DCIT, New Delhi V. M/s Kurele Paper Mills Pvt. Ltd., Kanpur

ITA 3761/DEL/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82138 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 05-06-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 04-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SULEKHA VERMA
• Assessee Lawyers: SS SANJAY KUMAR
• Keywords: Depreciation; Validity of assessment
• Section: 143(3); 153A; 234B; 115JB; 68; 263; 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D NEW DELHI) BEFORE SHRI I.C. SUDHIR AND SHRI J.S. REDDY ITA NO.3761/DEL/2011 ASSESSMENT YEAR: 2002-03 DEPUTY CIT, VS. KURELE PAPER MILLS PVT. LTD. CENTRAL CIRCLE 23, 113/127, SWAROOP NAGAR, NEW DELHI. KANPUR. (PAN: AABCK6213B) (APPLICANT) (RESPONDENT) ASSESSEE BY: S/S SANJAY KUMAR, CA & AKASH GA RG, ADV. REVENUE BY: MS. SULEKHA VERMA, CIT (DR) ORDER PER I.C. SUDHIR: JUDICIAL MEMBER THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDER ON THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.89,00,000 MADE BY THE A SSESSING OFFICER U/S. 68 OF THE INCOME-TAX ACT, 1961 ON BOGU S SHARE CAPITAL. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT NO ADDITION CAN BE MADE BY THE ASSESSI NG OFFICER U/S. 153A OF THE INCOME-TAX ACT, 1961 BY INVOKING T HE PROVISIONS OF SEC. 68 IN THE ABSENCE OF INCRIMINATI NG MATERIAL FOUND DURING THE SEARCH U/S. 132 OF THE INCOME-TAX ACT, 1961. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND ON FACTS IN PLACING RELIANCE ON THE DECISION OF THE HON'BLE SUPREME COU RT IN THE CASE OF M/S. LOVELY EXPORTS (P) LTD. WITHOUT APPREC IATING THAT 2 THE FACTS OF THIS CASE ARE DIFFERENT FROM THE FACTS OF THE CASE OF M/S. LOVELY EXPORTS (P) LTD. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT NO INTEREST CAN BE CHARGED U/S. 234A O F THE INCOME-TAX ACT, 1961 IF RETURN OF INCOME IS FILED L ATE DUE TO NON RECEIPT OF COPIES OF THE SEIZED MATERIAL. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT NO INTEREST CAN BE CHARGED U/S. 234A O F THE INCOME-TAX ACT, 1961 IF THE ADDITION HAS BEEN MADE IN THE ORDER U/S. 153A IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE SEARCH U/S. 132 OF THE INCOME-TAX ACT, 1961. 6. THE ORDER OF THE LEARNED CIT(APPEALS) IS ERRONEO US AND IS NOT TENABLE ON FACTS AND IN LAW. 2. AT THE OUTSET OF HEARING, BOTH THE PARTIES WERE DIRECTED TO ADVANCE THEIR RESPECTIVE ARGUMENTS ON GROUND NO.2 WHICH INV OLVES A LEGAL ISSUE GOING TO THE ROOT OF THE MATTER REGARDING THE VALID ITY OF INVOCATION OF PROVISIONS LAID DOWN UNDER SECTION 153A OF THE INCO ME-TAX ACT, 1961 IN THE ABSENCE OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH UNDER SEC. 132 OF THE INCOME-TAX ACT, 1961. 3. LEARNED AR POINTED OUT THAT THE ISSUE RAISED IS FULLY COVERED BY SEVERAL DECISIONS OF DIFFERENT BENCHES OF THE ITAT AS WELL AS HONBLE HIGH COURTS. 4. LEARNED CIT(DR) ON THE OTHER HAND PLACED RELIANC E ON THE ASSESSMENT ORDER. SHE SUBMITTED THAT THE PLAIN READING OF THE PROVISIONS OF SEC. 153A OF THE INCOME-TAX ACT, 1961 DOES NOT NEED AVAILABILITY OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH TO INITI ATE PROCEEDINGS THEREUNDER. THE ONLY REQUIREMENT FOR INITIATION OF PROCEEDINGS UNDER SEC. 153A OF THE 3 ACT IS THE CONDUCTION OF SEARCH UNDER SEC. 132 OF T HE ACT. SHE PLACED RELIANCE ON THE DECISION OF HON'BLE DELHI HIGH COUR T IN THE CASE OF CIT VS. ANIL KUMAR BHATIA (2012) 211 TAXMANN 453 (ALL.). SH E SUBMITTED FURTHER THAT THE ISSUE BEFORE THE SPECIAL BENCH OF THE ITAT IN THE CASE OF ALL CARGO GLOBLE LOGISTIC LTD. VS. CIT 137 ITD 287 (MUMBAI) ( S.B), REFERRED WAS REGARDING THE VALIDITY OF DISALLOWANCE OF DEDUCTIO N UNDER SEC. 80IA(4) OF THE ACT ON MERIT. LEARNED CIT(DR) CONTENDED FURTHER THAT THE WORDS INCRIMINATING MATERIAL DO NOT FIND MENTION EITHER IN SECTION 132(1) OR SEC. 153A OF THE INCOME-TAX ACT, 1961. SHE ALSO PLACED R ELIANCE ON THE FOLLOWING DECISIONS: 1. CANARA HOUSING DEVELOPMENT CO. VS. DCIT, ITA 38/2014 JUDGMENT DATED 25.07.2014 (KARN. H.C.); 2. FILALE X INDIA LTD. VS. CIT, ITA 269/2014, JUDGMENT DATED 14.07.2014 (DEL. H.C.). 5. THE LEARNED AR SUBMITTED THAT BOTH THE ABOVE CIT ED DECISIONS SUPPORT THE CASE OF THE ASSESSEE ON THE ISSUE. HE PLACED RE LIANCE THEREUPON AS WELL AS ON THE FOLLOWING DECISIONS: I) JAISTEEL (INDIA) JODHPUR VS. ACIT (RAJ.) 259 CTR 28 1 (RAJ.); II) KUSUM GUPTA VS. DCIT & ORS. ITA NO.4873/DEL/2009 OR DER DATED 28.3.2013; III) SHRI KABUL CHAWLA VS. ACIT ITA NO. 783/DEL/2013 ORD ER DATED 23.05.2014; IV) CIT VS. MUSLI AGRO PRODUCTS LTD., ITA NO. 36 OF 200 9 DATED 29.10.2010 (BOM. H.C.); V) SSP AVIATION LTD. VS. DCIT (2012) 252 CTR (DEL.) 29 1. 6. THE LD. AR SUBMITTED FURTHER THAT THE DECISIONS RELIED UPON BY THE LD. CIT-DR HAVING DISTINGUISHABLE FACTS ARE NOT HELPFUL TO THE REVENUE. HE 4 SUBMITTED THAT THE DECISION OF HONBLE KARNATAKA HI GH COURT IN THE CASE OF CANAVA HOUSING DEVELOPMENT COMPANY (SUPRA) WAS ON T HE VALIDITY OF APPLICABLE OF SEC. 263 OF THE ACT UNDER THE FACTS O F THAT CASE. THE HONBLE DELHI HIGH COURT IN THE CASE OF FILATEX INDIA LTD. (SUPRA) THE RATIO LAID DOWN BY THE HONBLE HIGH COURT IS THAT IN S. 153A PROCEE DINGS OTHER ADDITIONS CAN ALSO BE MADE BESIDES THE ADDITION BASED ON THE INCR IMINATING MATERIAL FOUND DURING THE COURSE OF THE SEARCH PROCEEDINGS CONDUCT ED U/S 132 OF THE ACT. THE OTHER DECISIONS ARE ON THE VALIDITY OF APPLICAT ION OF THE PROVISIONS LAID DOWN U/S 68 OF THE ACT. 6.1 ABOVE SUBMISSIONS HAVE BEEN CONSIDERED AND THE DECISIONS RELIED UPON HAVE BEEN GONE THROUGH. WE FIND THAT THE RELEV ANT FACTS OF THE PRESENT CASE ARE THAT THE ASSESSEE AND ITS GROUP WERE SUBJE CTED TO SEARCH OPERATIONS UNDER SEC. 132 OF THE ACT. THE ASSESSING OFFICER WA S NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE REGARDING THE RECEIPT O F SHARE CAPITAL OF RS.89 LACS AND ADDED THE AMOUNT UNDER SEC. 68 OF THE ACT TREATING THE CLAIMED SHARE CAPITAL AS BOGUS. THE SAME WAS QUESTIONED BEF ORE THE LEARNED CIT(APPEALS) ON THE MERITS OF THE ADDITION AS WELL AS THE VALIDITY OF PROCEEDINGS INITIATED UNDER SEC. 153A OF THE ACT ON SEVERAL BASIS. THE ASSESSEE SUCCEEDED IN ITS APPEAL BEFORE THE LEARNED CIT(APPEALS) AS THE LEARNED CIT(APPEALS) HAS HELD THE PROCEEDINGS INITI ATED UNDER SEC. 153A OF THE ACT IN ABSENCE OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF THE SEARCH AS INVALID. HE ALSO DELETED THE ADDITION OF RS. 89 LACS AFTER DISCUSSING THE MERITS OF THE ADDITION. THESE ACTIONS OF THE LE ARNED CIT(APPEALS) HAS BEEN QUESTIONED BY THE REVENUE BEFORE US IN THE PR ESENT APPEAL ON THE ABOVE STATED GROUNDS. 5 7. HAVING GONE THROUGH THE ASSESSMENT ORDER AND THE MATERIAL MADE AVAILABLE ON RECORD, WE DO NOT FIND REFERENCE OF AN Y INCRIMINATING MATERIAL RELEVANT TO THE ADDITION MADE UNDER SEC. 68 OF THE ACT WHICH WAS FOUND DURING THE COURSE OF SEARCH PROCEEDINGS TO JUSTIFY THE INITIATION OF PROCEEDINGS UNDER SEC. 153A OF THE ACT AGAINST THE ASSESSEE AND THE ASSESSMENT MADE IN FURTHERANCE THERETO UNDER SEC. 1 53A READ WITH SECTION 143(3) OF THE ACT. THE FINDINGS OF THE LEARNED CIT( APPEALS) IN THIS REGARD THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH WITH RESPECT TO THE COMPLETED ASSESSMENT HAS NOT BEEN RE BUTTED BY THE REVENUE BEFORE THE ITAT NOR THE SUBMISSIONS OF THE ASSESSEE IN THIS REGARD MADE BEFORE THE LEARNED CIT(APPEALS) AND REITERATED BEFO RE THE ITAT HAS BEEN CONTROVERTED. THE SUBMISSIONS OF THE ASSESSEE REMAI NED THAT NO INCRIMINATING MATERIAL WHATSOEVER WAS FOUND DURING THE COURSE OF SEARCH OPERATION, ALL THE AFFAIRS OF THE ASSESSEE WERE FOU ND TO BE IN ORDER, NO UNACCOUNTED ASSETS, INVESTMENT OR EXPENDITURE WAS F OUND, ALL THE RECORDS/DOCUMENTS WERE FOUND TO BE FULLY TALLYING W ITH BOOKS OF ACCOUNT AND OTHER RECORDS REGULARLY KEPT BY THE ASSESSEE AND FO UND TO BE SO DURING THE COURSE OF THE SEARCH AND THAT THIS WAS SO EVEN IN R ELATION TO ISSUE OF SHARE CAPITAL TO VARIOUS PERSONS IN RELATION TO WHICH HUG E ADDITION OF RS.89 LACS HAS BEEN MADE. BEING CONVINCED WITH THIS CONTENTION OF THE ASSESSEE AND THAT DURING THE COURSE OF SEARCH, NO ASSESSMENT WAS PENDING, THE LEARNED CIT(APPEALS) HAS HELD THE ASSESSMENT FRAMED UNDER S EC. 153A OF THE ACT AS INVALID. WE FIND THAT AN IDENTICAL ISSUE HAS BEEN D ECIDED IN FAVOUR OF THE ASSESSEE UNDER ALMOST SIMILAR FACTS AND CIRCUMSTANC ES BY THE SPECIAL BENCH 6 OF THE ITAT IN THE CASE OF ALL CARGO GLOBAL LOGISTI CS LTD. (SUPRA). IN PARA NO. 58 THEREOF, THE ISSUE HAS BEEN ANSWERED AS UNDE R: 58. 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 CONFE RRED ON HIM U/S 153A FOR WHICH ASSESSMENTS SHALL BE MADE FOR EA CH OF THE SIX ASSESSMENT YEAR SEPARATELY : (B) IN OTHER CASES, IN ADDITION TO THE INCOME THA T HAS ALREADY BEEN ASSESSED, THE ASSESSMENT U/S 153A WI LL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL, WHICH IN THE CONTEXT OF RELEVANT PROVISIONS MEANS (I) BOOKS OF A CCOUNT, OTHER DOCUMENTS, FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT, AND (II) UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE CO URSE OF SEARCH. 8. THE ISSUE RAISED BEFORE THE SPECIAL BENCH WA S AS TO WHETHER SCOPE OF ASSESSMENT U/S 153A ENCOMPASSES ADDITIONS NOT BA SED ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH? 9. IN THE CASE OF KUSUM GUPTA (SUPRA) ALSO THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT AND TIME LIMIT FOR ISSUANCE O F NOTICE U/S 143(2) HAD EXPIRED ON THE DATE OF SEARCH AND IT WAS HELD THAT NO ASSESSMENT WAS PENDING IN THAT CASE AND THUS THERE WAS NO QUESTION OF ABATEMENT OF ASSESSMENT. THEREFORE ADDITION IN THE ASSESSMENT U/ S 153A WOULD BE MADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL FO UND DURING THE SEARCH. THE DELHI BENCH OF THE TRIBUNAL IN ITS RECENT DECIS ION ON THE ISSUE IN THE CASE OF SHRI KABUL CHAWLA VS. ACIT, ITA NO. 783/D/2 013 (ASSTT. YEAR 2008-09) AND OTHERS VIDE ORDER DATED 23.5.2014 HAS EXPRESSED THE SIMILAR VIEW. IT HAS ALSO DISCUSSED THE DECISION OF HONBLE JURISDICTIONAL DELHI HIGH COURT IN THE CASE OF ANIL KUMAR BHATIA (SUPRA) WHILE DECIDING THE 7 ISSUE. THE RELEVANT PARA NO. 8 & 9 IN THIS REGARD I S BEING REPRODUCED AS UNDER :- 8. WE ARE UNABLE TO ACCEPT THE CONTENTION ADVANCED ON BEHALF OF THE REVENUE FOR THE REASON THAT IF BOTH THE PEND ING AND COMPLETED ASSESSMENT WERE TO BE TAKEN ON SAME PEDES TAL, THEN THERE WAS NO NEED TO ENSHRINE SECOND PROVISO TO SEC . 153A( 1) PROVIDING THAT THE PENDING ASSESSMENTS WITHIN THE P ERIOD OF SIX ASSESSMENT YEARS SHALL ABATE. THE HON'BLE DELHI HIG H COURT IN THE CASE OF ANIL KUMAR BHATIA (SUPRA) DEALT WITH A SITUATION IN WHICH SOME INCRIMINATING MATERIAL WAS FOUND IN RESP ECT OF A NON-PENDING ASSESSMENT. IT WAS IN THAT BACKGROUND T HAT THE HON'BLE HIGH COURT HELD THAT SEC. 153A APPLIES IF I NCRIMINATING MATERIAL IS FOUND EVEN IF ASSESSMENTS ARE COMPLETED . THE QUESTION AS TO WHETHER ANY ADDITION CAN BE MADE IN RESPECT OF COMPLETED ASSESSMENTS WHEN NO INCRIMINATING MATERIA L WAS FOUND, WAS APPARENTLY LEFT OPEN. HOWEVER, WE FIND T HAT THERE ARE SUFFICIENT INDIRECT HINTS GIVEN BY THE HON 'BLE DELHI HIGH COURT IN THE CASE OF ANIL KUMAR BHATIA (SUPRA) ABOU T NOT MAKING OF ANY ADDITION IN RESPECT OF AN ASSESSMENT YEAR FOR WHICH THE ASSESSMENT IS ALREADY COMPLETED UNLESS SO ME INCRIMINATING MATERIAL IS FOUND DURING THE COURSE O F SEARCH. THIS CAN BE SEEN FROM THE . FOLLOWING OBSERVATIONS OF THE HON'BLE HIGH COURT :- '20. A QUESTION MAY ARISE AS TO HOW THIS IS SOUGHT TO BE ACHIEVED WHERE AN ASSESSMENT ORDER HAD ALREADY BEEN PASSED IN RESPECT OF ALL OR ANY OF THOSE SIX ASSESSMENT YEARS, EITHER UNDER SECTION 143(1)(A) OR SECTION 143(3) OF THE ACT. IF SUCH AN ORDER IS ALREADY IN EXISTENCE, HAVING OBVIOUSLY BEEN PASSED PRIOR TO THE INITIATION OF THE SEARCH/REQUISITION, THE ASSESSING OFFICER IS EMPOWERED TO REOPEN THOSE PROCEEDINGS AND REASSESS THE TOTAL INCOME, TAKING NOTE OF THE UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SEARCH. 8 9. THE ABOVE EXTRACTED OBSERVATIONS OF THE HON'BL E HIGH COURT, WHICH ARE THOUGH OBITER DICTA, MAKE THE POIN T CLEAR THAT WHERE AN ASSESSMENT ORDER HAS ALREADY BEEN PASSED F OR A YEAR(S) WITHIN THE RELEVANT SIX ASSESSMENT YEARS, T HEN ALSO THE A.O IS DUTY BOUND TO REOPEN THOSE PROCEEDINGS AND R EASSESS THE TOTAL INCOME BUT BY 'TAKING NOTE OF THE UNDISCLOSED INCOME IF ANY, UNEARTHED DURING THE SEARCH'. THE EXPRESSION ' UNEARTHED DURING THE SEARCH' IS QUITE SIGNIFICANT TO DENOTE T HAT IN RESPECT OF COMPLETED OR NON-PENDING ASSESSMENTS, THE ASSESS ING OFFICER IS ALBEIT DUTY BOUND TO ASSESS OR REASSESS THE TOTA L INCOME BUT THERE IS A CAP ON THE SCOPE OF ADDITIONS IN SUCH AS SESSMENT, BEING THE ITEMS OF INCOME 'UNEARTHED DURING THE SEA RCH'. IN OTHER WORDS, THE DETERMINATION OF 'TOTAL INCOME' IN RESPECT OF THE ASSESSMENT YEARS FOR WHICH THE ASSESSMENTS ARE ALRE ADY COMPLETED ON THE DATE OF SEARCH, SHALL NOT BE INFLU ENCED BY THE ITEMS OF INCOME OTHER THAN THOSE BASED ON THE MATER IAL UNEARTHED DURING THE COURSE OF SEARCH. THERE IS NOT AND CANNOT BE ANY QUARREL OVER THE PROPOSITION THAT THE ASSESS ING OFFICER HAS NO OPTION BUT TO DETERMINE THE TOTAL INCOME OF THE ASSESSEE IN RESPECT OF THE RELEVANT SIX ASSESSMENT YEARS. HO WEVER, THE SCOPE OF SUCH DETERMINATION OF TOTAL INCOME IS DIFF ERENT IN RESPECT OF THE YEARS FOR WHICH THE ASSESSMENTS ARE PENDING VIS- VIS THE YEARS FOR WHICH ASSESSMENTS ARE NON-PENDING . IN RESPECT TO THE ASSESSMENT YEARS FOR WHICH THE ORIGINAL ASSE SSMENTS HAVE ALREADY BEEN COMPLETED ON THE DATE OF SEARCH, THE T OTAL INCOME SHALL BE DETERMINED BY RESTRICTING ADDITIONS ONLY T O THOSE WHICH FLOW FROM INCRIMINATING MATERIAL FOUND DURING THE C OURSE OF SEARCH. IF NO INCRIMINATING MATERIAL IS FOUND IN RE SPECT OF SUCH COMPLETED ASSESSMENT, THEN THE TOTAL INCOME IN THE PROCEEDINGS U/S 153A SHALL BE COMPUTED BY CONSIDERING THE ORIGI NALLY DETERMINED INCOME. IF SOME INCRIMINATING MATERIAL I S FOUND IN RESPECT OF SUCH ASSESSMENT YEARS FOR WHICH THE ASSE SSMENT IS NOT PENDING, THEN THE 'TOTAL INCOME' WOULD BE DETERMINE D BY CONSIDERING THE ORIGINALLY DETERMINED INCOME PLUS I NCOME EMANATING FROM THE INCRIMINATING MATERIAL FOUND DUR ING THE COURSE OF SEARCH. IN THE OTHER SCENARIO OF THE ASSE SSMENTS PENDING ON THE DATE OF SEARCH WHICH WOULD ABATE IN TERMS OF SECOND PROVISO TO SEC. 153A( 1), THE TOTAL INCOME S HALL BE 9 COMPUTED AFRESH UNINFLUENCED BY THE FACT WHETHER OR NOT THERE IS ANY INCRIMINATING MATERIAL. IN FACT, THIS IS THE POSITION WHICH FOLLOWS WHEN WE READ THE JUDGMENT OF THE HON'BLE DE LHI HIGH COURT IN ANIL KUMAR BHATIA (SUPRA) IN JUXTAPOSITION TO THE SPECIAL BENCH ORDER IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. (SUPRA). THE OTHER JUDGMENT RELIED BY THE LD. DR IN THE CASE OF MADUGULU VENU (SUPRA) ALSO TALKS ABOUT THE NEED FOR MAKING FRESH ASSESSMENT IN RESPECT OF THE ASSESSMEN T YEARS FOR WHICH THE ASSESSMENTS ARE NOT PENDING ON THE DATE O F SEARCH BUT DOES NOT SET OUT THE SCOPE OF SUCH ASSESSMENT, WHIC H IS THE ISSUE BEFORE USE. 10. WE, THUS, FIND THAT THE DECISION OF THE HONBLE JURISDICTIONAL DELHI HIGH COURT IN THE CASE OF ANIL KR. BHATIA (SUPRA) S UPPORTS THE CASE OF THE ASSESSEE THAT IN ABSENCE OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH AN ADDITION U/S 153A OF THE ACT CA NNOT BE MADE IN THE ASSESSMENT FRAMED THEREUNDER. THE DECISIONS RELIED UPON BY THE LD. CIT, DR IN THE CASES OF CANARA HOUSING DEVELOPMENT COMPA NY VS. DCIT(SUPRA) OF HONBLE KARNATAKA HIGH COURT AND FIL ATEX INDIA P. LTD. VS. CIT(SUPRA) OF HONBLE DELHI HIGH COURT HAVING D ISTINGUISHABLE FACTS ARE NOT APPLICABLE IN THE PRESENT CASE. IN THE CAS E OF FILATEX INDIA PVT. LTD. (SUPRA), THE QUESTION RAISED ON THE APPLICABIL ITY OF PROVISIONS U/S 153A WAS AS UNDER : WHETHER THE TRIBUNAL ERRED ON FACTS AND IN LAW IN NOT HOLDING THAT RECOMPUTATION OF BOOK PROFIT, DEHO RS ANY MATERIAL FOUND DURING THE COURSE OF SEARCH IN THE ORDER PASSED U/S 153A OF THE ACT WAS WITHOUT JURISDICTION, BEING OUTSIDE THE SCOPE OF PR OCEEDINGS UNDER THAT SECTION? THE OTHER QUESTION WAS, WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE TRIBUNAL ERRED IN LA W IN UPHOLDING THE ACTION OF THE AO IN DENYING SET OFF, OF BOOK LOSS U NABSORBED 10 DEPRECIATION RELATABLE TO EARLIER ASSESSMENT YEAR I N TERMS OF CLAUSE (III) OF EXPLANATION 1 TO SECTION 115JB OF THE ACT? THE RELEVANT FACTS OF THAT CASE NOTED IN PARA NO. 2 OF THE DECISION ARE THAT T HE AO IN THE PROCEEDINGS U/S 153A OF THE ACT, HAD MADE SEVERAL A DDITIONS, RELYING UPON THE INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH, WHICH WAS CONDUCTED ON 18.1.2006 AND SUBSEQUENT DATES. IN THI S PARAGRAPH OF THE DECISION IT HAS BEEN PERUSED FROM THE IMPUGNED ORDE R OF THE TRIBUNAL THAT INCRIMINATING MATERIAL INCLUDING STATEMENT OF SANJAY AGARWAL, GM (MARKETING) HAVE RESULTED IN ADDITIONS, WHICH HAVE BEEN UPHELD. THE HONBLE HIGH COURT HAS BEEN PLEASED TO NOTE IN THIS PARAGRAPH AS IT IS NOT THE CASE OF THE APPELLANT ASSESSEE THAT INITI ATION OF PROCEEDINGS U/S 153A WAS BAD OR UNWARRANTED IN LAW AS NO INCRIMINAT ING MATERIAL WAS FOUND DURING THE SEARCH. THE CONTENTION RAISED BY THE APPELLANT ASSESSEE IS THAT THE ADDITION, WHICH IS THE SUBJECT MATTER OF QUESTIONS NO. (II) AND (III), WAS/IS NOT JUSTIFIED IN THE ASSESSM ENT ORDER U/S 153, AS NO INCRIMINATING MATERIAL WAS FOUND CONCERNING THE ADD ITION U/S 115JB OF THE ACT. THE HONBLE HIGH COURT HAS REJECTED THIS CONTENTION OF THE ASSESSEE WITH THIS FINDING THAT U/S 153A OF THE ACT , THE ADDITIONS NEED NOT TO BE RESTRICTED OR LIMITED TO THE INCRIMINATIN G MATERIAL, WHICH WAS FOUND DURING THE COURSE OF SEARCH. THUS, IT IS CLE AR FROM THE FACTS OF THIS CASE BEFORE THE HONBLE HIGH COURT THAT SEVERAL ADD ITIONS RELYING UPON THE INCRIMINATING MATERIAL FOUND IN THE COURSE OF S EARCH WERE MADE BY THE AO IN THE ASSESSMENT PROCEEDINGS U/S 153A OF TH E ACT AND ADDITION U/S 115JB WAS MADE BY THE AO IN ABSENCE OF INCRIMIN ATING MATERIAL CONCERNING THIS ADDITION. THIS ADDITION WAS QUESTI ONED BY THE ASSESSEE 11 ON THE BASIS THAT THERE WAS NO INCRIMINATING MATERI AL FOUND CONCERNING THE ADDITION MADE IN THE ASSESSMENT U/S 153A OF THE ACT, WHICH HAS BEEN REJECTED BY THE HONBLE HIGH COURT WITH THE ABOVE F INDING. IT WAS HELD BY THE HONBLE HIGH COURT THAT THERE CANNOT BE MULT IPLE ASSESSMENTS, ONCE SEC. 153A OF THE ACT IS APPLICABLE. SECTION 1 53A(1) POSTULATES ONE ASSESSMENT; PUTTING THE TOTAL INCOME OF SIX ASSESSM ENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVI OUS YEAR IN WHICH SEARCH WAS CONDUCTED OR REQUISITION WAS MADE. 11. IN PARA NO. 3 OF THE JUDGMENT THE HONBLE DELHI HIGH COURT WHILE DISCUSSING THE CITED DECISIONS IN THE CASES CIT VS. CHETAN DAS (2012), 254 CTR (DEL) 292 AND CIT VS. ANIL KR. BHATIA (2012 ), 2010-11 TAXMAN 453 (DEL) CITED BY THE LD. AR OF THE ASSESSE E APPELLANT, HAS NOTED CERTAIN OBSERVATIONS MADE AND FINDINGS GIVEN BY THE HONBLE COURT THEREIN. THEREAFTER IN PARA NO. 4 OF THE JUD GMENT, THE HONBLE HIGH COURT HAS HELD AS UNDER: THE FIRST QUESTION, WE NOTICE WAS NOT RAISED BY THE APPELLANT BEFORE THE AO, CIT(A) AND B EFORE THE TRIBUNAL. THE APPELLANT CLAIMS THAT THE CONTENTION BEING LEGA L CAN BE RAISED AT ANY STAGE. WE HAVE EXAMINED SEC. 153A OF THE ACT AND F IND THAT THE SUBMISSION/ CONTENTION HAS NO MERIT. 11.1 WHEN WE PERUSE THE FACTS OF THE CASE IN THE CA SE OF FILATAX INDIA LTD. AND THE QUESTION RAISED THEREIN IT COMES OUT T HAT IN THAT CASE ADMITTEDLY DURING THE COURSE OF SEARCH INCRIMINATIN G MATERIAL INCLUDING STATEMENTS WERE FOUND AND RESULTED IN ADDITIONS AND THE ADDITION MADE U/S 115JB OF THE ACT WAS NOT BASED UPON ANY INCRIMI NATING MATERIAL. THUS, THE QUESTION RAISED BEFORE THE HONBLE HIGH C OURT WAS AS TO 12 WHETHER THE TRIBUNAL HAS ERRED IN LAW IN NOT UPHOLD ING THAT RECOMPUTATION OF BOOK PROFIT, DEHORS ANY MATERIAL F OUND DURING THE COURSE OF SEARCH IN THE ORDER BASED U/S 153A OF THE ACT WAS WITHOUT JURISDICTION, BEING OUTSIDE THE SCOPE OF PROCEEDING S UNDER THAT SECTION. THE HONBLE HIGH COURT AFTER DISCUSSING THE ISSUE I N DETAIL HAS BEEN PLEASED TO DECIDE THE QUESTION AGAINST THE ASSESSEE AND HAS UPHELD THE ADDITION MADE U/S 115JB OF THE ACT. THUS, HAVING D ISTINGUISHABLE FACTS THIS CITED THE DECISION IN THE CASE OF FILATAX INDI A LTD. (SUPRA) IS NOT HELPFUL TO THE REVENUE. 11.2 SO FAR AS, THE DECISION OF HONBLE KARNATAKA H IGH COURT IN THE CASE OF CANARA HOUSING DEVELOPMENT COMPANY (SUPRA) RELIED UPON BY THE LD. CIT DR IS CONCERNED, THE ISSUE RAISED BEFOR E THE HONBLE HIGH COURT WAS REGARDING VALIDITY OF REVISIONAL ORDER PA SSED U/S 263 OF THE ACT BY THE LD. CIT PARTLY UPHELD BY THE TRIBUNAL AN D DURING THAT COURSE THE HONBLE HIGH COURT HAS ALSO BEEN PLEASED TO DIS CUSS THE DECISION IN THE CASES OF CIT VS. ANIL KUMAR BHATIA (SUPRA) AND THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ALLCAR GO HONBLE LOGISTICS LTD. (SUPRA). IT HAS BEEN OBSERVED BY THE HONBLE HIGH COURT THAT THE CONDITION PRECEDENT FOR APPLICATION OF SEC. 153A IS THAT THERE SHOULD BE A SEARCH U/S 132 AND INITIATION OF PROCEEDINGS U/S 15 3A IS NOT DEPENDENT ON ANY UNDISCLOSED INCOME BEING UNEARTH DURING THE SUCH SEARCH. THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF JAI STE EL (SUPRA) HAS BEEN PLEASED TO HOLD THAT IF ANY BOOKS OF ACCOUNTS OR OT HER DOCUMENTS RELEVANT TO THE ASSESSMENT HAD NOT BEEN PRODUCED IN THE COUR SE OF ORIGINAL ASSESSMENT AND FOUND IN THE COURSE OF SEARCH, SUCH BOOKS OF ACCOUNTS OR 13 OTHER DOCUMENTS HAVE TO BE TAKEN INTO CONSIDERATION WHILE ASSESSING OR RE-ASSESSING THE TOTAL INCOME UNDER THE PROVISIONS OF SEC. 153A OF THE ACT. EVEN ANY UNDISCLOSED INCOME OR UNDISCLOSED PRO PERTY HAS BEEN FOUND AFTER THE CONCLUSIONS OF THE SEARCH, SAME WOU LD ALSO BE TAKEN INTO CONSIDERATION. THE REQUIREMENT OF ASSESSMENT OR RE -ASSESSMENT UNDER THE SAID SECTION HAS TO BE READ IN THE CONTEXT OF S ECTIONS 132 OR 132A OF THE ACT, IN MUCH AS, IN CASE NOTHING INCRIMINATING IS FOUND ON ACCOUNT OF SUCH SEARCH OR REQUISITION, THEN THE QUESTION OF RE -ASSESSMENT OF THE CONCLUDED ASSESSMENT DOES NOT ARISE, WHICH WOULD RE QUIRE MORE REITERATION AND IT IS ONLY IN THE CONTEXT OF THE AB ATED ASSESSMENT UNDER SECOND PROVISO WHICH IS REQUIRED TO BE ASSESSED. 12. IN THE CASE OF SSP AVIATION LTD. VS. DCIT (SUPR A) WHERE THE VALIDITY OF ASSESSMENT FRAMED U/S 153C WAS CHALLENG ED IT WAS HELD THAT IF THE AO IS SATISFIED THAT ANY MONEY, BULLION, JEWELL ERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS S EIZED IN THE COURSE OF THE SEARCH BELONGS TO A PERSON OTHER THAN THE PERSO N WHO WAS SEARCHED, THEN SUCH ASSETS OR BOOKS OF ACCOUNTS OR DOCUMENTS SHALL BE HANDED OVER BY HIM TO THE AO HAVING JURISDICTION OVER SUCH OTHE R PERSON. ONCE, THAT IS DONE, THE AO HAVING JURISDICTION OVER SUCH OTHER PERSON SHALL PROCEED AGAINST HIM FOR MAKING AN ASSESSMENT OR REASSESSMEN T OF HIS INCOME IN ACCORDANCE WITH THE PROVISIONS OF SEC. 153A. THE P ETITIONER THEREIN WAS NOT SEARCHED U/S 132 OF THE ACT, HOWEVER, SOME DOCU MENTS BELONGING TO IT WERE FOUND DURING THE SEARCH CARRIED OUT IN THE PREMISES OF PURI GROUP OF COMPANIES. 14 13. WE, THUS, FIND THAT THE RATIO LAID DOWN BY THE HONBLE DELHI HIGH COURT AND HONBLE RAJASTHAN HIGH COURT IN THE ABOVE CITED AND DISCUSSED DECISIONS SUPPORTS THE CASE OF THE ASSESS EE THAT IN ABSENCE OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH NO ADDITION CAN BE MADE U/S 153A OF THE ACT WHERE THE ORIGINAL ASSE SSMENT WAS ALREADY FRAMED ON THE DATE OF SEARCH. THE HONBLE KARNATAK A HIGH COURT IN THE CASE OF CANARA HOUSING DEVELOPMENT COMPANY (SUPRA) HAS, HOWEVER, BEEN PLEASED TO EXPRESS DIFFERENT VIEW HOWEVER, AS PER THE ESTABLISHED PROPOSITION OF LAW, WE ARE BOUND TO FOLLOW THE DECI SION OF HONBLE JURISDICTIONAL DELHI HIGH COURT AND SINCE, THE HON BLE KARNATAKA HIGH COURT AND THE HONBLE RAJASTHAN HIGH COUT HAVE EXPR ESSED DIFFERENT VIEWS ON THE ISSUE, THE VIEW FAVOURABLE TO THE ASSE SSEE IS TO BE FOLLOWED. WE, THUS, REITERATE THAT IN ABSENCE OF INCRIMINATIN G MATERIAL FOUND DURING THE COURSE OF SEARCH NO ADDITION CAN BE MADE IN A C ASE WHERE ORIGINAL ASSESSMENT WAS ALREADY FRAMED ON THE DATE WHEN SEAR CH TOOK PLACE. 14. WE THUS FIND THAT THE FIRST APPELLATE ORDER ON THE ISSUE IS FULLY SUPPORTED BY THE ABOVE DISCUSSED DECISIONS RELIED U PON BY THE LEARNED AR ESPECIALLY WHEN IT IS UNDISPUTED FACT OF THE PRE SENT CASE THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AGAINST THE ASSESSEE AND ON THE DATE OF SEARCH, NO ASSESSMENT B ASED ON THE RETURN OF INCOME ORIGINALLY FILED WAS PENDING. WE, THUS, DO N OT FIND ANY REASON TO INTERFERE WITH THE FIRST APPELLATE ORDER IN THIS RE GARD. THE SAME IS UPHELD. THE GROUND NO.2 IS ACCORDINGLY REJECTED. 15. THE REMAINING GROUNDS QUESTIONING ACTION OF THE LEARNED CIT(APPEALS) IN DELETING THE ADDITION OF RS.89 LACS MADE BY THE ASSESSING 15 OFFICER UNDER SEC. 68 OF THE ACT AND CHARGING OF IN TEREST OF INTEREST UNDER SEC. 234A AND 234B OF THE INCOME-TAX ACT, 1961 HAVE NOW BECOME ACADEMIC, HENCE, DO NOT NEED ADJUDICATION. 16. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14/11/2014 SD/- SD/- ( J.S. REDDY ) ( I.C. SUDHIR) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 14/11/2014 *MOHAN LAL *KAVITA COPY FORWARDED TO: 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR:ITAT ASSISTANT REGISTRAR