE SEARCH . 2.2 THE LD. CIT (A) ALSO REJECTED THE CONTENTIONS O F THE ASSESSEE ON MERITS OF THE ISSUE REGARDING SHARE CAPITAL. 2.3 NOW, THE ASSESSEE IS IN APPEAL BEFORE THE ITAT AND HAS CHALLENGED THE ACTION OF THE LD. CIT (A) IN DISMISS ING THE ASSESSEES APPEALS FOR THE CAPTIONED YEARS. THE ASS ESSEE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL FOR A.Y. 2006-07: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [CIT (A)] IS BAD BOTH IN THE EYE OF LAW A ND ON FACTS. ITA NO. 2838./D/2015 ITA NO.2839/D/2015 ASSESSMENT YEAR 2006-07, 2007-08 PAGE | 4 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN IGNORING THE FACT THAT THE ORDE R PASSED BY AO IS ILLEGAL, WITHOUT JURISDICTION AND I N VIOLATION OF THE STATUTORY REQUIREMENT OF THE ACT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LEAR NED CIT(A) HAS ERRED BOTH ON FACTS & IN LAW IN REJECTIN G THE CONTENTION OF THE ASSESSEE THAT THE ORDER PASSED BY THE LEARNED AO UNDER SECTION 153A IS BAD AND LIABLE TO BE QUASHED AS THE SAME HAS BEEN FRAMED CONSEQUENT TO A SEARCH WHICH ITSELF WAS UNLAWFUL AND INVALID IN THE EYE OF LAW. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LEAR NED CIT(A) HAS ERRED BOTH ON FACTS & IN LAW IN REJECTIN G THE CONTENTION OF THE ASSESSEE THAT THE PROCEEDINGS INI TIATED UNDER SECTION 153A ARE BAD IN LAW IN THE ABSENCE OF ANY INCRIMINATING MATERIAL BELONGING TO THE ASSESSE E BEING FOUND DURING THE COURSE OF THE SEARCH. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE L EARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN REJECT ING THE CONTENTION OF THE ASSESSEE THAT THE AO HAS ERRED IN GOING AHEAD WITH THE REASSESSMENT ORDER AND NOT CLOSING THE REASSESSMENT PROCEEDINGS, DESPITE THE F ACT THAT NO INCRIMINATING MATERIAL BELONGING TO THE ASS ESSEE WAS FOUND AND HAS BEEN SUBJECT MATTER OF ADDITION I N ANY OF THE REASSESSMENT UNDER SECTION 153A FOR ALL THE SIX YEARS. 6(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LEARNED CIT(A) HAS ERRED IN SUSTAINING THE ADDITIONS/DISALLOWANCES OF RS.1,29,28,000/- MADE BY THE AO TO THE RETURNED INCOME OF RS. NIL. (II) THAT THE ADDITIONS AND DISALLOWANCE SUSTAINED BY THE LEARNED CIT (A) ARE AGAINST THE FACTS ON RECORD AS WELL AS AGAINST THE STATUTORY PROVISIONS OF THE ACT. ITA NO. 2838./D/2015 ITA NO.2839/D/2015 ASSESSMENT YEAR 2006-07, 2007-08 PAGE | 5 7. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE L EARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN CONFIR MING THE ADDITION OF AN AMOUNT OF RS.1,28,00,000/- MADE BY AO ON ACCOUNT OF SHARE CAPITAL UNDER SECTION 68 OF THE ACT. 8. THAT THE SAID ADDITION HAS BEEN CONFIRMED REJECT ING THE DETAILED EXPLANATION AND EVIDENCES BROUGHT ON RECOR D BY THE ASSESSEE TO PROVE THE IDENTITY AND CREDITWORTHINESS OF THE SHAREHOLDERS AS WELL AS THE GENUINENESS OF THE TRANSACTION. 9. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE L EARNED CIT (A) HAS ERRED BOTH ON FACTS AND IN LAW IN IGNOR ING THE FACT THAT THE ADDITION OF RS 1,28,00,000/- MADE BY THE AO ARE OTHERWISE UNTENABLE SINCE THE SAME IS NO T ARISING FROM THE ANY INCRIMINATING MATERIAL SEIZED DURING THE COURSE OF SEARCH AND REASSESSMENT UNDER SECTION 153A/153A CONSEQUENT TO SEARCH IS TO BE CONFINED ONLY TO THE INCRIMINATING MATERIAL BELONGI NG TO THE ASSESSEE FOUND DURING THE COURSE OF THE SEARCH. 10(I) THAT THE ABOVE SAID ADDITION HAS BEEN CONFIRM ED DESPITE THE SAME HAVING BEEN MADE ON THE BASIS OF MATERIAL COLLECTED AT THE BACK OF THE ASSESSEE WITH OUT GIVING IT AN OPPORTUNITY TO REBUT THE SAME. (II) THAT THE ABOVE SAID ADDITION HAS BEEN CONFIRME D DESPITE THE SAME HAVING BEEN MADE ON THE BASIS OF STATEMENT RECORDED WITHOUT GIVING ASSESSEE AN OPPORTUNITY TO CROSS EXAMINE. 11(I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW IN MAKING ADDITION OF AN AMOUNT OF RS.1,28,000/- MADE BY AO O N ACCOUNT OF COMMISSION. ITA NO. 2838./D/2015 ITA NO.2839/D/2015 ASSESSMENT YEAR 2006-07, 2007-08 PAGE | 6 (II) THAT THE ABOVESAID ADDITION HAS BEEN CONFIRMED , DESPITE THE SAME BEING MADE ARBITRARILY AT THE RATE OF 1% WITHOUT THERE BEING ANY BASIS FOR THE SAME. 12. THE RESPONDENT CRAVES LEAVE TO ADD, AMEND OR AL TER ANY OF THE GROUNDS OF APPEAL. 2.4 SINCE THE GROUNDS RAISED IN THE ASSESSMENT YEAR 2007-08 ARE IDENTICAL AS IN ASSESSMENT YEAR 2006-07 , THE S AME ARE NOT BEING REPRODUCED. 3. THE LD. AR SUBMITTED THAT AY 2006-07 MAY BE TAKE N AS THE LEAD CASE AND HE BE PERMITTED TO ARGUE ON ASSESSEE S APPEAL FOR AY 2006-07. IT WAS SUBMITTED THAT SINCE THE ISSUE I NVOLVED WAS IDENTICAL, THE OUTCOME OF THE APPEAL FOR AY 2006-07 WILL DETERMINE THE OUTCOME OF THE APPEAL FOR AY 2007-08 ALSO. 3.1 THE LD. DR HAD NO OBJECTION TO THIS PROPOSAL OF THE LD. AR. 4. IT WAS SUBMITTED BY THE LD. AR THAT THE ADDITION S MADE BY THE AO WERE UNSUSTAINABLE IN THE ABSENCE OF ANY INC RIMINATING MATERIAL BEING FOUND DURING THE COURSE OF THE SEARC H. IT WAS SUBMITTED THAT THE SEARCH HAD TAKEN PLACE ON 28 TH JANUARY, 2011 AND THE ASSESSMENT YEARS UNDER CONSIDERATION WERE 2 006-07 AND 2007-08. THUS, THE ASSESSMENT PROCEEDINGS FOR THESE YEARS AS ON 28 TH JANUARY, 2011, I.E. THE DATE OF THE SEARCH, WERE N OT PENDING ITA NO. 2838./D/2015 ITA NO.2839/D/2015 ASSESSMENT YEAR 2006-07, 2007-08 PAGE | 7 AND HENCE THE SAME HAVE NOT ABATED. IT WAS FURTHER CONTENDED THAT IN THE ABSENCE OF INCRIMINATING MATERIAL, NO A DDITION COULD HAVE BEEN MADE BY THE AO IN RESPECT OF COMPLETED AS SESSMENTS. THE LD. AR PLACED RELIANCE ON THE JUDGMENT OF THE J URISDICTIONAL DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWL A REPORTED IN 380 ITR 573(DELHI) IN SUPPORT OF HIS CONTENTION. TH E LD. AR FURTHER PLACED RELIANCE ON THE FOLLOWING JUDGMENTS: PCIT VADODARA-1, VERSUS RSA DIGI PRINTS REPORTED IN 2017(9) TMI 530 (GUJRAT) PCIT-2, KOLKATA VERSUS M/S SALASAR STOCK BROKING LI MITED, (CALCUTTA) PR. CIT, DELHI 02 VS. BEST INFRASTRUCTURE INDIA ( P) LTD. REPORTED IN 2017 (10) TMI 1006. PR. CIT CENTRAL -3 VS. BABA GLOBAL LTD. REPORTED IN 2017 (2) TMI 346 (DELHI). PR. CIT (CENTRAL) 3 VS. DHARAMPAL PREMCHAND LTD. REPORTED IN 2017 (8) TMI 958 (DEL). CIT-(CENTRAL) -1, VS. JAKSON ENGINEERS LTD. REPORTE D IN 2015 (12) TMI 1523 (DEL). ITA NO. 2838./D/2015 ITA NO.2839/D/2015 ASSESSMENT YEAR 2006-07, 2007-08 PAGE | 8 CIT 7 VS. RRJ SECURITIES LTD. REPORTED IN 2015 (1 1) TMI 19 (DEL). ITAT CHANDIGARH IN MALA BUILDERS PVT. LTD. V. ACIT REPORTED IN [2016] 51 ITR (TRIB.) 272 ITAT DELHI IN SHASHI PURI V. ACIT IN ITA NO. 990 & 991/DEL/2012 DATED 14.02.2017 ITAT DELHI IN DCIT V. RAMESH BATTA REPORTED IN [201 7] 55 ITR (TRIB.) 612. 5. IN RESPONSE, THE LD. DR SUBMITTED THAT THE AO WA S JUSTIFIED IN MAKING THE IMPUGNED ADDITIONS ONCE A SEARCH HAS TAKEN PLACE ON THE ASSESSEE. IT WAS CONTENDED THAT AS PER PROVI SIONS OF SECTION 153A, THE ASSESSMENT FOR SIX YEARS PRECEDIN G THE YEAR OF THE SEARCH GET AUTOMATICALLY REOPENED ON THE DATE O F SEARCH AND ONCE THE ASSESSMENTS ARE REOPENED, THE AO IS ENTITL ED TO TAKE INTO CONSIDERATION THE ENTIRE FACTS AND HE IS NOT P ROHIBITED UNDER LAW TO RESTRICT THE ADDITION TO THE INCRIMINATING M ATERIAL FOUND DURING THE COURSE OF SEARCH. IT WAS VEHEMENTLY ARGU ED THAT THE ADDITIONS MADE SHOULD BE UPHELD. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAV E PERUSED THE MATERIAL ON RECORD. THE ONLY QUESTION REQUIRING CONSIDERATION ITA NO. 2838./D/2015 ITA NO.2839/D/2015 ASSESSMENT YEAR 2006-07, 2007-08 PAGE | 9 IS WHETHER THE AO COULD HAVE MADE ANY ADDITION DE HORS THE MATERIAL FOUND DURING THE COURSE OF THE SEARCH IN T HOSE ASSESSMENT YEARS WHICH HAVE NOT ABATED. IN THE PRES ENT CASE, IT IS AN ADMITTED FACT THAT ON THE DATE OF THE SEARCH I.E. ON 28 TH JANUARY, 2011, THE ASSESSMENT FOR THESE YEARS WAS N OT PENDING. IT IS ALSO AN ADMITTED FACT THAT NOTHING INCRIMINAT ING WAS FOUND DURING THE COURSE OF THE SEARCH. THE LD. DR WAS FAI R ENOUGH TO ACCEPT OUT THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF THE SEARCH. THE CONTENTION OF THE LD. DR WAS WITH REFERENCE TO THE INFORMATION WHICH AO GOT DURING TH E PENDENCY OF THE ASSESSMENT PROCEEDINGS UNDER SECTION 153A. IT W AS THE CONTENTION OF THE LD. DR THAT THE AO IN SUCH CASES IS ENTITLED TO USE THE SAME AND MAKE THE ADDITION. AT THIS JUNCTUR E, REFERENCE MAY BE MADE TO THE JUDGMENT OF THE HONBLE DELHI HI GH COURT IN THE CASE OF KABUL CHAWLA (SUPRA). IN PARA 37 OF THI S JUDGEMENT, THE HONBLE DELHI HIGH COURT HAS SUMMARIZED THE LEG AL POSITION AS UNDER: 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW E XPLAINED IN THE AFOREMENTIONED DECISIONS, THE LEGAL POSITION T HAT EMERGES IS AS UNDER: ITA NO. 2838./D/2015 ITA NO.2839/D/2015 ASSESSMENT YEAR 2006-07, 2007-08 PAGE | 10 I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF T HE ACT, NOTICE UNDER SECTION 153 A (1) WILL HAVE TO BE MAND ATORILY ISSUED TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR REL EVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DA TE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH A YS WILL HAVE TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHI CH THE SEARCH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE AFOREMENTIONED S IX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEAR S. IN OTHER WORDS THERE WILL BE ONLY ONE ASSESSMENT ORDER IN RE SPECT OF EACH OF THE SIX AYS IN WHICH BOTH THE DISCLOSED AN D THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX. IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITI ONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH, OR OTHER POST-SEARCH MATERIAL OR INF ORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE E VIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WI TH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATE RIAL. ITA NO. 2838./D/2015 ITA NO.2839/D/2015 ASSESSMENT YEAR 2006-07, 2007-08 PAGE | 11 V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE CO MPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSM ENT OR REASSESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECT ION 153 A IS RELATABLE TO ABATED PROCEEDINGS (I.E. THOSE PE NDING ON THE DATE OF SEARCH) AND THE WORD 'REASSESS' TO COMPLETE D ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, T HE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND TH E ASSESSMENT UNDER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER M ATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE AO. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH B Y THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONL Y ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UND ISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEAR CH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. 6.1 AS PER PARA IV ABOVE IT HAS BEEN HELD THAT THOU GH SECTION 153A DOES NOT SAY THAT ADDITION SHOULD BE STRICTLY MADE ON THE BASIS OF THE EVIDENCE FOUND IN THE COURSE OF THE SE ARCH, OR OTHER POST SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT M EAN THAT THE ITA NO. 2838./D/2015 ITA NO.2839/D/2015 ASSESSMENT YEAR 2006-07, 2007-08 PAGE | 12 ASSESSMENT CAN BE MADE WITHOUT ANY REFERENCE OR EST ABLISHING ANY NEXUS WITH THE SEIZED MATERIAL. THUS, AS PER TH IS JUDGMENT, THE EXISTENCE OF THE SEIZED MATERIAL FOUND DURING S EARCH IS A MUST FOR MAKING ADDITION IN THOSE ASSESSMENT YEARS WHICH HAVE NOT ABATED. 6.2 THE IMPORTANCE OF THE SEIZED MATERIAL BEING FOU ND DURING THE COURSE OF THE SEARCH HAS ALSO BEEN EXPLAINED IN THE SUBSEQUENT JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF PR. COMMISSIONER OF INCOME TAX. VS. MEETA GUTGUT IA REPORTED IN 395 ITR 526 (DELHI). IN THIS CASE, THE REVENUE H AD RELIED UPON THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF SMT. DAYAWANTI GUPTA VS. CIT REPORTED IN 390 ITR 496 (DE LHI), WHEREIN IT WAS HELD THAT MATERIAL SEIZED WHICH IS R ELEVANT TO ONE PARTICULAR ASSESSMENT YEAR IS SUFFICIENT TO INFER A CERTAIN MODUS OPERANDI ADOPTED BY THE ASSESSEE FOR ALL THE ASSESSMENT YEA RS IN QUESTION. IT WAS HELD THAT THE JUDGMENT IN THE CASE OF SMT. DAYAWANTI GUPTA VS. CIT (SUPRA) WAS RENDERED IN THE PECULIAR FACTS OF THAT CASE, WHEREBY IT WAS HELD THAT THE MA TERIAL SEIZED FOR ONE PARTICULAR ASSESSMENT YEAR COULD LEAD TO AN INF ERENCE REGARDING THE MODUS OPERANDI OF THE ASSESSEE FOR THE OTHER ITA NO. 2838./D/2015 ITA NO.2839/D/2015 ASSESSMENT YEAR 2006-07, 2007-08 PAGE | 13 ASSESSMENT YEARS. IT WAS EXPLAINED THAT IN THE CASE OF DAYAWANTI GUPTA VS. CIT (SUPRA), THE ASSESSEE HERSELF HAD MAD E A STATEMENT ADMITTING THAT THE DOCUMENTS SEIZED DURING THE COUR SE OF THE SEARCH COULD PERTAIN EVEN TO OTHER ASSESSMENT YEARS . THUS, IT WAS A CASE OF DOCUMENTS FOUND DURING SEARCH AND ADM ISSION BY THE ASSESSEE THAT SUCH DOCUMENT/S COULD PERTAIN TO OTHER ASSESSMENT YEARS AS WELL. 6.3 IN THE PRESENT CASE, AS STATED HEREINABOVE, THE LD. DR WAS FAIR ENOUGH TO ACCEPT THAT NO INCRIMINATING MATERIA L, WHATSOEVER, WAS FOUND DURING THE COURSE OF THE SEARCH. THE ADDI TION/S HAVE BEEN MADE ON THE BASIS OF THE SUBSEQUENT INFORMATIO N RECEIVED BY THE AO. SUCH INFORMATION, HAD IT BEEN RELATED TO THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF T HE SEARCH, THE AO COULD WELL HAVE BEEN WITHIN ITS JURISDICTION TO TAKE INTO CONSIDERATION SUCH INFORMATION AND MAKE ADDITIONS R ELATING TO THE SEARCH MATERIAL FOUND DURING THE SEARCH. HOWEVE R, IN ABSENCE OF ANY INCRIMINATING MATERIAL BEING FOUND D URING THE COURSE OF THE SEARCH, AS HELD BY THE JURISDICTIONAL DELHI HIGH COURT, THE AO WILL BE WITHOUT JURISDICTION IN MAKIN G SUCH ADDITIONS. IT IS THE INCRIMINATING MATERIAL FOUND D URING SEARCH ITA NO. 2838./D/2015 ITA NO.2839/D/2015 ASSESSMENT YEAR 2006-07, 2007-08 PAGE | 14 WHICH GIVES JURISDICTION TO THE AO TO MAKE ADDITION S IN THE ASSESSMENT PROCEEDINGS UNDER SECTION 153A OF THE AC T IN RESPECT OF ASSESSMENTS WHICH HAVE NOT ABATED. IN THE ABSENC E OF INCRIMINATING MATERIAL IN SUCH CASES, AS HELD BY TH E HONBLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA IN PAR A 37 (V) QUOTED HEREINABOVE, THE COMPLETED ASSESSMENT IS NOT TO BE DISTURBED. 6.4 IN VIEW OF THE ABOVE, WE ARE OF THE CONSIDERED OPINION THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN REJECTING THE C ONTENTIONS OF THE ASSESSEE COMPANY ON THIS ISSUE AND WE HOLD THAT THE ADDITIONS MADE IN BOTH THE ASSESSMENT YEARS UNDER CONSIDERATI ON ARE BEYOND JURISDICTION AND ACCORDINGLY DIRECT THE AO T O DELETE THE SAME. 6.5 SINCE WE HAVE DECIDED THE ISSUE IN FAVOUR OF TH E ASSESSEE ON THE LEGAL GROUND, THE OTHER GROUNDS RAISED BY THE A SSESSEE COMPANY BECOME ACADEMIC IN NATURE AND HENCE ARE NOT BEING ADJUDICATED UPON. 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ITA NO. 2838./D/2015 ITA NO.2839/D/2015 ASSESSMENT YEAR 2006-07, 2007-08 PAGE | 15 ORDER PRONOUNCED IN THE OPEN COURT ON 19/03/2018. SD/- SD/- (B.P.JAIN) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 19/03/2018 GS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSISTANT REGISTRAR