P.Rama Raju, Visakhapatnam V. THE DCIT, CENTRAL CIRCLE-1, Visakhapatnam

ITA 424/VIZ/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8813 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 4 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 31-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R GOVINDARAJAN
• Keywords: Unexplained cash credit; Unexplained investment; Search and seizure; Period of limitation; Deemed dividend; Block assessment
• Section: 143(3); 153A; 68; 69; 148; 263; 132

Judgement Text

ITA NOS.424, 425 & 426/VIZAG/2013 P. RAMA RAJU, VISAHKAPATNAM 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./I.T.A.NOS.424, 425 & 426/VIZAG/2013 ( / ASSESSMENT YEARS: 2005-06, 2007-08 & 2009-10 RESPECTIVELY) P. RAMA RAJU, VISAKHAPATNAM DCIT, CENTRAL CIRCLE - 1, VISAKHAPATNAM [PAN NO. AGIPP 5262B ] ( / APPELLANT) ( / RESPONDENT) / APPELLANT BY : SHRI G.V.N. HARI, AR / RESPONDENT BY : SHRI R. GOVINDA RAJAN, DR / DATE OF HEARING : 25. 0 7.2017 / DATE OF PRONOUNCEMENT : 31.07.2017 / O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER: THESE APPEALS ARE FILED BY THE ASSESSEE AGAINST OR DER OF THE COMMISSIONER OF APPEALS-I {CIT(A)-I}, HYDERABAD VID E ITA NOS.0496 TO 0501/CC-1, VIZAG/CIT(A)-I/10-11 DATED 28.2.2013 FOR THE ASSESSMENT YEARS 2005-06, 2007-08 & 2009-10. SINCE, THE FACTS ARE IDENTICAL AND THE ISSUES ARE COMMON, THEY ARE CLUBBED, HEARD TOGETHER AND DISPOSED-OFF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENI ENCE. ITA NOS.424, 425 & 426/VIZAG/2013 P. RAMA RAJU, VISAHKAPATNAM 2 ITA NO.424/VIZAG/2013 A.Y. 2005-06: 2. GROUND NOS.1 & 5 ARE GENERAL IN NATURE WHICH DOE S NOT REQUIRE SPECIFIC ADJUDICATION. 3. GROUND NO.4 IS INTER-RELATED WITH THE GROUND NOS .2 & 3. THE ISSUE RAISED BY THE ASSESSEE IN GROUND NO.4 IS RELATED TO THE JURISDICTION OF THE ASSESSMENT MADE U/S 153A OF THE INCOME TAX ACT, 196 1 (HEREIN AFTER CALLED AS THE ACT) WHICH IS ADJUDICATED ALONG WIT H THE GROUNDS IN GROUND NOS.2 & 3. THEREFORE, NO SEPARATE ADJUDICAT ION IS NECESSARY FOR GROUND NO.4. 4. GROUND NO.2 IS RELATED TO THE ADDITION OF RS.10. 00 LAKHS, UNEXPLAINED INVESTMENT IN SHOP AT SRI RAM RESIDENCY FOR THE A.Y. 2005- 06. THE ASSESSEE FILED THE RETURN OF INCOME DECLAR ING TOTAL INCOME OF RS.11,38,900/- ON 1.11.2005. A SEARCH U/S 132 OF T HE ACT WAS CONDUCTED IN THE RESIDENTIAL PREMISES AS WELL AS BU SINESS PREMISES OF THE ASSESSEE ON 22.8.2008. DURING THE COURSE OF SE ARCH PROCEEDINGS, THE INCRIMINATING MATERIAL RELATING TO THE ASSESSEE WAS FOUND AND SEIZED BY THE INVESTIGATION WING OF THE INCOME TAX DEPARTM ENT AND ISSUED A NOTICE U/S 153A OF THE ACT AND THE ASSESSMENT WAS C OMPLETED U/S 143(3) R.W.S. 153A OF THE ACT. ONE OF THE ADDITION S MADE IN THE ASSESSMENT ORDER WAS UNEXPLAINED INVESTMENT RELATIN G TO SHOP IN SRI RAM RESIDENCY AMOUNTING TO RS.10.00 LAKHS WHICH WAS ADDED BY THE ITA NOS.424, 425 & 426/VIZAG/2013 P. RAMA RAJU, VISAHKAPATNAM 3 A.O. U/S 69 OF THE ACT AND CONFIRMED BY THE LD. CIT (A). HENCE, THE ASSESSEE FILED APPEAL BEFORE US. 5. DURING THE COURSE OF SEARCH AND SEIZURE OPERATIO N IN THE RESIDENTIAL PREMISES OF THE ASSESSEE, THE INVESTIGA TION WING FOUND A LOOSE SHEET CONTAINING THE DETAILS OF INVESTMENTS O N THE LETTER HEAD OF SHRI P. SOMARAJU, FATHER OF THE ASSESSEE. AS PER TH E LOOSE SHEET, THE AMOUNT OF RS.10.00 LAKHS WAS SHOWN AGAINST SRI RAM RESIDENCY SHOP IN THE NAME OF SHRI P. RAMA RAJU. ON AN ENQUIRY IT W AS EXPLAINED THAT HE HAS CONSTRUCTED A SHOP IN THE SRI RAM RESIDENCY FOR WHICH NO APPROVAL WAS GIVEN BY THE MUNICIPAL AUTHORITIES AND THE MUNI CIPAL AUTHORITY IS AT LIBERTY TO DEMOLISH THE SHOP AT ANY POINT OF TIME, AND HENCE THE ASSESSEE HAS NOT DECLARED THE VALUE OF SHOP IN HIS REGULAR RETURN OF INCOME. NOT CONVINCED WITH THE ASSESSEES EXPLANAT ION, THE ASSESSING OFFICER MADE THE VALUE OF UNACCOUNTED INVESTMENT IN THE SHOP AS UNEXPLAINED INVESTMENT IN SRI RAM RESIDENCY AND BRO UGHT TO TAX. AGGRIEVED BY THE ORDER OF THE A.O., THE ASSESSEE WE NT ON APPEAL BEFORE THE CIT(A) AND CHALLENGED THE ADDITION TECHNICALLY AS WELL AS ON MERIT. NOT BEING SUCCESSFUL BEFORE THE CIT(A), THE ASSESSE E IS IN APPEAL BEFORE US. 6. DURING THE APPEAL HEARING, THE ASSESSEE ARGUED T HAT THE LOOSE DOCUMENT FOUND WAS ON THE LETTER HEAD OF HIS FATHER AND IT IS NOT ITA NOS.424, 425 & 426/VIZAG/2013 P. RAMA RAJU, VISAHKAPATNAM 4 PERTAINING TO THE ASSESSEE, HENCE THERE IS NO INCRI MINATING MATERIAL FOUND IN THIS CASE FOR MAKING ADDITION AS UNEXPLAIN ED INVESTMENT. FURTHER, THE LD. A.R. ALSO ARGUED THAT THE ASSESSEE IS FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING AND AS PER THE SYS TEM OF ACCOUNTING FOLLOWED BY THE ASSESSEE, THE COST OR MARKET VALUE OF WORK IN PROGRESS OR THE STOCK IN TRADE WHICHEVER IS LOWER IN REQUIRE D TO BE ACCOUNTED IN THE BOOKS OF ACCOUNTS. IN THE ASSESSEES CASE, THE SHOP WAS CONSTRUCTED WITH A NOMINAL EXPENDITURE AND NO APP ROVAL WAS ACCORDED BY THE MUNICIPAL AUTHORITIES AND THE SHOP IS LIABLE TO BE DEMOLISHED BY THE MUNICIPAL AUTHORITIES AT ANY POINT OF TIME AND THE ASSESSEE WAS UNDER THE IMPRESSION THAT THE VALUE OF THE STOCK WA S NIL, HENCE, IT WAS NOT DECLARED THE IN THE WORK IN PROGRESS OF THE ASS ESSEE. THEREFORE, THE LD. A.R. WAS OF THE VIEW THAT BOTH ON MERITS AND ON TECHNICAL GROUNDS, THERE IS NO CASE FOR MAKING THE ADDITION WHICH REQU IRES TO BE DELETED. 6.1 ON THE OTHER HAND, THE LD. D.R. ARGUED THAT DURING THE COURSE OF SEARCH, IT WAS FOUND BY THE DEPARTMENT THAT THE ASSESSEE HAS CONSTRUCTED A SHOP IN THE GROUND FLOOR OF SHRI RAM RESIDENCY BUT NOT DECLARED IN THE RETURNS OF INCOME. THOUGH THERE WA S NO APPROVAL, IT IS THE PRACTICE OF THE BUILDERS IN THE ANDHRA PRADESH TO CONSTRUCT THE PENT HOUSES IN THE TOP FLOORS AND SHOPS IN THE CELLARS A ND SELLING THE SAME TO THE CUSTOMERS. CUSTOMERS ARE AVAILABLE TO PURCHASE THE SHOPS AND PENT ITA NOS.424, 425 & 426/VIZAG/2013 P. RAMA RAJU, VISAHKAPATNAM 5 HOUSES EVEN THOUGH THERE IS NO APPROVAL TAKING THE RISK OF DEMOLITION BY THE MUNICIPAL AUTHORITIES. APART FROM THE ABOVE, T HE FACT REMAINED THAT THE ASSESSEE HAS CONSTRUCTED A SHOP IN SRI RAM RESI DENCY, TILL THE DATE OF SEARCH IT WAS NOT DEMOLISHED AND ASSET REMAINED INTACT IN AS IS WHERE IS CONDITION AND THE VALUE OF WHICH WAS DECLARED BY THE ASSESSEES FATHER AT RS.10 LAKHS. THE LOOSE SHEET WAS WRITTEN FOR THE SAKE OF THEIR INFORMATION AND THE SAME CANNOT BE IGNORED. THE UN ACCOUNTED ASSET FOUND DURING THE COURSE OF SEARCH AND THE DOCUMENT FOUND AT THE TIME OF SEARCH INDICATING THE VALUE OF THE ASSET AT RS.1 0 LAKHS CONSTITUTES INCRIMINATING MATERIAL WITHIN THE MEANING OF SECTIO N 132 & 153A OF THE ACT AND THUS, THE LD. D.R. ARGUED THAT THERE WAS NO ERROR IN THE ORDER OF THE ASSESSING OFFICER IN ISSUING THE NOTICE AND MAK ING THE ASSESSMENT U/S 153A OF THE ACT AND THE SAME TO BE UPHELD. FUR THER, THE LD. D.R. SUBMITTED THAT THERE IS AN ASSET IN THE SRI RAM RES IDENCY (SHOP), WHICH WAS AN UNDISPUTED FACT AND THE SAME WAS FOUND AT TH E TIME OF SEARCH. THE COST OF ASSET WAS NOT DECLARED IN THE BALANCE S HEET AND THE ASSESSEE HIMSELF HAS VALUED THE ASSET AT RS.10 LAKH S. THEREFORE, THERE IS NO REASON TO SUSPECT THE INVESTMENT OR VALUE OF THE ASSET AT RS.10 LAKHS. SINCE THE ASSET IS OUTSIDE THE BOOKS OF ACC OUNTS, THE SAME REQUIRED TO BE BROUGHT TO TAX AS UNEXPLAINED INVEST MENT U/S 69 OF THE ACT, WHICH THE A.O. HAS RIGHTLY DID. THEREFORE, TH E LD. D.R. ARGUED THAT ITA NOS.424, 425 & 426/VIZAG/2013 P. RAMA RAJU, VISAHKAPATNAM 6 THERE IS NO INFIRMITY IN THE ORDER OF THE LD. CIT(A ) OR LOWER AUTHORITIES, AND THE SAME IS TO BE UPHELD. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MA TERIALS AVAILABLE ON RECORD. A SEARCH U/S 132 OF THE ACT W AS CONDUCTED IN THE VARIOUS PREMISES OF THE ASSESSEE ON 22.8.2008 AND D URING THE COURSE OF SEARCH, A LOOSE SHEET WAS FOUND INDICATING THE VALU E OF SHOP AT SRI RAM RESIDENCY IN THE NAME OF SRI P. RAMA RAJU AT RS.10 LAKHS. THE DOCUMENT WAS FOUND IN THE RESIDENTIAL PREMISES OF T HE ASSESSEE. SIMILARLY, THE ASSESSEE HAS CONSTRUCTED A SHOP IN S RI RAM RESIDENCY WHICH FACT HAS BEEN ACCEPTED BY THE ASSESSEE. THE ASSET (SHOP) FOUND IN SRI RAM RESIDENCY AND THE DOCUMENT FOUND DURING THE COURSE OF SEARCH INDICATING THE VALUE OF THE SHOP CONSTITUTES THE INCRIMINATING MATERIAL AND THEREFORE, WE HOLD THAT THE A.O. HAS R IGHTLY INITIATED THE PROCEEDINGS U/S 153A OF THE ACT. ACCORDINGLY, THE ARGUMENT OF THE ASSESSEE THAT THERE IS NO INCRIMINATING MATERIAL, C ANNOT HOLD WATERS AND THE SAME IS REJECTED. THE NEXT ARGUMENT OF THE LD A.R IS THE ASS ESSEE IS FOLLOWING THE MERCANTILE SYSTEM OF ACCOUNTING AND THE VALUE OF AS SET AT COST OR MARKET PRICE WHICHEVER IS LOWER REQUIRED TO BE ADOPTED FOR THE PURPOSE VALUING CLOSING STOCK/WORK IN PROGRESS. IN THIS CASE, THE ASSET IS SAID TO BE CONSTRUCTED WITH A NOMINAL OR NEGLIGIBLE AMOUNT WIT HOUT THE APPROVAL OF ITA NOS.424, 425 & 426/VIZAG/2013 P. RAMA RAJU, VISAHKAPATNAM 7 THE MUNICIPAL AUTHORITIES. MUNICIPAL AUTHORITIES C AN DEMOLISH SHOP AT ANY TIME, SINCE IT WAS CONSTRUCTED WITHOUT AUTHORIZ ATION. THEREFORE, ACCORDING TO THE LD. A.R., THE VALUE OF THE ASSET W AS NIL, AND RIGHTLY ADOPTED BY THE ASSESSEE IN THE FINANCIAL STATEMENTS AND NO ADDITION IS WARRANTED. 8. IN THIS CASE, IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS CREATED AN ASSET AND THE VALUE OF THE SAME WAS NOT TAKEN IN THE WORK IN PROGRESS. THOUGH THE ASSET WAS CONSTRUCTED WITHOUT THE APPROVAL, THE ASSESSEE HAS INCURRED THE EXPENDITURE FOR CONSTRUCT ION OF THE SHOP AND THE ASSET CREATED OUT OF THE SAME WAS NOT DECLARED IN THE BALANCE SHEET WHICH CONSTITUTES THE ASSET OUTSIDE THE BOOKS OF ACCOUNTS. THE VALUE OF SRI RAM RESIDENCY SHOP SHOULD TO BE BROUGH T TO THE BOOKS OF ACCOUNTS IN THE STOCK IN TRADE OR WORK IN PROGRESS. IN THIS CASE, THE ASSESSEE FAILED TO DISCLOSE THE VALUE OF THE ASSET IN THE BALANCE SHEET. THE ONLY EVIDENCE AVAILABLE WHICH WAS FOUND AT THE TIME OF SEARCH WAS THE LOOSE SHEET INDICATING THE VALUE OF THE SHOP AT RS.10 LAKHS. THE LOOSE SHEETS WERE FOUND IN THE RESIDENCE OF THE ASS ESSEE AND THE BURDEN IS CAST ON THE ASSESSEE TO PROVE THE CONTENT S OF THE LOOSE SHEETS WERE NOT CORRECT AS PER SECTION 292C OF THE ACT. T HE ASSESSEE HAS NOT ESTABLISHED THAT THE VALUE OF THE ASSET WAS LESS TH AN RS.10 LAKHS AND THE FACT THAT THE ASSESSEE HAS CONSTRUCTED A SHOP IN TH E SRI RAM RESIDENCY ITA NOS.424, 425 & 426/VIZAG/2013 P. RAMA RAJU, VISAHKAPATNAM 8 IS AN UNDISPUTED FACT. THE ASSESSEE HAS NOT FURNISH ED DETAILS OF THE EXPENDITURE INCURRED FOR CONSTRUCTION OF THE SHOP. THEREFORE, IN THE ABSENCE OF ANY EVIDENCE TO SHOW THAT THE VALUE OF T HE ASSET WAS LESS THAN RS.10 LAKHS, WE DO NOT FIND ANY REASON TO INTE RFERE WITH THE ORDER OF THE LD. CIT(A) AND THE SAME IS UPHELD. THIS GRO UND OF APPEAL IS DISMISSED. 9. GROUND NO.3 OF THE ASSESSEE IS RELATED TO THE AD DITION OF RS.2,50,000/- TOWARDS UNEXPLAINED CREDITORS. DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS, THE A.O. FOUND A SUM OF RS. 2,50,000/- AS UNSECURED CREDIT IN THE NAME OF B.V.R. MURTHY. THE A.O. BROUGHT TO TAX THE ABOVE AMOUNT U/S 68 OF THE ACT. THE ASSESSEE C HALLENGED THE ADDITION ON TECHNICAL GROUNDS OBJECTING THE JURISDI CTION OF ASSESSMENT U/S 153BA OF THE ACT. IN THIS CASE, THE ASSESSEE F ILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2005-06 ON 1.11.2005 . THE TIME LIMIT FOR ISSUE OF NOTICE U/S 143(3) OF THE ACT WAS EXPIR ED ON 31.3.2007. THE ASSESSMENT FOR THE ASSESSMENT YEAR 2005-06 DEEMED T O HAVE BEEN COMPLETED BY 31/03/2007. THE LD. A.R. ARGUED THAT WHERE THE ASSESSMENTS ARE DEEMED TO HAVE BEEN COMPLETED OR AB ATED, THE ADDITION CANNOT BE MADE WITHOUT THE INCRIMINATING M ATERIAL. IN THE INSTANT CASE, AS FAR AS THE UNSECURED CREDIT OF RS. 2,50,000/- IS CONCERNED, THERE IS NO MATERIAL FOUND DURING THE CO URSE OF SEARCH. ITA NOS.424, 425 & 426/VIZAG/2013 P. RAMA RAJU, VISAHKAPATNAM 9 THEREFORE, ACCORDING TO THE LD. A.R., THERE IS NO C ASE FOR MAKING ANY ADDITION U/S 153BA R.W.S. 143(3) OF THE ACT. THE L D. A.R. RELIED ON THE ORDERS OF THIS TRIBUNAL IN THE CASE OF Y.V. ANJANEY ULU VS. DCIT, CENTRAL CIRCLE, VIJAYAWADA IN ITA NOS.513 & 514/VIZAG/2013. ON THE OTHER HAND, THE LD. D.R. RELIED ON THE ORDERS OF THE LOWE R AUTHORITIES. 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIALS AVAILABLE ON RECORD. IN THIS CASE, SEARCH WAS COND UCTED ON 22.8.2008 AND THE ASSESSMENT UNDER THE CONSIDERATION IS TH E A.Y. 2005-06. TIME LIMIT FOR ISSUE OF NOTICE U/S 143(2) OF THE AC T IS EXPIRED ON 31.3.2007. SINCE THE PERIOD OF LIMITATION FOR ISSU E OF NOTICE U/S 143(2) OF THE ACT HAS BEEN EXPIRED, THE ASSESSMENT DEEMED TO HAVE BEEN COMPLETED AND REACHED FINALITY. AS PER THE JUDICIA L PRECEDENTS AND THE RULING OF THIS TRIBUNAL IN THE CASE LAW CITED (SUPR A), THE COORDINATE BENCH HELD THAT WHERE THE ASSESSMENT HAVE BEEN REAC HED FINALITY CANNOT BE TINKERED WITH UNLESS THERE WAS A SEIZED D OCUMENT INDICATING UNDISCLOSED INCOME OR THE ASSET. FOR READY REFEREN CE, WE EXTRACT THE RELEVANT PARA OF THE ORDER CITED (SUPRA): 11. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MAT ERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. THE ONLY ISSUE THAT ARISES FOR OUR CONSIDERATION IS WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE A.O. IS RIGHT IN MAK ING ADDITIONS WITHOUT ANY SEIZED MATERIALS IN RESPECT OF ASSESSMENT YEARS FOR WHICH THE ASSESSMENT PROCEEDINGS HAVE BEEN CONCLUDED AS ON TH E DATE OF SEARCH. THE LD. A.R. FOR THE ASSESSEE, SUBMITTED THAT THE I SSUE HAS BEEN ALREADY CONSIDERED BY THE COORDINATE BENCH OF VISAKHAPATNAM ITAT IN THE CASE OF SRI HARI PRASAD BHARARIA VS. DCIT IN ITA NOS.435 TO 441/VIZAG/2014, ITA NOS.424, 425 & 426/VIZAG/2013 P. RAMA RAJU, VISAHKAPATNAM 10 WHEREIN IT HAS BEEN OBSERVED THAT THE A.O. HAS NO J URISDICTION TO MAKE ADDITIONS IN THE ABSENCE OF ANY SEIZED MATERIALS IN THE ASSESSMENTS MADE U/S 143(3) R.W.S. 153A OF THE ACT, FOR THE ASSESSME NT YEARS WHICH ARE CONCLUDED AND NO PROCEEDINGS ARE PENDING AS ON THE DATE OF SEARCH. THE RELEVANT PORTION OF THE ORDER IS EXTRACTED BELOW: 12. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MAT ERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. THE FACTUAL MATRIX OF THE CASE IS THAT THERE WAS A SEAR CH ACTION U/S 132 OF THE ACT. CONSEQUENT TO THE SEARCH, THE ASSESSEE CAS E WAS CENTRALIZED AND ACCORDINGLY, NOTICE U/S 153A OF THE ACT WAS ISS UED REQUIRING ASSESSEE TO FILE RETURN FOR 6 ASSESSMENT YEARS IMME DIATELY PRECEDING THE ASSESSMENT YEAR IN WHICH SEARCH IS CONDUCTED. T HE ASSESSEE FILED RETURNS IN RESPONSE TO NOTICE U/S 153A OF THE ACT. THE A.O. COMPLETED THE ASSESSMENT U/S 143(3) R.W.S. 153A OF THE ACT AN D MADE ADDITIONS TOWARDS DEEMED DIVIDEND UNDER THE PROVISIONS OF SEC TION 2(22)(E) OF THE ACT. THE A.O. WAS OF THE OPINION THAT TRANSACTI ONS BETWEEN THE ASSESSEE AND HIS COMPANY IS COMING WITHIN THE DEFIN ITION OF DEEMED DIVIDEND UNDER THE PROVISIONS OF SECTION 2(22)(E) O F THE ACT. IT IS THE CONTENTION OF THE ASSESSEE THAT THE ASSESSMENT ORDE R PASSED BY THE A.O. U/S 143(3) R.W.S. 153A OF THE ACT, FOR THE ASS ESSMENT YEARS 2005- 06 TO 2009-10 IS NULL AND VOID AS THE A.O. HAS MADE ADDITIONS TOWARDS DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT WITHOUT ANY INCRIMINATING MATERIALS. THE ASSESSEE FURTHER CONTENDED THAT AS P ER SECTION 153A OF THE ACT, DE-NOVO ASSESSMENT CAN BE MADE ONLY IN RES PECT OF ASSESSMENT YEAR FOR WHICH THE ASSESSMENT PROCEEDING S HAS BEEN ABATED AND THAT IN RESPECT OF ASSESSMENT YEARS FOR WHICH THE ASSESSMENT HAD ALREADY BEEN COMPLETED, NO ADDITIONS CAN BE MADE U/S 153A OF THE ACT UNLESS THERE WAS INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. 13. THE A.O. HAS PASSED ASSESSMENT ORDERS U/S 153A OF THE ACT, FOR ALL THE SIX ASSESSMENT YEARS, IMMEDIATELY PRECEDING THE YEAR IN WHICH THE SEARCH WAS CONDUCTED. ACCORDING TO THE A.O., AS PER THE PROVISIONS OF SECTION 153A OF THE ACT, THERE IS NO LIMITATION OR RESTRICTION PROVIDED IN THE NEW PROCEDURE OF SEARCH ASSESSMENT ON THE POWER S OF THE A.O. FOR MAKING ASSESSMENT/RE-ASSESSMENT AND THE A.O. IS NOT REQUIRED TO CONFINE HIS ASSESSMENTS ON THE MATERIALS FOUND DURI NG THE COURSE OF SEARCH AS WAS THE CASE IN THE OLD PROCEDURE OF BLOC K ASSESSMENTS. IT IS THE CONTENTION OF THE ASSESSEE THAT THE A.O. CAN NOT DISTURB THE COMPLETED ASSESSMENT UNLESS THERE WAS A SEIZED MATE RIAL. THE ASSESSEE FURTHER CONTENDED THAT WHERE ASSESSMENTS A RE NOT PENDING AS ON THE DATE OF SEARCH AND TIME LIMIT FOR ISSUE O F NOTICE U/S 143(2) OF THE ACT HAS BEEN EXPIRED, IRRESPECTIVE OF THE FACT THAT THOSE ASSESSMENTS HAVE BEEN COMPLETED U/S 143(1) OR 143(3 ) OF THE ACT, THEN THE A.O. HAS NO POWER TO RE-ASSESS THE INCOME OF THOSE COMPLETED ASSESSMENT YEARS. WE FIND FORCE IN THE A RGUMENTS OF THE ASSESSEE, FOR THE REASON THAT THE COORDINATE BENCH OF THIS TRIBUNAL IN ITA NOS.300 TO 305/VIZAG/2012, IN CASE OF L. SURYAK ANTHAM VS. ACIT, ITA NOS.424, 425 & 426/VIZAG/2013 P. RAMA RAJU, VISAHKAPATNAM 11 HAS CONSIDERED SIMILAR ISSUE AND HELD THAT THE A.O. HAD NO JURISDICTION TO MAKE ADDITIONS U/S 153A OF THE ACT, FOR THE ASSE SSMENTS WHICH ARE NOT PENDING AS ON THE DATE OF SEARCH AND ALSO THE T IME LIMIT FOR ISSUE OF NOTICE U/S 143(2) OF THE ACT HAS BEEN EXPIRED. THE RELEVANT PORTION OF THE ORDER IS EXTRACTED BELOW: 19. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MAT ERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE FACTUAL MATRIX OF THE CASE IS THAT THER E WAS A SEARCH ACTION U/S 132 OF THE ACT. DURING THE COURSE OF SEA RCH, INCRIMINATING DOCUMENTS FOUND REVEALS THAT THE ASSE SSEE HAS INFLATED LABOUR CHARGES FOR THE ASSESSMENT YEARS 20 08-09 & 2009- 10. BASED ON THE DOCUMENTS FOUND DURING SEARCH, TH E ASSESSEE HAS ACCEPTED THAT HE HAS INFLATED 10% LABOUR CHARGE S AND WHICH IS COMMON IN THIS LINE OF BUSINESS. CONSEQUENT TO SEA RCH ACTION U/S 132 OF THE ACT, THE ASSESSEE CASE HAS BEEN CENTRALI ZED AND ACCORDINGLY FRESH ASSESSMENT PROCEEDINGS HAVE BEEN INITIATED BY ISSUING NOTICE U/S 153A/153C OF THE ACT FOR THE SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR IN WHICH SEARCH WAS CONDUCTED. THE ASSESSEE HAS FILED REVISED RETU RNS IN RESPONSE TO NOTICE U/S 153A OF THE ACT AND ADMITTED THE ADDI TIONAL INCOME DISCLOSED DURING THE COURSE OF SEARCH. THE CASE HA S BEEN SELECTED FOR SCRUTINY. DURING THE COURSE OF ASSESSMENT PROC EEDINGS, THE ASSESSEE WAS ASKED TO PRODUCE BOOKS OF ACCOUNTS AND RELEVANT BILLS & VOUCHERS IN SUPPORT OF EXPENDITURE CLAIMED. IN RE SPONSE, THE ASSESSEE FILED WRITTEN SUBMISSION AND STATED THAT T HE BOOKS OF ACCOUNTS ARE NOT AVAILABLE AND HENCE CANNOT BE FURN ISHED. THEREFORE, THE A.O. ISSUED A SHOW CAUSE NOTICE AND ASKED TO EXPLAIN WHY THE NET PROFIT FROM THE BUSINESS SHALL NOT BE ESTIMATED. IN RESPONSE TO SHOW CAUSE NOTICE, THE ASSESSEE HAS FILED A WRITTEN REPLY AND CONTENDED THAT THE INCOME FOR THE ASSESSMENT YEAR 2004-05, 2005-06 AND 2007-08 CANNOT BE TINKERE D WITH, AS THERE WAS NO INCRIMINATING MATERIAL FOUND DURING TH E COURSE OF SEARCH FOR THE ABOVE ASSESSMENT YEARS AND AS SUCH N O ADDITIONS CAN BE MADE TO THE RETURNED INCOME. IT IS FURTHER S UBMITTED THAT AS PER SEC. 153A OF THE ACT, DE-NOVO ASSESSMENT CAN BE MADE ONLY IN RESPECT OF THE ASSESSMENT YEAR FOR WHICH THE ASS ESSMENT PROCEEDINGS HAD BEEN ABATED AND THAT IN RESPECT OF ASSESSMENT YEARS FOR WHICH THE ASSESSMENT HAD ALREADY BEEN REA CHED A FINALITY, SUCH ASSESSMENT COULD NOT BE MADE U/S 153 A OF THE ACT UNLESS THERE WAS SEIZED MATERIALS. 20. THE A.O. HAS PASSED REASSESSMENT ORDERS U/S 153 A/153C OF THE ACT FOR ALL THE SIX ASSESSMENT YEARS IMMEDIATEL Y PRECEDING THE YEAR IN WHICH SEARCH WAS CONDUCTED. ACCORDING TO T HE A.O., AS PER THE PROVISIONS OF SECTION 153A OF THE ACT, THERE IS NO LIMITATION OR RESTRICTION PROVIDED IN THE NEW PROCEDURE OF SEARCH ASSESSMENTS ON THE POWERS OF A.O. FOR MAKING ASSESSMENT/REASSESSME NT AND THE A.O. IS NOT REQUIRED TO CONFINE HIS ASSESSMENTS ON THE MATERIAL ITA NOS.424, 425 & 426/VIZAG/2013 P. RAMA RAJU, VISAHKAPATNAM 12 FOUND DURING THE COURSE OF SEARCH AS WAS THE CASE I N THE OLD PROCEDURE OF BLOCK ASSESSMENTS. THE NEW PROCEDURE OF BLOCK ASSESSMENT WAS EXPLAINED BY WAY OF PROVISIONS OF SE CTION 153A OF THE ACT. AS PER SECTION 153A OF THE ACT, THE A.O. SHALL ASSESS OR REASSESS THE TOTAL INCOME OF THE SPECIFIED SIX ASSE SSMENT YEARS IRRESPECTIVE OF THE FACT THAT THE ASSESSMENT OF THE SAID YEARS WERE COMPLETED OR PENDING AS ON THE DATE OF SEARCH. THE REFORE, THE A.O. HAS REASSESSED THE INCOME OF SIX ASSESSMENT YE ARS AND RECOMPUTED THE PROFITS AFRESH AFTER CONSIDERING THE RELEVANT FACTS AVAILABLE ON RECORD. IT WAS THE CONTENTION OF THE ASSESSEE THAT THE A.O. CANNOT DISTURB THE COMPLETED ASSESSMENTS UNLES S THERE WAS A SEIZED MATERIAL. THE ASSESSEE FURTHER CONTENDED THA T WHERE ASSESSMENTS ARE NOT PENDING AS ON THE DATE OF SEARC H AND TIME LIMIT FOR ISSUE OF NOTICES U/S 143(2) OF THE ACT HA S BEEN EXPIRED, IRRESPECTIVE OF THE FACT THAT THOSE ASSESSMENTS HAV E BEEN COMPLETED U/S 143(1) OR 143(3) OF THE ACT, THEN THE A.O. HAS NO POWER TO REASSESS THE INCOME OF THOSE COMPLETED ASS ESSMENT YEARS. 21. WE FIND FORCE IN THE ARGUMENTS OF THE ASSESSEE FOR THE REASON THAT THE ISSUE NO LONGER RES INTEGRA, AS THE ISSUE HAS BEEN ALREADY DECIDED BY THE ITAT, SPECIAL BENCH AND HELD THAT WHERE THE ASSESSMENTS ARE NOT PENDING AS ON THE DATE OF SEARC H, THE A.O. LOSSES JURISDICTION U/S 153A OF THE ACT TO REASSESS THE INCOME OF THOSE COMPLETED ASSESSMENTS. THOUGH THE PROVISIONS OF SECTION 153A OF THE ACT DOES NOT SPECIFY ABATED AND COMPLET ED ASSESSMENTS, THE NATURAL MEANING ASSIGNED TO IT SHO ULD BE GIVEN TO INTERPRET THE PROVISIONS IN SUCH A WAY THAT WHICH S HALL NOT CAUSE UNDUE HARDSHIP TO THE TAX PAYERS. THE PROVISIONS OF SECTION 153A OF THE ACT EXPLAINED THE PROCEDURE OF ASSESSMENTS, ABA TED ASSESSMENTS AND THE MANNER IN WHICH THE ASSESSMENT SHOULD BE FRAMED, WHICH WAS FURTHER SUPPORTED BY CIRCULAR NO. 7 OF 2003 ISSUED BY THE CBDT. WHEN THE LAW HAS EXPLAINED THE POSITION OF ABATED ASSESSMENTS, THEN THE SAME WAY THE COMPLETED ASSESSMENT SHOULD BE TREATED SO AS TO UNDERSTAND THAT THOSE AS SESSMENTS ARE REACHED FINALITY AND WHICH CANNOT BE TINKERED WITH UNLESS THERE WAS A SEIZED DOCUMENT. THEREFORE, WE ARE OF THE CON SIDERED OPINION THAT WHERE SEARCH IS INITIATED, ALL PENDING ASSESSMENTS ARE MERGE INTO ONE AND ONLY ONE ASSESSMENT FOR EACH ASS ESSMENT YEAR SHALL BE MADE SEPARATELY ON THE BASIS OF FINDINGS O F SEARCH AND OTHER MATERIAL EXISTING OR BROUGHT ON RECORD BY THE A.O. IN RESPECT OF NON ABATED OR COMPLETED ASSESSMENTS, THE ASSESSM ENT WILL BE MADE ON THE BASIS OF BOOKS OF ACCOUNTS OR OTHER REL EVANT DOCUMENTS FOUND DURING THE COURSE OF SEARCH, BUT NO T PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT. 22. IN THE PRESENT CASE ON HAND, ON PERUSAL OF THE D OCUMENT AVAILABLE ON RECORD, WE FIND THAT THE ASSESSMENT FO R THE ITA NOS.424, 425 & 426/VIZAG/2013 P. RAMA RAJU, VISAHKAPATNAM 13 ASSESSMENT YEAR 2004-05 TO 2007-08 WERE NOT PENDING AS ON THE DATE OF SEARCH. THE FACT THAT THE ASSESSMENT HAS B EEN COMPLETED U/S 143(1) & 143(3) OF THE ACT ARE NOT MATERIAL. TH E TIME LIMIT FOR ISSUE OF NOTICE U/S 143(2) OF THE ACT HAS BEEN EXPI RED. ON FURTHER VERIFICATION OF THE DOCUMENTS AVAILABLE ON RECORD, WE FIND THAT THERE WAS NO INCRIMINATING DOCUMENTS FOUND DURING T HE COURSE OF SEARCH IN RESPECT OF ASSESSMENT YEAR 2004-05 TO 200 7-08. THEREFORE, WE ARE OF THE OPINION THAT THE A.O. WAS NOT CORRECT IN REASSESSING THE TOTAL INCOME OF THE ASSESSMENT YEAR 2004-05 TO 2007-08 IN THE ABSENCE OF ANY SEIZED MATERIALS. AC CORDINGLY, WE DIRECT THE A.O. TO DELETE THE ADDITIONS MADE FOR TH E ASSESSMENT YEAR 2004-05, 2005-06 & 2007-08. 23. IT IS PERTINENT TO DISCUSS HEREIN THE CASE LAWS RELIED UPON BY THE ASSESSEE. THE ASSESSEE HAS RELIED UPON THE ITA T, SPECIAL BENCH DECISION IN THE CASE OF ALL CARGO GLOBAL LOGI STICS LTD. VS. DCIT (2012) 137 ITD 287. THE COORDINATE BENCH OF T HIS TRIBUNAL, WHILE DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE HELD AS UNDER: IN ASSESSMENTS THAT ARE ABATED, THE AO ARETAINS TH E ORIGINAL JURISDICTION AS WELL AS JURISDICTION CONFERRED ON H IM U/S 153A FOR WHICH ASSESSMENTS SHALL BE MADE FOR EACH OF THE SIX ASSESSMENT YEARS SEPARATELY. IN OTHER CASES, IN ADDITION TO T HE INCOME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT U/S 153A WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL, WHICH IN THE C ONTEXT OF RELEVANT PROVISIONS MEANS (I) BOOKS OF ACCOUNT, OTHER DOCU MENTS, FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT, AND (II) UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH. 24. THE ASSESSEE RELIED UPON, A.P. HIGH COURT DECIS ION IN THE CASE OF CIT VS. M/S. AMR INDIA LTD. IN ITTA NO.354 O F 2014 DATED 12.6.2014. THE HONBLE HIGH COURT HELD THAT THE A.O . HAS NO JURISDICTION TO RE-AGITATE THE ASSESSMENTS WHICH WE RE ALREADY COMPLETED AND SUBSIDING. THE RELEVANT PORTION IS E XTRACTED BELOW: WE HAVE HEARD SRI J.V. PRASAD, LEARNED COUNSEL FOR THE APPELLANT, AND GONE THROUGH THE IMPUGNED JUDGEMENT AND ORDER O F THE LEARNED TRIBUNAL. IT APPEARS THAT THE LEARNED TRIBUNAL FOUND ON FACT T HAT AFTER COMPLETION OF ASSESSMENT PROCEEDINGS AND AFTER REAC HING FINALITY THEREON, THE ASSESSING OFFICER TRIED TO REAGITATE T HE ASSESSMENTS. ACCORDING TO US, THE LEARNED TRIBUNAL HAS RIGHTLY H ELD THAT THE ASSESSING OFFICER HAS NO JURISDICTION TO REAGITATE THE ASSESSMENTS WHICH WERE ALREADY COMPLETED AND SUBSISTING. WE TH EREFORE DO NOT FIND ANY ELEMENT OF LAW TO BE DECIDED IN THIS APPEA L. ITA NOS.424, 425 & 426/VIZAG/2013 P. RAMA RAJU, VISAHKAPATNAM 14 HENCE, THE APPEAL IS DISMISSED. THERE WILL BE NO O RDER AS TO COSTS. 25. THE ASSESSEE HAS RELIED UPON THE COORDINATE BEN CH DECISION OF ITAT, VISAKHAPATNAM IN THE CASE OF A.T. RAYUDU I N ITA NO.373 TO 379/VIZAG/2014. THE COORDINATE BENCH, UNDER SIMI LAR CIRCUMSTANCES HELD THE ISSUE IN FAVOUR OF THE ASSES SEE. THE RELEVANT PORTION IS REPRODUCED HEREUNDER: 22. IN THIS REGARD, IT IS ALSO PERTINENT TO REFER TO THE FOLLOWING OBSERVATIONS MADE BY THE SPECIAL BENCH IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD (SUPRA):- 57 (F) IN THE CASE OF PARASHURAM POTTERY WORKS CO. LTD VS. ITO (106 JTR 57)(SC), IT HAS BEEN MENTIONED IN THE LAST PARAGRAP H OF THE JUDGMENT THAT THE COURT HAS TO BEAR IN MIND THAT THE POLICY OF LA W IS THAT THERE MUST BE A POINT OF FINALITY IN ALL LEGAL PROCEEDINGS, THAT ST ALE ISSUES SHOULD NOT BE REACTIVATED BEYOND A PARTICULAR STAGE AND THAT LAPS E OF TIME MUST INDUCE REPOSE IN AND SET AT REST JUDICIAL AND QUASI JUDICI AL CONTROVERSIES AS IT MUST IN OTHER SPHERES OF HUMAN ACTIVITY. OUR DECISION IS IN CONSONANCE WITH THIS OBSERVATION. THE DECISION RENDERED BY THE SPECIAL BENCH THAT THE ASSESSING OFFICER CAN MAKE ADDITIONS IN THE CASE OF CONCLUDED ASSESSM ENTS ON THE BASIS OF INCRIMINATING MATERIALS IS ALSO BASED UPON THE DECI SION RENDERED BY HONBLE SUPREME COURT IN THE CASE OF PARASHURAM POTTERY WOR KS CO. LTD (SUPRA). 23. WE HAVE EARLIER NOTICED THAT THE HON'BLE JURIS DICTIONAL ANDHRA PRADESH HIGH COURT HAS ALSO UPHELD BY THE ORDERS PASSED BY THE TRIBUNAL BY FOLLOWING THE DECISION RENDERED BY THE SPECIAL BENCH IN THE C ASE OF ALL CARGO GLOBAL LOGISTICS LTD (SUPRA) IN THE FOLLOWING CASES: - (A) SREE LALITHA CONSTRUCTIONS (J1TA NO 368 OF 2014) (B) M/S. HYDERABAD HOUSE PVT LTD (ITTA NO.266 OF 2 013) (C)M/S. AMR INDIA LTD (FITA NO.357 /V/2014) FURTHER WE AGREE WITH THE CONTENTIONS OF THE ASSESS EE THAT THE DECISION RENDERED BY THE JURISDICTIONAL HIGH COURT IN THE CA SE OF GOPAL DAS BHADRUKA (SUPRA) HAVE BEEN RENDERED ON THE FACTS PREVAILING IN THOSE CASES, SINCE THE ISSUE RELATING TO CONCLUDED ASSESSMENTS AND PENDING ASSESSMENTS WAS NOT BEFORE THE I1ON'BLE ANDHRA PRADESH HIGH COURT ON TH E CONTRARY, THE ABOVE SAID THREE DECISIONS OF THE JURISDICTIONAL HIGH COU RT COMES TO THE SUPPORT OF THE ASSESSEE'S CONTENTIONS WITH REGARD TO THE LEGAL PROPOSITION AGITATED BEFORE US, BESIDES THE DECISIONS RENDERED BY VARIOU S OTHER HIGH COURTS. ACCORDINGLY, WE ARE OF THE VIEW THAT THE SCOPE OF E NQUIRY IN THE CASE OF UNABATED ASSESSMENTS, I.E., THE ASSESSMENT YEARS IN WHICH PROCEEDINGS ARE NOT PENDING, IS THAT THE UNDISCLOSED INCOME SHOULD BE ASCERTAINED ONLY ON THE BASIS OF MATERIALS FOUND DURING THE COURSE OF S EARCH. IF NO INCRIMINATING ITA NOS.424, 425 & 426/VIZAG/2013 P. RAMA RAJU, VISAHKAPATNAM 15 MATERIAL SHOWING ANY UNDISCLOSED INCOME WAS FOUND I N THE CASE OF CONCLUDED PROCEEDINGS, THEN THE QUESTION OF MAKING ANY ADDITION DOES NOT ARISE. IN THAT CASE, THE ASSESSING OFFICER SHOULD C OMPLETE THE ASSESSMENT OF THOSE YEARS BY DETERMINING THE VERY SAME TOTAL INCO ME THAT WAS ASSESSED IN THE EARLIER PROCEEDING. 24. IN VIEW OF THE ABOVE, WE ARE UNABLE TO AGREE W ITH THE CONTENTIONS OF LD STANDING COUNSEL THAT THE ASSESSING OFFICER W OULD GET UNFETTERED POWERS IN THE CASE OF UNABATED ASSESSMENTS, ONCE TH EY WERE REOPENED US 153A OF THE ACT. IN OUR VIEW, IN THE CASE OF UNA BATED ASSESSMENTS, THE TOTAL INCOME SHOULD BE DETERMINED BY THE ASSESSING OFFICER BY COMBINING THE INCOME ALREADY ASSESSED/DISCLOSED IN THE RETURN OF INCOME AND THE UNDISCLOSED INCOME, IF ANY, FOUND DURING THE COURSE OF SEARCH PROCEEDING. EVEN OTHERWISE, IT IS SETTLED PROPOSITION OF LAW TH AT THE ASSESSEE IS ENTITLED TO TAKE SUPPORT OF THE DECISION IN HIS FAVOUR, WHEN TWO CONTRADICTORY VIEWS HAVE BEEN EXPRESSED BY THE HIGH COURTS. IN TH E INSTANT CASE THE HONBLE JURISDICTIONAL HIGH COURT COMES TO THE SUPP ORT OF THE ASSESSEE IN RESPECT OF THE LEGAL PROPOSITION IN ADDITION TO THE DECISION RENDERED BY THE HON'BLE BOMBAY HIGH COURT. ACCORDINGLY, WE FIND MER IT IN THE CONTENTIONS OF THE ASSESSEE ON THE LEGAL ISSUE. 26. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO RESPECTFULLY FOLLOWING THE COORDINATE BENCH DECISIO N IN THE CASE OF ALL CARGO LOGISTICS PVT. LTD. (SUPRA), WE ARE OF TH E OPINION THAT THE A.O. HAS MADE REASSESSMENT U/S 153A/153C OF THE ACT ON THE BASIS OF INFORMATION/MATERIAL AVAILABLE IN THE RETURN OF INCOME, WITHOUT REFERRING TO ANY SEIZED MATERIAL. THEREFORE, FOLLO WING THE SPECIAL BENCH DECISION (SUPRA) WE HOLD THAT THE A.O. HAD NO JURISDICTION TO MAKE ADDITIONS U/S 153A OF THE ACT FOR THE ASSESSME NTS WHICH ARE NOT PENDING AS ON THE DATE OF SEARCH. IN THIS CASE , THE SEARCH WAS CONDUCTED ON 14.7.2009. THE ASSESSMENT FOR THE ASS ESSMENT YEARS 2004-05 TO 2007-08, WERE NOT PENDING AS ON TH E DATE OF SEARCH. THE TIME LIMIT FOR ISSUE OF NOTICE UNDER S EC. 143(2) HAS BEEN EXPIRED. THEREFORE, THE A.O. HAS NO JURISDICTI ON TO REASSESS THE INCOME FOR THE ASSESSMENT YEAR 2004-05 TO 2007- 08 IN THE ABSENCE OF ANY INCRIMINATING MATERIALS. HENCE, WE DELETE THE ADDITIONS MADE BY THE A.O. FOR THE ASSESSMENT YEAR 2004-05, 2005-06 & 2007-08. ACCORDINGLY, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED. 14. IN THIS VIEW OF THE MATTER AND CONSIDERING FACTS AND CIRCUMSTANCES OF THIS CASE AND ALSO RESPECTFULLY FOLLOWING THE DE CISION OF CO-ORDINATE BENCH OF VISAKHAPATNAM, IN THE CASE OF L. SURYAKANT HAM VS. ACIT, IN ITA NOS.300 TO 305/VIZAG/2012, WE ARE OF THE VIEW T HAT THE A.O. HAS MADE REASSESSMENT U/S 153A/153C OF THE ACT, ON THE BASIS OF INFORMATION/MATERIAL AVAILABLE IN THE RETURN OF INC OME, WITHOUT ITA NOS.424, 425 & 426/VIZAG/2013 P. RAMA RAJU, VISAHKAPATNAM 16 REFERRING TO ANY SEIZED MATERIAL. THEREFORE, FOLLOW ING THE SPECIAL BENCH DECISION (SUPRA) WE HOLD THAT THE A.O. HAD NO JURIS DICTION TO MAKE ADDITIONS U/S 153A OF THE ACT, FOR THE ASSESSMENTS WHICH ARE NOT PENDING AS ON THE DATE OF SEARCH. THE ASSESSMENT FO R THE ASSESSMENT YEARS 2005-06 TO 2009-10 WERE NOT PENDING AS ON THE DATE OF SEARCH. THE TIME LIMIT FOR ISSUE OF NOTICE UNDER SEC. 143(2 ) HAS BEEN EXPIRED. THEREFORE, THE A.O. HAS NO JURISDICTION TO REASSESS THE INCOME FOR THE ASSESSMENT YEAR 2005-06 TO 2009-10 IN THE ABSENCE O F ANY INCRIMINATING MATERIALS. THE CIT(A) HAS RIGHTLY DE LETED THE ADDITIONS. WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDE R OF CIT(A). HENCE, WE INCLINED TO UPHOLD CIT(A) ORDER AND DIRECT THE A .O. TO DELETE THE ADDITIONS MADE TOWARDS DEEMED DIVIDEND FOR THE ASSE SSMENT YEAR 2005-06 TO 2009-10. 12. IN THIS CASE, SEARCH WAS TAKEN PLACE ON 24.7.200 8. AS ON THE DATE OF SEARCH, THE ASSESSMENTS FOR THE ASSESSMENT YEARS 2004-05 & 2005-06 ARE ALREADY CONCLUDED AND THERE IS NO PENDING PROCE EDING FOR THOSE ASSESSMENT YEARS. THE TIME LIMIT FOR ISSUE OF NOTI CE U/S 143(2) OF THE ACT, FOR THE ASSESSMENT YEARS 2004-05 & 2005-06 HAS BEEN EXPIRED. THE A.O. MADE ADDITIONS TOWARDS DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT WITHOUT ANY INCRIMINATING MATERIALS AND ALSO BASED ON THE B OOKS OF ACCOUNTS AND FINANCIAL STATEMENTS, WHICH WERE ALREADY PART OF RE GULAR RETURN OF INCOME FILED BY THE ASSESSEE U/S 139(1) OF THE ACT, FOR TH OSE ASSESSMENT YEARS. THEREFORE, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO RESPECTFULLY FOLLOWING THE DECISION OF COORDINATE B ENCH OF ITAT, VISAKHAPATNAM IN THE CASE OF SRI HARI PRASAD BHARAR IA VS. DCIT (SUPRA), WE ARE OF THE VIEW THAT THE A.O. HAS NO JURISDICTIO N TO MAKE ADDITIONS IN RESPECT OF CONCLUDED ASSESSMENTS IN THE ABSENCE OF ANY INCRIMINATING MATERIALS FOUND DURING THE COURSE OF SEARCH. IN TH IS CASE, UNDOUBTEDLY THE A.O. HAS MADE ADDITIONS TOWARDS DEEMED DIVIDEND ON THE BASIS OF FINANCIAL STATEMENTS FILED BY THE ASSESSEE ALONG WI TH REGULAR RETURN OF INCOME WITHOUT ANY MATERIAL FOUND DURING THE COURSE OF SEARCH. THEREFORE, WE DIRECT THE A.O. TO DELETE ADDITIONS M ADE TOWARDS DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT FOR THE ASSESSMENT YEARS 2004-05 & 2005-06. 11. THE SIMILAR ISSUE HAS BEEN CONSIDERED BY THE HO NBLE ITAT KOLKATA BENCH IN THE CASE OF SMT. YAMINI AGARWAL VS. DCIT ( CENTRAL CIRCLE)-3, KOLKATA REPORTED IN 83 TAXMAN.COM 209 AFTER CONSIDE RING THE DECISION OF SPECIAL BENCH RULING IN THE CASE OF ALL CARGO LOTIS TICS AND THE DECISION OF ITA NOS.424, 425 & 426/VIZAG/2013 P. RAMA RAJU, VISAHKAPATNAM 17 HONBLE KARNATAKA HIGH COURT IN THE CASE OF CANARA HOUSING AND THE BOMBAY HIGH COURT DECISION IN THE CASE OF ANIL KUMA R BHATIA EXPRESSED A VIEW THAT IN RESPECT OF ASSESSMENTS COMPLETED PRI OR TO THE DATE OF SEARCH THE SCOPE OF PROCEEDINGS U/S 153A OF THE ACT HAS TO BE CONFINED ONLY TO THE MATERIAL FOUND IN THE COURSE OF SEARCH. FOR THE SAKE OF CONVENIENCE, WE EXTRACT THE RELEVANT PARA-25 & 26 O F THE CITED ORDER. 25. WE THEREFORE HOLD THAT THE SCOPE OF THE PROCEEDING S U/S.153A IN RESPECT OF ASSESSMENT YEAR FOR WHICH ASSESSMENT HAVE ALREADY BEEN CONCLUD ED AND WHICH DO NOT ABATE U/S.153A OF THE ACT, THAT THE ASSESSMENT WILL HAVE TO BE CONFIN ED TO ONLY INCRIMINATING MATERIAL FOUND AS A RESULT OF SEARCH. THE NEXT ASPECT TO BE CONSIDERED IS AS TO WHEN RETURNS OF INCOME FILED U/S.139 OF THE ACT ARE SHOWN TO HAVE BEEN ACCEPTED WITHOUT AN INTIMATION U/S.143(1) OF THE ACT OR WITHOUT ANY NOTICE ISSUED U/S.143(2) OF THE ACT WITHIN THE TIME LIMIT CONTEMPLATED BY THE PROVISO THERETO, CAN BE SAID TO BE ASSESSMENT P ROCEEDINGS CONCLUDED THAT HAVE NOT ABATED U/S.153A OF THE ACT. SECTION 153A OF THE ACT, USES THE EXPRESSING 'PENDING ASSESSMENT OR REASSESSMENT'. WHEN A RETURN IS FILED AND WHEN NEIT HER AN ACKNOWLEDGEMENT OR INTIMATION U/S.143(1)OF THE ACT IS ISSUED NOR A NOTICE U/S.143 (2) OF THE ACT IS ISSUED WITHIN THE TIME LIMIT LAID DOWN IN THE PROVISO TO SECC.143(2) OF THE ACT, THE PROCEEDINGS INITIATED BY FILING THE RETURN ARE CLOSED. IN THE PRESENT CASE, THE PERIOD FOR ISSUING THE NOTICE U/S 143(2) ELAPSED. THEREFORE THE PROCESS HAS ATTAINED THE FINALITY WHI CH CAN ONLY BE ASSAILED U/S 148 OR 263 OF THE ACT. IT CAN THUS BE CONCLUDED THAT MAKING OF AN ADDITION IN AN ASSESSMENT UNDER SECTION 153A OF THE ACT, WITHOUT THE BACKING OF INCRIMINATI NG MATERIAL, IS UNSUSTAINABLE EVEN IN A CASE WHERE THE ORIGINAL ASSESSMENT ON THE DATE OF S EARCH STOOD COMPLETED BY ABSENCE OF ISSUE OF INTIMATION UNDER SECTION 143(1) OF THE ACT OR BY NOT ISSUING NOTICE U/S.143(2) OF THE ACT WITHIN THE TIME LIMIT LAID DOWN IN THE PROVISO TO S EC.143(2) OF THE ACT, RESULTS IN AN ASSESSMENT PROCEEDINGS AND WHERE SUCH ASSESSMENT PR OCEEDINGS ARE COMPLETED PRIOR TO THE DATE OF SEARCH THEN THEY DO NOT ABATE IN TERMS OF T HE SECOND PROVISO TO SECTION 153A(1) OF THE ACT. THE DECISION OF THE ITAT KOLKATA BENCH RENDERE D IN THE CASE OF SHRI BISHWANATH GARODIA (SUPRA) ON IDENTICAL FACTS OF THE CASE AS T HAT OF THE ASSESSEE IN THE PRESENT CASE, CLEARLY SUPPORTS OUR CONCLUSIONS AS ABOVE. 26. IN THE LIGHT OF THE DISCUSSION ABOVE, OUR CONCLUSI ON IS THAT IN THE PRESENT CASE, THE ISSUE DEALT WITH BY THE AO IN THE ASSESSMENT ORDER U/S.15 3A OF THE ACT, COULD NOT AND OUGHT NOT TO HAVE BEEN EXAMINED BY THE AO IN THE ASSESSMENT PROC EEDINGS U/S.153A OF THE ACT AS THE SAID ISSUE STOOD CONCLUDED WITH THE ASSESSEE'S RETURN OF INCOME BEING ACCEPTED PRIOR TO THE DATE OF SEARCH AND NO NOTICE HAVING BEEN ISSUED U/S.143(2) OF THE ACT WITHIN THE TIME LIMIT LAID DOWN IN THAT SECTION. SUCH ASSESSMENT DID NOT ABATE ON T HE DATE OF SEARCH WHICH TOOK PLACE ON 28.3.2008. IN RESPECT OF ASSESSMENTS COMPLETED PRIO R TO THE DATE OF SEARCH THAT HAVE NOT ABATED, THE SCOPE OF PROCEEDINGS U/S.153A OF THE AC T HAS TO BE CONFINED ONLY TO MATERIAL FOUND IN THE COURSE OF SEARCH. SINCE NO MATERIAL WH ATSOEVER WAS FOUND IN THE COURSE OF SEARCH, THE ADDITIONS MADE BY THE AO IN THE ORDER O F ASSESSMENT FOR BOTH THE ASSESSMENT YEARS COULD NOT HAVE BEEN SUBJECT MATTER OF PROCEED INGS U/.S.153A OF THE ACT. CONSEQUENTLY, THE SAID VARIOUS ADDITIONS MADE IN THE ORDERS OF AS SESSMENT OUGHT NOT TO HAVE OR COULD NOT BE MADE BY THE AO. GR.NO.1 RAISED BY THE ASSESSEE IN B OTH THE APPEALS ARE ACCORDINGLY ALLOWED. ITA NOS.424, 425 & 426/VIZAG/2013 P. RAMA RAJU, VISAHKAPATNAM 18 12. RESPECTFULLY FOLLOWING THE DECISION OF THIS COO RDINATE BENCH IN THE CASE CITED (SUPRA) AND THE DECISION OF HONBLE ITAT KOLKATA BENCH, WE HOLD THAT THE ADDITION OF RS.2,50,000/- IS SQUARELY COVERED BY THE ABOVE CASE LAWS IN FAVOUR OF THE ASSESSEE AND THE SAME IS DELETED. THE APPEAL OF THE ASSESSEE IS ALLOWED ON THIS GROUND. 13. IN THE RESULT, APPEAL FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-06 IN ITA NO.424/VIZAG/2013 IS PARTLY ALLOWED. ITA 425/VIZAG/2013 A.Y. 2007-08: 14. ALL GROUNDS OF APPEAL ARE RELATED TO THE ADDITI ON OF RS.15 LAKHS TOWARDS THE UNEXPLAINED INVESTMENTS. DURING THE CO URSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER MADE THE ADDITI ON OF RS.35 LAKHS TOWARDS UNEXPLAINED CREDITORS, SINCE THE ASSESSEE HAS NOT PRODUCED THE DETAILS AND CONFIRMATIONS FROM THE CREDITORS. OUT OF ADDITION MADE BY THE A.O. OF RS.35 LAKHS, A SUM OF RS.20 LAKHS WAS D ELETED BY THE CIT(A) RELATING TO M. RAJU & P.R. SRINIVASA RAO AND THE AM OUNT OF RS.5 LAKHS IN THE CASE OF D.V. SUBBA RAJU AND RS.10 LAKHS IN THE CASE OF R. PURUSHOTTAM WAS CONFIRMED BY THE CIT(A). THEREFORE , THE ASSESSEE IS IN APPEAL BEFORE US. THE LD. A.R. ARGUED THAT THE ASS ESSEE HAS ADMITTED ADDITIONAL INCOME OF RS.1,50,00,000/-, DURING THE S EARCH AND REQUESTED FOR TELESCOPING THE ADDITION FROM THE UNDISCLOSED I NCOME ADMITTED BY ITA NOS.424, 425 & 426/VIZAG/2013 P. RAMA RAJU, VISAHKAPATNAM 19 HIM. THE LD. A.R. FURTHER ARGUED THAT IN THIS CASE , THE TIME LIMIT FOR ISSUING THE NOTICE WAS EXPIRED BY THE TIME THE SEAR CH WAS CONDUCTED AND THE ASSESSMENT WAS COMPLETED, NO ADDITION CAN B E MADE IN THE HANDS OF THE ASSESSEE. 15. ON THE OTHER HAND, THE LD. D.R. RELIED ON THE O RDER OF THE LOWER AUTHORITIES. 16. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. IN THIS CASE, THE ASSESSEE FILED RETURN OF INCOME ON 19.11.2007 FOR THE ASSESSMENT YEAR 2007-08. THE TI ME LIMIT FOR ISSUING NOTICE U/S 143(2) OF THE ACT EXPIRES ON 30.9.2008 B Y THE DATE OF CONDUCTING THE SEARCH THE TIME LIMIT FOR ISSUE OF N OTICE U/S 143(2) OF THE ACT HAS NOT EXPIRED AND THE ASSESSMENT REMAINED NOT COMPLETED AND ABATED THEREFORE, THE A.O. IS PERMITTED TO VERIFY A LL THE RELEVANT INCRIMINATING MATERIAL AS WELL AS REGULAR BOOKS OF ACCOUNTS AND MAKE THE ASSESSMENT. THIS ISSUE WAS SETTLED BY THIS TRIBUNA L IN THE ORDER CITED (SUPRA) IN THE A.Y.2005-06 IN APPEAL NO.424/2013 AN D THE RULING OF HONBLE KOLKATA TRIBUNAL WHICH WAS CITED (SUPRA). THEREFORE, THE A.O. HAS RIGHTLY INVOKED THE PROVISIONS OF SECTION 153A OF THE ACT AND ASSESSEES APPEAL ON THIS GROUND IS DISMISSED. 17. THE NEXT ARGUMENT AGAINST THE ADDITION WAS THAT THE ASSESSEE HAS DISCLOSED THE UNDISCLOSED INCOME OF RS.150,00,000/- DURING THE SEARCH ITA NOS.424, 425 & 426/VIZAG/2013 P. RAMA RAJU, VISAHKAPATNAM 20 AND THE ADDITION OF ` 15 LAKHS SHOULD BE SET OFF AGAINST THE UNDISCLOSED INCOME. THE LD. A.R. HAS NOT FURNISHED THE STATE MENT OF ASSETS, INVESTMENTS FOR WHICH THE AMOUNT OF UNDISCLOSED INC OME WAS ADMITTED. THEREFORE, WE ARE UNABLE TO ACCEPT THE REQUEST OF T HE LD. A.R. FOR GIVING TELESCOPING BENEFIT OF THE AMOUNT OF RS.15.00 LAKHS FROM THE UNDISCLOSED INCOME ADMITTED BY THE ASSESSEE. IN TH IS CASE, THERE ARE CREDITORS TO THE EXTENT OF RS.15 LAKHS IN THE NAME OF DR. SUBBA RAJU AND R. PURUSHOTTAM INTRODUCED DURING THE YEAR FOR WHICH THE ASSESSEE REQUIRED TO ESTABLISH THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE CREDITORS AND THE ASSESSEE FAILED TO ESTABLISH THE SAME. THOUGH THE ASSESSEE HAS EXPLAINED THAT THE LOANS WERE WRONGLY CATEGORIZED AS UNSECURED LOANS INSTEAD OF ADVANCES STILL THE ASSES SEE HAS TO PROVE THE CAPACITY, CREDIT WORTHINESS AND THE IDENTITY OF THE CREDITORS SINCE THE CREDITS WERE INTRODUCED IN THE BOOKS OF ACCOUNTS IN THE YEAR UNDER CONSIDERATION. THE ASSESSEE FAILED TO ESTABLISH TH AT THE AMOUNT OUTSTANDING WAS IN FACT ADVANCES AND GOT ADJUSTED A GAINST THE SALE OF FLATS. IN NUTSHELL, THE ASSESSEE FAILED TO OFFER A NY EXPLANATION WITH REGARD TO THE CREDITS INTRODUCED DURING THE FINANCI AL YEAR. THEREFORE, THE A.O. RIGHTLY BROUGHT THE UNEXPLAINED CREDITS U/ S 68 OF THE ACT, WHICH THE CIT(A) HAS UPHELD THE ORDER OF THE A.O. AND WE DO NOT FIND ANY ITA NOS.424, 425 & 426/VIZAG/2013 P. RAMA RAJU, VISAHKAPATNAM 21 INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND THE SA ME IS UPHELD. THE APPEAL OF THE ASSESSEE IS DISMISSED. ITA NO.426/VIZAG/2013 A.Y. 2009-10 : 18. ALL THE GROUNDS OF APPEAL ARE RELATED TO THE AD DITION OF RS.7,88,000/- ASSESSED AGAINST UNEXPLAINED INVESTME NT AND JEWELLERY. DURING THE COURSE OF SEARCH, THE INVESTIGATION WING FOUND THE GOLD AND JEWELLERY WEIGHING AROUND 1044 GMS AND THE SILVER A RTICLES WEIGHING 5840 GMS IN THE PREMISES OF THE ASSESSEE. AT THE T IME OF SEARCH, THE ASSESSEE EXPLAINED THAT 430 GMS. OF GOLD WAS BELONG ING TO HIM AND THE BALANCE OF GOLD WAS BELONGING TO HIS FATHER AND SIS TER. ACCORDINGLY, THE VALUE OF 473 GMS. WAS ADMITTED BY THE ASSESSEE IN H IS HANDS. WITH REGARD TO THE 614 GMS. OF GOLD, WHICH WAS SAID TO B E BELONGING TO HIS SISTER AND SILVER ARTICLES WHICH WAS SAID TO BE BEL ONGING TO THE FATHER OF THE ASSESSEE WAS TREATED AS UNEXPLAINED INVESTMENT IN THE HANDS OF THE ASSESSEE BY THE A.O. AND BROUGHT TO TAX A SUM OF RS .7,88,000/-. AGGRIEVED BY THE ORDER OF THE A.O., THE ASSESSEE WE NT ON APPEAL BEFORE THE LD. CIT(A) AND THE LD. CIT (A) HAS CONFIRMED TH E ORDER OF THE A.O. AS PER THE DISCUSSION IN PARA-12 OF THE ORDER, WHIC H IS REPRODUCED AS UNDER FOR THE SAKE OF CONVENIENCE: I HAVE GONE THROUGH THE FACTS OF THE CASE AND THE S UBMISSIONS OF THE APPELLANT. FROM THE FACTS, IT IS CLEAR THAT OU T OF 1044 GMS. OF GOLD JEWELLERY FOUND IN THE COURSE OF SEARCH, JEWELLERY THAT OF 430 GMS. ONLY WAS CLAIMED AS BELONGING TO THE APPELLANT, HIS WIFE AND DAUGHTER. IN VIEW ITA NOS.424, 425 & 426/VIZAG/2013 P. RAMA RAJU, VISAHKAPATNAM 22 OF SUCH ADMISSION, NO FURTHER ALLOWANCE IS REQUIRED TO BE GIVEN IN THEIR HANDS EVEN WITH REFERENCE TO THE BOARDS INSTRUCTIO N. AS REGARDS THE REMAINING GOLD OF 614 GMS., IT WAS ONLY IN THE COUR SE OF ASSESSMENT PROCEEDINGS THAT THE APPELLANT CLAIMED THOSE BELONG ING TO HIS FATHER, MOTHER AND SISTER. HOWEVER, THIS CONTENTION COULD NOT BE ESTABLISHED WITH ANY DOCUMENTARY EVIDENCE. BESIDES, IT HAS ALSO NOT BEEN PROVED THAT GOLD OF RS.6 LAKHS ADMITTED TOWARDS UNEXPLAINED GOLD FOR THE ASSESSMENT YEAR 2008-09 ONLY WAS FOUND IN THE COURSE OF SEARCH. AC CORDINGLY, FINDING NO INFIRMITY IN THE ACTION OF THE ASSESSING OFFICER, T HE ADDITION OF RS.7,88,880/- TOWARDS UNEXPLAINED GOLD/SILVER IN AS SESSMENT YEAR 2009-10 IS UPHELD AND THE GROUNDS RAISED IN THIS REGARD ARE DECIDED AGAINST THE APPELLANT. 19. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSES SEE IS IN APPEAL BEFORE THIS TRIBUNAL. APPEARING FOR THE ASSESSEE, THE LD. A.R. ARGUED THAT DURING THE COURSE OF SEARCH, THE A.O. FOUND TH E GOLD WEIGHING AROUND 1044 GMS. AND SILVER ARTICLES 5840 GMS. OU T OF WHICH, 430 GMS. WAS CLAIMED TO BE BELONGING TO THE ASSESSEE AN D THE BALANCE GOLD WAS STATED TO BE BELONGING TO HIS SISTER AND ALSO T HE SILVER ARTICLES WERE BELONGING TO HIS FATHER. THE LD. A.R. STATED THAT THE GOLD WAS NOT FOUND IN THE RESIDENCE OF THE ASSESSEE BUT FOUND FROM THE LOCKERS. THE LOCKERS WERE NOT BELONGING TO THE ASSESSEE. THE LOCKERS WE RE BELONGING TO HIS FATHER OR HIS SISTER. THEREFORE, EXCEPT 430 GMS. OF GOLD, THE REMAINING GOLD AND SILVER SHOULD NOT BE ASSESSED IN THE HANDS OF THE ASSESSEE. 20. ON THE OTHER HAND, THE LD. D.R. RELIED ON THE O RDERS OF THE LOWER AUTHORITIES. 21. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIALS AVAILABLE ON RECORD. DURING THE COURSE OF SEARCH C ONDUCTED IN THE ITA NOS.424, 425 & 426/VIZAG/2013 P. RAMA RAJU, VISAHKAPATNAM 23 RESIDENCE OF THE ASSESSEE, GOLD WEIGHING AROUND 104 4 GMS. AND SILVER ARTICLES 5840 GMS. WAS FOUND FROM THE LOCKERS. THE ASSESSEE HAS STATED THAT THERE WERE NO LOCKERS IN HIS NAME. THIS IS EV IDENT FROM QUESTION NO.6 OF THE STATEMENT RECORDED FROM THE ASSESSEE ON 22.8.2008 AND IN RESPONSE TO QUESTION NO.10, THE ASSESSEE HAS REITER ATED THAT LOCKERS WERE BELONGING TO HIS FATHER AND HIS SISTER. FOR R EADY REFERENCE, WE REPRODUCE THE QUESTION NO.10 AND ANSWER OF THE STAT EMENT DATED 22.8.2008 FROM PAGE 28 OF PAPER BOOK. Q.10. DURING THE COURSE OF S&S OPERATIONS, WE OPEN ED TWO LOCKERS AT HDFC BANK, DWARAKANAGAR AND SBI, DONDAPARTHI, WHEREI N WE FOUND JEWELLERY ARTICLES OF GOLD & SILVER. PLEASE EXPLAI N THE SOURCES AND ALSO STATE WHETHER YOU HAVE FILED ANY WEALTH TAX RETURNS . A. ACTUALLY THESE TWO LOCKERS BELONG TO MY FATHER AND MY SISTER. HOWEVER, MY FATHER WILL EXPLAIN ALL THE SOURCES FOR ACQUISITION OF GOLD AND SILVER ARTICLES. THE DETAILED EXPLANATION WILL BE SUBMITTED TO YOU WITHIN A WEEK. 22. THE ASSESSEE ALSO IN HIS WRITTEN STATEMENT REIT ERATED THE FACT THAT THE GOLD WEIGHING AROUND 430 GMS. WAS BELONGING TO HIM AND THE BALANCE GOLD AROUND 614 GMS. WAS BELONGING TO HIS S ISTER AND SILVER ARTICLES WERE BELONGING TO HIS FATHER. THOUGH ASSE SSEE STATED THAT THE LOCKERS WERE NOT BELONGING TO HIM IN RESPONSE TO QU ESTION NO.10 OF THE STATEMENT RECORDED, WHICH WAS REPRODUCED ABOVE, THE A.O. HAS NOT REBUTTED THE CLAIM MADE BY THE ASSESSEE. AS PER SE CTION 292C OF THE ACT, THE ONUS IS ON THE ASSESSEE TO PROVE THE MATER IAL FOUND DURING THE COURSE OF SEARCH IS NOT TRUE WITH TANGIBLE EVIDENCE . IN THIS CASE, THE ITA NOS.424, 425 & 426/VIZAG/2013 P. RAMA RAJU, VISAHKAPATNAM 24 ASSESSEE HAS STATED IN HIS STATEMENT RECORDED AT TH E TIME OF SEARCH AND SUBSEQUENTLY DURING THE POST SEARCH OPERATION AND E NQUIRIES DURING THE ASSESSMENT PROCEEDINGS THAT THE GOLD WEIGHING AROUN D 640 GMS. AND SILVER ARTICLES WERE NOT BELONGING TO HIM BUT BELON GING TO HIS FATHER AND SISTER. THE LOCKERS FROM THE GOLD AND SILVER FOUND WERE ALSO NOT BELONGING TO THE ASSESSEE AS STATED BY HIM. THE AS SESSING OFFICER HAS NOT MADE ANY ENQUIRY WITH REGARD TO THE OWNERSHIP O F THE GOLD AND SILVER ARTICLES FOUND AT THE TIME OF SEARCH AND TO REBUT THE CLAIM MADE BY THE ASSESSEE THAT THE ARTICLES WERE BELONGING TO HIS FATHER AND SISTER. WHEN THE FACT THAT LOCKERS WERE NOT BELONGING TO THE ASSESSEE IS ACCEPTED AND THE ASSESSEE EXPLAINS THAT THE GOLD AN D SILVER ARTICLES WERE NOT BELONGING TO HIM BUT BELONGED TO HIS FATHER AND SISTER THE BURDEN SHIFTS TO THE DEPARTMENT AND THE ONUS IS ON THE DEP ARTMENT TO PROVE THAT THE ARTICLES WERE BELONGING TO THE ASSESSEE. IN THIS CASE, THE DEPARTMENT HAS NOT DISCHARGED THE ONUS BY CONDUCTIN G THE NECESSARY ENQUIRIES. WHEN ASSESSEE HAS GIVEN A SUBMISSION THA T THE GOLD AND SILVER ARTICLES WERE BELONGING TO HIS FATHER AND SI STER, THE SAME REQUIRED TO BROUGHT TO TAX OR EXAMINE THE SOURCES IN THE HAN DS OF HIS SISTER AND FATHER BUT NOT IN THE HANDS OF THE ASSESSEE. ACCOR DINGLY, THE ADDITION MADE BY THE A.O. IN THE HANDS OF THE ASSESSEE CANNO T BE SUSTAINED AND ITA NOS.424, 425 & 426/VIZAG/2013 P. RAMA RAJU, VISAHKAPATNAM 25 WE SET ASIDE THE ORDER OF LOWER AUTHORITIES AND DEL ETE THE ADDITION MADE BY THE A.O. THE APPEAL OF THE ASSESSEE IS ALLOWED. 23. IN THE RESULT, THE APPEALS OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2005-06 IN ITA NO.424/VIZAG/2013 IS PARTLY ALLOWED, FOR THE ASSESSMENT YEAR 2007-08 IN ITA NO.425/VIZAG/2013 IS DISMISSED AND FOR THE ASSESSMENT YEAR 2009-10 IN ITA NO.426/VIZAG/2013 IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT O N 31 ST JUL17. SD/- SD/- ( . ) ( . . ) (V. DURGA RAO) (D.S. SUNDER SINGH) /JUDICIAL MEMBER /ACCOUNTANT MEMBER /VISAKHAPATNAM: /DATED : 31.07.2017 VG/SPS /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT SHRI P. RAMA RAJU, PROP. VIGNESW ARA CONSTRUCTIONS, D.NO.49-54-9, FLAT NO.401, SANJANA RESIDENCY, R.K. LAYOUT, VISAKHAPATNAM-530 013. 2. / THE RESPONDENT THE DCIT, CENTRAL CIRCLE-1, VIS AKHAPATNAM 3. / THE CIT (CENTRAL), HYDERABAD 4. ( ) / THE CIT (A)-I, HYDERABAD 5. , , / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM