M/s Modern Steels Ltd., Chandigarh V. ACIT, Chandigarh

ITA 287/CHANDI/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9136 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 25-07-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 14-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: ASHOK GOELCA
• Keywords: Search and seizure; Block assessment; Reassessment proceedings
• Section: 143(3); 153A; 147; 148; 263; 132; 12; 15; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA,ACCOUNTANT MEMBER ITA NOS. 433 TO 437/CHANDI/2014 (A.Y.2004-05 TO 2008-09) M/S MALA BUILDERS PVT. LTD, VS ACIT-CC-II,. SCO: 98-99,SUB CITY CENTRE, CHANDIGARH SECTOR -34-CHANDIGARH (PAN NO. AABCN0099B) (APPELLANT) (RESPONDENT) ITA NOS. 286, 287 & 289/CHANDI/2013 (A.Y.2005-06, 2006-07 & TO 2008-09) M/S MODERN STEEL LTD, VS ACIT-CC-II, SCO: 98-99,SUB CITY CENTRE, CHANDIGARH SECTOR -34-CHANDIGARH (PAN NO. AABCM1871 F) (APPELLANT) (RESPONDENT) ITA NOS. 330 TO 334/CHANDI/2013 (A.Y.2004-05 TO 2008-09) M/S MODERN DAIRIES LTD, VS ACIT-CC-II, , SCO 98-99, SUB CITY CENTRE, CHANDIGARH SECTOR -34-CHANDIGARH (PAN NO. AABCM 1240L) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ASHOK GOEL,C.A REVENUE BY : SHRI MANJIT SINGH & SHRI MANOJ MISHRA, D.R ITA NO. 715 /CHANDI/2013 (A.Y.2003-0 4) DCIT,CC-I, CHANDIGARH VS M/S HEERA MOTI AGRO INDUSTRIES, 204,HPSIDC,INDL. AREA BADDI, DISTT. SOLAN(HP) (PAN NO. AADFH 7463B) (APPELLANT) (RESPONDENT) 2 C.O.NO.20/CHANDI/2013 ITA NO. 715 /CHANDI/2013 (A.Y.2003-0 4) M/S HEERA MOTI AGRO INDUSTRIES, VS DCIT,CC-I,CHANDIGARH. 204,HPSIDC,INDL. AREA BADDI, DISTT. SOLAN(HP) (PAN NO. AADFH 7463B) (APPELLANT) (RESPONDENT) ITA NOS. 736 TO 738/CHANDI/2013 (A.Y. 2004- 05 TO 2006-07) M/S HEERA MOTI AGRO INDUSTRIES, VS DCIT, CC-I,CHANDIGARH. 204,HPSIDC,INDL. AREA BADDI, DISTT. SOLAN(HP) (PAN NO. AADFH 7463B) (APPELLANT) (RESPONDENT ITA NO. 716 /CHANDI/2013 (A.Y.2003 -04) DCIT,CC-I, CHANDIGARH VS M/S HIMLAND AGRO FOODS, 1054,HPSIDC,INDL. AREA PHASE II, CHANDIGARH (PAN NO. AAACH 9406 Q) (APPELLANT) (RESPONDENT) C.O.NO. 28/CHANDI/2013 ITA NO. 716 /CHANDI/2013 (A.Y. 2003 -04) M/S HIMLAND AGRO FOODS, VS DCIT,CC-I,CHANDIGARH 1054,HPSIDC,INDL. AREA PHASE II, CHANDIGARH (PAN NO. AAACH 9406 Q) (APPELLANT) (RESPONDENT ITA NO. 717 /CHANDI/2013 (A.Y. 2003- 04) DCIT,CC-I,CHANDIGARH VS M/S HEERA MOTI AGRO PRODUCTS, 198-99,HPSIDC,INDL. AREA BADDI, DISTT. SOLAN(HP) (PAN NO. AACFH8098M) (APPELLANT) (RESPONDENT) 3 C.O.NO.21/CHANDI/2013 ITA NO. 717 /CHANDI/2013 (A.Y.2003-0 4) M/S HEERA MOTI AGRO PRODUCTS, VS DCIT,CC-I,CHANDIGARH 198-99,HPSIDC,INDL. AREA BADDI, DISTT. SOLAN(HP) (PAN NO. AACFH 8098M) (APPELLANT) (RESPONDENT ITA NOS. 753 TO 755/CHANDI/2013 (A.Y.2004-0 5 TO 2006-07) M/S HEERA MOTI AGRO PRODUCTS, VS DCIT,CC-I, CHANDIGARH. 199,HPSIDC,INDL. AREA BADDI, DISTT. SOLAN(HP) (PAN NO. AACFH 8098M) (APPELLANT ) (RESPONDENT) ITA NOS. 748 TO 749/CHANDI/2013 (A.Y.2004-05 & 2005-06) M/S HEERA MOTI HEALTH CARE PRODUCTS LTD. VS DCIT,CC-I, CHANDIGA RH. CHANDIGARH (PAN NO. (AAACH 3744D) ITA NO. 560 /CHANDI/2013 (A.Y.2003-0 4) DCIT,CC-I, CHANDIGARH VS M/S HEERA MOTI SPICES (P) LTD., 1054, INDL. AREA CHANDIGARH,) (PAN NO. (AABCH 4813J) (APPELLANT) (RESPONDENT) C.O.NO.19/CHANDI/2013 ITA NO. 560 /CHANDI/2013 (A.Y.2003 -04) M/S HEERA MOTI SPICES (P) LTD., VS DCIT,CC-I,CHANDIGARH CHANDIGARH ) (PAN NO. (AABCH 4813J) 4 ITA NOS. 565 TO 567/CHANDI/2013 (A.Y. 2004- 05 TO 2006-07) M/S HEERA MOTI SPICES (P) LTD., VS DCIT,CC-I,CHANDIGARH 1054, ,INDL. AREA, CHANDIGARH (PAN NO. (AABCH 4813J) ITA NO. 59 /CHANDI/2014 (A.Y.2004 -05) M/S SURBHI AGRO FOOD PRODUCTS, VS DCIT,CC-I,CHANDIGARH 144, HPSIDC,INDL. AREA BADDI, DISTT. SOLAN(HP) (PAN NO. AAJFS 0102Q) ITA NOS. 41 TO 43 /CHANDI/2014 (A.Y. 2003-04 T O 2005-06) SHRI AMIT JINDAL , VS DCIT,CC-I,CHANDIGARH PROP. M/S SPICY PRODUCTS, R/O HOUSE NO. 21,NAC, MANIMAJRA,CHANDIGARH (PAN NO. ACGPJ 8215N) ASSESSEE BY :SHRI SUDHIR SEHGAL REVENUE BY : SHRI MANJIT SINGH & SHRI MANOJ MISHRA,D.R ITA NO 1037 /CHANDI/2013 (A.Y.20 04-05) M/S SMILE FINVEST PVT. LTD, VS ACIT,CC-II,CHANDIGARH 98-99, SUB CITY CENTRE SECTOR 34- CHANDIGARH (PAN NO. AAHCS 6803P) ( APPELLANT ) ( RESPONDENT) ASSESSEE BY :SHRI ASHWANI KUMAR REVENUE BY :SHRI MANJIT SINGH & SHRI MANOJ MISHRA,D.R DATE OF HEARING : 28.07.2016 DATE OF PRONOUNCEMENT : 23.08.2016 PER BENCH : 5 THESE 37 APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY A COMMON ORDER. IT WAS AGREED BY B OTH SIDES THAT A COMMON ISSUE AROSE FOR THE PURPOSE OF ADDRESSAL BY THE BENCH IN ALL THE APPEALS AND THER EFORE THEY ADVANCED SIMILAR CONTENTIONS. IT IS IN THESE CIRCUMSTANCES THAT THESE APPEALS ARE BEING DISPOSED OFF BY A COMMON ORDER. THE ISSUE INVOLVED IN ALL THES E APPEALS IS: WHETHER THE ADDITION MADE TO THE INCOME OF THE ASSESSEE FOR THE SAID ASSESSMENT YEARS WAS NOT SUSTAINABLE BECAUSE NO INCRIMINATING MATERIAL CONCERNING SUCH ADDITIONS WAS FOUND DURING THE COURSE OF SEARCH AND FURTHER NO ASSESSMENTS FOR SUCH YEARS WERE PENDING ON THE DATE OF SEARCH. 2. IT WAS SUBMITTED BEFORE US THAT IN ALL THE CASES INCOME HAD BEEN ORIGINALLY ASSESSED EITHER UNDER SE CTION 143(3) OF THE ACT OR THE RETURN FILED BY THE ASSESS EE ACCEPTED U/S 143(1) OF THE INCOME TAX ACT,1961 AND THE TIME PERIOD FOR ISSUING NOTICE UNDER SECTION 143(2) HAD EXPIRED ON THE DATE OF INITIATION OF SEARCH, AND F URTHER THAT NO INCRIMINATING MATERIAL PERTAINING TO THE IM PUGNED YEARS WAS FOUND DURING SEARCH CONDUCTED ON THE ASSE SSEES AND THE ADDITION MADE, IN THE COURSE OF ASSESSMEN T FRAMED UNDER SECTION 153A, DID NOT PERTAIN TO ANY INCRIMINATING MATERIAL FOUND DURING SEARCH . CHARTS REFLECTING THE ABOVE FACTS IN RELATION TO ALL THE A SSESSES WAS PLACED BEFORE US. 6 3. FURTHER IT WAS STATED, THAT IN THE BUNCH OF CASE S RELATING TO MODERN STEEL LTD, MODERN DIARIES LTD., HEERA MOTI AGRO INDUSTRIES, HEERA MOTI AGRO PRODUCTS, HEE RA MOTI HEALTH CARE PRODUCTS LTD., HEERA MOTI SPICES P VT. LTD, SURBHI AGRO PRODUCTS, AMIT JINDAL (PROP) AND S MILE FINVEST PVT LTD., THIS GROUND WAS AN ADDITIONAL GRO UND BEING RAISED FOR THE FIRST TIME BEFORE THE BENCH, A ND AN APPLICATION FOR ADMITTING THE SAME WAS FILED BEFORE US UNDER RULE 11 OF THE INCOME TAX APPELLATE TRIBUNAL RULES. WE FIND THAT THE GROUND RAISED BEFORE US IS A LEGAL GROUND WHICH CAN BE DECIDED ON THE BASIS OF MATERIAL AND F ACTS AVAILABLE ON RECORD AND THEREFORE IN VIEW OF THE DE CISION OF THE APEX COURT IN NTPC LTD. VS CIT (1998) 229 ITR 3 83 ,THE SAME IS ADMITTED FOR ADJUDICATION. 4. WE SHALL NOW PROCEED TO ADJUDICATE THE COMMON GROUND RAISED BEFORE US. FOR THE SAKE OF CONVENIENC E, THE CASE OF MALA BUILDERS PVT. LTD. VS. ACIT, CENTRAL C IRCLE-II, CHANDIGARH IN ITA NO.433/CHD/2014 PERTAINING TO ASSESSMENT YEAR 2004-05,IS BEING TAKEN AS THE LEAD CASE. 5. AT THE OUTSET, IT MAY BE STATED THAT THIS CASE W AS EARLIER DISMISSED FOR NONPROSECUTION BUT WAS RECAL LED ON A MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE V IDE ORDER DATED 18.09.2015 AND RE-FIXED FOR HEARING. I N PURSUANCE TO THE SAME, THE PRESENT CASE WAS HEARD. THE FACTS RELATING TO THE CASE ARE THAT THE ASSESSEE FI LED ITS RETURN OF INCOME UNDER SECTION 139 OF THE INCOME TA X ACT, 1961 (IN SHORT THE ACT) ON 29.6.2004, DECLARING A N 7 INCOME OF RS.2,89,220/-. THE RETURNED INCOME WAS ACCEPTED UNDER SECTION 143(1) OF THE ACT AS NO NOTI CE UNDER SECTION 143(2) OF THE ACT WAS ISSUED WITHIN T HE STIPULATED TIME. SEARCH & SEIZURE OPERATIONS WERE CONDUCTED ON THE RESIDENTIAL AND BUSINESS PREMISES OF M/S MODERN GROUP, TO WHICH THE ASSESSEE BELONGS, ON 17.3.2010 AND THE ASSESSEE WAS ALSO COVERED. IN RE SPONSE TO NOTICE UNDER SECTION 153A(1), THE ASSESSEE DECLA RED SAME INCOME AS DECLARED IN THE RETURN FILED UNDER SECTION 139(1) OF THE ACT BEING RS.2,89,220/-. THE ASSESSI NG OFFICER ASSESSED THE INCOME AT RS.8,85,515/- AFTER DISALLOWING INTEREST OF RS.5,96,295/- CLAIMED UNDE R SECTION 24(B) OF THE ACT IN THE ABSENCE OF ANY EVID ENCE OF THE SAME. 6. AGGRIEVED WITH THIS ORDER OF THE ASSESSING OFFIC ER, THE ASSESSEE FILED APPEAL BEFORE THE LEARNED CIT (APPEA LS). ONE OF THE GROUNDS URGED BEFORE THE LEARNED CIT (AP PEALS) WAS THAT THE ASSESSMENT FRAMED UNDER SECTION 153A R .W.S. 143(3) OF THE ACT WAS BAD IN LAW AS NO INCRIMINATIN G MATERIAL WAS FOUND DURING THE COURSE OF SEARCH WHIC H COULD WARRANT SUCH ADDITION. 7. BY THE ORDER DATED 28.2.2014, THE LEARNED CIT (APPEALS) DISMISSED THE APPEAL. THE LEARNED CIT (APPEALS), RELYING ON VARIOUS JUDGMENTS OF THE HIGH COURT HELD THAT WHILE MAKING ASSESSMENT UNDER SECTION 153 A OF THE ACT, THE ASSESSING OFFICER IS NOT OBLIGED TO UT ILIZE ONLY THE INCRIMINATING MATERIAL COLLECTED DURING THE SEA RCH. 8 FURTHER, THE ADDITION MADE UNDER SECTION 24(B) OF T HE ACT WAS ALSO UPHELD. 8. AGGRIEVED BY THE SAME THE ASSESSEE FILED THE PRE SENT APPEAL BEFORE US. 9. DURING THE COURSE OF HEARING BEFORE US, THE LEA RNED COUNSEL FOR THE ASSESSEE SH.ASHOK GOEL, SUBMITTED T HAT THE PROVISIONS OF SECTION 153A HAD BEEN THE SUBJECT MATTER OF INTERPRETATION BY VARIOUS COURTS, WHICH H AD CLEARLY LAID DOWN THE PROPOSITION IN A NUMBER OF DE CISIONS THAT, AS PER THE SECTION, WHERE ASSESSMENT PROCEEDI NGS WERE PENDING ON THE DATE OF SEARCH THE SAME WOULD A BATE AND ASSESSMENT U/S 153A WOULD BE FRAMED AFRESH TAK ING INTO CONSIDERATION ALL MATERIAL INCLUDING INCRIMIN ATING MATERIAL FOUND DURING SEARCH. WHILE IN CASES WHERE ASSESSMENT HAD BEEN MADE U/S 143(1) OR 143(3) OF TH E ACT, THERE WOULD BE NO ABATEMENT AND IN THE ASSESSM ENT U/S 153A THE COMPLETED ASSESSMENT WAS TO BE REITER ATED AND ADDITION WAS TO BE MADE ONLY WITH RESPECT TO IN COME RELATING TO INCRIMINATING MATERIAL FOUND DURING COU RSE OF SEARCH. LD COUNSEL FOR THE ASSESSEE STATED THAT SIN CE IN THE PRESENT CASE THE ASSESSMENTS WERE COMPLETED ON THE DATE OF SEARCH AND NO INCRIMINATING MATERIAL RELATI NG TO THE IMPUGNED YEARS WAS FOUND , NO ADDITION COULD BE MADE TO THE INCOME OF THE ASSESSEE U/S 153A OF THE ACT,. RELIANCE WAS PLACED ON THE FOLLOWING DECISIONS BY T HE LEARNED COUNSEL FOR THE ASSESSEE : 9 1. CIT VS. M/S MURLI AGRO PRODUCTS LTD. ITA NO. 36 OF 2009 (BOM). 2. CIT VS. CONTINENTAL WAREHOUSING CORPORATION, (2015)374 ITR 645(BOM). 3. CIT VS. KABUL CHAWLA, 61 TAXMANN.COM 412 (DELHI). 4. JAI STEEL (INDIA) VS. ACIT,(2013) 259 CTR 281 (RAJ). 5. M/S TIMES FINVEST & COMMERCE LTD. , ITA NO.541/CHD/2014, DATED 08.12.2015 10. SHRI SUDHIR SEHGAL, LEARNED COUNSEL FOR THE ASSESSEE BELONGING TO THE HEERA MOTI GROUP, IN HIS ARGUMENTS, REITERATED THE ABOVE CONTENTIONS AND FUR THER DREW OUR ATTENTION TO SEVERAL OTHER JUDGMENTS OF HI GH COURTS AND I.T.A.T. ON THIS ISSUE. THE LEARNED COU NSEL FOR THE ASSESSEE ALSO PLACED RELIANCE ON THE DECISION O F THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT (CENTRAL), GURGAON VS. M/S BRINSAR FOODS PVT. LTD. IN ITA NO.192-204-224-225-2015 DT.03-08-2015 11. THE LEARNED DEPARTMENTAL REPRESENTATIVE, SHRI MANJIT SINGH, ON THE OTHER HAND, ARGUED AT LENGTH D RAWING OUR ATTENTION TO SEVERAL ASPECTS OF THE ISSUE IN S UPPORT OF HIS CONTENTION THAT THE GROUND OF THE ASSESSEE BE O UT RIGHTLY DISMISSED. THE GIST OF THE ARGUMENTS OF SH RI MANJIT SINGH, LEARNED DR WAS THAT; 1) THE CHANDIGARH BENCH OF THE I.T.A.T. HAS ALREADY DECIDED THIS ISSUE AGAINST THE ASSESSEE IN THE CASE OF SHRI VIPIN KUMAR VERMA VS. ACIT, VIDE ORDER DATED 22.8.2012. 10 2) THE HON'BLE SUPREME COURT HAS GRANTED SLP AGAINST THE HIGH COURTS RULING IN THE CASE OF CIT VS. CONTINENTAL WAREHOUSING CORPORATION, (2015)374 ITR 645(BOM),ON WHICH HEAVY RELIANCE HAS BEEN PLACED BY THE LEARNED COUNSEL FOR THE ASSESSEE. 3) THE PROCEDURE FOR ASSESSMENT OF SEARCH CASES PRESCRIBED UNDER SECTION 153A, 153B AND 153C WAS INTRODUCED BY THE FINANCE ACT, 2003, TO DO AWAY WITH THE CONTROVERSIES AND LITIGATION RELATING TO UNDISCLOSED INCOMES , WHETHER RELATABLE TO MATERIAL FOUND DURING SEARCH OR NOT, AS PROVIDED IN THE EARLIER BLOCK ASSESSMENT PROCEDURE. BY LIMITING ADDITION, UNDER SECTION 153A OF THE ACT, ALSO TO INCRIMINATING MATERIAL, IT WOULD TANTAMOUNT TO BRINGING CURRENT PROCEDURE AT PAR WITH THE EARLIER ONE,THUS DEFEATING THE VERY PURPOSE OF INTRODUCING THE LEGISLATION. 4) REFERRING TO CBDT CIRCULAR NO.7, DATED 5.9.2003, WHICH DEALT WITH THE NECESSITY OF BRINGING THE NEW SECTION, THE LEARNED D.R. POINTED OUT THAT THE CIRCULAR STATES THAT THE ASSESSING OFFICER HAS TO ASSESS/REASSESS THE TOTAL INCOME (EMPHASIS SUPPLIED) OF THE ASSESSEE, WHICH WAS INTERPRETED BY THE LEARNED D.R. TO MEAN THAT IT SHOULD NOT BE RESTRICTED TO INCRIMINATING MATERIAL ONLY. 5) THAT THE SECTION BEGAN WITH A NON-OBSTANTE CLAUSE AND THE ASSESSING OFFICER WAS BOUND (SHALL) TO ISSUE NOTICE FOR ALL SIX YEARS TO ASSESS/REASSESS THE TOTAL INCOME. 6) RELIANCE WAS PLACED ON SEVERAL CASE LAWS MORE SPECIFICALLY RAJAT TRADE COM INDIA (P) LTD. VS. 11 DCIT, 120 ITD 48 AND CANARA HOUSING DEVELOPMENT COMPANY VS. DCIT [2014] 52 TAXMANN.COM 172. 7) IT WAS POINTED OUT THAT THE CONTROVERSY IN QUESTION WHETHER ASSESSMENT UNDER SECTION 153A COULD BE VALIDLY FRAMED IN THE ABSENCE OF ANY INCRIMININATING MATERIAL, WAS LEFT OPEN IN THE CASE OF ANIL BHATIA (SUPRA), BUT WAS ANSWERED AGAINST THE ASSESSEE IN THE CASE OF MADUGULA VENU VS. DIT, 29 TAXMANN.COM 200 (DEL) AND CIT VS. RAJ KUMAR ARORA, 367 ITR 517 (ALLAHABAD). 8) THE CASE LAWS RELIED UPON BY THE ASSESSEE WERE REBUTTED ON FACTS. 9) THE CASE OF KABUL CHAWLA (SUPRA) WAS ANALYZED AND DISCUSSED PRIMARILY FOR THE REASON THAT THE CONCLUSION THEREIN WAS AGAINST ALL PRINCIPLES OF STATUTORY INTERPRETATION. THAT CLAUSE (IV) OF THE JUDGMENT STATING IT DOES NOT MEAN THAT THE ASSESSMENT CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL.OBVIOUSLY, AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL WAS BORROWED FROM THE JUDGMENT IN THE CASE OF CIT VS CHETAN DASS LACHMAN DASS, 254 CTR 392, WHICH WAS CLARIFIED IN FILATEX INDIA LTD., 49 TAXMANN.COM 461, AS BEING MERELY CLARIFICATORY THAT THE ASSESSMENT UNDER SECTION 153A EMANATES AND STARTS ON THE FOUNDATION OF SEARCH. 10) THAT WHEREVER THE LEGISLATURE DEEMED FIT, IT CARRIED AN EXCEPTION TO THE RIGOURS OF SECTION 153A AS IN THE THIRD PROVISO TO THE SECTION AND THEREFORE THERE WAS NO SCOPE TO READ /INTERPRET 12 THE SECTION IN THE LIKEWISE MANNER IN THE ABSENCE OF CLEAR LANGUAGE TO THIS EFFECT. 11) THAT EVEN ON FACTS THERE WAS INCRIMINATING MATERIAL, BEING STATEMENT RECORDED UNDER SECTION 132(4) BY THE ASSESSING OFFICER OF SHRI KRISHAN KUMAR GOYAL OF MODERN GROUP OF CASES, WHEREIN HE HAD ADMITTED THAT INCRIMINATING DOCUMENTS WERE FOUND AND, IN PURSUANCE TO THIS STATEMENT, MADE SURRENDER OF ADDITIONAL INCOME INCOME RS. 11 CRORES. 12. IN REJOINDER, THE LEARNED COUNSEL FOR THE ASSESSEE, SHRI.ASHOK GOEL ,STATED THAT ALL ISSUES R AISED BY THE LEARNED D.R. HAVE ALREADY BEEN DEALT WITH BY TH E HIGH COURTS IN THE DECISIONS RELIED UPON BY THE ASSESSEE . THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER STATED THA T NO INCRIMINATING MATERIAL VIZ-A-VIZ THE ADDITION MADE IN THE IMPUGNED YEAR WAS FOUND AND ALSO THAT THE SURRENDER MADE PERTAINED TO THE ASSESSMENT YEARS RELATING TO THE YEAR IN WHICH SEARCH WAS CONDUCTED AND, WHICH WERE NOT PENDING BEFORE THE BENCH. SHRI SUDHIR SEHGAL, LEAR NED COUNSEL FOR THE ASSESSEE, STATED IN HIS COUNTER ARGUMENT, THAT THE ISSUE HAD BEEN SETTLED IN FAVOUR OF THE AS SESSEE IN VIEW OF VARIOUS JUDGMENTS OF HIGH COURTS. 13. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTI ES, PERUSED THE DOCUMENTS PLACED BEFORE US AS ALSO THE ORDERS OF THE AUTHORITIES BELOW. 14. THE UNDISPUTED FACTS IN THE PRESENT CASE ARE TH AT ON THE DATE OF SEARCH CONDUCTED ON THE ASSESSEE U/S 132 OF 13 THE ACT, I.E 17-03-2010, NO ASSESSMENT PROCEEDINGS RELATING TO THE IMPUGNED YEAR WERE PENDING. IN FAC T THE ASSESSEE HAD FILED RETURN FILED U/S 139(1) OF THE A CT ON 29-06-2004,NO NOTICE U/S 143(2) HAD BEEN ISSUED TO THE ISSUE AND ON THE DATE OF INITIATION OF SEARCH I.E 1 7-03- 2010 THE TIME LIMIT FOR ISSUING NOTICE U/S 143(2) HAD EXPIRED. THUS, ON THE DATE OF SEARCH NO ASSESSMENT PROCEEDINGS WERE PENDING. FURTHER IN THE ASSESSMENT MADE U/S 153A OF THE ACT, THE ONLY ADDITION MADE PERTAINED TO DISALLOWANCE OF INTEREST U/S 24(B) OF THE ACT IN THE ABSENCE OF ANY DOCUMENTARY PROOF FOR CLAIMIN G THE SAME BY THE ASSESSEE. NO INCRIMINATING MATERIAL, F OUND DURING THE COURSE OF SEARCH, PERTAINING TO THE ADDITION/DISALLOWANCE MADE WAS REFERRED TO WHILE M AKING THE DISALLOWANCE. 15. THE ISSUE BEFORE US IS, WHETHER IN CASE OF ASSESSMENTS FRAMED UNDER SECTION 153A OF THE ACT, ADDITION COULD BE MADE IN THE ABSENCE OF ANY INCRIMINATING MATERIAL IN THOSE YEARS WHERE NO ASSESSMENT PROCEEDINGS WERE PENDING AND ASSESSMENT HAD BEEN MADE U/S 143(1)/143(3) OF THE ACT. 16. WE ARE IN COMPLETE AGREEMENT WITH THE CONTENTION OF THE LD.AR THAT THE ISSUE IS NO LONGER RES INTEGRA IN VIEW OF VARIOUS DECISIONS OF THE HIGH C OURTS HOLDING THAT COMPLETED ASSESSMENTS CAN BE INTERFERE D WITH BY THE ASSESSING OFFICER WHILE MAKING THE ASSESSMENT U NDER SECTION 153 A ONLY ON THE BASIS OF SOME INCRIMINATI NG MATERIAL 14 UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITIO N OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVE RED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL A SSESSMENT. 17. WE FIND,THAT THE ISSUE FIRST CAME UP FOR CONSID ERATION BEFORE THE HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. M/S MURLI AGRO PRODUCTS LTD. (SUPRA), WHEREIN ON TH E ISSUE OF EXERCISE OF REVISIONARY POWERS BY THE COMMISSIONER OF INCOME TAX U/S 263 OF THE ACT, ON T HE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 153A, IT WAS CONTENDED BY THE REVENUE THAT THE IMPUGNED O RDER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF TH E REVENUE SINCE THE ASSESSING OFFICER HAD ONLY DETERM INED THE UNDISCLOSED INCOME AND NOT THE TOTAL INCOME WHI CH IS THE MANDATE OF SECTION 153A .THE HON'BLE HIGH COURT , WHILE ADJUDICATING THE ISSUE, DEALT AT LENGTH WITH THE PURPOSE OF INTRODUCTION OF THE NEW SEARCH ASSESSMEN T PROCEDURES, AS AGAINST THE EARLIER BLOCK ASSESSMENT PROCEDURES AND THEN WENT ON TO INTERPRET THE PROVIS O TO SECTION 153A(1) , AND HELD THAT IT IS ONLY PENDING PROCEEDINGS WHICH ARE ABATED ON INITIATION OF PROCE EDINGS UNDER SECTION 153A OF THE ACT, WHILE THE ASSESSMENT S WHICH HAVE ATTAINED FINALITY CANNOT BE DISTURBED UN LESS MATERIALS GATHERED IN THE COURSE OF PROCEEDINGS UND ER SECTION 153A OF THE ACT ESTABLISHED OTHERWISE. 18. THEREAFTER, THE DELHI HIGH COURT IN THE CASE O F CIT VS. ANIL KUMAR BHATIA 352 ITR 493, INTERPRETED THE 15 PROVISIONS OF SECTION 153A OF THE ACT AT LENGTH, AN D HELD THAT AS AGAINST THE EARLIER BLOCK ASSESSMENT PROCED URE WHICH ROPED IN ONLY THE UNDISCLOSED INCOME AND THE REGULAR ASSESSMENT PROCEEDINGS WERE PRESERVED, RESU LTING IN MULTIPLE ASSESSMENTS, UNDER THE PRESENT ASSESSME NT PROCEDURES PRESCRIBED UNDER SECTION 153A/B/C OF THE ACT, ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX ASSESSMENT YEARS HAD TO BE PASSED. TH HONBLE HIGH COURT HELD THAT THIS WAS SOUGHT TO BE ACHIEVED IN CASE OF THOSE ASSESSMENT YEARS WHERE ASSESSMENT PROCEEDINGS WERE PENDING ON THE DATE OF SEARCH BY ABATING THEM AND FRAMING FRESH ASSESSMENT INCLUDING INCOMES RELATING TO INCRIMINATING MATERIAL FOUND DURING SEARCH. IN CAS E OF THOSE ASSESSMENT YEARS WHERE AN ASSESSMENT ORDER HA D ALREADY BEEN PASSED UNDER SECTION 143(1)(A) OR 143( 3), THOSE ASSESSMENTS COULD BE REOPENED AND THE TOTAL INCOME REASSESSED TAKING NOTE OF THE UNDISCLOSED IN COME IF ANY UNEARTHED DURING SEARCH, THE FETTERS TO REO PENING, BEING REMOVED BY INSERTION OF THE NON-OBSTANTE CLAU SE TO SECTION 153A. THE ENTIRE THRUST OF THE JUDGMENT RE STED ON THE INTERPRETATION THAT THERE CANNOT BE MULTIPLE ASSESSMENT ORDERS IN CASE OF SEARCH ASSESSMENTS UND ER SECTION 153A/B/C OF THE ACT AND, THEREFORE, WHERE ASSESSMENTS WERE PENDING THEY WOULD ABATE TO ENABLE THE ASSESSING OFFICER TO ASSESS THE TOTAL INCOME INCLU DING UNDISCLOSED INCOME, AND WHERE ASSESSMENTS OR RE- ASSESSMENTS HAD BEEN COMPLETED, THEY WOULD NOT ABAT E AND THE ASSESSING OFFICER WOULD ONLY REOPEN THE COM PLETED 16 ASSESSMENTS AND INCLUDE THEREIN UNDISCLOSED INCOME. THE HIGH COURT WENT ON TO HOLD THAT SUCH DETERMINATION WOULD BE SIMILAR TO ORDERS PASSED IN ANY RE-ASSESSMENT WH ERE THE TOTAL INCOME DETERMINED IN THE ORIGINAL ASSESSM ENT ORDER AND INCOME THAT ESCAPED ASSESSMENT ARE CLUBB ED TOGETHER AND ASSESSED AS TOTAL INCOME. 19. THE BOMBAY HIGH COURT IN THE CASE OF CIT VS. CONTINENTAL WAREHOUSING (SUPRA) UPHELD THE INTERPRETATION OF THE SECTION BY THE DIVISION BENCH OF THE SAME COURT IN THE CASE OF MURLI AGRO (SUPRA) AND H ELD THAT FINALIZED ASSESSMENTS CANNOT BE TOUCHED BY RES ORTING TO THE PROVISION OF SECTION 153A AND ADDITION WAS T O BE MADE ONLY ON THE BASIS OF MATERIAL UNEARTHED DURING SEARCH, SINCE SEARCH AND REQUISITION ARE THE C RUCIAL WORDS APPEARING IN THE SUBSTANTIVE PROVISION AND PR OVISO AND THEY WOULD THROW LIGHT ON THE ISSUE OF APPLICAB ILITY OF THE PROVISION. THE COURT UPHELD THE UNDERSTANDING OF THE LEGAL PROVISION OF SECTION 153A BY THE SPECIAL BENC H IN THE I.T.A.T. IN THIS CASE AND FURTHER HELD THAT THE DELHI HIGH COURT HAD IN THE CASE OF ANIL KUMAR BHATIA AL SO REACHED TO THE SAME CONCLUSION. IT ALSO REFERRED T O THE JUDGMENT OF THE KARNATAKA HIGH COURT IN THE CASE OF CANARA HOUSING DEVELOPMENT CO. VS. DCIT (2014) 49 TAXMANN..98 AND STATED THAT EVEN AS PER THAT JUDGME NT, THE SCOPE OF ENQUIRY IN SEARCH CARRIED UNDER SECTIO N 153A HAD TO ESSENTIALLY REVOLVE AROUND SEARCH OR REQUISI TION UNDER SECTION 132A OF THE ACT. 17 20. IN THE CASE OF KABUL CHAWLA (SUPRA), THE DELHI HIGH COURT AFTER CONSIDERING VARIOUS DECISIONS OF HIGH C OURTS, SUMMARIZED THE LEGAL POSITION IN PARAGRAPH 37, WHIC H IS REPRODUCED BELOW : 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN T HE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UN DER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153 A (1) WILL HAVE TO BE MANDATORILY ISSUE D TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE S EARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DA TE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO B E 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 WHICH THE SEAR CH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INC OME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORD ERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WILL BE ONLY ONE ASSESS MENT ORDER IN RESPECT 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 O F THE SEARCH, OR OTHER POST-SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THA T 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 S ECTION ONLY ON THE BASIS OF SEIZED MATERIAL.' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE CO MPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESS MENT CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATABLE TO ABAT ED PROCEEDINGS (I.E. 18 THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD ' REASSESS' TO COMPLETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, T HE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARAT ELY 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 ONLY ON THE BASI S OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR P ROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT P RODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF OR IGINAL ASSESSMENT. 21. THE DELHI HIGH COURT FURTHER REITERATED THE PROPOSITION LAID DOWN IN KABUL CHAWLA (SUPRA) IN TH E CASE OF CIT VS. RRJ SECURITIES, 380 ITR 612 AND PR. CIT VS. LATA JAIN IN ITA NO.274/2016 DT.29-04-2016. 22. ON GOING THROUGH THE ABOVE JUDGMENTS, WE FIND T HAT THE REASON FOR UPHOLDING THE PROPOSITION THAT ADDIT ION U/S 153A, IN CASE OF EARLIER COMPLETED ASSESSMENTS, CAN BE MADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL FO UND DURING SEARCH OR REQUISITION IS THAT: 1. ASSESSMENT U/S 153A CAN BE FRAMED ONLY IN CASES WHERE A SEARCH IS INITIATED U/S 132 OR BOOKS OF ACCOUNTS, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED U/S 132A OF THE ACT. MOREOVER NOTICES U/S 153A(1)(A) CAN BE ISSUED AND INCOME ASSESSED OR REASSESSED OF SIX YEARS PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS 19 CONDUCTED OR REQUISITION IS MADE. THUS THE CRUCIAL WORDS SEARCH AND REQUISITION APPEAR IN THE SUBSTANTIVE PROVISION AND THE PROVISO, WHICH THROWS LIGHT ON THE ISSUE OF APPLICABILITY OF THE PROVISIO N .SUCH ASSESSMENTS HAVE A VITAL LINK WITH THE INITIATION AND CONDUCT OF SEARCH .SINCE SEARCH CAN BE AUTHORIZED ONLY ON THE FULFILLMENT OF CONDITIONS ENUMERATED IN SECTION 132,THOSE CONDITIONS WILL HAV E TO BE TAKEN INTO ACCOUNT WHILE INTERPRETING SECTION 153A AND THE INTERPRETATION ARRIVED AT IS THAT IN RESPECT OF UNABATED PROCEEDINGS ASSESSMENT HAS TO BE MADE ON THE BASIS OF BOOKS OF ACCOUNTS OR OTHER DOCUMENTS NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT BUT FOUND IN THE COURSE OF SEARCH AND UNDISCLOSED INCOME/PROPERTY DISCOVERED IN THE COURSE OF SEARCH. SECTION 153A BEING ENACTED TO A SEARCH AND REQUISITION, ITS CONSTRUCTION WOULD HAVE TO BE MADE ACCORDINGLY. 2. THE SECOND PROVISO TO SECTION 153A (1) STATES THAT ON INITIATION OF PROCEEDINGS U/S 153A ,THE ASSESSMENT/REASSESSMENT PROCEEDINGS PENDING ON THE DATE OF CONDUCTING SEARCH OR MAKING REQUISITION U/S 132A OF THE ACT, SHALL STAND ABATED. THE CBDT CIRCULAR NO. 8 OF 2003 DT.18-09-03,CLARIFIES THAT PROCEEDINGS IN APPEAL, REVISION OR RECTIFICATION AGAINST FINALIZED ASSESSMENTS/REASSESSMENTS SHALL NOT ABATE. READING THE TWO TOGETHER, THE COURTS HAV E STATED THAT AS PER SECTION 153A,ASSESSMENTS/REASSESSMENTS ALREADY FINALIZED DO NOT ABATE, MEANING THEREBY THAT THEY ATTAIN FINALITY, WHICH CANNOT BE DISTURBED UNLESS SOME INCRIMINATING MATERIALS ARE GATHERED DURING THE COURSE OF SEARCH. 3. THAT THE WORDS ASSESS OR REASSESS HAS BEEN USED AT MORE THAN ONE PLACE IN THE SECTION AND A HARMONIOUS CONSTRUCTION OF THE ENTIRE PROVISION 20 WOULD LEAD TO THE CONCLUSION THAT THE WORD ASSESS HAS BEEN USED IN THE CONTEXT OF ABATED PROCEEDINGS AND REASSESS HAS BEEN USED FOR COMPLETED PROCEEDINGS WHICH WOULD NOT ABATE AS THEY ARE NOT PENDING ON THE DATE OF INITIATION OF SEARCH OR MAKI NG OF REQUISITION. 23. WE MAY ADD THAT THAT THE REQUIREMENT OF THE SEC TION IS LIMITED TO OPENING OR REOPENING OF THE CASES FOR THE PURPOSE OF MAKING ASSESSMENT OR REASSESSMENT OF THE TOTAL INCOME OF PRECEDING SIX ASSESSMENT YEARS PRIO R TO THE YEAR OF SEARCH. IT DOES NOT CONTAIN ANY PROVISI ON REGARDING THE CONCEPT OF MAKING ASSESSMENT OF UNDISCLOSED INCOME AS WAS THERE IN THE EARLIER BLOC K ASSESSMENT REGIME UNDER CHAPTER XIVB. IT DOES NOT SPECIFICALLY CONTAIN ANY PROVISION REGARDING THE N ATURE OF ADDITION WHICH CAN BE MADE UNDER THIS SECTION. THE SECTION HAS PROVIDED, FOR THE REMOVAL OF DOUBTS ,BY WAY OF INSERTION OF EXPLANATION AT THE END OF THE SECTION THAT SAVE AS OTHERWISE PROVIDED IN THIS SECTION, SECTION 153B AND SECTION 153C, ALL OTHER PROVISIONS OF THIS ACT SHALL APPLY TO ASSESSMENT MADE UNDER THIS SECTION. THIS IMPLIES THAT NATURE OF ASSESSMENT OR REASSESSMENT M ADE UNDER THIS SECTION SHALL BE GOVERNED BY THE NORMAL PROVISIONS OF THE ACT. IN CASE IT IS AN ASSESSMENT MADE FOR THE FIRST TIME, ALL PROVISIONS OF ASSESSMENT WHICH ARE APPLICABLE TO ASSESSMENTS MADE U/S 143(3) SHALL APP LY AND IN CASE IT IS A REASSESSMENT BEING MADE ALL PRI NCIPLES OF REASSESSMENT WHICH ARE APPLICABLE IN CASE OF PROCEEDINGS U/S 147/148 SHALL BECOME APPLICABLE . T HUS 21 IN CASES WHERE ASSESSMENTS HAVE ALREADY BEEN MADE ADDITION TO BE MADE IN PROCEEDINGS U/S 153A IS TO B E RESTRICTED TO INCRIMINATING MATERIAL FOUND IF ANY. 24. IT IS AMPLY EVIDENT FROM THE ABOVE THAT THE IS SUE IS SETTLED, WITH A NUMBER OF DECISIONS OF THE HIGH C OURTS HOLDING THAT IN THE CASE OF COMPLETED ASSESSMENTS, NO ADDITION CAN BE MADE IN THE ABSENCE OF ANY INCRIMIN ATING MATERIAL. THOUGH WE DO AGREE THAT THERE ARE DECISIO NS OF HIGH COURTS WHICH HOLD OTHERWISE AND STATE THAT U/S 153A , ADDITION IN CASE OF COMPLETED ASSESSMENTS NEED NO T BE RESTRICTED TO INCRIMINATING MATERIAL, BUT IN VIEW O F THE APEX COURT DECISION IN CIT VS VEGETABLE PRODUCTS LTD.(1973) 88 ITR 192 WHICH STATES THAT WHERE THER E ARE TWO REASONABLE CONSTRUCTIONS OF A STATUTE ,THE CONSTRUCTION FAVOURING THE ASSESSEE SHOULD BE ADOPT ED, WE HOLD THAT IN CASE OF COMPLETED ASSESSMENTS UND ER SECTION 143(3)/143(1) OF THE ACT, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH, THE ASSESSING OFFICER HAS NO JURISDICTION TO MAKE A NY ADDITION UNDER SECTION 153A OF THE ACT. 25. WE MAY ADD THAT DURING THE COURSE OF HEARING BE FORE US, THE LEARNED DR, SHRI MANJIT SINGH, VEHEMENTLY A RGUED AT LENGTH, RAISING SEVERAL ISSUES AGAINST THE PRO POSITION AND THOUGH AS OBSERVED ABOVE, THE ISSUE IS NO LONGE R RES INTEGRA, WE SHALL STILL DEAL WITH THE ARGUMENTS OF THE LEARNED D.R. 22 26. THE FIRST ARGUMENT OF THE LEARNED D.R. THAT TH E ISSUE HAD BEEN DECIDED AGAINST THE ASSESSEE BY THE CHANDI GARH BENCH OF THE I.T.A.T. IN THE CASE OF VIPAN KUMAR V ERMA VS. ACIT VIDE ITS ORDER DATED 22.8.2012, MERITS NO CONSIDERATION IN VIEW OF THE NUMEROUS JUDGMENTS OF THE HIGHER AUTHORITIES I.E. HIGH COURTS ON THIS ISSUE. 27. THE ARGUMENT OF THE LEARNED D.R. THAT THE HON'BLE SUPREME COURT HAS GRANTED SLP AGAINST THE H IGH COURTS RULING IN THE CASE OF CONTINENTAL WAREHOUSIN G (SUPRA) DOES NOT DISTURB THE CURRENT STATUS OF THE INTERPRETATION OF THE PROPOSITION SINCE THE FACT RE MAINS THAT AS ON DATE THERE ARE SEVERAL JUDGMENTS OF THE HIGH COURTS UPHOLDING THE PROPOSITION THAT NO ADDITION C AN BE MADE IN THE ABSENCE OF INCRIMINATING MATERIAL IN TH E CASE OF COMPLETED ASSESSMENTS UNDER SECTION 153A OF THE ACT. 28. THE NEXT ARGUMENT OF THE LEARNED D.R. WAS THAT IF ADDITION UNDER SECTION 153A OF THE ACT IS TO BE RESTRICTED TO THE EXTENT OF INCRIMINATING MATERIAL FOUND/UNDISCLOSED INCOME (TERM USED BY THE LEARNED D.R.) THERE WOULD BE NO DIFFERENCE BETWEEN THE PROC EDURES PRESCRIBED UNDER THE BLOCK ASSESSMENT REGIME PRESCR IBED IN CHAPTER XIV AND THE CURRENT SEARCH ASSESSMENT PROCEEDINGS UNDER SECTION 153A AND THE VERY PURPOSE OF INTRODUCING THE NEW PROCEDURE TO DO AWAY WITH CONTROVERSIES RELATING TO UNDISCLOSED INCOME, WOULD BE DEFEATED. WE FIND NO MERIT IN THIS CONTENTION OF T HE LEARNED D.R. ALSO SINCE , THE RESTRICTION OF ADDITI ON UNDER 23 SECTION 153A OF THE ACT TO THE EXTENT OF INCRIMINAT ING MATERIAL FOUND, IS TO BE MADE ONLY IN THE CASE OF COMPLETED ASSESSMENTS OR RE-ASSESSMENTS, WHICH DO N OT ABATE UNDER SECTION 153A OF THE ACT. THERE IS THERE FORE NO SIMILARITY BETWEEN THE ASSESSMENT PROCEDURES PRESCRIBED UNDER BLOCK ASSESSMENT REGIME AND THE CURRENT PROCEDURES U/S153A/B/C/D OF THE ACT. MOREO VER, BY PRESCRIBING ONE ASSESSMENT FOR EACH OF THE SIX Y EARS, COVERED UNDER SEARCH, THE LEGISLATURE HAS DONE AWAY WITH THE REQUIREMENT OF MAKING ASSESSMENT ONLY OF UNDISC LOSED INCOME PRESCRIBED IN THE EARLIER BLOCK ASSESSMENT REQUIREMENT, AND THUS DOING AWAY WITH CONSEQUENT LITIGATION REGARDING THE SAME. 29. THE LEARNED D.R. FURTHER ARGUED THAT EVEN THE CIRCULAR OUTLYING THE OBJECTIVE BEHIND BRINGING THE PRESENT SEARCH ASSESSMENT PROCEDURES STATED THAT TH E ASSESSEE SHALL ASSESS/REASSESS TOTAL INCOME FOR E ACH OF THE SIX YEARS. THE LEARNED D.R. STATED THAT THE MA NDATE OF THE CURRENT REQUIREMENT WAS TO ASSESS THE TOTAL INCOME, HENCE, IT CANNOT BE RESTRICTED TO THE EXTEN T OF INCRIMINATING MATERIAL ONLY. 30. WE FIND THAT THE MEANING OF THE WORD TOTAL INCOME IN THE CONTEXT OF COMPLETED ASSESSMENT WAS INTERPRETED BY THE DELHI HIGH COURT IN THE CASE OF ANIL BHATIA(SUPRA), WHEREIN IN PARA 21, THE COURT HELD T HAT 24 IN CASES WHERE THE ASSESSMENT OR REASSESSMENT PROC EEDINGS HAVE ALREADY BEEN COMPLETED AND ASSESSMENT ORDERS H AVE BEEN PASSED DETERMINING THE ASSESSEES TOTAL INCOME AND SUCH ORDERS ARE SUBSISTING AT THE TIME WHEN THE SEARCH O R THE REQUISITION IS MADE, THERE IS NO QUESTION OF ANY AB ATEMENT SINCE NO PROCEEDINGS ARE PENDING. IN THIS LATTER SITUATIO N, THE ASSESSING OFFICER WILL REOPEN THE ASSESSMENTS OR REASSESSMENTS ALREADY MADE (WITHOUT HAVING THE NEED TO FOLLOW THE STRICT PROVISIONS OR COMPLYING WITH THE STRICT CONDITIONS OF SECTIONS 147 , 148 AND 151 ) AND DETERMINE THE TOTAL INCOME OF THE ASSESSEE. SUCH DETERMINATION IN THE ORDERS PASS ED UNDER SECTION 153A WOULD BE SIMILAR TO THE ORDERS PASSED 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.( EMPHASIS SUPPLIED BY US) IN SUCH A CASE, TO REITERATE, THERE IS NO QUESTION OF ANY ABATEMENT OF THE EARLIER PROCEEDINGS FOR THE SIMPLE REASON THAT NO PROCEEDINGS FOR ASSESSMENT OR REASSE SSMENT WERE PENDING SINCE THEY HAD ALREADY CULMINATED IN A SSESSMENT OR REASSESSMENT ORDERS WHEN THE SEARCH WAS INITIATE D OR THE REQUISITION WAS MADE. 31. IT IS EVIDENT FROM THE SAME THAT THE UNDERSTAND ING OF THE LEARNED D.R. THAT BY INCLUDING ONLY UNDISCLOSED INCOME DISCOVERED AS A RESULT OF SEARCH, IN THE ASS ESSMENT FRAMED UNDER SECTION 153A IN THOSE CASES WHERE ASSESSMENT HAVE BEEN COMPLETED EARLIER UNDER SECTIO N 143(3)/143(1) OF THE ACT, THE TOTAL INCOME, IS NO T 25 ASSESSED IS MISPLACED. WHAT SECTION 153A OF THE AC T PRESCRIBES IS THAT WHERE ASSESSMENTS ARE COMPLETED, THEY SHALL BE REOPENED, INCOMES RELATING TO INCRIMINATIN G MATERIAL FOUND DURING THE SEARCH DETERMINED AND ADD ED TO THE ALREADY ASSESSED INCOME AND THUS TOTAL INCOME COMPUTED. THUS, RESTRICTING THE ADDITION MADE TO T HE EXTENT OF INCRIMINATING MATERIAL WOULD NOT MEAN, TH AT TOTAL INCOME IS NOT DETERMINED. 32. AS FOR THE RELIANCE PLACED BY THE LEARNED D.R. ON THE DECISIONS AGAINST THE PROPOSITION,WE AGREE THAT THE RE ARE DIVERGENT VIEWS OF THE HIGH COURTS ON THIS ISSUE,BU T AS STATED ABOVE WE UPHOLD THE VIEW FAVOURING THE ASSES SEE IN VIEW OF THE APEX COURT DECISION IN CASE OF VEGETABL E PRODUCTS LTD.(SUPRA). FURTHER WE MAY ADD THAT THE HONBLE DELHI HIGH COURT ,IN ITS DECISION RENDERED IN THE CASE OF KABUL CHAWLA (SUPRA),HAS DEALT AND DISTINGU ISHED MOST OF THESE DECISIONS PRIMARILY BY FINDING THAT T HOSE DECISIONS DEALT WITH THE FACT SITUATION WHERE MATER IAL HAD BEEN UNEARTHED DURING SEARCH AND THEREFORE COULD NO T APPLY IN SITUATIONS WHERE NO MATERIAL WAS FOUND DUR ING SEARCH. 33. THE LD. DR FURTHER CONTENTED THAT THE STATEMENT OF SH. KISHAN KUMAR GOYAL WHICH WAS RECORDED DURING TH E COURSE OF SEARCH CONDUCTED ON THE MODERN GROUP, CONSTITUTED INCRIMINATING MATERIAL. AS PER THE LD. DR ,IN THE STATEMENT , SH. KISHAN KUMAR GOYAL ADMITTED THA T INCRIMINATING DOCUMENTS RELATING TO VARIOUS INVESTM ENT 26 COMPANIES, EXCESS CASH AND JEWELLERY WERE FOUND. TH E ASSESSEE IN CONSEQUENCE THEREOF HAD SURRENDERED ADDITIONAL INCOME OF RS.11 CRORES . 34. THE STATEMENT REFERRED TO BY THE LD. DR IS REPRODUCED AS UNDER: Q.3 DO YOU WANT TO SAY ANYTHING ELSE FURTHER? ANS. DURING THE COURSE OF SEARCH OPERATION CERTAIN INCRIMINATING DOCUMENTS RELATING TO VARIOUS INVESTME NT COMPANIES, EXCESS CASH & JEWELLERY WERE FOUND AT MY RESIDENCE. IN THIS CONNECTION I WOULD LIKE TO OFFER A DDITIONAL INCOME TO THE TUNE OF RS. 11 CRORE (RUPEES ELEVEN CROR E ONLY) TO AVOID LITIGATION WITH THE DEPARTMENTS, OVER AND ABOVE THE INCOME OF MY FAMILY AND INVESTMENT COMPANIES AS STA TED ABOVE SUBJECT TO NO PENAL ACTION. THE DISCLOSURE IS MA DE U/S 132(4) OF THE IT ACT, 1961 VOLUNTARILY. THE BREAK-UP OF THE SAME WILL BE SUBMITTED IN THE NEXT TWO DAYS. A SEPARAT E LETTER TO THIS EFFECT IS SUBMITTED HEREBY. FROM A READING OF THE ABOVE ,IT IS EVIDENT THAT SH GOYAL ADMITTED THAT CERTAIN INCRIMINATING DOCUMENTS RELAT ING TO VARIOUS INVESTMENT COMPANIES, EXCESS CASH AND JEWEL LERY WAS FOUND AT HIS RESIDENCE. ADMITTEDLY THERE IS NO REFERENCE IN THE STATEMENT TO ANY DOCUMENT FOUND, W HICH REVEALED THAT THE ASSESSEE HAD WRONGLY CLAIMED INTE REST ON LOAN TAKEN FOR HIS HOUSE PROPERTY, WHICH WAS THE ONLY DISALLOWANCE MADE IN THE ASSESSMENT ORDER PASSED U/ S 153A FOR THE IMPUGNED YEAR. MOREOVER WE FIND THAT T HE DISALLOWANCE WAS MADE FOR WANT OF EVIDENCE AND NOT ON 27 THE BASIS OF ANY INCRIMINATING MATERIAL FOUND DURIN G SEARCH. FURTHER WE FIND THAT THE STATEMENT IS GENER AL WITH NO REFERENCE TO ANY SPECIFIC DOCUMENT OR ASSET FOUN D DURING SEARCH AND THE ASSESSEE HAS ADMITTEDLY SURRENDERED RS. 11 CRORE ON ACCOUNT OF THE SAME AND PAID TAXES THEREON.THE STATEMENT THEREFORE CANNOT BE STA TED TO BE INCRIMINATING MATERIAL FOR THE PURPOSE OF DISALL OWING INTEREST ON HOUSING LOAN. 35. MOREOVER THE DELHI BENCH OF THE ITAT IN THE CAS E OF M/S BEST INFRASTRUCTURE (INDIA) PVT. LTD. VS ACIT I N ITA NO.1698/DEL/2014 DT.31-05-2016, HELD THAT ANY STATE MENT RECORDED DURING SEARCH CANNOT ON STANDALONE BASIS WITHOUT REFERENCE TO ANY OTHER MATERIAL DISCOVERED DURING SEARCH BE TREATED AS EVIDENCE FOUND DURING SEARCH .THE RELEVANT FINDINGS OF THE COORDINATE BENCH AT PARA 2 3 (II) IS AS FOLLOWS: (II) ANY STATEMENT RECORDED DURING THE COURSE OF SEARCH CANNOT ON A STANDALONE BASIS WITHOUT REFERENCE TO ANY OTHER MATERIAL DISCOVERED DURING SEARCH AND SEIZURE OPERATION WOULD EMPOWER THE ASSESSING OFFICER TO MAKE THE ADDITION. THE WORDS 'EVIDENCE FOUND AS A RESULT OF SEARCH' WOULD NOT TA KE WITHIN ITS SWEEP STATEMENT RECORDED DURING SEARCH AND SEIZURE OPERATIONS. THEREFORE, THE REVENUE'S STAND THAT THE ADDITION U/S 153A CAN BE MADE IN RESPECT OF SHARE CAPITAL ON ACCOUNT OF STATEMENT OF SHRI TARUN GOYAL AND SHRI ANU AGGARWAL CANNOT BE ACCEPTED. 28 36. IN VIEW OF THE ABOVE THE STAND OF THE REVENUE THAT THE STATEMENT OF SH. KISHAN KUMAR GOYAL CONSTITUTED INCRIMINATING MATERIAL FOR THE PURPOSE OF MAKING DISALLOWANCE OF INTEREST ON HOUSING LOAN U/S 153A CANNOT BE ACCEPTED. 37. IN VIEW OF THE ABOVE WE HOLD THAT IN THE ABSENC E OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH AND THE ASSESSMENT PROCEEDINGS HAVING NOT AB ATED AT THE TIME OF SEARCH, THE ASSESSING OFFICER HAS NO JURISDICTION TO MAKE THE ADDITION U/S 153A OF THE A CT. 38. THIS GROUND OF APPEAL OF THE ASSESSEE IS THEREF ORE ALLOWED. THE ADDITIONS MADE IN THE ORDER U/S 153A / 143(3) ARE ACCORDINGLY DELETED. 39. SINCE THE JURISDICTION OF THE ASSESSING OFFICER TO MAKE ADDITION UNDER SECTION 153A HAS BEEN HELD TO B E NOT AS PER LAW ,WE DO NOT FIND ANY NEED TO DECIDE THE O THER GROUNDS RAISED BY THE ASSESSEE ON MERITS. 40. THE APPEAL OF THE ASSESSEE IS THEREFORE ALLOWED . 41. SINCE THE ISSUE INVOLVED AND FACTS BEING IDENTI CAL IN ALL THE REMAINING APPEALS AND CROSS OBJECTIONS WHIC H WERE HEARD TOGETHER, THE DECISION RENDERED HEREINABOVE W ILL APPLY TO ALL THE APPEALS AND CROSS OBJECTIONS WITH EQUAL FORCE. HENCE, ALL THE APPEALS & CROSS OBJECTIONS OF THE ASSESSEE ARE, THEREFORE, ALLOWED AND ALL THE ADDITI ONS ARE DELETED. 29 42. IN SOME YEARS, THE DEPARTMENTAL APPEALS ARE ALS O FILED. IN VIEW OF FINDINGS THAT NO ADDITION CAN BE MADE IN ASSESSMENT ORDERS U/S 153A, IN THE ABSENCE OF INCRIMINATING MATERIAL FOUND IN SEARCH, DEPARTMENTA L APPEALS WOULD STAND DISMISSED. 43. IN THE RESULT, THE APPEALS FILED BY THE ASSESSE ES AND CROSS OBJECTIONS ARE ALLOWED WHEREAS THE APPEALS OF THE DEPARTMENT STAND DISMISSED. 44. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (BHAVNESH SAINI) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : AUGUST, 2016 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH