DCIT CEN CIR 8(1), MUMBAI V. GARNET INTERNATIONAL LTD, MUMBAI

ITA 3468/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0402 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 08-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Source of fund; Question of law
• Section: 143(3); 153A; 133(6); 68; 132; 2

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI MAHAVIR SINGH , JM AND SHRI RAJESH KUMAR, AM ./ I .T.A. NO . 3468 / MUM/201 5 ( / ASSESSMENT YEA RS : 200 8 - 09 ) DY. COMMISS IONER OF INCOME TAX - CENTRAL CIRCLE - 8(1), ROOM NO.656, 6 TH FLOOR, AAYAKAR BHAVAN, M K ROAD, MUMBAI - 400020 VS. SHRI GARNET INTERNATIONAL LTD, 901, RAHEJA CHAMBERS, NARIMAN POINT MUMBAI - 400063 / APPELLANT .. / RESPONDENT ./ PAN : AABCG8503A / A PPELLANT BY : SHRI RAHUL RAMAN / R ESPONDENT BY : SHRI VIJAY MEHTA AND GOVIND JAVERI / DATE OF HEARING : 23.3. 201 7 / DATE OF PRONOUNCEMENT : 16.6.2017 / O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER : TH IS IS AN APPEAL FILED BY THE REVENUE AND IT IS DIRECTED AGAINST THE ORDER DATED 31.03.2015 FOR THE ASSESSMENT YEAR 200 8 - 09. 2. GROUNDS OF APPEAL TAKEN BY THE DEPARTMENT ARE AS UNDER : 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A) IS JUSTIFIED IN DELETING THE ADDITION MADE U/ S 68 OF THE ACT MADE BY THE AO OF RS.59,80,000/ - BEING LOAN CLAIMED FROM BALRAM CHANRAI INSPITE OF THE FACTS THAT ASSESSEE COULD NO T EXPLAIN THE SOURCE OF FUNDS DURING THE ASSESSMENT PROCEE1DINGS ?' 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. CIT(A) IS JUSTIFIED IN DELETING THE ADDITION MADE U/S 68 OF 2 I .T.A. NO .3468 /MUM/2015 THE ACT MADE BY THE AO OF RS 2,00,000/ - ON A CCOUNT OF UNACCOUNTED CASH DEPOSITS IN BANK INSPITE OF THE FACT THE ASSESSEE COULD NOT PRODUCE THE CASH BOOK DURING THE ASSESSMENT PROCEEDINGS ?'. 3 . AT THE OUTSET T HE LD.AR DREW OUR ATTENTION TO A JURISDICTIONAL ISSUE THAT THE AO HAS NO JURISDICTION TO MAKE THE ADDITIONS EXCEPT ON THE BASIS OF SEIZED MATERIALS BECAUSE THE ASSESSMENT IN THE YEAR HAD ATTAINED FINALITY ON THE DATE OF SEARCH AND THEREFORE , THE AO HA D NO AUTHORITY UNDER THE PROVISIONS OF SECTION 153A/153C OF THE ACT TO DISTURB THE ASSESSMENT WHICH HAD ATTAINED FINALITY ON THE DATE OF SEARCH . THE LD COUNSEL DREW OUR ATTENTION TO APPLICATION DATED NIL. WHEREIN THE ASSESSEE RAISED A GROUND UNDER RULE 27 OF THE INCOME TAX APPELLATE TRIBUNAL RULES, 1963 (HEREINAFTER CALLED AS THE RULES) . THE LD COUNSEL OF THE ASSESSEE STATED THAT THE ISSUE IS PURELY OF LEGAL NATURE WHICH WILL GO TO THE ROOT OF THE MATTER AND HAS BEEN RAISED BEFORE LD CIT(A) ALSO BUT THE SAME HAS BEEN DECIDED AGAINST THE ASSESSEE. THE ORDER OF CIT(A) WAS NOT CHALLENGE D BY THE ASSESSEE AS RELIEF HAS BEEN GRANTED ON MERIT OF THE CASE BY THE CIT(A) . 4. REFERRING TO THE ABOVE, THE LD COUNSEL FOR THE ASSESSEE STATED THAT THE AO HA D NO JURISDICTION U/S 153A /153C OF THE ACT TO MAKE ANY ADDITIONS BY DISTURBING THE ASSESSMEN T ORDER WHICH HA D ATTAINED FINALITY ON THE DATE OF SEARCH WITHOUT ANY INCRIMINATING MATERIAL BEING FOUND BY THE SEARCH TEAM DURING THE COURSE OF SEARCH . THE LD COUNSEL DREW OUR ATTENTION TO THE PROVISIONS OF SECTION 153C R . W.S. 153A OF THE ACT WHICH PRO VIDES THAT THE 3 I .T.A. NO .3468 /MUM/2015 ASSESSMENT WHICH ARE PENDING ON THE DATE OF SEARCH SHALL ABATE AND THE AO HAS SAME JURISDICTION TO FRAME THE ASSESSMENT AS U/S 143(3) OF THE ACT AND ASSESSMENT WHICH HAVE ATTAINED FINALITY ON THE DATE OF SEARCH CANNOT BE DISTURBED EXCEPT ON THE BASIS OF SEIZED MATERIALS AND NOT OTHERWISE. THE LD COUNSEL OF THE ASSESSEE VEHEMENTLY SUBMITTED THAT IN RESPECT OF ASSESSMENT WHICH IS COMPLETE AND ATTAINED FINALITY ON THE DATE OF SEARCH, THE JURISDICTION OF AO IS CONFINED TO MAKE ADDITIONS BASED ON THE SEARCH MATERIALS. 5 . THE D R . VEHEMENTLY ARGUED AGAINST TAKING UP OF THIS ISSUE UNDER RULE 27 OF THE R ULES FOR THE REASON THAT BY TAKING UP AND DECIDING THIS GROUND, TRIBUNAL CANNOT PUT THE REVENUE IN WORST POSITION THAN WHAT IT WAS BEFORE CIT(A). THE LD DR ARGUED THAT THE POWERS OF THE TRIBUNAL ARE CONFINED TO SECTION 254(1) OF THE ACT WHEREIN IT HAS TO PASS ORDERS ON THE SUBJECT MATTER OF THE ISSUE BEFORE IT AND THE TRIBUNAL CANNOT GO BEYOND IT OR PASS ORDERS OR GIVE DIRECTIONS WHICH DO NOT FALL WITH IN THE SUBJECT MATTER OF THE APPEAL FOR WHICH THE LD DR RELIED UPON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF NEW INDIA INSURANCE COM PANY LTD VS CIT (1957) 31 ITR 844 (BOM) WHEREIN IT HAS BEEN HELD AS UNDER : 3. BEFORE WE LOOK AT THE AUTHOR ITIES AND BEFORE WE LOOK AT THE SECTION AND THE RELEVANT RULES, IT IS DESIRABLE TO CONSIDER ON GENERAL PRINCIPLES WHAT ARE THE POWERS OF AN APPELLATE COURT. WHEN AN APPELLANT COMES BEFORE A COURT OF APPEAL, HE COMES THERE BECAUSE HE IS DISSATISFIED WITH TH E DECISION OF THE TRIAL COURT AND HE CHALLENGES THAT DECISION; AND HE CHALLENGES THAT DECISION ON CERTAIN GROUNDS WHICH ARE SET OUT IN THE GROUNDS OF APPEAL OR IN THE MEMO OF APPEAL. THE RESPONDENT, IF HE HAS NOT APPEALED OR HAS NOT CROSS - OBJECTED, IS 4 I .T.A. NO .3468 /MUM/2015 SATI SFIED WITH THE DECISION OF THE TRIAL COURT AND HE IS BEFORE THE COURT OF APPEAL TO SUPPORT THE JUDGMENT OF THE TRIAL COURT. THE APPELLANT MAY CHALLENGE THE DECISION OF THE TRIAL COURT EVEN ON GROUNDS NOT CONTAINED IN THE GROUNDS OF APPEAL IF THE COURT OF A PPEAL GRANTS HIM LEAVE TO DO SO. UNDOUBTEDLY IN GRANTING LEAVE THE COURT OF APPEAL WOULD CONSIDER VARIOUS FACTORS : WHETHER THE QUESTION RAISED WOULD INVOLVE QUESTIONS OF FACT WHICH MAY NECESSITATE A REMAND; WHETHER THE CONDUCT OF THE APPELLANT IS SUCH AS TO DISENTITLE HIM TO RAISE THE NEW GROUND; AND SO ON. BUT IF LEAVE IS GRANTED AND IF THE OTHER SIDE HAS NOTICE OF THE NEW GROUND WHICH THE APPELLANT SEEKS TO URGE, THERE DOES NOT SEEM TO BE ANY REASON WHY THE COURT OF APPEAL SHOULD NOT PERMIT THE APPELLANT TO CHALLENGE THE DECISION OF THE TRIAL COURT ON A GROUND OTHER THAN THOSE TAKEN IN THE GROUNDS OF APPEAL. THE POSITION WITH REGARD TO THE RESPONDENT IS DIFFERENT: IT IS NOT OPEN TO HIM TO URGE BEFORE THE COURT OF APPEAL AND GET A RELIEF WHICH WOULD ADVERS ELY AFFECT THE APPELLANT. IF THE RESPONDENT WANTED TO CHALLENGE THE DECISION OF THE TRIAL COURT, IT WAS OPEN TO HIM TO FILE A CROSS - APPEAL OR CROSS - OBJECTIONS. BUT THE VERY FACT THAT HE HAS NOT DONE SO SHOWS THAT HE IS QUITE CONTENT WITH THE DECISION GIVEN BY THE TRIAL COURT. THEREFORE, UNDER THESE CIRCUMSTANCES, HIS ONLY RIGHT IS TO SUPPORT THE DECISION OF THE TRIAL COURT. IT IS TRUE THAT HE MAY SUPPORT THE DECISION OF THE TRIAL COURT, NOT ONLY ON THE GROUNDS CONTAINED IN THE JUDGMENT OF THE TRIAL COURT, B UT ON ANY OTHER GROUND. IN APPRECIATING THE QUESTION THAT ARISES BEFORE US, ONE MUST CLEARLY BEAR IN MIND THE FUNDAMENTAL DIFFERENCE IN THE POSITIONS OF THE APPELLANT AND THE RESPONDENT. THE APPELLANT IS THE PARTY WHO IS DISSATISFIED WITH THE JUDGMENT; THE RESPONDENT IS THE PARTY WHO IS SATISFIED WITH THE JUDGMENT. NOW WHAT WE HAVE JUST SAID IS NOTHING MORE THAN REALLY A SUMMARY OF THE PROVISIONS WITH REGARD TO APPEALS AND CROSS - OBJECTIONS CONTAINED IN ORDER XLI OF THE CIVIL PROCEDURE CODE ; AND, AS WE SHAL L PRESENTLY POINT OUT, THE POSITION OF THE APPELLATE TRIBUNAL IS THE SAME AS A COURT OF APPEAL UNDER THE CIVIL PROCEDURE CODE AND THE POWERS OF THE APPELLATE TRIBUNAL ARE IDENTICAL WITH THE POWERS ENJOYED BY AN APPELLATE COURT UNDER THE CODE. 6 . WE HAVE H EARD THE RIVAL CONTENTIONS AND PERUSED THE RELEVANT MATERIALS INCLUDING THE ISSUE OF ADDITIONS WITHOUT BEING BASED UPON THE SEIZED MATERIALS IN THOSE ASSESSMENT YEARS WHICH HAD ATTAINED FINALITY ON THE DATE OF SEARCH AS RAISED BY THE LD.AR UNDER RULE 27 OF THE RULES. THE FACTS OF THE CASE REVEAL THAT THIS ISSUE WAS TAKEN UP BY THE ASSESSEE BEFORE CIT(A) 5 I .T.A. NO .3468 /MUM/2015 AND HE ADJUDICATED THE SAME AGAINST THE ASSESSEE. HOWEVER, THE CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE ON MERITS, HENCE, ASSESSEE WAS NOT AGGRIEVED BY T HE ORDER OF THE CIT(A). HERE FIRST OF ALL, WE HAVE TO REFER TO RULE 27 OF THE APPELLATE TRIBUNAL RULES, 1963 WHICH READS AS UNDER: - 27 . RESPONDENT MAY SUPPORT ORDER ON GROUNDS DECIDED AGAINST HIM . - THE RESPONDENT, THOUGH HE MAY NOT HAVE APPEALED, MAY SUP PORT THE ORDER APPEALED AGAINST ON ANY OF THE GROUNDS DECIDED AGAINST HIM. 7 . WE FIND FROM THIS RULE THAT RESPONDENT MAY SUPPORT AN ORDER ON THE GROUND DECIDED AGAINST HIM EVEN THOUGH HE HAS NOT APPEALED AGAINST AN ORDER DECIDING ONE OF THE GROUNDS AGAI NST HIM. WE FURTHER FIND THAT HON'BLE SUPREME COURT IN THE CASE OF CIT VS. MANICK SONS, 74 ITR 1(SC) HAS INTERPRETED THE PROVISIONS OF SECTION 254(1) OF THE ACT AND NOT THAT THE RULE 27 OF APPELLATE TRIBUNAL, WHEREIN RESPONDENT HAS BEEN ALLOWED TO SUPP ORT THE ORDER APPEALED AGAINST ON ANY OTHER GROUND DECIDED AGAINST HIM EVEN T THOUGH HE MAY NOT HAVE APPEALED AGAINST. IT WAS EXPLAINED BY THE HON'BLE SUPREME COURT THAT THE POWERS CONFERRED BY THIS SUB - SECTION IS WIDE BUT STILL IT IS A JUDICIAL POWER W HICH MAY BE EXERCISED IN RESPECT OF MATTER THAT ARISE IN THE APPEAL AND ACCORDING TO LAW. THE TRIBUNAL IN DECIDING AN APPEAL BEFORE IT MUST DEAL WITH QUESTION OF LAW AND FACT, WHICH ARISES OUT OF AN ORDER OF ASSESSING OFFICER AND THAT OF THE CIT(A). IT C ANNOT ASSUME POWERS WHICH ARE INCONSISTENT WITH THE EXPRESS PROVISIONS OF THE ACT OR ITS SCHEME. HONBLE ALLAHABAD HIGH COURT IN THE CASE OF KANPUR INDUSTRIAL WORKS VS. CIT, 59 ITR 407 (AL) HAS HELD THAT IN CASE THE ASSESSEE NOT LIABLE TO BE ASSESSED AT A LL IS 6 I .T.A. NO .3468 /MUM/2015 ALSO A GROUND FOR SHOWING THAT THERE SHOULD BE NO FURTHER INCREASE AND ASSESSEE MAY RESIST THE APPEAL ON THIS GROUND ALSO. IN THE PRESENT CASE BEFORE US, THE CIT(A) HAS ALLOWED THE APPEAL OF THE ASSESSEE ON MERITS AND RELIEF HAS BEEN GRANTED BY DELETING ALL THE ADDITIONS. THE ONLY GROUND DISMISSED BY CIT(A) WAS WITH REGARD TO ASSUMPTION OF JURISDICTION BY AO TO MAKE ADDITION WITHOUT BASED ON SEARCHED MATERIALS AS NOTHING WAS FOUND DURING THE SEARCH PROCEEDINGS . IN VIEW OF THE ABOVE FACTS WE A DMIT THIS ADDITIONAL GROUND OF THE ASSESSEE UNDER RULE - 27 AND WILL ADJUDICATE THE SAME. 8 . THE GROUND TAKEN BY THE ASSESSEE UNDER RULE 27 OF THE RULES DATED 25.10.2016 READS AS UNDER: - RESPONDENT'S GROUNDS UNDE R RULE 27 OF THE APPELLATE TRIBUNAL RULES, 19 63 . 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN AFFIRMING THE ACTION OF THE AO IN CONFIRMING THE ADDITION M A DE U/S 143(3) R.W.S 153C OF THE ACT IN ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE O F SEARCH QUA TH E ADDITIONS, AND HENCE , THE ADDITIONS MADE BY THE AO ARE BAD IN LAW . 2. THE APPELLANT CRAVES LEAVE TO ADD TO, AMEND OR ALTER, THE FOREGOING GROUND OF APPEAL 9 . BRIEF FACTS OF THE CASE ARE THAT THERE WAS A SEARCH ACTION CONDUCTED ON 6.10 .2010 IN THE CASE OF M/S ARSS INFRASTRUCTURE PROJECT LIMITED AND GROUP CONCERNS . I N THE SAID SEARCH ACTION , THE CASE OF THE ASSESSEE WAS ALSO COVERED UNDER SECTION 132 OF THE ACT . NOTICE UNDER SECTION 153 A OF THE ACT WAS ISSUED TO THE ASSESSEE CALLING UP ON THE ASSESSEE TO FILE RETURN OF INCOME 7 I .T.A. NO .3468 /MUM/2015 WHICH WAS COMPLIED WITH BY THE ASSESSEE BY FILING RETURN OF INCOME ON DECLARING TOTAL INCOME AT NIL UNDER THE NORMAL PROVISIONS OF ACT AND RS. 1,17,14,353/ - UNDER THE MAT PROVISIONS OF ACT. THE ASSESSMENT WAS FR AMED U/S 153A R.W.S.143(3) OF THE ACT ASSESSING THE TOTAL INCOME AT RS.82,32,500/ - BY MAKING ADDITION OF RS.82,32,500/ - U/S 68 TOWARDS UNSECURED LOAN AND CASH CREDIT OF RS.2,00,000/ - AS UNEXPLAINED MONEY. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILED APPEAL BEFORE THE LD.CIT(A) CHALLENGING THE ORDER OF THE AO BY RAISING SPECIFIC GROUND THAT THE ASSESSMENT IN THE CURRENT YEAR WAS NOT PENDING ON THE DATE OF SEARCH AND THEREFORE NOT ABATED AND CONSEQUENTLY T HE ADDITION S MADE BY THE AO WITHOUT RE FERENCE IN SEIZED MATERIAL W ERE LEGALLY UNLAWFUL AND WITHOUT JURISDICTION . HOWEVER, THE LD. CIT(A) ALLOWED THE GROUND ON THE ISSUE OF ADDITION U/S 68 OF RS.80,32,500/ - BY OBSERVING AND HOLDING AS UNDER : 7.5 I HAVE CAREFULLY EXAMINED THE FACTS OF THE CASE, THE OBSERVATIONS OF THE A.O. IN THE ASSESSMENT ORDER, THE GROUNDS OF APPEAL, THE STATEMENT OF FACTS, THE WRITTEN SUBMISSIONS AND DOCUMENTS SUBMITTED DURING THE APPELLATE PROCEEDINGS, COMMENTS AND FINDINGS OF THE A.O. IN HIS REMAND REPORT AND FURTHER SUBMISSION OF THE APPELLANT COMPANY FILED BY THE APPELLANT DURING THE HEARING PROCEEDINGS. OBSERVING THE ABOVE FACTS CLEARLY, IT IS ESTABLISHED THAT THE LOAN FROM J AYMAN DEALER PVT LTD. WAS GENUINE AS THE APPELLANT COMPANY PROVED THE IDENTITY, CREDITWORTH INESS AND GENUINENESS OF THE LOAN TRANSACTION, THE PRIMARY INGREDIENTS TO APPLY / SATISFY APPLICABILITY OF S. 68. ON INDEPENDENT INQUIRY MADE BY THE A.O. TO CROSS VERIFY THE GENUINENESS OF THE TRANSACTION BY ISSUING NOTICE U / S 133(6) TO THE LENDER, THE A.O . RECEIVED THE CONFIRMING REPLIES PROVING THE CLAIM OF THE APPELLANT COMPANY. THE LENDER ALSO ESTABLISHED THE SOURCE OF THE FUNDS AND FURNISHED BANK STATEMENTS REFLECTING THE LOAN AMOUNTS GRANTED TO THE APPELLANT 8 I .T.A. NO .3468 /MUM/2015 COMPANY DURING THE YEAR UNDER CONSIDERAT ION AND THUS, CONFIRMING THE GENUINENESS OF THE TRANSACTION. SINCE THE GENUINENESS OF THE LOAN TRANSACTION OF RS.80,32,SOO/ - IS ESTABLISHED, THE ADDITION OF THE SAME CANNOT BE SUSTAINED. THE ADDITION THUS MADE DELETED. GROUND OF APPEAL NO.3 IS ALLOWED. 10. IN RESPECT OF ADDITION OF RS.2,00,000/ - THE LD.CIT(A), THE LD.CIT(A) HAS DELETED THE ADDITION MADE U/S 68 OF THE ACT BY OBSERVING AND HOLDING AS UNDER : 8.5 I HAVE CAREFULLY EXAMINED THE FACTS OF THE CASE, THE OBSERVATIONS OF THE A.O. IN THE ASSES SMENT ORDER, THE GROUNDS OF APPEAL, THE STATEMENT OF FACTS, THE WRITTEN SUBMISSIONS AND DOCUMENTS SUBMITTED DURING THE APPELLATE PROCEEDINGS, CO MMENTS AND FINDINGS OF THE AD. IN HIS REMAND REPORT AND FURTHER SUBMISSION OF THE APPELLANT COMPANY FILED BY THE APPELLANT DURING THE HEARING PROCEEDINGS. THERE IS NOTHING IN THE LAW WHICH PREVENTS ANY PERSON FROM WITHDRAWING ANY AMOUNT OF CASH FROM HIS OWN BANK - ACCOUNT OR DEPOSITING THE SAME IN THE BANK ACCOUNT. 0 N PERUSING THE CASH BOOK SUBMITTED BY THE APPEL LANT COMPANY, IT COULD BE NOTICED THAT THE APPELLANT HAD ENOUGH OPENING CASH BALANCE AND THE DEPOSITS OF CASH IN HAND DURING THE WHOLE OF THE YEAR UNDER CONSIDERATION ON VARIOUS DATES ARE REFLECTED IN THE CASH BOOK AS WELL AS BANK STATEMENTS. THE PASSING O F CONTRA ENTRIES CANNOT BE TERMED AS UNEXPLAINED MONEY. ON VERIFICATION OF THE CASH BOOK, IT WAS CLEAR THAT THE CASH IN HAND WAS EITHER OPENING BALANCE OR APPELLANT HAD ENOUGH WITHDRAWALS BEFORE DEPOSITS IN THE BANK. THUS, THE DEPOSITS OF CASH IN THE B ANK STATEMENTS WAS MERE CONTRA ENTRY AND ARE NOT UNEXPLAINED CREDITS U / S 68 OF THE ACT. FURTHER, IT IS OBSERVED THAT, THE A.O. HAS MADE A GENERAL REMARK ON THE CASH BOOK SUBMITTED BY DOUBTING ON ITS A UTHENTICITY WITHOUT VERIFYING THE DEPARTMENTAL RECORDS . 9 I .T.A. NO .3468 /MUM/2015 T HE COPY OF THE PANCHNAMA DATED 06.10.2010 IS A DEPARTMENTAL DOCUMENT AND THE SAME CLEARLY SHOWS THAT THE DATA OF THE APPELLANT COMPANY AT THE TIME OF THE SEARCH WAS SEIZED IN THE FORM OF ITS HARD DISC OF THE OPERATING SYSTEM OF THE COMPANY. THUS, THE CASH BOOK BEING PART OF THE DATA, THE SAME CANNOT BE CLAIMED AS NOT BEING: A PART OF SEIZED MATERIAL. AS THE CASH BOOK WAS AVAILABLE WITH THE DEPARTMENT IN SOFT COPY, THE SAME COULD HAVE BEEN VERIFIED AT THE TIME OF THE ASSESSMENT PROCEEDINGS ITSELF AND ALSO AT THE TIME OF R EMAND PROCEEDINGS. HOWEVER, THE AO HAS ERRED IN NOT VERIFYING THE SAME AND DOUBTING THE AUTHENTICITY OF THE S A ME WITHOUT ANY SUBSTANTIATION. THUS, THE ADDITION MA D E OF RS.2,00,000/ - IS DELE T ED. GROUND OF APPEAL NO.4 IS ALLOWED. 11 . THE LD. AR VEHEMENTLY ARGUED BEFORE US THAT THE ADDITION MADE BY THE AO WAS WITHOUT ANY JURISDICTION AS THE SAME WAS NOT BASED UPON ANY INCRIMINATING DOCUMENTS /MATERIAL FOUND DURING THE COURSE OF SEARCH . WHILE DRAWING OUR ATTENTION THE PROVISION S O F SECTION 153A OF THE ACT , THE LD COUNSEL ARGUED THAT IN RESPECT OF THOSE ASSESSMENTS WHICH WERE NOT PENDING ON THE DATE OF SEARCH , THE AO C OULD MAKE ADDITION ONLY ON THE BASIS OF OR WITH REFERENCE TO THE SEIZED MATERIAL AND NOT OTHERWISE . THE LD AR STATED THAT DURING THE COURSE OF SEARCH, NO INCRIMINATING MATERIAL WAS FOUND AND SEIZED AND THEREFORE THE UPHOLDING THE JURISDICTION OF THE AO TO MAKE ADDITIONS WITHOUT REFERENCE TO SEIZED MATERIALS WAS AGAINST THE PROVISIONS OF SECTION 153 A OF THE ACT . TH E LD. AR IN DEFENCE OF HIS ARGUMENT HEAVILY RELIED ON THE DECISION IN THE CASE OF CIT V/S MURLI AGRO PRODUCTS LTD [2014] 49 TAXMANN.COM 172 (BOMBAY) AND ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT (2012) 137 ITD 287 (MUM) SPECIAL BENCH. FINALLY, THE LD. AR SUBMITTED THAT SINCE NO INCRIMINATING MATERIAL WAS FOUND AND SEIZED DURING THE COURSE OF 10 I .T.A. NO .3468 /MUM/2015 SEARCH PROCEEDINGS A ND THEREFORE THE ADDITION S MADE BY THE AO IN RESPECT OF UNSECURED LOANS AND CASH WERE WITHOUT JURISDICTION AS THE ASSESSMENT IN THE INSTANT YEAR H A D ATTAINED FINALITY ON THE DATE OF SEARCH. 1 2 . THE LD. DR ON THE OTHER HAND, HEAVILY R ELI ED ON THE ORDERS OF AUTHORITIES BELOW AND SUBMITTED THAT THE MATERIAL WA S GATHERED BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS UNDER SECTION 153 A AND THE REFORE THE AO HA D THE MATERIAL ON THE BASIS OF WHICH HE RIGHTLY MADE ADDITION S IN RESPECT OF FIVE UNSECURED LOANS / CREDITORS ON THE GROUNDS OF CREDITWORTHINESS , GENUINENESS OF TRANSACTION S AND IDENTITY OF THE CREDITOR S NOT BEING PROVED AND SO WAS THE POSIT ION QUA ADDITION OF CASH CREDIT . 1 3 . WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL PLACED BEFORE US INCLUDING THE ORDERS OF AUTHORITIES BELOW AND THE CASE LAWS RELIED UPON BY THE PARTIES. WE FIND THAT ON THE DATE OF SEARCH T HE ASSESSMENT FOR THE INSTANT YEAR H A D ALREADY ATTAINED FINALITY AS THE RETURN WAS FILED ON 23 .9.200 8 WHEREAS THE SEARCH W A S CONDUC T ED ON 6.10.2010 AND THE TIME LIMIT FOR ISSUING NOTICE U/S 143(2) OF THE ACT EXPIRED ON 30.9.2009 . WE ALSO FIND FROM THE PE RUSAL OF PROVISION OF SECTION 153 A OF THE ACT THAT THE AO SHALL ASSESS THE INCOME IN RESPECT OF SIX ASSESSMENT YEARS PRIOR TO THE YEAR IN WHICH THE SEARCH WAS CONDUCTED. IT HAS ALSO BEEN PROVIDED IN THE SECTION THAT THE ASSESSMENT WHICH ARE PENDING O N THE DA T E OF SEA R CH SHALL BE ABATE D AND ASSESSMENT SHALL BE MA D E BY THE AO UNDER SECTION 153 A IN THE 11 I .T.A. NO .3468 /MUM/2015 SAME MANNER AS ASSESSMENT U/S 143(3) OF THE ACT WHEREAS IN RESPECT OF THOSE ASSESSMENT YEARS OUT OF SIX YEARS WHICH ARE NOT PENDING ON THE DATE OF S EARCH AND HAVE ATTAINED THE FINALITY, THE AO HAS LIMITED JURISDICTION TO MAKE ADDITION BASED UPON THE MATERIAL SEIZED DURING THE COURSE OF SEARCH AND NOT OTHERWISE. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF MURLI AGRO PRODUCT LIMITED (SUPRA) AND ALL C ARGO GLOBAL LOGISTICS LTD (SUPRA) AS AFFIRMED BY THE JURISDICTIONAL HIGH COURT AN IDENTICAL ISSUE HAS BEEN DECIDED BY HOLDING THAT IN RESPECT OF ASSESSMENTS WHICH HAS ATTAINED FINALITY ON THE DATE OF SEARCH THE ADDITIONS CAN ONLY BE MADE BASED ON THE SEA RCH MATERIALS . WE ACCORDINGLY, FIND MERIT IN THE CONTENTION OF THE LD. AR AND HOLD THAT THE ORDER OF THE LD.CIT(A) IS WRONG AND CANNOT BE SUSTAINED QUA DISMISSING THE GROUND RAISED BY THE ASSESSEE QUA VALIDITY OF ADDITIONS MADE IN T HE ASSESSMENT ORDER BY THE AO W ITHOUT SEIZED MATERIAL. WE ACCORDINGLY, SET ASIDE THE ORDER OF LD.CIT(A) AND HOLD THAT THE AO HAS NO JURISDICTION U/S 153A OF THE ACT TO MAKE ADDITIONS AS NO INCRIMINATING MATERIAL WAS FOUND DURING THE SEARCH PROCEEDINGS. 1 4 . IN THE RESULT , THE APPEAL OF THE REVENUE IS DISMISSED . THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 16 TH JUNE ,201 7 . SD SD ( MAHAVIR SINGH ) ( RAJESH KUMAR ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 16.6. 2017 SRL,SR.PS 12 I .T.A. NO .3468 /MUM/2015 / COPY OF THE ORDER FO RWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE / BY ORDER, TRUE COPY / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI