GOVIND AGARWAL, MUMBAI V. A.C.I.T. CENTRAL CIRCLE-32, MUMBAI

ITA 3389/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75199 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Next Hearing Date: 04-12-2013
• Assessment Year: 2002-2003
• Appeal Filed On: 28-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRITAM SINGH
• Assessee Lawyers: DEVENDRA MEHTA
• Keywords: Gift; Loose papers; Cost of acquisition; Fair market value; Valuation report
• Section: 143(3); 153A; 14A; 147; 68; 148; 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ./I.T.A. NO.3389/M/2011 (AY: 2002 - 2003) ./I.T.A. NO.3390/M/2011 (AY: 2004 - 2005) SHRI GOVIND AGARWAL, 377 - B, FIRST FLOOR, JAGANNATH SHANKER SETH MARG, CHIRABAZAR, MUMBAI 400 002. / VS. ACIT, CENTRAL CIRCLE - 32, MUMBAI. ./ PAN : ADOPA 4038 K ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI DEVENDRA MEHTA / RESPONDENT BY : SHRI PRITAM SINGH, DR / DATE OF HEARING : 06.12.2013 / DATE OF PRONOUNCEMENT : 10 .01.2014 / O R D E R PER D. KARUNAKARA RAO, AM: THERE ARE TWO APPEALS UNDER CONSIDERATION. BOTH THESE APPEALS ARE FILED BY THE ASSESSEE ON 28.4.2011 AGAINST THE SEPARATE ORDERS OF THE CIT (A) - 41, MUMBAI COMMONLY DATED 28.3 .2011 FOR THE ASSESSMENT YEARS 2002 - 2003 AND 2004 - 2005. SINCE, THE IDENTICAL ISSUES ARE INVOLVED IN THE BOTH THESE APPEALS, THEREFORE, FOR THE SAKE OF CONVENIENCE, THEY ARE CLUBBED, HEARD COMBINEDLY AND BEING DISPOSED OF IN THIS CONSOLIDATED ORDER. APPEAL WISE AND GROUND WISE ADJUDICATION IS GIVEN IN THE FOLLOWING PARAGRAPHS. 2. T HE GROUNDS RAISED IN BOTH THESE APPEALS ARE SIMILAR AND FOR REFERENCE, THE GROUNDS RAISED WITH REGARD TO AY 2002 - 2003 ARE REPRODUCED AS UNDER. ASSESSMENT ORDER U/S 143(3) R.W.S. 153A OF THE ACT BEING BAD IN LAW AND BAD IN FACTS. 1. THE ORDER PASSED BY THE CIT (A) PARTLY CONFIRMING THE ADDITIONS MADE BY THE AO IN THE ASSESSMENT ORDER PASSED U/S 143(3) R.W. SECTION 153A OF THE ACT IS BOTH BAD IN LAW AND BAD IN FACTS. 2 ADDITION ON ACCONT OF ARTIFICIALLY INFLATED INVESTMENT IN HOUSE DULY DISCLOSED IN THE BALANCE SHEET OF THE ASSESSEE RS.31,33,07/ - . 2. THE CIT (A) ERRED IN CONFIRMING THE ADDITION OF RS. 31,33,007/ - MADE BY THE AAO ON ACCOUNT OF ARTIFICIALLY INFLATED INVESTMENT IN HOUSE WHICH W AS DULY DISCLOSED IN THE ASSESSEES BALANCE SHEET. DISALLOWANCE U/S 14A: RS. 23,31,469/ - 3. THE LD CIT (A) ERRED IN DIRECTING THE AO TO RECOMPUTED THE DISALLOWANCE U/S 14A OF THE ACT WITHOUT APPRECIATING THE FACT THAT (A) THE PERSONAL BOOKS OF ACCOUNTS OF THE ASSESSEE WERE SEPARATELY MAINTAINED FROM THE BOOKS OF ACCOUNTS OF HIS BUSINESS; (B) NO EXPENDITURE WHATSOEVER WAS INCURRED BY THE ASSESSEE AND (C) NO DEDUCTION WAS CLAIMED BY HIM WHILE COMPUTING THE TOTAL INCOME. 3. DURING THE PROCEEDINGS BEFORE US AND A T THE OUTSET, SHRI DEVENDRA MEHTA, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT THE APPEALS OF THE FOR THE AY 2003 - 04, 2005 - 06, 2006 - 07 AND 2007 - 08 ARE DISMISSED FOR WANT OF PROSECUTION. FURTHER, LD COUNSEL MENTIONED THAT THE ISSUES RAISED IN THOSE APPEALS ARE ENTIRELY DIFFERENT AND THEY RELATE TO ISSUES OF CAPITAL GAINS . T HEREFORE, ADJUDICATION OF THESE PR ESENT APPEALS NEED NOT WAIT . LD DR HAS NOT BROUGHT OUT AN Y INFORMATION CONTRARY TO THE ABOVE. 4. FURTHER, ON FACTS RELEVANT FOR ADJUDICATION OF THESE APPEALS, SRI MEHTA, MENTIONED THAT THE ASSESSEE BELONGS TO EVERSHINE GROUP OF CASES . T HERE WAS A S EARCH ACTION U/S 132 OF THE ACT ON THE SAID GROUP ON 3.1.2008 . TH E RESIDENTIAL PREMISES AS WELL AS THE OFFICE PREMISES OF THE ASSESSEE LOCATED AT MUMBAI AND UDAIPUR WERE COVERED . THE SEARCH ACTION THE GROUP RESULTED IN THE DISCOVERY OF UNDISCLOSED INCOME. HOWEVER, THIS IS THE SUBMISSION OF THE ASSESSEE THAT THERE IS NO INCRIMINATING MATERIAL SEIZED IMPLICATING THE ASSESSEE FOR THE AYS UNDER CONSIDERATION. OTHERWISE, THIS ASSESSEE FILED THE RETURN OF INCOME FOR THE AY 2002 - 03 ON 28.10.2002 DECLARING THE TOTAL INCOME OF RS.6,21,051/ - . THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT. T HUS, T HERE WAS NO REGULAR ASSESSMENT IN THIS CASE AND THUS , THE QUESTION OF ABETMENT OF THE ASS ESSMENT DOES NOT ARISE HERE . C ONSEQUENT TO SEARCH ACTION, AO ISSU ED NOTICED FOR ALL THE SIX AYS U/S 153A OF THE ACT IN ACCORDANCE WITH THE PROVISIONS OF THE FIRST PROVISO AND PRESENT AY 2002 - 2003 IS ONE OF THE 6 AYS. IN RESPONSE TO THE SAID NOTICE, ASSESSEE FILED THE RETURN OF INCOME DECLARING THE INCOME OF RS. 6,21,051/ - AS DONE ORIGINALLY. THE CASE WAS HEARD AS PER THE PROVISIONS OF SECTION 143(3) READ WITH SECTION 153A OF THE ACT AND THE ASSESSMENT WAS COMPETED DETERMINING THE ASSESSED INCOME OF RS. 60,97, 527/ - . 3 IN THE ASSESSMENT, AO MADE ADDITION OF RS. 31,33,007/ - ON ACCOUNT OF INFLATION OF EXPENSES AND RS. 23,31,460/ - ON ACCOUNT OF DISALLOWANCE U/S 14A OF THE ACT READ WITH RULE 8D OF THE IT RULES . FROM THE ASSESSMENT ORDER, IT IS EVIDENT THAT THERE WAS NO SEIZED MATERIAL UTILIZED BY THE AO FOR MA K ING THE ABOVE SAID ADDITIONS. HOWEVER, THE ADDITION OF RS. 31,33,007/ - ON ACCOUNT OF BOGUS INVESTMENT WAS MADE FOR FAILURE TO FURNISH THE EVIDENCES IN SUPPORT OF THE CLAIM OF THE EXPENDITURE IN THE CONSTRUCTION OF RESIDENTIAL HOUSE. BARRING THE INVESTME NT IN THE PLOT OF LAND, AO DISALLOWED WHOLE OF THE EXPENDITURE INCURRED ON THE CONSTRUCTION OF THE HOUSE FOR WANT OF EVIDENCES. ADMITTEDLY, THERE IS NO INCRIMINATING EVIDENCE TO SUPPORT THE CLAIM OF THE AO. F URTHER, REGARDING OTHER ADDITION U/S 14A OF THE ACT, AO INVOKED THE PROVISIONS OF RULE 8D TO THE AY 2003 - 04 WHICH IS AGAINST THE SETTLED LEGAL PROPOSITIONS ON THIS ISSUE. FURTHER ALSO, I T IS EVIDENT FROM THE ORDERS OF THE REVENUE AUTHORITIES THAT THE ASSESSEE HAS NOT RAISED THE QUESTION OF VALIDITY OF T HE NOTICE U/S 153A OF THE ACT DURING THE ASSESSMENT PROCEEDINGS. AGGRIEVED WITH THE ABOVE ADDITIONS AS WELL AS THE VALIDITY OF THE NOTICE U/S 153A OF THE ACT, ASSESSEE FILED AN APPEAL BEFORE THE CIT (A) RAISING BOTH THE LEGAL ISSUE AS WELL AS THE MERITS O F THE ABOVE SAID ADDITIONS. 5. VALIDITY OF THE NOTICE U/S 153A OF THE ACT IS THE LEGAL ISSUE BEFORE THE CIT(A) . I N THIS REGARD , ASSESSEE SUBMITTED THAT THE NOTICE IS NOT VALID FOR THE REASONS I.E., (I) THE RE IS NO INCRIMINATING MATERIAL TO SUGGEST THE CO NCEALMENT OR UNDISCLOS URE OF ANY INCOME BEYOND WHAT IS DISCLOSED IN THE ORIGINAL RETURN WHICH IS DULY ASSESSED IN THE COMPLETED ASSESSMENT ; AND (2) THE ADDITIONS REFER RED ABOVE SHOULD HAVE BEEN MADE U/S 68 AND 14A ARE TO BE DONE IN THE REGULAR AS WELL AS REOPENED ASSESSMENTS, IF ANY AND CERTAINLY NOT IN THE ASSESSMENT MADE U/S 153A OF THE ACT . CONSIDERING THE EXPIRY OF THE TIME, THE REVENUE COULD NOT HAVE ISSUED NOTICE U/S 143(2) OR 148 FOR BRINGING AFORESAID ADDITIONS TO THE TAX. IN THIS REGARD, ASSESSE E SUBMITTED THAT THE PROVISIONS OF SECTION 153A ARE NO SUB STITUTE FOR THE REASSESSMENT US 148 OR REGULAR ASSESSMENT U/S 143(2) OF THE ACT. THE PROVISIONS OF SECTION 153 A, BEING SPECIAL PROVISIONS, INCRIMINATING MATERIAL IS REQUIRED FOR ASSUMPTION OF JURIS DICTION BY THE AO TO I SSUE THE IMPUGNED NOTICED U/S 153 A OF THE ACT. IN THIS REGARD, BEFORE US, LD COUNSEL RELIED ON VARIOUS DECISIONS IN HIS SUPPORT. REFERRING TO THE HONBLE RAJASTHAN HIGH COURT JUDGMENT IN THE CASE OF JAI STEEL (INDIA) LTD VS. ACIT [2013] 4 36 TAXMANN.COM 523 (RAJASTHAN), AND RELYING VARIOUS OTHER DECISIONS OF THE TRIBUNAL, LD COUNSEL EXPLAINED RELEVANT PROVISIONS OF SECTION 153A IN GENERAL AND FIRST PROVISO TO THE SAID SECTION, IN PARTICULAR AND CONCLUDED BY STATING THAT THE IMPUGNED NOTICE IS BAD IN LAW . FURTHER, RELYING ON THE COORDINATE BENCH DECISION OF MUMBAI IN THE CASE OF ACIT VS. PRATIBHA INDUSTRIES LTD [2012] 28 TAXMANN.COM 246 (MUMBAI TRIB.) LD COUNSEL MENTIONED THAT THE COMPLETED ASSESSMENTS , WHERE NO INCRIMINATI NG MATERIAL WAS FOUND, SHOULD NOT BE DISTURBED BY INVALIDLY ISSUING NOTICE U/S 153A OF THE ACT . IN THIS REGARD, L D COUNSEL RELIED ON THE CONTENT S OF PARA 41 - 44 OF THE SAID ORDER OF THE TRIBUNAL. FURTHER, LD COUNSEL BROUGHT OUR ATTENTION TO THE ANOTHER DE CISION OF THE COORDINATE BENCH IN THE CASE OF GURINDER SINGH BAWA VS. DCIT [2012] 28 TAXMANN.COM 328 (MUMBAI TRIB.) AND READ OUT THE CONTENTS OF PARA 6.1 & 6.2 AND STATED THAT IN THE CASE OF COMPLETED ASSESSMENT , WHERE THE TIME LIMIT FOR ISSUE OF NOTICE U/ S 143(2) HAS EXPIRED AS ON THE DATE OF THE SEARCH, AS IN THE ASSESSEES CASE, THE ADDITION COULD BE MADE ONLY ON THE BASIS OF INCRIMINATING MAT ERIAL FOUND DURING THE SEARCH. HOWEVER, ON HEARING THE OBJECTIONS OF THE ASSESSEE, CIT (A) MENTIONED THAT THE ASSESSMENT U/S 143(1)(A) CANNOT BE TREATED AS ASSESSMENT AND FURTHER, HE RELIED ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF DCIT VS. RAJESH JAVERI STOCK BROKERS 291 ITR 500. FURTHER, CIT (A) RELIED ON THE FIRST PROVISO OF SECTION 153A OF THE ACT AND MENTIONED THAT AO IS UNDER STATUTORY OBLIGATION TO ISSUE NOTICE U/S 153A OF THE ACT FOR AL L THE SIX ASSESSMENT YEARS PRIOR TO THE DATE OF SEARCH AND HELD THAT THE REQUIREMENT OF INCRIMINATING MATERIAL IS NOT THE REQUIREMENT OF LAW . WHILE COMMENTING THAT THE FACTS OF THE PRESENT CASE ARE DISTINGUISHABLE FROM THE CASES RELIED UPON BY THE ASSESSEE, THE CIT (A) COMMENTED THAT IN THE PRESENT CASE, LOOSE PAPERS SEIZED ARE RELATING TO THE SHARES PURCHASED OF 3 UNLISTED COMPANIES, TRIAL BAL ANCE AND PAPERS RELATING TO THE PURCHASE OF IMMOVABLE PROPERTIES WERE FOUND AND SEIZED. THUS, THE ARGUMENT OF THE ASSESSEE THAT NO PAPERS WERE SEIZED IS WRONG AND WITHOUT ANY BASIS. UNDISCLOSED INCOME WAS DECLARED OF RS. 11 CRS ON THE BASIS OF THESE PAPE RS. THE DECISIONS RELIED ON BY THE APPELLANT ARE TOTALLY DISTINGUISHABLE TO THE FACTS OF THE PRESENT CASE BECAUSE IN THOSE CASES NO DOCUMENTS WERE FOUND AND SEIZED DURING THE COURSE OF SEARCH. THEREFORE, IN THE PRESENT CASE, THE AO HAS RIGHTLY ASSESSED T HE INCOME ON THE BASIS OF SEIZED MATERIAL AND OTHER FACTS ON RECORD. CIT (A) DISMISSED THE ARGUMENTS OF THE ASSESSEE ON THE LEGAL ISSUE RELATING TO THE VALIDITY OF 5 THE NOTICE U/S 153A OF THE ACT. AS PER THE LD CIT (A), ONCE THE NOTICE IS VALIDLY ISSUED, ADDITION CAN B E MADE WITH OR WITHOUT THE PRESENCE OF INCRIMINATING MATERIAL. AGGRIEVED WITH THE ABOVE DECISION OF THE CIT (A), ASSESSEE FILED AN APPEAL BEFORE THE TRIBUNAL BY RAISING THE GROUND NO.1 RELATING TO THE VALIDITY OF THE NOTICE. 6 . BEFORE THE TRIBUNAL: DURING THE PROCEEDINGS BEFORE US, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE CONTENTS OF THE RELEVANT ASSESSMENT ORDER PASSED U/S 153A R W S 143(3) OF THE ACT AND DEMONSTRATED THAT NO SEIZED MATERIAL WAS USED FOR MAKING THE ADDITION S EITHER ON ACCOUNT OF INFLATED INVESTMENT OR ON ACCOUNT OF DISALLOWANCE U/S 14A OF THE ACT. FAIRLY REFERRING TO THE PROCEEDINGS DURING THE SEARCH ACTION, LD COUNSEL MENTIONED THAT IT IS THE VALUATION REPORT OF THE DVO WHICH WAS GARNERED BY THE OFFICE OF THE DIT (INV) DURING THE SEARCH ACTION. THIS WAS THE ONLY MATERIAL COLLECTED BY THE REVENUE IN THE SEARCH, WHICH WAS AVAILABLE FOR THE AO BOTH FOR ISSUING THE NOTICE AS WELL AS FOR MAKING ADDITIONS. HE REASONED THAT THE VALUATION REPORT CAN AS WELL BE OBT AINED DURING THE NORMAL ASSESSMENT OR REASS ESS MENT PROCEEDINGS AND THERE IS NO NEED FOR INVOKING THE PROVISIONS OF SECTION 153A OF THE ACT IN THIS REGARD. 7. FURTHER , LD COUNSEL HAS TWO FOLD ARGUMENTS TO MAKE BEFORE US I.E., (I) CONSIDERING THE FACT THAT NO INCRIMINATING MATERIAL WAS FOUND FROM THE ASSESSEE S PREMISES DURING THE SEARCH ACTION , THE NOTICE U/S 153A WAS NOT REQUIRED TO BE ISSUED. EVEN IT IS ISSUED VALIDLY, NO ADDITION CAN BE MADE IN THE CASES OF COMPLETED ASSESSMENTS WITHOUT THE SUPPORT OF THE INCRIMINATING MATERIAL ISSUED OR ACQUIRED IN SEARCH ACTION U/S 132 / 132A OF THE ACT. IN THIS REGARD, LD COUNSEL RELIED ON THE RAJASTHAN HIGH COURT JUDGMENT IN THE CASE OF JAI STEEL (INDIA) LTD (SUPRA); COORDINATE BENCH DECISIONS IN THE CASE OF PRATIBHA INDUSTRIES LTD (SUPRA) AND GURINDER SINGH BAWA (SUPRA) AND SPECIAL BENCH DECISION IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD VS. DCIT 2012 - TIOL - 391 - ITAT - MUM - SB. LD COUNS EL ARGUED IN RESPECT OF THE COMPLETED ASSESSMENT , SUCH AS THE PRESENT ONE, ASSESSMENT WILL BE MADE ONLY ON THE BASIS OF BOOKS OF ACCOUNTS OR OTHER DOCUMENTS NOT PRODUCED IN THE ORIGINAL ASSESSMENT BUT IN THE COURSE OF THE SEARCH AND UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF THE SEARCH. NONE OF THESE CONDITIONS ARE MET BY THE REVENUE BEFORE ISSUING OF THE NOTICE U/S 153A OF THE ACT OR BEFORE MAKING ADDITIONS . THEREFORE, AS PER THE LD COUNSEL, THE IMPUGNED NOTICE IS INVALID ONE AND 6 ADDITIONS SHOULD BE DELETED . FAIRLY REFERRING TO THE DELHI HIGH COURT JUDGMENT IN THE CASE OF CIT VS. ANIL KUMAR BHATIA VIDE ITA NO.1626/2010, DATED 7.8.2012 (DEL.), LD COUNSEL MENTIONED THAT THIS ISSUE REGARDING THE ADDITION TO BE MADE IN A COMPLETED ASSESSMENT WHERE NO INCRIMINATING MATERIAL WAS FOUND, WAS LEFT OPEN. PARA 23 OF TH E SAID JUDGMENT IS RELEVANT IN THIS REGARD. FURTHER, RELYING ON THE ORDER OF THE ITAT, JODHPUR IN THE CASE OF DINESH TABACCO INDUSTRIES VS. DCIT VIDE ITA NO.184 & 185/JU/2011 DATED 22.2.2013, LD COUNSEL REITERATED THAT THE NOTICE BECOMES INVALID WHEN THER E IS NO INCRIMINATING MATERIAL. SIMILAR VIEW WAS REPEATED BY THE LD COUNSEL BY RELYING ON THE DECISION OF THE ITAT, KOLKATA IN THE CASE OF LMJ INTERNATIONAL LTD VS. DCIT, 119 TTJ 214 (KOL). THE SAID DECISION OF THE OF ITAT KOLKATA (SUPRA) IS RELEVANT FOR THE PROPOSITION THAT WHERE NOTING INCRIMINATING WAS FOUND IN COURSE OF SEARCH RELATING TO ASSESSMENTS, ASSESSMENT FOR SUCH YEARS CANNOT BE DISTURBED. HE CULLED OUT MANY OTHER DECISIONS WHICH ARE AS UNDER. A) ANIL P KHIMANI VS. DCIT [2010 TIOL - 177 - ITAT - MUM] B) MEGHMANI ORGANICS LTD VS. DCIT [2010] 36 DTR 187 (AHD) C) SUNCITY ALLYS PVT. LTD. VS. ACIT [2009] 124 TTJ 674 (JODH) D) ACIT VS. PACL INDIA LTD [ITA NO.2637/ DEL/2010] E) SHRI DEEPEN A PAREKH VS. ACIT [ ITA NO.467/MUM/2011] F) MGF AUTOMOBILES LTD VS. ACIT [ ITA NO.4212 & 4213/DEL/2011] FURTHER, LD COUNSEL FILED A COPY OF THE ORDER OF THE TRIBUNAL IN THE CASE OF GOVIND AGARWAL HUF VS ACIT VIDE ITA NO.217/MUM/2011 (AY 2008 - 2009) WHICH IS A PART OF THE ASSESSEES GROUP AND WHERE NOTICE U/S 153C WAS ISSUED. LD COUNS EL MENTIONED THAT THE TRIBUNAL HAS UPHELD THE INVALIDITY OF SUCH NOTICE AND DELETED THE ADDITIONS MADE ON ACCOUNT OF GIFT EMANATED FROM THE BOOKS OF ACCOUNTS. (II) THE SECOND ASPECT OF HIS ARGUMENTS RELATES TO THE TREATMENT TO BE GIVEN TO THE DVOS REPOR T, IF THE SAID REPORT CONSTITUTES ANY INCRIMINATING MATERIAL. MENTIONING THA T THE REVENUE DID NOT CONSIDER THE SAME AS A INCRIMINATING MATERIAL FOR THE PURPOSE OF ISSUANCE OF NOTICE U/S 153A OF THE ACT, LD COUNSEL MENTIONED THAT THE OFFICE OF DIT (INV) REFERRED THE IMPUGNED HOUSE PROPERTY (MANGALDEEP AT UDAIPUR) TO THE VALUATION CELL FOR IDENTIFYING THE MARKET VALUE OF THE PROPERTY, NOT THE COST OF ACQUISITION . ( AARCH CONSULATANTS & VALUERS, MUMBAI) T HE VALUERS SUBMITTED A REPORT ON 16.2.2008 DETERMINING THE VALUE OF THE PROPERTY AT RS. 3,67,09,000/ - AS THE FAIR MARKET VALUE AS AGAINST THE DISCLOSED AMOUNT OF RS. 1.56 7 CRS BY THE ASSESSEE IN THE BOOKS OF ACCOUNTS AS ON 31.3.2007. IT IS THE SUBMISSION OF THE ASSESSEE THAT SUCH REPORTS OF THE DVO IGNORED B Y THE DIT OFFICE DURING THE SEARCH PROCEEDINGS CANNOT CONSTITUTE INCRIMINATING MATERIAL AND THE AO SHOULD NOT RELY ON SUCH REPORTS FOR ISSUANCE OF NOTICE U/S 153A OF THE ACT AND FOR MAKING ADDITIONS U/S 143(3) R.W.S 153A OF THE ACT . AS PER THE LD COUNSEL SUCH REPORTS ARE MERE ESTIMATES AND THE ADDITIONS ARE NOT SUSTAINABLE IN THE SEARCH ASSESSMENT. IN THIS REGARD, LD COUNSEL RELIED ON THE JUDGMENT OF THE HONBL E SUPREME COURT IN THE CASE OF ASSISTANT COMMISSIONER OF INCOME - TAX V. DHARIYA CONSTRUCTION CO , 328 ITR 515 WHICH IS RELEVANT FOR THE PROPOSITION THAT HAVING EXAMINED THE RECORDS, WE FIND IN THAT CASE DEPARTMENT SOUGHT REOPENING OF THE ASSESSMENT BASED ON THE OPINION GIVEN BY THE DVO. THE OPINION GIVEN BY THE DISTRICT VALUATION OFFICER IS NOT PER SE INFORMATION FOR THE PURPOSE OF REOPENING AN ASSESSMENT UNDER SECTION 147 OF THE INCOME - TAX ACT, 1961 . AO HAS TO APPLY HIS MIND AND FORM A BELIEF THERE FROM. THE DEPARTMENT WAS NOT ENTITLED TO REOPEN THE CONCLUDED ASSESSMENT BASED ON SUCH DVOS REPORT . SUCH REPORTS ARE MERE AN OPINION OF THE VALUER, THE THIRD PARTY AND NEVER CAN BE EQUATED TO THE OPIN ION OF THE AO AND RELIED ON THE GUWAHATI HIGH COURT JUDGMENT IN THE CASE OF BHOLA NATH MAJUMDAR V. INCOME - TAX OFFICER 221 ITR 608 AND THE JUDGMENT OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF BRIG. B. LALL V. WEALTH - TAX OFFICER 127 ITR 308 . IN THESE CASES, THE CONCEALMENT PROCEEDINGS WERE QUASHED ON THIS BASIS. REFERRING TO THE ANOTHER JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. SU RAJ DEVI, 328 ITR 604 AND IN THE CASE OF CIT VS. NAVEEN GERA [2011] 328 ITR 516, LD COUNSEL MENTIONED THAT THE ADDITIONS CANNOT BE MADE ON THE BASIS OF THE VALUATION REPORT OF THE DVO IN THE ABSENCE OF ANY INCRIMINATING MATERIAL. THE BURDEN VESTS ON THE R EVENUE IN SUCH CAES. REFERRING TO THE FACTS OF THE PRESENT CASE, LD COUNSEL MENTIONED THAT THE ASSESSEE DISCLOSED INVESTMENT OF RS. 46,13,007/ - ON THE HOUSE AS ON 31.3.2002 WHEREAS THE AO CAME TO THE CONCLUSION THAT THE LAND VALUE OF RS. 14.8 LAKHS IS TH E ONLY INVESTMENT ON THE HOUSE, NO CONSTRUCTION WAS UNDERTAKEN BY THIS DATE. AO CAME TO SUCH CONCLUSION FOR ASSESSEES FAILURE TO FURNISH THE SUPPORTING BILLS TO DEMONSTRATE THE FACT OF PART CONSTRUCTION OF THE IMPUGNED RESIDENTIAL PROPERTY. IT IS A CASE OF MERE PRESUMPTION AND THE ADDITIONS ARE UNSUSTAINABLE ON SUCH PRESUMPTION. AO HAS NO EVIDENCE TO INFER THAT THE ASSESSEES FIGURE OF RS. 46,13,007/ - IS BOGUS AND RS. 14.8 LAKHS IS THE ONLY INVESTMENT ON THE SAID PROPERTY. IN FACT, RS. 14.8 LAKHS IS 8 TH E COST OF THE LAND PLOTS ON WHICH THE HOUSE WAS CONSTRUCTED AND ASSESSEE SPENT THE BALANCE OF RS. 31,33,007/ - IN CONSTRUCTION OF THE HOUSE. THEREFORE, THE PROCEEDINGS INITIATED U/S 153A IS REQUIRED TO BE QUASHED AND THE ADDITION BASED ON THE SURMISES OF T HE AO SHOULD NOT BE SUSTAINED. 8. ON THE OTHER HAND, LD DR RELIED HEAVILY ON THE ORDER OF THE AO AND THE CIT (A). IN CONNECTION WITH THE LEGAL ISSUE REGARDING THE VALIDITY OF THE NOTICE U/S 153A OF THE ACT, LD DR FILED A COPY OF THE ORDER OF THE TRIBUNAL IN THE CASE OF SCOPE (P) LTD VS. DCIT [2013] 33 TAXMANN.COM 167 (MUMBAI TRIB.) DATED 20.3.2013 AND STATED THAT UNDER THE PROVISIONS OF SECTION 153A OF THE ACT, AO IS BOUND TO PROCEED FOR ALL THE 6 AYS IMMEDIATELY PRECEDING AY RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH WAS CONDUCTED EVEN IF THERE IS NO INCRIMINATING MATERIAL TO INDICATE ANY UNDISCLOSED INCOME DURING THE ORIGINAL ASSESSMENT COMPLETED U/S 143(3) FOR ANY YEAR. THIS IS THE CASE WHERE REGULAR ASSESSMENT U/S 143(3) WAS COMPLETED ON 7.11.2007 PRIOR TO THE DATE OF SEARCH ON 15.11.2007 AND THE ADDITION WAS MADE U/S 14A OF THE ACT AND NOT BASED ON ANY SEIZED MATERIAL FOUND DURING THE SEARCH. THOUGH SUCH DISALLOWANCE WAS DELETED FOR OTHER RE ASONS BUT THE VALIDITY OF THE NOTICE WAS UPHELD IN THIS CASE. CIT - DR ALSO BROUGHT OUR ATTENTION TO THE JUDGMENT OF ANDHRA PRADESH HIGH COURT IN THE CASE OF GOPAL LAL BHADRUKA VS. DCIT [2012] 27 TAXMANN.COM 167 (AP) IN HIS FAVOUR. OF COURSE, THIS IS THE C ASE WHERE ASSESSMENTS COMPLETED U/S 158BD OF THE ACT AND NOT U/S 153A AS IN THE PRESENT CASE. FURTHER, LD DR ALSO FILED THE JUDGMENT OF DELHI HIGH COURT IN THE CASE OF MADUGULA VENU VS. DIT [2013] 29 TAXMANN.COM 200 (DELHI), WHICH IS RELEVANT FOR THE PROP OSITION THAT THE NOTICE ISSUED U/S 153A CALLING UPON ASSESSEE TO FILE THE RETURNS FOR EARLIER 6 AYS CANNOT BE CHALLENGED ON THE GROUND THAT IT WOULD CAUSE CERTAIN DEGREE OF HARDSHIP TO ASSESSEE. LD DR HAS BROUGHT OUR ATTENTION TO PARA 7 OF THE SAID JUDGME NT OF THE DELHI HIGH COURT AND MENTIONED THAT THE SECTION COUCHED IN MANDATORY LANGUAGE WHICH IMPLIES THAT ONCE THERE IS A SEARCH, THE AO HAS NO OPTION BUT TO CALL UPON THE ASSESSEE TO FILE THE RETURNS OF THE INCOME FOR THE EARLIER SIX ASSESSMENT YEARS. IT IS NOT M ERELY THE UNDISCLOSED INCOME THAT WILL BE BROUGHT TO TAX IN SUCH ASSESSMENTS, BUT THE TOTAL INCOME OF THE ASSESSEE, INCLUDING BOTH THE INCOME EARLIER DISCLOSED AND INCOME FOUND CONSEQUENT TO THE SEARCH, WOULD BE BROUGHT TO TAX. THE NORMAL PROVI SIONS RELATING TO INQUIRY, AFFORDING OPPORTUNITY ETC., WHICH ARE PROVIDED FOR IN 9 SECTIONS 142, 143 ETC ARE TO BE FOLLOWED BY THE ASSESSING OFFICER. OF COURSE, THE ABOVE EXPLANATION OF THE PROVISIONS DO ES NOT REFER TO THE PRESENT DEBATE RELATING TO THE I NCRIMINATING MATERIAL BASED ADDITIONS IN THE CASES OF COMPLETED ASSESSMENTS. DECISION OF THE TRIBUNAL: 9. WE HAVE HEARD BOTH THE PARTIES ON THE LEGAL ISSUE RELATING TO THE SUSTAINABILITY OR VALIDITY OF THE ADDITIONS MADE IN THE ASSESSMENTS MADE U/S 153A R EAD W ITH SECTION 143(3) OF THE ACT IN RESPECT OF COMPLETED ASSESSMENTS . 10. THE STAND OF THE REVENUE IS THAT THE FIRST PROVISO TO SECTION 153 A EMPOWERS THE AO TO ISSUE NOTICE U/S 153A OF THE ACT IN RESPECT OF THE 6 AYS PRIOR TO THE ASSESSMENT YEAR IN WHICH THE SEARCH TOOK PLACE. THE RELEVANCE OF THE EXISTENCE OF INCRIMINATING MATERIAL IS NOT PR OVIDED IN THE SAID PROVISIONS. AS PER THE REVENUE THERE SHOULD NOT BE ANY DIFFERENCE QUA THE COMPLETED ASSESSMENTS AND THE ABATED ASSESSMENTS FOR ALL SIX AYS IN SO FAR AS THE POWERS OF THE AO IS CONCERNED AND HE IS EMPOWERED TO ISSUE NOTICE U/S 153A AND MAKE ADDITIONS EITHER BASED IN THE INCRIMINATING MATERIAL OR OTHE RWISE. 11. PER CONTRA, THE CASE OF THE ASSESSEE IS THAT THE AO MAY BE EMPOWERED TO ISSUE NOTICES FOR ALL THE SIX AYS IN VIEW OF THE CITED DECISIONS IE JAI STEEL (INDIA) LTD (SUPRA), SCOPE (P) LTD (SUPRA) ETC . HOWEVER, IN CASE OF COMPLETED ASSESSMENTS, A O IS EMPOWERED TO MADE ADDITIONS ONLY BASED ON THE INCRIMINATING MATERIALS AND NOT OTHERWISE JAI STEEL (INDIA) LTD (SUPRA), LMJ INTERNATIONAL LTD (SUPRA) , GURINDER SINGH BAWA (SUPRA) ETC . FOR MAKING THE ROUTINE ADDITIONS, WHICH ARE NORMALLY DONE IN THE REGULAR ASSESSMENTS, THE COMPLETED ASSESSMENT NEED NOT BE DISTURBED BY INVOKING THE PROVISIONS OF SECTION 153A OF THE ACT IF NOT FOR REITERATING THE RETURNED OR ASSESSED INCOME AS THE CASE MAY BE . JUDGMENT IN THE CASE OF JAI STEEL (INDIA) LTD (SUPRA) SUPPO RTS THE ABOVE LEGAL PROPOSITION. AS PER THE ASSESSEE, REGARDING THE CASES OF ABATED ASSESSMENTS, CONSIDERING THE SCHEME OF ASSESSMENT S U/S 153A , PER CONTRA , EVEN THE ROUTINE ADDITIONS ARE DONE IN THESE ASSESSMENTS. 10 12. WE HAVE HEARD THE PARTIES AND THEIR DIVERGENT STANDS ON THE LEGAL ISSUE AND THE VALIDITY OF THE INSTANT ASSESSMENT/REASSESSMENT WITH THE ROUTINE ADDITIONS U/S 68 AND SECTION 14A OF THE ACT BASED ON THE ACCOUNTED TRANSACTIONS. THE INSTANT CASE FOR THE AY 20 02 - 03 DEALS WITH THE CASE OF DISTURBING THE COMPLETED ASSESSMENT. EARLIER THE ASSESSMENT WAS COMPLETED U/S 143(1) OF THE ACT. COMPLETENESS OF THE SUMMARY ASSESSMENT IS CONSIDERED AND HELD IN FAVOUR OF THE ASSESSEE VIDE MANY JUDGMENTS CITED ABOVE. IN THE ASSESSMENT U/S 153A, THE AO MADE (I ) ADDITION U/S 68 ON ACCOUNT OF ARTIFICIALLY INFLATED INVESTMENT IN HOUSE DULY DISCLOSED IN THE BALANCE SHEET OF THE ASSESSEE RS.31,33,07 0 / - ; AND (II) DISALLOWANCE U/S 14A: RS. 23,31,469/ - . ADMITTEDLY, THERE IS NO INCRI MINATING MATERIAL BEFORE THE AO TO SUPPORT THE ABOVE ADDITIONS. THE VALUATION REPORT, WHICH IS GARNERED BY THE AUTHORITIES CONSTITUTES MERE ESTIMATES AND THE PROVISIONS OF SECTION 132 IS NOT REQUIRED TO OBTAIN SUCH REPORT FROM THE DVO. AS SUCH , FOR MAKING AFORESAID ADDITIONS OF RS 31,33,070/ - , AO HAS NOT USED EVEN THE SAID VALUATION REPORT AND THE AO DISALLOWED WHAT IS REPORTED IN THE BOOKS. SIMILAR IS THE CASE WITH THE ADDITIONS U/S 14A OF THE ACT. THEREFORE, UNDISPUTEDLY, THE IMPUGNED QUANTUM ADDITIONS AR E MADE MERELY BASED ON THE ENTRIES IN THE ACCOUNTED BOOKS AND CERTAINLY NOT BASED ON EITHER THE UNACCOUNTED BOOKS OF ACCOUNTS OF THE ASSESSEE OR BOOKS NOT PRODUCED TO THE AO EARLIER OR THE INCRIMINATING MATERIAL GATHERED BY THE INVESTIGATION WING OF THE REVENUE. CONSIDERING THE LEGAL PROPOSITIONS PLACE BEFORE US BY THE ASSESSEES COUNSEL, WE ARE OF THE OPINION, SUCH ASSESSMENTS OR ADDITIONS ARE UNSUSTAINABLE IN LAW. 13. FOR THE SAKE COMPLETENESS OF THE ASSESSEE, WE INSERT HERE SOME OF THE EXTRACTS FROM RELEVANT JUDGMENTS AND THEY ARE: A. [2013 36 TAXMANN.COM 523 (RAJASTHAN) IN THE CASE OF JAI STEEL (INDIA) VS. ACIT - FROM HELD PORTION : . THE REQUIREMENT OF ASSESSMENT OR REASSESSMENT UNDER THE SAID SECTION HAS TO BE READ IN THE CONTEXT OF SECTIONS 132 OR 132A, INASMUCH AS, IN CASE NOTHING INCRIMINATING IS FOUND ON ACCOUNT OF SUCH SEARCH OR REQUISITION, THEN THE QUESTION OF REASSESSMENT OF T HE CONCLUDED ASSESSMENTS DOES NOT ARISE , WHICH WOULD REQUIRE MORE REITERATION AND IT IS ONLY IN THE CONTEXT OF THE ABATED ASSESSMENT UNDER SECOND PROVISO WHICH IS REQUIRED TO BE ASSESSED. FROM A PLAIN READING OF THE PROVISION ALONG WITH THE PURPOSE AND PURPORT OF THE SAID PROVISION, WHICH IS INTRICATELY LINKED WITH SEARCH AND REQUISITION UNDER SECTIONS 132 AND 132A, IT IS APPARENT THAT: 11 ( A ) THE ASSESSMENTS OR REASSESSMENTS, WHICH STANDS ABATED IN TERMS OF SECOND PROVISO TO SECTION 153A, THE ASSESSING OFFICER ACTS UNDER HIS ORIGINAL JURISDICTION, FOR WHICH, ASSESSMENTS HAVE TO BE MADE; ( B ) REGARDING OTHER CASES, THE ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL AND ( C ) IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE . .. THE ARGUMENT OF THE ASSESSEE THAT THE ASSESSING OFFICER IS ALSO FREE TO DISTURB INCOME, EXPENDITURE OR DEDUCTION DE HORS THE INCRIMINATING MATERIAL, WHILE MAKING ASSESSMENT UNDER SECTION 153A IS ALSO NOT BORNE OUT FROM THE SCHEME OF THE SAID PROVISION WHICH AS NOTICED ABOVE IS ESSENTIALLY IN CONTEXT OF SEARCH AND/OR REQUISITION. PARA 26 OF THE JUDGMENT: THE PLEA RAIS ED ON BEHALF OF THE ASSESSEE THAT AS THE FIRST PROVISO PROVIDES FOR ASSESSMENT OR REASSESSMENT OF THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSESSMENT YEARS, IS MERELY READING THE SAID PROVISION IN ISOLATION AND NOT IN THE CONTEXT OF THE ENTIRE SECTION. THE WORDS 'ASSESS' OR 'REASSESS' HAVE BEEN USED AT MORE THAN ONE PLACE IN THE SECTION AND A HARMONIOUS CONSTRUCTION OF THE ENTIRE PROVISION WOULD LEAD TO AN IRRESISTIBLE CONCLUSION THAT THE WORD 'ASSESS' HAS BEEN USED IN THE CONTEXT OF AN ABATED PROCEEDINGS AND REASSESS HAS BEEN USED FOR COMPLETED ASSESSMENT PROCEEDINGS, WHICH WOULD NOT ABATE AS THEY ARE NOT PENDING ON THE DATE OF INITIATION OF THE SEARCH OR MAKING OF REQUISITION AND WHICH WOULD ALSO NECESSARILY SUPPORT THE IN TERPRETATION THAT FOR THE COMPLETED ASSESSMENTS, THE SAME CAN BE TINKERED ONLY BASED ON THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS. B . [2012] 28 TAXMANN.COM 328 (MUMBAI TRIB.) IN THE CASE OF GURINDER SINGH BAVA VS. DCIT . WHETHER SINCE ASSESSMENT UNDER SECTION 153A WAS PASSED BY ASSESSING OFFICER ON BASIS OF MATERIAL AVAILABLE IN RETURN OF INCOME AND THERE WAS NO REFERENCE TO ANY INCRIMINATING MATERIAL FOUND DURING SEARCH AND SINCE NO ASSESSMENT WAS ABATED, ASSESSMENT UNDER SECTION 153A WAS TO BE QUASHED BEING MADE WITHOUT JURISDICTION AVAILABLE UNDER SECTION 153A - HELD, YES [PARA 6.2] [IN FAVOUR OF ASSESSEE] PARA 6.1 OF THE ORDER: THE SPECIAL BENCH IN THE CASE OF ALCARGO GLOBAL LOGISTICS LTD. ( SUPRA ), HAS HELD THAT PROVISIONS OF SECTION 153A COME INTO OPERATION IF A SEARCH OR REQUISITION IS INITIATED AFTER 31.5.2003 AND ON SATISFACTION OF THIS CONDITION, THE AO IS UNDER OBLIGATION TO ISSUE NOTICE TO THE PERSON REQUIRING HIM TO FURNISH THE RETURN OF I NCOME FOR SIX YEARS IMMEDIATELY PRECEDING THE YEAR OF SEARCH. THE SPECIAL BENCH FURTHER HELD THAT IN CASE ASSESSMENT HAS ABATED, THE AO RETAINS THE ORIGINAL JURISDICTION AS WELL AS JURISDICTION UNDER SECTION 153A FOR WHICH ASSESSMENT SHALL BE MADE FOR EACH ASSESSMENT YEAR SEPARATELY. THUS IN CASE WHERE ASSESSMENT HAS ABATED THE AO CAN MAKE ADDITIONS IN THE ASSESSMENT, EVEN IF NO INCRIMINATING MATERIAL HAS BEEN FOUND. BUT IN OTHER CASES THE SPECIAL BENCH HELD THAT THE ASSESSMENT UNDER SECTION 153A CAN BE MAD E ON THE BASIS OF INCRIMINATING MATERIAL WHICH IN THE CONTEXT OF RELEVANT PROVISIONS MEANS BOOKS OF ACCOUNT AND OTHER DOCUMENTS FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT AND UNDISCLOSED INCOME OR PROPERTY DISCLOSED DURING THE COURSE OF SEARCH. IN THE PRESENT CASE, THE ASSESSMENT HAD BEEN COMPLETED UNDER SUMMARY SCHEME UNDER SECTION 143(1) AND TIME LIMIT FOR ISSUE OF NOTICE UNDER SECTION 143(2) HAD EXPIRED ON THE DATE OF SEARCH. THEREFORE, THERE WAS NO ASSESSMENT PEN DING IN THIS CASE AND IN SUCH A CASE THERE WAS NO QUESTION OF 12 ABATEMENT. THEREFORE, ADDITION COULD BE MADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING SEARCH. B. ALL CARGO GLOBAL LOGISTICS LTD. V. DEPUTY COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE - 44 [2012] 23 TAXMANN.COM 103 (MUM.) (SB) PARA 58 OF SB DECISIONS: THUS, QUESTION 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 YEARS SEPARATELY ; ( 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 SEARC H BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT, AND (II) UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH. 14. THUS, IN CASE OF THE COMPLETED ASSESSMENTS EITHER U/S 143(1) OR 143(3), THE ABOVE EXTRACTS ARE UNIFORM IN ADVOCATING A GAINST MAKING ADDITIONS IN ROUTINE MANNER IN THE ASSESSMENTS MADE U/S 153A OF THE ACT WHEN THERE IS NO INCRIMINATING MATERIAL GATHERED IN THE SEARCH ACTION. STATUTORY NOTICE U/S 153A OF THE ACT CAN ALSO BE ISSUED TO REITERATE THE RETURNED INCOME OR FOR MAK ING ADDITIONS BASED ON THE INCRIMINATING MATERIAL OR UNPRODUCED BOOKS OF ACCOUNT. OTHERWISE, ADDITIONS MADE IN ROUTINE MATTER AS IN THE PRESENT APPEAL ARE NOT SUSTAINABLE. FURTHER, FOR THE SAKE COMPLETENESS OF THE ORDER, WE HAVE PERUSED THE ORDERS/JUDGMENTS RELIED UPON BY LD DR FOR THE REVENUE AND FOUND THEY ARE D ISTINGUISHABLE ON FACTS FOR ONE REASON OR OTHER. TO START WITH, W E HAVE PERUSED THE JUDGMENT OF HONBLE HONBLE DELHI HIGH COURT IN THE CASE OF MADUGULA VENU (SUP RA) AND FIND THAT, THOUGH EXPLAINED THE PROVISIONS IN PLAIN LANGUAGE, IT DOES NOT DEALT WITH THE RELEVANCE OR FACTUM OF INCRIMINATING MATERIAL. FURTHER, THE JUDGMENT OF ANDHRA PRADESH HIGH COURT IN THE CASE OF GOPAL LAL BHADRUKA (SUPRA) IS NOT ON THE NOTIC ES ISSUED U/S 153A OF THE ACT AND THE SAME IS PRONOUNCED IN THE CONTEXT OF THE NOTICE U/S 153C OF THE ACT. FURTHER, ALSO, THE COORDINATE BENCH DECISION IN THE CASE OF SCOPE (P) LTD (SUPRA) HAS GRANTED RELIEF TO THE ASSESSEE THOUGH THE NOTICE ISSUED U/S 15 3A OF THE ACT WAS UPHELD. HOWEVER, THIS ORDER HAS NOT CONSIDERED THE THEN EXISTING DECISION OF THE COORDINATE BENCH DECISION IN THE CASE OF PRATIBHA INDUSTRIES LTD (SUPRA) WHICH IS RELEVANT FOR THE PROPOSITION THAT THE COMPLETED ASSESSMENT MAY NOT BE DIST URBED IN THE ABSENCE OF ANY INCRIMINATING MATERIAL SPECIFIC TO THE ASSESSEE. IN FACT, ALL THESE JUDGMENTS TAKE SPIRIT FROM THE SPECIAL BENCH DECISION IN THE CASE OF ALL CARGO 13 GLOBAL LOGISTICS LTD (SUPRA), WHICH IS RELEVANT FOR THE PROPOSITION THAT THE ASS ESSMENT U/S 153A WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL SUCH AS BOOKS OF ACCOUNTS, OTHER DOCUMENTS FOUND IN THE SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT AND UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF THE SEA RCH. 15. WE ALSO FIND THAT THE CIT(A) MADE A REFERENCE TO THE INCRIMINATING MATERIAL , WHICH YIELDED DISCLOSURE OF SOME UNDISCLOSED INCOME . BUT, ON PERUSAL OF THE DOCUMENTS, WE FIND THAT THE CIT( A) ENTERED INTO AN ERROR ZONE AND THE DISCLOSURE IS ONLY RS 5 CRORES IN THIS CASE AND THE SAME RELATES TO THE LANDS DEALS . IN PRINCIPLE THIS DISCLOSURE HAS NOTHING DO WITH THE IMPUGNED ADDITIONS U/S 68 OR 14A OF THE ACT . IN THE INSTANT CASE, SPECIFIC TO TH E ASSESSEE, NO INCRIMINATING MATERIAL WITH THE DETAILS WAS REFERRED EITHER IN THE ASSESSMENT ORDER OR IN THE ORDER OF THE CIT (A) FOR MAKING THE IMPUGNED ADDITIONS . AS PER THE CITED JUDGMENT IN THE CASE OF JAI STEELS LTD, SUPRA, THE ASSESSMENT U/S 153A IS ONLY FOR REITERATION RATHER THAN MAKING ANY ADDITIONS IN A ROUTINE MANNER WITHOUT THE STRENGTH OF THE INCRIMINATING MATERIALS. SIMILAR VIEW WAS TAKEN UP BY THE ITAT, DELHI H BENCH, IN THE CASE OF V.K. FISCAL SERVICES P LTD VS. DCIT VIDE ITA NOS.5460 TO 5 465/DEL /2012 ( WWW. ITATONLINE.ORG ). IN THIS REGARD, PARA 13 FROM THE SAID ORDER OF THE ITAT DELHI BENCH (SUPRA) IS RELEVANT AND THE SAME READS AS UNDER: 13. APPLYING THE ABOVE CASE LAWS TO THE FACTS OF THE CASE, WE HAVE TO NECESSARILY QUASH THE ASSESSMENT PROCEEDINGS FOR AY 2004 - 2005, 2005 - 06, 2007 - 08, 2008 - 09 ON THE FOLLOWING GROUNDS. (A) NO BOOKS OF ACCOUNTS BELONGING TO THE ASSESSE WERE FOUND AND SEIZED IN THE PREMISES OF THE OTHER PERSON. WHAT WAS FOUND WAS IN THE HARD DISK WAS ONLY A CONFIRMATION OF ACCOUNT THAT AN ATTACHED ANNEXURES . SUCH DOCUMENTS CANNOT BE SAID TO BE BOOKS OF ACCOUNTS OR DOCUMENTS BELONGING TO THE ASSESSEE. (B) THE REVENUE HAS NOT PRODUCED THE RECORD OF THE SEARCHED PERSON TO DEMONSTRATE THAT SAT ISFACTION WAS RECORDED DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN THE CASE OF M/S. GLOBAL REALITY VENTURES P. LTD. ON THE DATE OF RECORDING OF SATISFACTION, FIRST NOTICE U/S 153(C) WAS ISSUED. THERE IS NO INDICATION WHATSOEVER, THAT THE ASSESSMENT PRO CEEDINGS IN THE CASE OF GLOBAL REALITY VENTURE S P. LTD WERE IN PROGRESS OR NOT, AT THE POINT OF TIME AND THAT THE AO DURING THE COURSE OF THAT PROCEEDINGS RECORDED THIS SATISFACTION. THE PROCEDURE CONTEMPLATED UNDER THE ACT WAS NOT FOLLOWED. (C) THE SATISFACT ION IS RECORDED ON 23 RD JULY, 2010. THE RELEVANT AY WOULD BE 2011 - 12. THE SIX PRECEDING AYS RELEVANT TO THIS AY WOULD BE 2005 - 14 06 / 2006 - 07 / 2007 - 08 / 2008 - 09 / 2010 - 11. THUS, THE NOTICE ISSUED U/S 153C FOR THE AY 2004 - 05 IS CLEARLY BARRED BY LIMITATI ON. (D) EVEN OTHERWISE, AS THERE IS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH, THE AO SHOULD HAVE DROPPED THE PROCEEDINGS INITIATED U/S 153C OF THE ACT. (E) AS THERE IS NO DISPUTE THAT NO ASSESSMENT OR REASSESSMENT HAS ABATED IN THIS CASE FOR T HE REASON, THAT THE DATE OF SEARCH, THE DATE OF SEARCH WHICH IN THE CASE ON HAND WOULD BE 25.3.2010, BY VIRTUE OF FIRST PROVISO TO SECTION 153C, I.E., THE DATE OF PASSING AN ORDER U/S 127 TRANSFERRING THE CASES OF THE ASSESSEE TO THE PRESENT ASSESSING OF FICER NO ASSESSMENT OR REASSESSMENT WAS PENDING. WHEN NO ASSESSMENT HAS ABATED, THE QUESTION OF MAKING ANY ADDITION OR MAKING DISALLOWANCE WHICH ARE NOT BASED ON ONLY MATERIAL FOUND DURING THE SEARCH IS BAD IN LAW. 16. IN THESE CIRCUMSTANCES, WE HAVE NO DOUBT ABOUT THE ABSENCE OF ANY SEIZED MATERIAL WHICH ARE INCRIMINATING IN NATURE TO BACK THE ADDITIONS U/S 68 OR 14A O THE ACT MADE IN THE ASSESSMENT MADE U/S 153A OF THE ACT FOR THE AY UNDER CONSIDERATION. REGARDING THE DVOS REPORT GATHERED DURING THE SEARCH ACTION, WE FIND THAT THE REPORT SUFFERS FROM CERTAIN DEFICIENCIES QUA COST OF CONSTRUCTION OF RESIDENTIAL PROPERTY AND THE LAND OBTAINED THERETO. THE SAID REPORT CONSTITUTES AN OPINION OF THE THIRD PARTY WHICH CANNO T BE USED BY THE AO FOR MAKING ADDITIONS AND SUCH ADDITIONS, IF ANY, CANNOT BE SUSTAINED LEGALLY . AS SUCH, WE FIND THAT THE AO HAS NOT USED THE SAID REPORT OF THE DVO ALSO FOR MAKING ADDITIONS OF RS. 31,33,007/ - , THE DIFFERENCE BETWEEN ACCOUNTED AMOUNT OF RS. 46,13,007/ - , CLAIMED AS THE AMOUNT SPENT ON CONSTRUCTION OF HOUSE AND ACQUISITION OF LAND AS ON 31.3.2002 MINUS RS. RS. 14.8 LAKHS, THE INVESTMENT MADE ON THE LAND PLOTS. AO MADE ADDITION FOR ASSESSEES FAILURE TO PROVIDE EVIDENCES / BILLS IN SUPPORT OF THE CLAIM OF EXPENDITURE ON THE CONSTRUCTION. IT THE PRESUMPTION OF THE AO THAT THE PLOTS SINCE ACQUIRED ONLY BY JULY 2001, THE ASSESSEE WOULD NOT HAVE SPEND RS. 31,33,007/ - BY 31.3.2002. THIS IS MERELY A PRESUMPTION RATHER CONCLUSION BASED ON ANY EV IDENCES. SUCH ADDITIONS ARE UNSUSTAINABLE IN LAW IN THE ASSESSMENTS MADE U/S 153A R.W.S 143(3) OF THE ACT. 17 . RAJASTHAN HIGH COURT JUDGMENT IN THE CASE OF JAI STEEL (INDIA) (SUPRA), VIDE PARA 18, IT IS CATEGORICALLY MENTIONED THAT THE REQUIREMENT OF ASSESSMENT OR REASSESSMENT UNDER THE SAID SECTION (153A) HAS TO BE READ IN THE CONTEXT OF SECTIONS 132 OR 132A OF THE ACT, INASMUCH AS, IN CASE NOTHING INCRIMINATING IS FOUND ON ACCOUNT OF SEARCH OR REQUISITION, THEN THE QUESTION OF REAS SESSMENT OF THE CONCLUDED 15 ASSESSMENTS DOES NOT ARISE, WHICH WOULD MORE REITERATION.. THUS, THE JUDGMENT OF HONBLE HIGH COURT IN THE CASE OF JAI STEEL LTD, SUPRA AND ABOVE DECISIONS OF THE TRIBUNAL ARE CATEGORICAL IN CONCLUDING THAT, IN CASE OF THE C ONCLUDED ASSESSMENTS LIKE THE PRESENT ONE, THE ADDITIONS ARE MADE ONLY BASED ON THE INCRIMINATING MATERIAL DISCOVERED DURING THE SEARCH ACTION. THE FACTS OF THE JAI STEEL LTD ( SUPRA ) ARE IDENTICAL TO THE PRESENT ONE IE AO MADE ADDITIONS BY REASSESSING U/S 153A ON THE COMPLETED ASSESSMENT U/S 143(1) OF THE ACT. THUS, CONSIDERING THE JUDGMENT IN THE CASE OF THE JAI STEEL LTD (SU P R A ) , THE ARGUMENTS ON THE LEGAL ISSUE RAISED BEFORE US STANDS COVERED. THEREFORE, CONSIDERING THE RAJASTHAN HIGH COURTS JUDGMENT IN THE CASE OF JAI STEELS LTD, SUPRA, WE HAVE NO DIFFICULTY IN (I) UPHOLDING THE ISSUE OF NOTICE U/S 153A OF THE ACT AND (2) IN DISAPPROVING THE MAKING OF THE IMPUGNED ADDITIONS U/S 68 AND 14A OF THE ACT, WHICH ARE NOT BACKED BY THE INCRIMINATING MATERIALS. IN THE ABSENCE OF INCRIMINATING MATERIAL, THE ROLE OF THE AO IS ONLY TO REITERATE THE RETURNED INCOME FILED IN RESPONSE TO THE NOTICE U/S 153A OF THE ACT. ACCORDINGLY, IN SUBSTANCE, THE COMMON LEGAL ISSUE RAISED IN THE GROUND S FOR BOTH THE APPEALS OF THE ASSESSEE (ITA NO 3389&3390/M/2011 ) IS ALLOWED . 18. REGARDING OTHER TWO GROUNDS ON THE MERITS OF THE ADDITIONS RASIED IN BOTH THE APPEALS , CONSIDERING THE RELIEF GRANTED TO THE ASSESSEE ON THE LEGAL GROUND, WE FIND THE ADJUDICATION IS ONLY OF ACADEMIC IMPO RTANCE. THEREFORE, WE DISMISS THE SAME ACADEMIC. 19. IN THE RESULT, BOTH THE APPEAL S OF THE ASSESSEE ARE PARTLY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 1 0 T H JANUARY, 2014. S D / - S D / - (DR. S.T.M. PAVALAN) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 10/01/2014. . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 16 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI