CAPRIHANS INDIA LTD, MUMBAI V. DCCC -36, MUMBAI

ITA 4248/MUM/2011

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 3102 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 03-06-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 25-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Capital asset; Business income; Depreciation; Document seized; Earning of tax free income; Documents seized; Unabsorbed depreciation; Reassessment proceedings
• Section: 143(3); 80HHC; 153A; 14A; 115JB; 27; 132

Judgement Text

CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C , MUMBAI , , BEFORE SHRI G S PANNU , ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUDICIAL MEMBER ITA NO. : 4248 /MUM/20 1 1 ( ASSESSMENT YEAR: 200 1 - 0 2 ) ITA NO. : 4249 /MUM/20 11 ( ASSESSMENT YEAR: 2002 - 03 ) ITA NO. : 4250 /MUM/20 11 ( ASSESSMENT YEAR: 2003 - 04 ) ITA NO. : 4251 /MUM/20 11 ( ASSESSMENT YEAR: 2004 - 05 ) CAPRIHANS INDIA LTD . , BLOCK D, SHIVSAGAR ESTATE. DR A B ROAD, WORLI, MUMBAI - 400 018 .: PAN: AAAC C 1646 F VS DY. CIT CENTRAL CIRCLE - 3 6 , MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NIKHIL PATHAK RESPONDENT BY : SHRI SANJAY BAHADUR ITA NO. : 4569 /MUM/20 1 1 ( ASSESSMENT YEAR: 2001 - 02 ) ITA NO. : 4570 /MUM/20 11 ( ASSESSMENT YEAR: 2002 - 03 ) ITA NO. : 4571 /MUM/20 11 ( ASSESSMENT YEAR: 2003 - 04 ) ITA NO. : 4572 /MUM/20 11 ( ASSESSMENT YEAR: 2004 - 05 ) DY. CIT CENTRAL CIRCLE - 36, MUMBAI VS CAPRIHANS INDIA LTD . , BLOCK D, SHI VSAGAR ESTATE, MUMBAI - 4000 018 .: PAN: AAACC 1646 F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SANJAY BAHADUR RESPONDENT BY : SHRI NIKHIL PATHAK /DATE OF HEARING : 02 - 0 7 - 201 5 / DATE OF PRONOUNCEMENT : 30 - 09 - 201 5 CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 2 ORDER , . . : PER AMIT SHUKLA, J M : THE A FORESAID EIGHT CROSS APPEALS HAVE FILED BY THE ASSESSEE AS WELL AS BY THE REVENUE AGAINST SEPARATE IMPUGNED ORDERS OF EVEN DATE 16.03.2 011 PASSED BY CIT(A) - 41, MUMBAI FOR THE QUANTUM OF ASSESSMENT PASSED U/S 143( 3 ) R.W.S. 153C FOR THE ASSESSMENT YEARS 2001 - 02, 2002 - 03, 2003 - 04 AND 2004 - 05. SINCE ISSUES INVOLVED IN ALL THE APPEALS ARE COMMON ARISING OUT OF IDENTICAL SET OF FACTS, THEREFORE , FOR THE SAKE OF BREVITY THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY WAY OF THIS CONSOLIDATED ORDER. 2. FOR THE SAKE OF CONVENIENCE, CROSS APPEALS FOR ASSESSMENT YEAR 2001 - 02 ARE BEING TAKEN - UP FIRST TO UNDERSTAND THE FACTS AND ISSUES INVOLVED , WHICH IS APPLICABLE IN ALL THE APPEALS. WE WILL FIRST TAKE - UP ASSESSEES APPEAL BEING ITA NO. 4248/MUM/2011, VIDE WHICH VARIOUS GROUNDS HAVE BEEN RAISED INCLUDING THE VALIDITY OF NOTICE ISSUED U/S 153C. IN THE VARIOUS GROUNDS, FOLLOWING ADDITIONS SUSTAIN ED BY THE CIT(A) HAS BEEN CHALLENGED, WHICH ARE AS UNDER : - SR.NO. PARTICULARS OF ADDITIONS MADE AMOUNT (RS) 1 ADDITION ON ACCOUNT OF MISC. RECEIPTS 53,500 2 INTEREST INCOME EARNED BY THE ASSESSEE TO BE TREATED AS INCOME FROM OTHER SOURCES AS AGAI NST BUSINESS INCOME OFFERED BY THE ASSESSEE 6,08,54,307 3 DISALLOWANCE U/S 14A 8,000 4 DISALLOWANCE OF LONG TERM CAPITAL LOSS ON FORFE - ITURE OF SHARES 14,08,718 5 WHETHER CHARGES ON REALIZATION OF NON - CORE ASSETS ARE TO REDUCED FROM THE BOOK PROFIT 3,58,89,586 6 WHETHER PROVISION FOR LEAVE ENCASHMENT AND GRATUITY TO BE REDUCED WHILE COMPUTING BOOK PROFIT GRATUITY 8,66,920 8,32,842 7 WHETHER THE METHOD ADOPTED BY THE AO FOR COMPUTATION OF BROUGHT FORWARD LOSSES AND DEPRECIATION IS JUSTIFIED. N.P. CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 3 3. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN ALL THE APPEALS ONE PRELIMINARY COMMON ISSUE , WHICH IS PERMEATING IN ALL THE YEARS IMPUGNED IN THE PRESENT APPEALS ARE THAT , PRIOR TO THE DATE OF SEAR CH, THE ASSESSMENT FOR ALL THE AFORESAID ASSESSMENT YEARS HAD ATTAINED FINALITY AND THERE WAS NO PENDING ASSESSMENT WHICH CAN BE SAID TO HAVE BEEN ABATED IN TERMS OF SECOND PROVISO TO SECTION 153A AT THE TIME OF SEARCH. HERE IN THIS CASE, NO MATERIAL OR EV IDENCE WHATSOEVER HAS BEEN FOUND REL A TING TO THE ASSESSEE AND EVEN IN THE NOTICE U/S 153C OR THE SATISFACTION NOTE , THERE IS NO WHISPER OR REFERENCE OF ANY SEIZED MATERIAL IN RELATION TO THE ADDITIONS MADE BY THE AO AND SUSTAINED BY THE CIT(A) . T HEREFORE , IN VIEW OF THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS ALL CARGO GLOBAL LOGISTIC LTD. IN ITA N O . 1969 OF 2013 VIDE ORDER DATED 21 ST APRIL, 2015, THE ADDITIONS MADE BY THE AO ARE BEYOND THE SCOPE OF SECTION 153A AND ACCORDINGLY , THEY HAVE TO BE DELETED . 4. THE RELEVANT FACTS QUA THE PRELIMINARY GROUND RAISED BY THE LD. COUNSEL ARE THAT, THE ASSES S EE COMPANY HAD FILED ITS ORIGINAL RETURN OF INCOME ON 30 TH OCTOBER, 2001 FOR THE ASSESSMENT YEAR 2001 - 02 DECLARING NIL INCOME AFTER SET OFF THE BROUGHT FORWARD LOSSES. THEREAFTER, REGULAR ASSESSMENT U/S 143(3) WAS COMPLETED ON 09.02.2014 WHEREBY CERTAIN ADDITIONS WERE MADE, HOWEVER THE ASSESSMENT WAS COMPLETED AT NIL INCOME ONLY DUE TO SET OFF BROUGHT FORWARD LOSSES. LATER ON A SEAR CH AND SEIZURE ACTION U/S 132(1) WAS CONDUCTED ON KALPTARU GROUP ON 22.03.2007 AND ALSO SIMILAR SEARCH ACTION WAS CONDUCTED AT THE RESIDENTIAL PREMISES OF MR. MUNOT WHO WAS THE CHAIRMAN OF THE ASSESSEE COMPANY. SINCE ASSESSEE WAS NOT COVERED UNDER SAID T HE SEARCH, A NOTICE U/S 153C WAS ISSUED TO THE ASSESSEE ON 26.12.2007 AND ACCORDINGLY, ASSESSEE WAS ALSO ROPED IN UNDER THE PROVISIONS OF 153A R.W.S. 153C . IN RESPONSE TO SUCH NOTICE, THE ASSESSEE DECLARED NIL INCOME . THEREAFTER ASSESSMENT HAS BEEN COMPL ETED AT AN INCOME OF RS. 609,07,807/ - . THE MAJOR ADDITION MADE BY THE AO WAS CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 4 FIRSTLY, ON ACCOUNT OF INTEREST INCOME WHICH HAS BEEN TREATED AS BUSINESS INCOME BY THE ASSESSEE AND HAS BEEN TAXED BY THE AO AS INCOME FROM OTHER SOURCES; SECONDLY, WHETHER CHARGES ON REALIZATION OF NON - CORE ASSETS ARE TO BE REDUCED FROM THE BOOK PROFIT; THIRDLY, DISALLOWANCE OF LONG - TERM - CAPITAL - LOSS O N FORFEITURE OF SHARES; FOURTHLY, WHETHER PROVISION FOR LEAVE ENCASHMENT AND GRATUITY SHOULD BE REDUCED FROM THE BOOK PROFIT ; AND LASTLY, DISALLOWANCE U/S 14A AND ADDITION ON ACCOUNT OF MISCELLANEOUS RECEIPTS. 5. BEFORE US, L D. COUNSEL SUBMITTED THAT NONE OF THE ADDITIONS MADE IN THE IMPUGNED ASSESSMENT ORDER ARE BASED ON ANY INCRIMINATING MATERIAL OR DOCUMENT FOUND AS A RESU LT OF SEARCH OR AS A RESULT OF ANY DOCUMENT OR MATERIAL HANDED OVER BY THE AO IN THE CASE OF SEARCH ED PERSON U/S 153A. ALL THESE ITEMS WERE DULY DISCLOSED IN THE REGULAR BOOKS OF ACCOUNT OR WERE DULY DISCLOSED IN THE COMPUTATION OF BOOK PROFIT. NOT ONLY TH AT THESE BOOKS OF ACCOUNT AND COMPUTATION OF BOOK PROFIT WERE ALSO SUBJECT MATTER OF SCRUTINY U/S 143(3). HENCE, NO FURTHER ADDITION CAN BE ROPED IN THE ASSESSMENT PASSED U/S 153C, BECAUSE THE ASSESSMENT FOR THE ASSESSMENT YEAR 2001 - 02 HAD ATTAINED FINALIT Y AND IN VIEW OF THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF ALL CARGO GLOBAL LOGISTIC LTD. SUPRA ) ALL SUCH ADDITIONS MADE BY THE AO SANS ANY INCRIMINATING MATERIAL SHOULD BE DELETED. 6. ON THE OTHER HAND, THE LD. DR STRONGLY RELIED U PON THE ORDER OF THE CIT(A) AND SUBMITTED THAT ONCE DOCUMENTS HAVE BEEN FOUND AND SEIZED , WHICH WAS THE BASIS FOR INITIATING THE PROCEEDINGS U/S 153C IN THE CASE OF THE ASSESSEE, THEN ASSESSMENT HAS TO BE COMPLETED IN ACCORDANCE WITH SECTION 153A AND ACCOR DINGLY , ALL THE ADDITIONS MADE BY THE AO HAVE TO BE DEALT AND DISCUSSED ON MERITS. 7. AFTER CONSIDERING THE RIVAL CONTENTIONS AND ON PERUSAL OF THE IMPUGNED ORDERS AND RELEVANT MATERIAL ON RECORD, WE FIND THAT IN CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 5 THIS CASE, THE ORIGINAL RETURN OF INCOME W AS FILED ON 31 ST OCTOBER 2001 , WHICH WAS SUBJECT TO SCRUTINY ASSESSMENT U/S 143(3) , WHEREBY INCOME WAS DETERMINED AT NIL AFTER MAKING CERTAIN ADDITIONS ON ACCOUNT OF DISALLOWANCE U/S 14A AT RS. 42,200/ - ; DISALLOWANCE OF GRATUITY PAYMENT OF R S. 8,32,842/ - AND RS. 41,56,680 / - ON ACCOUNT OF ACCRUED OCTOR I INCENTIVES. IN THE FIRST APPEAL, RELIEF ON ACCOUNT OF DISALLOWANCE U/S 14A WAS GIVEN AND SUCH A DISALLOWANCE WAS RESTRICTED TO 2% OF THE DIVIDEND INCOME, WHICH WAS AT RS. 1,678/ - . IN THE WAKE OF SEARCH & SE IZURE ACTION U/S 132 IN THE CASE OF KALPTARU GROUP AND RESIDENTIAL PREMISES OF THE CHAIRMAN OF THE ASSESSEE COMPANY, PROCEEDINGS U/S 153C HA VE BEEN INITIATED IN THE CASE OF THE ASSESSEE. THOUGH THE VALIDITY OF NOTICE/PROCEEDINGS U/S 153C HAS NOT BEEN CHA LLENGED BEFORE US ( AS THE SAME HAVE NOT BEEN PRESSED ) , HOWEVER, THE ADDITIONS MADE BY THE AO AND SUSTAINED BY THE CIT(A) HAS TO BE SCRUTINIZED IN THE LIGHT OF THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF ALL CARGO GLOBAL LOGISTIC LTD. ( SUPRA ). AT THE TIME OF INITIATION PROCEEDINGS U/S 153C, THE ASSESSMENT OF THE ASSESSEE FOR THIS ASSESSMENT YEAR HAD ATTAINED FINALITY AND NO ASSESSMENT WAS PENDING WITHIN THE TERMS OF SECON D PROVISO TO SECTION 153A. THE LEGAL PROPOSITION AS LAID DOWN BY THE VARIOUS COURTS INCLUDING THAT OF JURISDICTIONAL HIGH COURT IS THAT , IF THE ASSESSMENT WHICH ARE NOT ABATED WITHIN THE MEANING OF SECOND PROVISO TO SECTION 153A AND HAVE ATTAINED FINALITY ON THE DATE OF INITIATION OF SEARCH ; OR IN OTHER WORDS, NO ASSESS MENT WAS PENDING ON THE DATE OF SEARCH, THEN NO ADDITION CAN BE MADE OV ER AND ABOVE ALREADY ASSESSED I NCOME , UNLESS SOME INCRIMINATING DOCUMENT OR MATERIAL IS FOUND QUA THAT ADDITION. IN OTHER WORDS, THE ORIGINAL ASSESSED INCOME SHALL BE RECKONED AS ASSESS ED INCOME FOR THE PURPOSE OF ASSESSMENT U/S 153A IN SUCH CASES. 8. NOW AS PER THE VARIOUS JUDICIAL PRECEDENCE, ESPECIALLY SETTLED IN THE JURISDICTION OF BOMBAY HIGH COURT, THE SCOPE OF ADDITION IN THE NON - ABATED ASSESSMENT IS LIMITED TO THE MATERIALS FOUND CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 6 DURING THE SEARCH HAVING LIVE - LINK - NEXUS WITH SUCH ADDITIONS OR DISALLOWANCES. IF WE ANALYSE THE PROVISIONS OF SECTION 153A, IT IS APPARENT THAT, WHERE SEARCH HAS BEEN INITIATED U/S 132 OR REQUISITION HAS BEEN MADE UNDER SECTION 132A, IT IS INCUMBENT UPON THE ASSESSING OFFICER TO ISSUE NOTICES REQUIRING THE PERSON SEARCHED TO FILE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR IN WHICH SEARCH IS CONDUCTED. THE ASSESSING OFFICER HAS TO ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS. THUS, IT IS STATUTORY MANDATE UPON THE ASSESS ING OFFICER TO ASSESS OR REASSESS THE TOTAL INCOME ON WHICH A PERSON CAN BE SAID TO BE ASSESSABLE UNDER THE PROVISIONS OF THE A CT. THE FIRST PROVISO TO SECTION 153A COVERS THE INCOME WHICH IS TO BE ASSESSED I.E. EMANATING NOT ONLY, FROM THE DECLARED SOURCES BUT ALSO FROM ANY MATERIAL FOUND DURING THE COURSE OF SEARCH. HOWEVER IF THE ASSESSME NT HAS ALREADY BEEN MADE OR FINALIZED BEFORE THE DATE OF SEARCH, THEN THE AO CAN REASSESS THE TOTAL INCOME ON THE BASIS OF MATERIAL FOUND OR GATHERED DURING THE COURSE OF SEARCH OVER AND ABOVE THE INCOME WHICH ALREADY STOOD ASSESSED. HOWEVER, THE SECO ND PROVISO CARVES OUT EXCEPTION/LIMITATION THAT, PENDING ASSESSMENT OR REASSESSMENT RELATING TO ANY ASSESSMENT YEAR F A LLING WITHIN THE PERIOD OF SIX YEARS ON THE DATE OF SEARCH, THE SAME GETS ABATED. IN OTHER WORDS, THE ASSESSMENTS WHICH HAVE NOT ATTAINED FINALITY AND ARE PENDING ON THE DATE OF SEARCH, THEN THE SAME DOES NOT GETS ABATED. THE ASSESSMENTS WHICH A R E ABATED, FRESH DETERMINATION OF TOTAL INCOME IS REQUIRED TO BE MADE WHICH CAN BE ON THE BASIS OF MATERIAL ALREADY ON RECORD AS WELL AS MATERIAL GAT HERED DURING THE COURSE OF SEARCH. HOWEVER, THE ASSESSMENTS WHICH HAVE ALREADY ATTAINED FINALITY AND DOES NOT GET ABATED, THEN THEY HAVE TO BE ASSESSED ON THE SAME INCOME AND CANNOT INCLUDE ANY TIME OF INCOME FOR WHICH NO INCRIMINATING MATERIAL HAS BEEN FO UND. THE REASON BEING THAT THE ASSESSMENTS WHICH ARE PENDING AND GET ABATED, THE ENTIRE INCOME HAS TO BE DETERMINED WHICH INCLUDES CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 7 MATERIAL ALREADY ON RECORD AND ALSO THE MATERIAL FOUND AS A RESULT OF SEARCH. HOWEVER, STATUTE HAS CARVED OUT THE EXC EPTION TO THOSE ASSESSMENTS WHICH HAVE ATTAINED FINALITY, BECAUSE THOSE ASSESSMENTS DOES NOT GET ABATED. IN SUCH A SITUATION, THE INCOME WHICH HAS ALREADY BEEN ASSESSED, THE SAME CANNOT BE DISTURBED UNLESS SOME INCRIMINATING INFORMATION OR MATERIAL IS FOUN D SUGGESTING THAT THE INCOME WHICH ALREADY STOOD ASSESSED REQUIRES TO BE REASSESSED ON THE BASIS OF NEW MATERIAL FOUND. THIS PROPOSITION HAS BEEN UPHELD AND CLARIFIED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF MURLI AGRO PRODUCTS LTD. IN THE F OLLOWING MANNER: - 10). THUS ON A PLAIN READING OF SECTION 153A OF THE INCOME - TAX ACT, IT BECOMES CLEAR THAT ON INITIATION OF PROCEEDINGS UNDER SECTION 153A, IT IS ONLY THE ASSESSMENT/REASSESSMENT PROCEEDINGS THAT ARE PENDING ON THE DATE OF CONDUCTING SEA RCH UNDER SECTION 132 OR MAKING REQUISITION UNDER SECTION 132A OF THE ACT STAND ABATED AND NOT THE ASSESSMENTS/REASSESSMENTS ALREADY FINALIZED FOR THOSE ASSESSMENT YEARS COVERED' UNDER SECTION 153A OF THE ACT. BY A CIRCULAR NO.8 OF 2003 DATED 18 - 9 - 2003 (SE E 263 ITR (ST) 61 AT 107) THE CBDT HAS CLARIFIED THAT ON / INITIATION OF PROCEEDINGS UNDER SECTION 153A, THE PROCEEDINGS PENDING IN APPEAL, REVISION OR RECTIFICATION PROCEEDINGS FINALIZED ASSESSMENT/ AGAINST REASSESSMENT SHALL NOT ABATE. IT IS ONLY BECAUSE , THE FINALIZED ASSESSMENTS/REASSESSMENT DO NOT ABATE, THE APPEAL, REVISION OR RECTIFICATION PENDING AGAINST FINALIZED ASSESSMENTS/REASSESSMENTS WOULD NOT ABATE. THEREFORE, THE ARGUMENT OF THE REVENUE, THAT ON INITIATION OF PROCEEDINGS UNDER SECTION 153A, THE ASSESSMENTS/REASSESSMENTS FINALIZED FOR THE YEARS COVERED UNDER SECTION 153A OF THE INCOME - TAX ACT STAND ABATED CANNOT BE ACCEPTED. SIMILARLY ON ANNULMENT OF ASSESSMENT MADE UNDER SECTION 153A (1) WHAT STANDS REVIVED IS THE PENDING ASSESSMENT/ REASSESSM ENT PROCEEDINGS WHICH STOOD ABATED AS PER SECTION 153A(1). 11) IN THE PRESENT CASE, AS CONTENDED CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 8 BY SHRI MANI, LEARNED COUNSEL FOR THE ASSESSEE, THE ASSESSMENT FOR THE ASSESSMENT YEAR 1998 - 99 WAS FINALIZED ON 29 - 12 - 2000 AND SEARCH WAS CONDUCTED THEREAFTER ON 3 - 12 - 2003. THEREFORE, IN THE FACTS OF THE PRESENT CASE INITIATION OF PROCEEDINGS UNDER SECTION 153A WOULD NOT AFFECT THE ASSESSMENT FINALIZED ON 29 - 12 - 2000. 12) ONCE IT IS HELD THAT THE ASSESSMENT FINALIZED ON 29.12.2000 HAS ATTAINED FINALITY, THEN THE DEDUCTION ALLOWED UNDER SECTION 80HHC OF THE INCOME - TAX ACT AS WELL AS THE LOSS COMPUTED UNDER THE ASSESSMENT DATED 29 - 12 - 2000, WOULD ATTAIN FINALITY. IN SUCH A CASE, THE AO WHILE PASSING THE INDEPENDENT ASSESSMENT ORDER UNDER SECTION 153A READ WITH SECTIO N 143 (3) OF THE I.T. ACT COULD NOT HAVE DISTURBED THE ASSESSMENT/ REASSESSMENT ORDER WHICH HAS ATTAINED FINALITY, UNLESS THE MATERIALS GATHERED IN THE COURSE OF THE PROCEEDINGS UNDER SECTION 153A OF THE INCOME - TAX ACT ESTABLISH THAT THE RELIEFS GRANTED UN DER THE FINALISED ASSESSMENT/REASSESSMENT WERE CONTRARY TO THE FACTS UNEARTHED DURING THE COURSE OF 153 A PROCEEDINGS. 13) IN THE PRESENT CASE, THERE IS NOTHING ON RECORD' TO SUGGEST THAT ANY MATERIAL WAS UNEARTHED DURING THE SEARCH OR DURING THE 153A PROC EEDINGS WHICH WOULD SHOW THAT THE RELIEF UNDER SECTION, 80HHC WAS ERRONEOUS. IN SUCH A CASE, THE A.O. WHILE PASSING THE ASSESSMENT ORDER UNDER SECTION 153A READ WITH SECTION 143(3) COULD NOT HAVE DISTURBED THE ASSESSMENT ORDER FINALIZED ON 29.12.2000 RELAT ING TO SECTION 80 HHC DEDUCTION AND CONSEQUENTLY THE CIT COULD NOT HAVE INVOKED JURISDICTION UNDER SECTION 263 OF THE ACT. THE PRINCIPLE AND THE RATIO REITERATED IN PARA 12 OF THE AFORESAID ORDER MAKES IT ABUNDANTLY CLEAR THAT, THE ASSESSING OFFICER WHIL E PASSING THE ASSESSMENT ORDER U/S 153A CANNOT DISTURB THE ASSESSMENTS/REASSESSMENT ORDER WHICH HAD ATTAINED FINALITY, UNLESS MATERIAL GATHERED IN THE COURSE OF SEARCH ESTABLISHES THAT THE EARLIER ASSESSMENT FINALIZED IS CONTRARY TO THE FACT. CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 9 9 . THIS PRI NCIPLE HAS AGAIN BEEN REITERATED BY THE HONBLE RAJASTHAN HIGH COURT, WHEREIN LORDSHIPS AFTER ANALYZING THE ENTIRE PROVISION OF SECTION 153A, HELD AND CONCLUDED AS UNDER : - 22. THE UNDERLYING PURPOSE OF MAKING ASSESSMENT OF TOTAL INCOME UNDER S. 153A O F THE ACT IS, THEREFORE, TO ASSESS INCOME WHICH WAS NOT DISCLOSED OR WOULD NOT HAVE BEEN DISCLOSED. THE PURPOSE OF SECOND PROVISO IS ALSO VERY CLEAR, IN AS MUCH AS ONCE AN ASSESSMENT OR REASSESSMENT IS 'PENDING' ON THE DATE OF INITIATION OF SEARCH OR REQUI SITION AND IN TERMS OF S. 153A A RETURN IS FILED AND THE AO IS REQUIRED TO ASSESS THE SAME, THERE CANNOT BE TWO ASSESSMENT ORDERS DETERMINING THE TOTAL INCOME OF THE ASSESSEE FOR THE SAID ASSESSMENT YEAR AND THEREFORE, THE PROVISO PROVIDES FOR ABATEMENT OF SUCH PENDING ASSESSMENT AND REASSESSMENT PROCEEDINGS AND IT IS ONLY THE ASSESSMENT MADE UNDER S. 153A OF THE ACT THAT WOULD BE THE ASSESSMENT FOR THE SAID YEAR. 23. THE NECESSARY COROLLARY OF THE ABOVE SECOND. PROVISO IS THAT THE ASSESSMENT OR REASSESSM ENT PROCEEDINGS, WHICH HAVE ALREADY BEEN 'COMPLETED' AND ASSESSMENT ORDERS HAVE BEEN PASSED DETERMINING THE ASSESSEE'S TOTAL INCOME AND SUCH ORDERS ARE SUBSISTING AT THE TIME WHEN THE SEARCH OR THE REQUISITION IS MADE, THERE IS NO QUESTION OF ANY ABATEMENT SINCE NO PROCEEDINGS ARE PENDING. IN SUCH CASES, WHERE THE ASSESSMENT ALREADY STANDS COMPLETED, THE AO CAN REOPEN THE ASSESSMENTS OR REASSESSMENTS ALREADY MADE WITHOUT FOLLOWING THE PROVISIONS OF SS. 147, 148 AND 151 OF THE ACT AND DETERMINE THE TOTAL INC OME OF THE ASSESSEE. 24. THE ARGUMENT RAISED BY THE COUNSEL FOR THE APPELLANT TO THE EFFECT THAT ONCE A NOTICE UNDER S. 153A OF THE ACT IS ISSUED, THE ASSESSMENTS FOR SIX YEARS ARE AT LARGE BOTH FOR THE AO AND ASSESSEE HAS NO WARRANT IN LAW. CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 10 25. IN THE F IRM OPINION OF THIS COURT FROM A PLAIN READING OF THE PROVISION ALONG WITH THE PURPOSE AND PURPORT OF THE SAID PROVISION, WHICH IS INTRICATELY LINKED WITH SEARCH AND REQUISITION UNDER SS. 132 AND 132A O F THE ACT, IT IS APPARENT THAT : - (A) THE ASSESSMENT S OR REASSESSMENTS, WHICH STAND ABATED IN TERMS OF SECOND PROVISO TO S. 153A OF THE ACT, THE AO ACTS UNDER HIS ORIGINAL JURISDICTION, FOR WHICH, ASSESSMENTS HAVE TO BE MADE; (B) REGARDING OTHER CASES, THE ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSE SSED, THE ASSESSMENT WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL AND (C) IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE. 10 . EARLIER, THE ITAT SPECIAL BENCH IN THE CASE OF ALL - CARGO GLOBAL LOGISTIC LTD, REPORTED IN [2012] 18 ITR (TRIB) 106 HAS REITERATED THIS PROPOSITION. NOW, THIS DECISION OF THE SPECIAL BENCH HAS NOW BEEN UPHELD BY THE HONBLE BOMBAY HIGH COURT SINCE REPORTED IN [2015] 374 ITR 645 , WHE REIN, THE HONBLE BOMBAY HIGH COURT HELD THAT IF THERE WAS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH, THEN WITHIN THE SCOPE OF SECTION 153A NO ADDITION CAN BE MADE WHERE THE ASSESSMENT ARE NOT ABATED AND ONLY PENDING ASSESSMENT ARE OPEN F OR ALL KIND OF ADDITIONS INCLUDING THE MATERIALS FOUND DURING THE COURSE OF SEARCH AND ALSO OTHERWISE. THUS, RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT, WE ALSO HOLD THAT NONE OF THE ADDITIONS AND DISALLOWANCE MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) CAN BE SUSTAINED, BECAUSE ADMITTEDLY, NO INCRIMINATING MATERIAL HAS BEEN FOUND QUA THE ADDITION MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT YEAR , WHICH IS EVIDENT FROM THE DISCUSSION MADE HEREINAFTER . CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 11 11. NOW, WE WILL EXAMINE IN BRIEF , WHETHER THE ADDITION MADE BY THE AO AND SUSTAINED BY THE CIT(A) ARE ARISING ON ACCOUNT OF ANY SEIZED MATERIAL OR DOCUMENTS FOUND AT THE TIME OF SEARCH. HERE THE MAJOR ADDITION IS OF RS. 6,08,54,307/ - WHICH IS ON ACCOU NT OF INTEREST EARNED BY THE ASSESSEE WHICH HAS BEEN TREATED AS INCOME FROM OTHER SOURCES AS AGAINST THE BUSINESS INCOME OFFER ED BY THE ASSESSEE. THE ASSESSEE HAS SHOWN INTEREST INCOME OF RS. 6 . 08 CRORES. ACCORDING TO THE AO, THE INTEREST RECEIVED ON FIXED DEPOSIT AND ICDS CANNOT BE CONSIDERED AS BUSINESS INCOME AND ACCORDINGLY, HE HAS TREATED AS INCOME FROM OTHER SOURCES. THE DETAILS OF THE SUMMARY OF ADDITION OF INTEREST MADE BY THE AO BY TREATING IT AS INCOME FROM OTHER SOURCES IN VARIOUS ASSESSMENT YEAR S IS AS UNDER : - ASSESSMENT YEAR PARTICULARS 2001 - 02 2002 - 03 2003 - 04 2004 - 05 INTEREST ON INTER - CORPORATE DEPOSITS 2,79,84,732 1,24,61,223 99,51,265 82,27,637 INTEREST ON STAFF LOAN 95,757 9 9,540 41,136 40,535 INTEREST ON NON - CORE DUES BEING MAINLY FROM KALPATARU HEIGHTS PROJECT 3,16,00,000 13,62,597 98,22,542 36,81,162 INTEREST ON MARGIN MONEY DEPOSITS 3,72,637 4,87,500 5,42,733 6,27,553 INTEREST ON SHORT TERM DEPOSITS 8,01,363 38,67,636 7,67,591 50,61,747 INTEREST ON NIL 3,32,344 4,83,055 41,69,693 INTEREST RECEIVED FROM SALES TAX DEPARTMENT NIL NIL NIL NIL TOTAL 6,08,54,307 1,86,10 ,850 2,16,08,322 2,18,08,327 S UCH A TREATMENT OF INTEREST INCOME FOR MAKING THE ADDITION H AS NO CORRELATION WHATSOEVER WITH ANY INCRIMINATING MATERIAL FOUND AT THE TIME OF SEARCH, WHICH IS EVIDENT FROM THE DISCUSSION MADE BY THE AO FROM PAGE 12, WHEREIN HE HAS NOTED THE FIGURES OF INTEREST INCOME WHICH HA S BEEN TAKEN FROM SCHEDULE - 2 OF AUDITED PROFIT AND LOSS ACCOUNT SUBMITTED BY THE ASSESSEE FOR THE YEAR ENDING 31 ST MARCH, 2001. THE REASONS FOR TREATING SUCH INTEREST INCOME AS INCOME FROM OTHER SOUR CES HAVE BEEN ELABORATED AT PAGE 15, CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 12 HOWEVER, THERE IS NO WHISPER ABOUT ANY INCRIMINATING MATERIAL WHICH LED THE AO FOR TREATING SUCH AN INTEREST INCOME AS INCOME FROM OTHER SOURCES AS AGAINST THE BUSINESS INCOME SHOWN BY THE ASSESSEE. HENCE, THE AD DITION OF RS. 6,08,54,307/ - IS BEYOND PURVIEW OF SECTION 153A , AS PER THE PRINCIPLES DISCUSSED IN THE FOREGOING PARAGRAPHS. 12 . SECOND ADDITION PERTAINS TO TAXING OF AMOUNT OF RS. 3,16,00,000/ - ON ACCOUNT OF INTEREST DUE FROM KALPTARU HOMES LTD, WHICH HAS BEEN RAISED VIDE GROUND NO. 4.3 AND 4.4. THIS ADDITION HAS NOT BEEN PRESSED BEFORE US AND ACCORDINGLY, THE ADDITION OF RS. 3,16,00,000/ - IS SUSTAINED AND GROUND NO. 4.3 AND 4.4 IS DISMISSED. 1 3 . THE THIRD ADDITION IS OF RS. 3,58,89,586/ - MADE ON THE G ROUND , WHETHER THE CHARGES OF REALIZATION OF NON - CORE ASSETS ARE TO BE REDUCED FROM THE BOOK PROFIT, OR NOT, WHICH HAS BEEN RAISED VIDE GROUND NO. 8. 13.1 BRIEF FACTS QUA THE SAID ISSUE ARE THAT THE ASSESSEE HAD ENTERED INTO AN AGREEMENT WITH KALPTARU HO MES LTD, FOR LIQUIDATION AND REALIZATION OF ASSETS OF ITS NON - CORE BUSINESS. AS PER CLAUSE (2) OF THE SAID AGREEMENT, IT WAS DECIDED THAT THE ASSESSEE SHALL GET A PRE - DECIDED PRICE FOR ALL THE ASSETS REALIZED FROM KALPTARU HOMES LTD (KHL) . IT WAS FURTHER AGREED THAT ANY EXCESS REALIZATION ON THE LIQUIDATION OF THE SAID ASSET WOULD CONSTITUTE THE GAINS FOR KHL , WHEREAS ANY SHORTFALL IN THE AMOUNT REALIZED WOULD BE LOSS ACCOUNTED BY KALPTARU HOMES. THUS, IT WAS AGREED THAT ASSESSEE WOULD RECEIVE A FIXED CONS IDERATION IN RESPECT OF ALL THE INDIVIDUAL ASSETS WH ICH I S REALIZED BY KALPTARU HOMES. THIS AMOUNT OF EXCESS/SHORTAGE OVER THE AGREED VALUE WAS AVAILED AT EACH YEAR END. DURING THIS YEAR AN AMOUNT OF RS. 3,58,89,586/ - WAS CHARGED TO THE PROFIT AND LOSS ACC OUNT AS THE SAME WAS DUE TO KALPTARU HOMES BEING EXCESS REALIZATION UNDER THE AFORESAID CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 13 AGREEMENT. THE AO NOTICED THAT THE ASSESSEE HAD NOT ADDED BACK THE CHARGES ON REALIZATION OF NON - CORE ASSETS WHILE COMPUTING THE BOOK PROFIT U/S 115JB. ACCORDING TO HIM THE ENTIRE TRANSACTION OF NON - CORE ASSETS WOULD ATTAINED FINALITY ONLY WHEN THE ENTIRE REALIZATION IS MADE. FURTHER, EXACT QUANTUM OF EXCESS OR SHORTAGE OF REALIZATION COULD BE ARRIVED AT, WHEN ALL ASSETS ARE REALIZED. THEREFORE, IT CANNOT BE HELD THAT LI ABILITIES A RE ASCERTAINED. THE ASSESSEE THOUGH ITSELF HAS DISALLOWED THESE EXPENSES IN THE COMPUTATION OF INCOME UNDER THE NORMAL PROVISIONS OF THE ACT HOWEVER FOR THE BOOK PROFIT IT HAS REDUCED IT. T HE AO WAS OF THE OPINION THAT THE ASSESSEE IS NOT JUSTIF IED IN TAKING A DIFFERENT STAND UNDER THE PROVISIONS OF MAT. ACCORDINGLY, HE ADDED THE AMOUNT OF RS. 3,58,89,586/ - TO THE NET PROFIT WHILE COMPUTING THE BOOK PROFIT U/S 115JB. THIS ADDITION AGAIN IS NOT FLOWING FROM ANY INCRIMINATING MATERIAL FOUND AT THE TIME OF SEARCH BUT A DIFFERENT OPINION TAKEN BY THE AO THAT SUCH AN AMOUNT SHOULD HAVE BEEN SHOWN IN THE COMPUTATION OF BOOK PROFIT BY THE ASSESSEE. ACCORDINGLY , THIS ADDITION AGAIN IS BEYOND THE SCOPE OF ASSESSMENT U/S 153A. FURTHER, THIS FACT HAS ALREADY BEEN DISCLOSED BY THE ASSESSEE IN THE COMPUTATION OF MAT LIABILITY WHICH HAS BEEN ACCEPTED IN THE ORIGINAL ASSESSMENT COMPLETED U/S 143(3). IT HAS NOTHING TO DO WITH ANY MATERIAL FOUND AT THE TIME OF SEARCH AND ACCORDINGLY, NO ADDITION CAN BE MADE IN THE IMPUGNED ASSESSMENT. 14. THE NEXT ADDITION PERTAINS TO DISALLOWANCE OF LONG - TERM CAPITAL LOSS ON FORFEITURE OF SHARES AS RAISED VIDE GROUND NO. 6 AND 6.1. 14.1 BRIEF FACTS ARE THAT, D URING THE YEAR, THE ASSESSEE HAS CLAIMED LONG - TERM - CAPITAL - LOSS OF RS. 14,07,718/ - ON ACCOUNT OF FORFEITURE OF PARTLY PAID SHARES OF IDBI BANK AFTER CONSIDERING THE INDEX ED COST. THE AO HELD THAT ANY EQUITY SHARE BECOME S ASSETS OF THE SUBSCRIBER ONLY IF IT IS FULLY PAID. FORFEITURE OF UNPAID SHARES CANNOT BE TERM ED AS TRANSF ER OF SHARES AND ACCORDINGLY, HE HELD CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 14 THAT IT WAS NEITHER ANY CAPITAL ASSET NOR IT IS A CASE OF TRANSFER OF SHARES HENCE, HE DISALLOWED THE LONG - TERM CAPITAL LOSS. THIS ADDITION/DISALLOWANCE IS AGAIN IS NOT BASED ON ANY INCRIMINATING MATERIAL FOUND AT THE TIME OF SEARCH BUT A DIFFERENT OPINION BASED ON THE MATERIAL ALREADY SCRUTINIZED AND, THEREFORE, SUCH AN ADDITION AGAIN CANNOT BE ROPED IN THE IMPUGNED ASSESSMENT ORDER. THUS, ON THIS DISALLOWANCE ALSO NO ADDITION CAN BE MADE. 15 . THE NEXT ADDITION IS DIS ALLOWANCE UNDER SECTION 14A OF RS. 8,000/ - WHICH HAS BEEN RAISED VIDE GROUND NO. 5. 15.1 DURING THE YEAR THE ASSESSEE HAS RECEIVED EXEMPT INCOME OF RS. 83,944/ - IN THE FORM OF DIVIDEND FROM UTI/US 64 WHICH WAS CLAIMED HAS EXEMPT. THE SAID ISSUE WAS ALSO R AISED IN THE ORIGINAL ASSESSMENT AND FINALLY DISALLOWANCE SUSTAINED IS AT RS. 1,678/ - . THIS ADDITION AGAIN CANNOT BE SUSTAINED BEING BEYOND THE SCOPE OF 153A IN VIEW OF THE LEGAL PRO PO SI TI ON DISCUSSED ABOVE. 16 . NEXT ISSUE RELATES TO ADDITION ON ACCOUNT O F PROVISION FOR GRATUITY AND PROVISION FOR LEAVE ENCASHMENT OF RS. 8,32,842/ - AND RS. 8,66,920/ - RESPECTIVELY, ADDED BACK TO THE BOOK PROFIT U/S 11 5 JB, WHICH HAS BEEN RAISED AS GROUND NO. 8.1. 16.1 THE AFORESAID PROVISIONS MADE BY THE ASSESSEE WAS BASED O N ACTUARIAL VALUATION AND SAME HAS BEEN ADDED BACK BY THE AO WHILE COMPUTING THE BOOK PROFIT. THIS ADDITION AGAIN IS SANS A N Y MATERIAL BASED ON SEARCH AND ACCORDINGLY , SUCH AN ADDITION T O THE BOOK PROFIT MADE BY THE AO IS AGAIN BEYOND THE SCOPE OF ASSESSME NT U/S 153A IN THE PRESENT CASE. 17 . NEXT ISSUE RELATES TO ADDITION ON ACCOUNT OF MISCELLANEOUS RECEIPTS, WHICH HAS BEEN RAISED VIDE GROUND NO. 3. 17.1 THE ASSES S EE HAD RECEIVED MISCELLANEOUS RECEIPTS OF RS. 53,500/ - CONSISTING OF AMOUNTS RECEIVED BY THE ASSESSEE TOWARDS CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 15 FILM SHOOTING, CLUB HOUSE CHARGES, REIMBURSEMENT ETC. ASSESSEES CASE HAD BEEN THAT, THESE AMOUNTS HAVE BEEN DULY RECORDED IN THE BOOKS OF ACCOUNTS, HOWEVER, THE SAID ADDITIONS HAVE BEEN MADE ON THE GROUND THAT ASSESSEE COULD NOT FURNISH THE DETAILS OF THE RECEIPTS . THIS ADDITION AGAIN IS NOT BASED ON ANY EVIDENCE OR MATERIAL AT THE TIME OF SEARCH BUT TREATMENT OF CERTAIN RECEIPTS AS INCOME OF THE ASSESSEE BY THE AO , HENCE, THIS AGAIN IS BEYOND THE SCOPE OF SECTION 153A. 17.2 THE NEXT ISS UE R AISED VIDE GROUND NO.7 IS RE - COMPUTATION OF DEDUCTION U/S 80HHC & 80IA. IN THIS REGARD, THE ASSESSEES CONTENTION IS THAT, IN CASE ASSESSMENT IS COMPLETED ON POSITIVE INCOME, THEN DEDUCTION U/S 80HHC & 80IA SHOULD BE ALLOWED. WE ACCORDINGLY, DIRECT THE AO TO ALLOW SUCH DEDUCTION IN CASE THERE IS POSITIVE INCOME AFTER GIVING EFFECT TO THIS ORDER. 18 . SO FAR AS THE OTHER GROUNDS RELATING TO METHOD ADOPTED BY THE AO FOR COMPUTATION OF BROUGHT FORWARD LOSSES AND DEPRECIATION IS JUSTIFIED OR NOT, THE SAME H A V E NOT BEING PRESSED BEFORE US BY THE LD. COUNSEL AND ACCORDINGLY , THE SAME IS TREATED AS DISMISSED. 1 9 . THUS IN VIEW OF OUR AFORESAID FINDING , IN RESPECT OF THE ADDITIONS DISCUSSED ABOVE , WE DIRECT THE AO TO DELETE THE SAME BEING BEYOND THE SCOPE OF S ECTION 153A , EXCEPT FOR THE ADDITION OF RS. 3,16,00,000/ - WHICH HAS TO BE ADDED. ALL OTHER GROUNDS AND CONTENTION ARE NOT BEING DISCUSSED AS ADJUDICATED UPON AS THE SAME HA VE NOT BEEN ARGUED BEFORE US AND ALSO THE OTHER ADDITIONS WHICH HAS BEEN MA D E/DISCUS SED BY THE AO AND CIT(A) . ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE BEFORE US ARE TREATED AS PARTLY ALLOWED. 20 . NOW, WE SHALL TAKE - UP REVENUES APPEAL IN ITA NO. 4569/MUM/2011 VIDE WHICH FOLLOWING GROUNDS HAVE BEEN RAISED : - CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 16 I. WHETHER ON THE FACTS A ND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS JUSTIFIED IN ALLOWING THE DEDUCTION OF RS. 1,27,10,655/ - PROVISION WRITTEN BACK WITHOUT APPRECIATING FACTS THAT ASSESSEE HAS NOT FILED ANY EVIDENCE SHOWING THAT ANY PART OF THE PROVISIONS WR ITTEN BACK WAS NOT ALLOWED AS DEDUCTION IN EARLIER YEARS. II. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS JUSTIFIED IN ALLOWING THE DEDUCTION OF RS. 1,65,10,695/ - FOR ARRIVING AT BOOK PROFIT WITHOUT APPRECIATING THE FACT THAT PROVISIONS CANNOT BE REDUCED WHILE COMPUTING INCOME U/S 115JB. 2 1. SO FAR AS THE ABOVE GROUNDS, AS RAISED BY THE REVENUE, THE SAME ARE AGAIN UNSUSTAINABLE ON THE PRELIMINARY GROUND THAT THEY ARE NOT MADE AS A RESULT OF ANY EVIDENCE OR MA TER IAL AT THE TIME OF SEARCH, BUT ON THE BASIS OF MATERIAL ALREADY ON RECORD AT THE TIME OF ORIGINAL ASSESSMENT AND ON THE BASIS OF AUDITED FINANCIAL STATEMENT. 22 . IN BRIEF, THE NATURE OF ADDITIONS ARE BEING DISCUSSED , SO AS TO EX AMINE WHETHER THEY ARE RESU LT OF ANY SEIZED MATERIALS OR INCRIMINATING EVIDENCE FOUND DURING THE COURSE OF SEARCH OR NOT. SO FAR AS THE ISSUE OF RS. 1,27,10,655/ - ON ACCOUNT OF PROVISION WRITTEN BACK, IT IS SEEN THAT ASSESSEE HAS CREDITED THE SAID AMOUNT ON ACCOUNT OF PROVISION WRIT TEN BACK IN THE PROFIT AND LOSS ACCOUNT, HOWEVER, IT HAS NOT CLAIMED THE ABOVE PROVISION AS DEDUCTION IN THE PAST YEARS FROM THE TOTAL INCOME AND HENCE IT WAS TREATED THAT RIGHT BACK OF PROVISION IN THIS YEAR DID NOT CONSTITUTE INCOME U/S 41(1). ACCORD INGLY, IN THE COMPUTATION OF TOTAL INCOME, THE ASSESSEE HAS REDUCED THE PROFIT AS PER P&L ACCOUNT BY THE SAID AMOUNT OF WRITE BACK. THE AO HA S ADDED AMOUNT AS INCOME O F THE ASSESSEE ON THE GROUND THAT ASSESSEE HAS NOT PROVED THAT IN THE PAST YEARS, THE PRO VISIONS WHICH ARE WRITTEN BACK IN THIS YEAR WERE NOT CLAIMED AS DEDUCTION FROM THE PROFIT. THIS ADDITION AGAIN IS NOT CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 17 RELATED TO ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH , A LBEIT IS DULY BORNE OUT FROM THE ACCOUNTS AND THE AMOUNT ALREADY SHOWN IN THE PROFIT AND LOSS ACCOUNT AND DULY EXAMINED UNDER REGULAR ASSESSMENT U/S 143(3) BY THE A O IN THE PAST. HENCE, THIS ADDITION CANNOT BE ROPED IN THE IMPUGNED ASSESSMENT . 23 . THE SECOND ISSUE RELATED TO DEDUCTION OF RS. 1,16,10,695/ - FROM THE BOO K PROFIT FOR THE PURPOSE U/S 115JB. 23 . 1 THE ASSES S EE HAS WRITTEN BACK THE PROVISIONS TO THE PROFIT & LOSS ACCOUNT AS A PROVISION FOR AN AMOUNT OF RS. 1,65,10,695/ - WHICH WAS NO LONGER REQUIRED AND IT WAS WRITTEN BACK , BECAUSE IT WAS NOT CLAIMED AS DEDU CTION IN THE PAST YEARS AND ACCORDINGLY , THE ASSESSEE REDUCED THE BOOK PROFIT BY THE SAID AMOUNT. THE AO WAS OF THE VIEW THAT THESE PROVISIONS WRITTEN BACK CANNOT BE REDUCED FROM THE BOOK PROFITS. THIS AGAIN IS NOT BASED ON ANY MATERIAL FOUND AT THE TIME O F SEARCH AND HENCE, ADDITION CANNOT BE MADE IN THE IMPUGNED ASSESSMENT PROCEEDINGS. ACCORDINGLY, ADDITIONS WHICH HAS BEEN CHALLENGED BY THE DEPARTMENTAL APPEAL ARE DELETED ON THE PRELIMINARY GROUND THAT THESE ARE BEYOND THE SCOPE OF SECTION 153A . THUS, WIT HOUT GOING INTO THE MERITS OF THE ISSUES, THE ADDITION S MADE ARE DELETED . ACCORDINGLY GROUNDS RAISED BY THE REVENUE ARE TREATED AS DISMISSED. 24 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED WHEREAS, APPEAL OF REVENUE IS TREATED AS DISMISSE D. 2 5 . NOW, WE WILL TAKE - UP THE ASSESSEES APPEAL PERTAIN IN G TO ASSESSMENT YEARS 2002 - 03. IN THIS YEAR ALSO, THE LD. COUNSEL HAD SUBMITTED THAT ALL THE ADDITIONS MADE ARE BEYOND THE SCOPE OF ASSESSMENT U/S 153A , BECAUSE THE ASSESSMENT FOR THE ASSESSMENT Y EAR 2002 - 03 WAS COMPLETED U/S 143(3) WHICH HAS ATTAINED FINALITY MUCH BEFORE THE DATE OF SEARCH. THE ADDITIONS WHICH HA VE BEEN CHALLENGED IN THE VARIOUS GROUNDS OF APPEAL ARE NOT ARISING OUT OF ANY SEIZED DOCUMENTS OR INCRIMINATING MATERIAL FOUND AT THE TI ME CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 18 OF SEARCH AND THEREFORE , THE SAID ADDITION SHOULD BE DELET ED ON THIS PRELIMINARY GROUND ALONE. 26 . AFTER CONSIDERING THE RELEVANT FINDING GIVEN IN THE IMPUGNED ORDER, SPECIFICALLY IN LINE OF THE ASSESSEES ARGUMENT THAT NONE OF THE ADDITIONS WHICH HA V E BEEN CHALLENGED V I DE VARIOUS GROUNDS OF APPEAL BY THE ASSESSEE , ARE ARISING OUT OF ANY SEIZED DOCUMENTS OR INCRIMINATING MATERIAL FOUND AT THE TIME OF SEARCH. HERE IN THIS CASE, THE ORIGINAL RETURN OF INCOME WAS FILED ON 31.10.2002 DECLARING NIL INCOME AND ASSESSMENT WAS COMPLETED U/S 143(3) VIDE ORDER DATED 27.01.2005 AT NIL INCOME AFTER MAKING CERTAIN ADDITIONS. SUCH AN ASSESSMENT WAS SUBJECT TO APPEAL BEFORE THE CIT(A) WHICH TOO STAND S DECIDED VIDE ORDER DATED 05.08.2005 AND APPEAL FILED BEFORE THE TRIBUNAL WAS LATER ON WITHDRAWN. THUS, NO ASSESSMENT WAS PENDING AT THE TIME OF SEARCH ACCORDINGLY, THERE WAS NO AB ATE MENT OF ASSESSMENT PROCEEDINGS IN TERMS OF SECOND PROVISO TO SECTION 153A. AS REGARD ISSUE OF INTEREST INCOME , WHETHER IT IS TAXABLE AS B USINESS INCOME OR INCOME FROM OTHER SOURCES AS CHALLENGED VIDE GROUND NO. 3.4 , THE SAME IS SIMILAR TO GROUND RAISED IN THE ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2001 - 02 AND IN VIEW OF THE FINDING GIVEN THEREIN, SUCH AN ADDITION MADE BY THE AO CANNOT BE SUSTAINED ON THE GROUND THAT SAME IS NOT BASED ON ANY INCRIMINATING MATERIAL FOUND AT THE TIME OF SEARCH IS BEYOND THE SCOPE OF SECTION 153A. 27 . THE NEXT ISSUE PERTAINS TO CLAIM OF DEDUCTION ON ACCOUNT OF REVERSAL OF INTEREST OF RS. 2,79,70,000/ - . 2 8. THE ASSESSEE HAD ACCOUNTED FOR INTEREST RECEIVABLE FROM KALPTARU HOMES OF RS. 3.16 CRORES IN AY 2001 - 02, HOWEVER, KALPTARU HOMES DID NOT AGREE TO PAY ENTIRE AMOUNT OF RS. 3.16 CRORES. ACCORDINGLY MOU WAS ENTERED ON 15.12.2001 , WHEREIN IT WAS DECIDED THAT A S AGAINST RS. 3.16 CRORES KALPTARU HOMES AGREED TO PAY INTEREST OF RS. 36 LAKHS. THE DIFFERENCE BETWEEN THE CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 19 TWO AMOUNTS WAS CLAIMED AS REVERSAL AND HENCE DEDUCTION WHILE COMPUTING THE INCOME FOR THE ASSESSMENT YEAR 2002 - 03. THE AO AND CIT(A) HELD THAT SINC E KALPTARU HOMES DID NOT ACCOUNT FOR THE INTEREST PAID BY THE ASSESSEE IN THE EARLIER YEARS, THEREFORE, ASSESSEE CANNOT ON ITS OWN REVERSE THE INTEREST IN THE SUBSEQUENT YEARS. WHILE DOING SO, THEY HAVE NOT REFERRED TO ANY MATERIAL OR EVIDENCE FOUND DURING THE COURSE OF SEARCH, WHICH IS EVIDENT FROM THE DISCUSSION MADE BY THE CIT(A) IN PARA 8.3 , WHERE IN THE ADDITIONS HAS BEEN SUSTAINED. THUS, SUCH AN ADDITION SUSTAINED IS AGAIN BEYOND THE SCOPE OF PRESENT ASSESSMENT PROCEEDINGS AS IT IS NOT BASED ON ANY INC RIMINATING MATERIAL OR ANY EVIDENCE FOUND AT THE TIME OF SEARCH. 29 THE NEXT ISSUE RELATES TO RE - COMPUTATION OF DEDUCTION U/S 80HHC & 80IA. 30 IN THIS REGARD, THE ASSESSEES CONTENTION IS THAT , IN CASE ASSESSMENT IS COMPLETED ON POSITIVE INCOME , THEN DED UCTION U/S 80HHC & 80IA SHOULD BE ALLOWED. WE ACCORDINGLY , DIRECT THE AO TO ALLOW SUCH DEDUCTION IN CASE THERE IS POSITIVE INCOME AFTER GIVING EFFECT TO THIS ORDER. 29 . NEXT IS SUE RELATES TO WHETHER CHARGES OF REALIZATION OF ASSET OF R S. 27,57,712/ - , IS TO BE INCLUDED IN THE BOOK PROFIT U/S 115JB OR NOT. THIS ISSUE HAS BEEN RAISED VIDE GROUND NO. 6, WHICH IS SIMILAR TO THE GROUND RAISED BY THE ASSESSEE IN THE EARLIER YEAR, THEREFORE, IN VIEW OF THE FINDING GIVEN THEREIN, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. 3 0 . THE NEXT GROUND RELATES TO PROVISION OF GRATUITY OF RS. 25,23,000/ - , WHETHER IS TO BE TAKEN AS INCOME AND ADDED TO THE BOOK PROFIT FOR COMPUTATION OF 115JB. THIS ISSUE IS AGAIN SIMILAR TO THE GROUND RAISED IN AY 2001 - 02, THAT IS NOT BAS ED ON MATERIAL CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 20 FOUND AND SEIZED AT THE TIME OF SEARCH. ACCORDINGLY, THIS ISSUE IS TOO DECIDED IN FAVOUR OF THE ASSESSEE. 3 1 . NEXT GROUND RELATES TO COMPUTATION OF BROUGHT FORWARD LOSSES/DEPRECIATION WHILE COMPUTING THE BOOK PROFIT U/S 115JB. THIS ISSUE AG AIN HAS NOTHING TO DO WITH THE MATERIAL FOUND AND SEIZED AT THE TIME OF SEARCH. ACCORDINGLY , THE AO IS DIRECTED TO DECIDE THIS ISSUE PRO TANTO IN ACCORDANCE WITH THE PROVISIONS OF LAW. 32 . THUS, GROUND RAISED BY THE ASSESSEE IS PARTLY ALLOWED. 3 3 . NOW WE WILL TAKE - UP REVENUES APPEAL BEING ITA NO. 4570/MUM/2011 FOR AY 2002 - 03 VIDE WHICH FOLLOWING GROUNDS HAVE BEEN RAISED : - I. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS JUSTIFIED IN DELETING THE ADDITION OF RS. 1,23,484/ - MADE ON ACCOUNT OF UNDISCLOSED INCOME FROM THE HINDUSTAN MILLS PROJECT. II. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS JUSTIFIED IN ALLOWING THE ASSESSEE TO REDUCE AN AMOUNT OF RS. 8,48,922/ - FROM T HE TOTAL INCOME AS BEING PROVISION WRITTEN BACK DURING THE YEAR. III. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS JUSTIFIED IN DELETING THE ADDITION MADE ON ACCOUNT OF BOGUS AMOUNT CREDITED TO CONSTRUCTION WORK - IN - PROGRESS OF RS. 6.77 CRORES WITHOUT APPRECIATING THE FACTS THAT SINCE HAS TRANSFERRED PART WORK IN PROGRESS AT COST TO M/S HINDUSTAN SPINNING AND WEAVING MILLS IT CAN NOT EFFECT THE PROFIT OF CURRENT YEAR AND THEREFORE THE COST OF WORK CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 21 IN PROGRESS TRANS FERRED SHOULD HAVE BEEN REDUCED FROM OPENING AS WELL AS CLOSING STOCK WORK IN PROGRESS. IV. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS JUSTIFIED IN HOLDING THAT UNABSORBED DEPRECIATION CAN BE SET OFF AGAINST AN Y INCOME OF THE YEAR WITHOUT APPRECIATING THE DECISION OF ITAT SPECIAL BENCH IN CASE OF DCIT VS TIMES GUARANTY LTD 2010 40 SOT 14 (MUM) SB. V. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS JUSTIFIED IN DIRECTING A O TO REDUCE IN AMOUNT OF RS. 8,50,922/ - WHILE RE - COMPUTING THE NET PROFIT FOR ARRIVING AT BOOK PROFIT U/S 115JB OF THE INCOME TAX ACT, 1961. 3 4 . WITH REGARD TO AFORESAID GROUND S , IT HAS BEEN SUBMITTED BEFORE US THAT NONE OF THE ADDITIONS ARE BA S ED ON ANY INCRIMINATING MATERIAL FOUND AT THE AT THE TIME OF SEARCH OR ARE ARISING OUT OF ANY SEARCH MATERIAL. IN FACT, ALL THESE ADDITIONS ARE BASED ON MATERIAL ALREADY AVAILABLE ON RECORD WHICH HA VE BEEN SUBJECTED TO THE SCRUTINY ASSESSMENT U/S 143(3) BY THE AO. 3 5 . AS REGARDS THE MISCELLANEOUS RECEIPTS OF RS. 1,23,484/ - AS RAISED IN GROUND NO. 1, THE ASSESSEES CASE HAS BEEN THAT SOME OF THESE RECEIPTS HAVE BEEN RECEIVED ON SOCIETY S ACCOUNT WHICH HAS BEEN RECEIVED TOWARDS PARKING RECEIPTS RECEIVED FROM CUSTOMER S , RENT OF THE PREMISES FOR BUILDING LET OUT FOR SHOOTING, CONDUCTING SIMILAR FUNCTIONS ETC. THE SAID AMOUNT WAS DULY RECORDED IN THE BOOKS OF ACCOUNT AND MOST OF THE RECEIPTS HAVE BE EN REDUCED FROM THE COST OF CONSTRUCTION OF THE PROJECT. THE LD. CIT(A) H AS DELETED THE SAID ADDITION ON MERITS AFTER APPRECIATING TH E ENTIRE FACT AND MATERIAL ON RECORD . THIS ADDITION AGAIN IS NOT BASED ON ANY CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 22 INCRIMINATING MATERIAL FOUND AND SEIZED AT THE TIME OF SEARCH , HENCE SAME IS BEYOND THE SCOPE OF ASSESSMENT U/S 153A. 3 6 . SIMILARLY, THE ADDITION OF RS. 8,48,922/ - MADE U/S 41(1) IS AGAIN NOT BASED ON ANY INCRIMINATING MATERIALS BUT ARE ARISING FROM THE DETAILS AVAILABLE IN THE BOOKS OF ACCOUNTS WHICH HA VE BEEN SCRUTINIZED DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143(3) , THEREFORE , THIS ADDITION IS AGAIN UNSUSTAINABLE IN THE PRESENT PROCEEDINGS. 38 . SO FAR AS THE ADDITION OF RS. 6.77 CRORES , IS CONCERNED, THE RELEVANT FACTS ARE THAT THE ASSESSEE HAS ENTERED INTO AN AGREEMENT WITH HINDUSTAN SPINNING & WEAVING MILL S FOR CONSTRUCTION OF RESIDENTIAL BUILDING IN KALPTARU HOMES. AS PER THE AGREEMENT, THE ASSESSEE HAS AGREED TO PROVIDE AN AREA OF 23 ,000 . SQ. FT. TO HINDUSTAN SPINNING MILLS AND IN TURN , THE COST OF CONSTRUCTION WOULD BE REIMBURSED BY THE SAID COMPANY TO T HE ASSESSEE. ACCORDINGLY, THE ASSESSEE CONSTRUCTED AN AREA AND HANDED OVER THE AREA OF 23,000 SQ. FT. IN THE BOOKS, THE ASSESSEE DETERMINED THE COST AT RS. 6.77 CRORES WHICH WAS REDUCED FROM THE COST OF CONSTRUCTION IN AY 2002 - 03. THE AO HELD THAT CREDIT O F RS. 6 .77 CRORES TO THE CONSTRUCTION WORK - IN - PROGRESS A CCO UNT IS RESULTING IN TO INCOME OF THE ASSESSEE AND HENCE HE MADE THE ADDITION ON THE GROUND THAT ASSESSEE HAS MADE BOGUS AND ARBITRARY CREDIT ENTRY IN WIP ACCOUNT, BECAUSE OF WHICH THERE IS SUPPRESS ION OF PROFIT. THE LD. CIT(A) HELD THAT IT IS NOT BOGUS CREDIT ENTRY BUT AMOUNT IS DUE TO THE ASSESSEE FROM HINDUSTAN SPINNING AND WEAVING MILLS LTD. AS PER THE AGREEMENT AND THEREFORE, THE ASSESSEE HAS REDUCED THE SAME FROM THE COST OF THE CONSTRUCTION. T HERE WAS A DISPUTE GOING ON REGARDING RECOVERY OF SAID AMOUNT FROM HINDUSTAN SPINNING & WEAVING MILLS LTD. AND THE SAID MATTER WAS SUBJUDICE BEFORE THE ARBITRATOR. THE RELEVANT FINDING OF THE LD. CIT(A) ON THIS ISSUE IS AS UNDER : - CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 23 CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 24 TH O U GH , THE AFORESA ID FINDING OF THE CIT(A) IS BASED ON THE APPRECIATION OF FACTS AND MATERIAL ON RECORD, HOWEVER, FROM THE PERUSAL OF THE IMPUGNED ORDER AS WELL AS THE ASSESSMENT ORDER, IT IS SENT T HAT THIS ADDITION IS NOT BASED ON ANY MATERIAL FOUND DURING THE COURSE OF SE ARCH AND, THEREFORE, WITHOUT THERE BEING ANY INCRIMINATING MATERIAL , SUCH AN ADDITION CANNOT BE ROPED IN THE ASSESSMENT U/S 153A. ACCORDINGLY, THIS ADDITION IS DELETED ON THE PRELIMINARY GROUND . 3 9 . THE NEXT ISSUE PERTAINS TO WHETHER UNABSORBED DEPRECIATI ON CAN SET OFF AGAINST ANY OTHER INCOME. 40. BEFORE US THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT, THIS ISSUE IS COVERED BY THE DECISION OF HONBLE GUJARAT HIGH COURT IN GENERAL M OTORS INDIA PVT. LTD. VS DCIT, REPORTED IN [2013] 257 CTR 123 , WHEREAS , LD. DR RELIED UP ON THE DECISION OF ITAT SPECIAL BENCH IN THE CASE OF DCIT VS TIMES GUARANTEE , REPORTED IN [ 2 0 10 ] 40 SOT 14 (MUMBAI) (SB). 4 1 . IN VIEW OF THE DECISION OF HONBLE GUJARAT HIGH COURT, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE AND ORDE R OF THE CIT(A) ON THIS SCORE IS UPHELD. CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 25 4 2. THE LAST ISSUE PERTAINS TO PROVISION WRITTEN BACK WHILE COMPUTING DEDUCTION U/S 115JB. 4 3. AGAIN, AMOUNTS IN QUESTION ARE DULY RECORDED IN THE BOOKS OF ACCOUNT AND NOTHING INCRIMINATING IS FOUND PERTAINING TO SUCH PROVISION OF WRITTEN BACK IN THE COURSE OF SEARCH AND HENCE BEYOND THE SCOPE OF SECTION 153A. ACCORDINGLY, ALL THE GROUNDS RAISED BY THE REVENUE ARE TREATED AS DISMISSED. 44 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. 4 5 . NOW, WE WILL TAKE A SSESSEES APPEAL IN ITA NO. 4250/MUM/2011 FOR THE AY 2003 - 04. 46 . GROUND NO. 1.1 RELATING TO VALIDITY OF NOTICE ISSUED U/S 153C , HAS NOT BEEN PRESSED , ACCORDINGLY, THE SAME IS DISMISSED AS NOT PRESSED. 47 . REGARDING OTHER ADDITIONS, AS RAISED IN VARIOUS GROUNDS OF APPEAL, THE LD. COUNSEL SUBMITTED THAT NONE OF THE ADDITIONS ARE BASED ON ANY MATERIAL OR INCRIMINATING EVIDENCE FOUND AT THE TIME OF SEARCH AND SINCE THE ASSESSMENT FOR THE IMPUGNED ASSESSMENT YEAR HAD NOT ABATED AND STOOD FINALIZED AT THE TIME OF SEARCH, THEREFORE, IN VIEW OF THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CARGO GLOBAL LOGISTIC ( SUPRA ) THE SAID ADDITION SHOULD BE DELETED. 48 . FOR THE ASSESSMENT YEAR 2003 - 04, THE ASSESSEE HAS FILED ITS ORIGINAL RETURN OF INCOME ON 23.07.2003 AT NIL INCOME. THEREAFTER, THE SCRUTINY ASSESSMENT U/S 143(3) WAS COMPLETED ON 24.10.2005, WHICH WAS ALSO COMPLETED AT NIL INCOME. THE ADDITIONS, WHICH WERE MADE BY THE AO STOOD CONFIRMED FROM THE STAGE OF THE CIT(A). THUS, AT THE TIME O F SEARCH THE ASSESSMENT FOR THIS ASSESSMENT YEAR STOOD FINALIZED AND WAS NOT PENDING, HENCE CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 26 UNABATED IN TERMS OF SECOND PROVISO TO SECTION 153A. AS REGARDS ISSUE RELATING TO INTEREST INCOME RECEIVED , WHETHER THE SAME IS TAXABLE AS BUSINESS INCOME OR INCOME FROM OTHER SOURCES RAISED VIDE GROUND NO. 3 TO 3.4, THE SAME ARE SIMILAR TO THE GROUNDS RAISED IN THE AY 2001 - 02 AND 2002 - 03 AND, THEREFORE, IN VIEW OF THE FINDING GIVEN THEREIN THAT IT HAS NOT BASED ON ANY INCRIMINATING EVIDENCE FOUND AT THE TIME OF SEAR CH THEREFORE, FOLLOWING THE SAME NO ADVERSE INFERENCE IS DRAWN ON THESE GROUNDS. ACCORDINGLY GROUND NO. 3 TO 3.4 ARE TREATED AS ALLOWED. 49 . GROUND NO. 4 RELATES TO RE - COMPUTATION OF DEDUCTION U/S 80HHC AND 80IA IN CASE THERE IS A POSITIVE INCOME AFTER G IVING EFFECT TO THIS ORDER. ACCORDINGLY, WE DIRECT THE AO TO RE - COMPUTE THE DEDUCTION U/S 80HHC & 80IA IN CASE THERE IS A POSITIVE INCOME AFTER GIVING EFFECT TO THE ITAT ORDER. 50 . IN GROUND NO. 5 THE ASSESSEE HAS RAISED THE PROVISION FOR GRATUITY AND PRO VISION FOR LEVY OF ENCASHMENT AT RS. 2,51,156/ - TO BE REDUCED WHILE COMPLETING THE BOOK PROFIT U/S 115JB. 5 1 . IN THIS REGARD, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ALL THESE AMOUNTS RELATING TO PROVISION FOR GRATUITY AND LEAVE ENCASHMENT HAVE B EEN DULY RECORDED IN THE BOOKS OF ACCOUNTS AND IT IS NOT ARISING OUT OF ANY SEIZED DOCUMENT AND INCRIMINATING MATERIAL FOUND AT THE TIME OF SEARCH AND THEREFORE, NO ADDITION SHOULD BE MADE IN THE BOOK PROFIT . W E FIND THAT THIS ISSUE IS SIMILAR TO THE ISSUE RAISED IN EARLIER YEARS, THEREFORE, VIEW TAKEN THEREIN THAT THIS ADDITION IS BEYOND THE SCOPE OF ASSESSMENT MADE U/S 153A, WILL APPLY HERE ALSO. THUS SUCH AN ADDITION IN THE BOOK PROFIT IS DELETED. ACCORDINGLY, GROUND NO. 5 IS TREATED AS ALLOWED. 5 2 . TH E ISSUE RAISED VIDE GROUND NO. 5.1, IS THAT LD. CIT(A) HAS ERRED IN NOT ACCEPTED THE METHOD OF COMPUTING THE BROUGHT FORWARD LOSS AND DEPRECIATION FOR THE PURPOSE OF SECTION 115JB CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 27 AGAIN IS BEYOND THE SCOPE OF ADDITION U/S 153A, BECAUSE THE SAME IS NOT BASED ON ANY INCRIMINATING MATERIAL FOUND AT THE TIME OF SEARCH , BUT IS BASED ON ENTITIES DULY RECORDED IN THE BOOKS OF ACCOUNT. THEREFORE, NO ADVERSE INFERENCE CAN BE DRAWN. MOREOVER, THIS ISSUE IS SIMILAR TO THE ISSUE RAISED IN AY 2001 - 02 AND IN VIEW OF THE F INDING GIVEN THEREIN , THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. 5 3 . LASTLY, IN GROUND NO. 5.2, THE ASSESSEE HAS CHALLENGED WHETHER THE PROVISION FOR WEALTH - TAX HA S TO BE REDUCED WHILE COMPUTING THE BOOK PROFIT U/S 115JB OF THE ACT. THIS ISSUE AGAIN IS NOT BORNE OUT FROM ANY INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH AND, THEREFORE, ANY ADDITION IN THE BOOK PROFIT CANNOT BE MADE. IN VIEW TAKEN IN ALL THE AFORESAID APPEALS, ACCORDINGLY, GROUND NO. 5.2 IS ALLOWED. 5 4 . ACCORDINGLY, ASSESSEES APPEAL IS TREATED AS PARTLY ALLOWED. 5 5 . NOW WE SHALL TAKE - UP REVENUES APPEAL BEING ITA NO. 4571/MUM/2011 FOR THE ASSESSMENT YEAR 2003 - 04 VIDE WHICH FOLLOWING GROUNDS HAVE BEEN RAISED : - I . 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES CASE AND IN LAW, TH E LD. CIT(A) IS JUSTIFIED IN DELETING THE ADDITION OF RS.85,832/ - MADE ON ACCOUNT OF UNDISCLOSED OTHER INCOME FROM THE HINDUSTAN MILLS PROJECT.' II . 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS JUSTIFIED IN DELETING THE ADDITION OF RS.9,90,000/ - MADE ON ACCOUNT OF UNDISCLOSED RENT INCOME FROM M/S. DURABLE TRADING CO. PVT. LTD.' III . 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS JUSTIFIED IN ALLOWING THE ASSESSEE TO REDUCE AN AM OUNT OF RS.6,13,514/ FROM THE TOTAL INCOME AS BEING PROVISION WRITTEN BACK DURING THE YEAR. IV . 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS JUSTIFIED IN DIRECTING AO TO REDUCE IN AMOUNT OF RS. 6,13,514/ - WHILE RE CO MPUTING THE NET PROFIT FOR ARRIVING AT BOOK PROFIT U/S. 115 JB OF THE INCOME TAX ACT 1961.' 56 . THE FIRST GROUND RELATES TO WHETHER THE MISCELLANEOUS RECEIPTS OF RS. 85,832/ - IS TO BE TREATED AS UNDISCLOSED INCOME OF CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 28 THE ASSESSEE FROM HINDUSTAN MILLS. THE MISCELLANEOUS RECEIPTS OF RS. 85,832/ - CONSISTS OF FOLLOWING RECEIPTS : REFUND OF INSURANCE PREMIUM RECEIVED FROM NEW INDIA INSURANCE RS. 287/ - LEASE RENT FOR FLAT NO. 131 FROM HSBC RS. 39,895/ - RECTIFICATION WORK RECEIVED FROM CONTRACTOR RS. 16,8 00/ - PARKING FEES RECEIVED RS. 21,000/ - AMOUNT RECEIVED FOR CONDUCTING SMALL FUNCTIONS RS. 7,850/ - TOTAL RS. 85,832/ - 57 . THE AO OBSERVED THAT SINCE ASSESSEE COULD NOT SUBMIT ANY EXPLANATION, THEREFORE, HE ADDED THE SAID AMOUNT . 58 . BEFORE THE CIT(A ), THE ASSESSEES CONTENTION HAD BEEN THAT ALL THE DETAILS REQUIRED BY THE AO WERE FURNISHED AND SOME OF THE RECEIPTS LIKE LEASE RENT WERE SHOWN AS RECEIPTS IN THE BOOKS OF ACCOUNTS WHICH HAS BEEN REDUCED FROM THE COST OF CONSTRUCTION. REGARDING RECTIFICAT ION WORK RECEIVED FROM CONTRACTOR WAS AS PER THE CONTRACT AGREEMENT AND IT WAS NOT THE INCOME OF THE ASSESSEE; REGARDING PARKING FEES ALSO, IT WAS SUBMITTED THAT THIS AMOUNT WAS GIVEN TO THE HOUSING SOCIETY AND HENCE DID NOT BELONG TO THE ASSESSEE. LASTLY, WITH REGARD TO REFUND OF INSURANCE PREMIUM , AND AMOUNT RECEIVED CONDUCTING SMALL FUNCTIONS, THE SAME WAS ALSO NOT ALSO RECEIPTS/INCOME OF THE ASSES S EE. 59 . THE LD. CIT(A) DULY APPRECIATED THE ASSESSEES CONTENTION AND DELETED THE ADDITION. 6 0 . BEFORE US, THE LD. COUNSEL SUBMITTED THAT THE AFORESAID ADDITION D OES NOT ARISE OUT OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH AND ACCORDINGLY , IS BEYOND THE SCOPE OF SECTION 153A. 61 . ON THE OTHER HAND LD. DR STRONGLY RELIED UPON THE ORDER OF THE AO. CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 29 6 2 . AFTER CONSIDERING THE AFORESAID FACT AND THE RELEVANT FINDING GIVEN IN THE IMPUGNED ORDER, WE FIND THAT ALL THESE RECEIPTS HAVE BEEN SHOWN BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS AND THIS ADDITION IS NOT BASED ON ANY EVIDENCE OR MATERIAL F OUND AT THE TIME OF SEARCH, THEREFORE, BEING A N UNABATED ASSESSMENT, SUCH AN ADDITION CANNOT BE MADE , ESPECIALLY WHEN SCRUTINY ASSESSMENT PROCEEDINGS HAVE ALREADY BEEN COMPLETED U/S 143(3) AFTER EXAMINING THE BOOKS OF ACCOUNT . 6 3 . IN G ROUND NO. 2, THE REV ENUE HAS CHALLENGED THE AMOUNT OF RS. 9.00 LAKHS RECEIVED FROM M/S D URABLE TRADING CO. P. LTD. AS UNDISCLOSED INCOME OF THE ASSESSEE. 6 4 . THE RELEVANT FACTS ARE THAT, THE AO NOTICED THAT ASSESSEE HAS MADE PAYMENT OF RS. 90,000/ - PER MONTH FOR 11 MONTHS A S COMPENSATION AND MAINTENANCE CHARGES IN ACCORDANCE WITH THE AGREEMENT DATED 19.05.2001 WITH M/S CAPRIHANS INDIA LTD., IN RESPECT OF CELL - PHONE TOWARDS AT KALPTARU HEIGHTS. IT WAS FURTHER NOTICED BY THE AO THAT ASSESSEE HAS NOT OFFERED THIS AMOUNT FOR TAX ATION AND ACCORDINGLY , ADDED THE SAID AMOUNT TO THE INCOME OF THE ASSESSEE. THE ASSESSEES CASE BEFORE THE AO AS WELL AS BEFORE THE CIT(A) WAS THAT IT HAD ENTERED INTO AN AGREEMENT WITH DURABLE T RADING C OMPANY FOR INSTALLATION OF TOURS/ CELL STATIONS AND WAS TO RECEIVE AN AMOUNT , OUT OF WHICH 80% WAS PAYABLE TO THE SOCIETY. THE ASSESSEE RECEIVED THE OTHER AMOUNTS FROM WITH DURABLE TRADING COMPANY, TOWARDS REIMBURSEMENT OF EXPENSES ETC. THE DETAILS OF THE AMOUNT RECEIVED AND TREATMENT IN THE BOOKS OF ACCO UNTS WERE DULY FURNISHED. IT WAS SUBMITTED THAT ALL THESE AMOUNTS WERE PROPERLY ACCOUNTED FOR IN THE BOOKS . THE ASSESSEES SUBMISSION IN THIS REGARD HAS BEEN DEALT IN PARA 7.5 OF THE CIT(A) . THE LD. CIT(A) AFTER CONSIDERING THE ENTIRE FACTS, MATERIALS ON R ECORD AND SUBMISSION OF THE ASSESSEE DELETED THE SAID ADDITION AFTER OBSERVING AND HOLDING AS UNDER : - CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 30 65 . AFTER HEARING BOTH THE PARTIES AND CONSIDERING IMPUGNED ORDERS, WE FIND THAT THIS ADDITION AGAIN IS NOT BASED ON ANY INCRIMINATING MATERIAL FOUND AT THE TIME OF SEARCH BUT IS DULY RECORDED IN THE BOOKS OF ACCOUNT, WHICH W E SUBJECTED TO THE DETAIL SCRUTINY U/S 143(3). ACCORDINGLY, THE SAID ADDITION IS BEYOND THE SCOPE OF SECTION 153A. ACCORDINGLY, THE SAME STANDS DELETED. 6 6 . ON G ROUND NO. 3, THE AS SESSEE HAS CHALLENGED THE ADDITION OF RS. 6,83,514/ - U/S 41(1). THIS ISSUE AGA I N IS SIMILAR TO GROUND NO. 2 RAISED BY THE REVENUE IN ASSESSMENT YEAR 2001 - 02 , THEREFORE, IN VIEW OF THE FINDING GIVEN THEREIN , THIS GROUND IS TREATED AS DISMISSED. 6 7 . GROUND NO. 4 RELATES TO THE PROVISIONS WRITTEN BACK . R EVENUE HAS CHALLENGED WHETHER THE PROVISIONS WRITTEN BACK IS TO BE ADDED WHILE COMPUTING THE BOOK PROFIT OR NOT . CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 31 68 . THIS ISSUE AGAIN IS SIMILAR TO GROUND RAISED IN AY 2001 - 02 WHEREIN WE HAVE ALREADY HELD TH AT , IT IS NOT ARISING OUT OF ANY EVIDENCE FOUND AT THE TIME OF SEARCH, THEREFORE, NO ADDITION IN THE BOOK PROFIT CAN BE MADE. ACCORDINGLY, THIS GROUND IS TREATED AS DISMISSED. 69 . IN THE RESULT, REVENUES APPEAL IS DISMISSED. 70 . NOW WE SHALL TAKE - UP ASS ESSEE APPEAL BEING ITA NO. 42 5 1/MUM/2011 FOR AY 2004 - 05. 71 . HERE ALSO GROUND NO. 1 TO 1.1 RESULTING TO VALIDITY OF NOTICE ISSUED U/S 153 C IS NOT PRESSED AND ACCORDINGLY, THE SAME IS TREATED AS DISMISSED AS NOT PRESSED. 7 2 . IN THIS YEAR ALSO VIDE GROUND NO. 2, THE ASSESSEE HAS CHALLENGED VARIOUS ADDITIONS WHICH HAVE BEEN RAISED IN GROUNDS OF APPEAL ARE NOT BASED ON ANY INCRIMINATING MATERIAL FOUND AT THE TIME OF S E ARCH AND THEY ARE BEYOND THE SCOPE OF ASSESSMENT PASSED U/S 153A. 73 . FOR THE YEAR 2004 - 0 5, THE ASSES S E E HAS FILED ITS RETURN OF INCOME ON 29.10.2004 DECLARING NIL INCOME AND SCRUTINY ASSESSMENT U/S 143(3) WAS ALSO COMPLETED VIDE ORDER DATED 28.10.2005 DETERMINING THE TOTAL INCOME AT RS. 4,17,270/ - WHICH WAS SUBJECT MATTER OF APPEAL BEFORE T HE CIT(A) WHEREIN THE ASSESSEES APPEAL WAS DISMISSED. HERE IN THIS CASE ON LIMITED ISSUE, THE ASSESSMENT WAS SET ASIDE U/S 263 BY THE CIT VIDE ORDER 14.03.2008. HOWEVER, SUCH SETTING ASIDE OF THE ASSESSMENT ON CERTAIN ISSUES HAVE NOTHING TO DO WITH THE AD DITIONS WHICH ARE IMPUGNED AND CHALLENGED IN THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE AS WELL AS REVENUE . FURTHER QUA THE SAID ADDITIONS WHICH ARE IMPUGNED AND ALSO THE EARLIER ASSESSMENT COMPLETED U/S CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 32 143(3) HAVE NOT BEEN ABATED IN TERMS OF SECOND PRO VISO TO SECTION 153A. IN OTHER WORD THE ASSESSMENT U/S 143(3) WAS NOT PENDING. 7 4 . IN GROUND NO. 3 TO 3.4, THE ASSESSEE HAS CHALLENGED THE TREATMENT OF INTEREST INCOME AS INCOME FROM OTHER SOURCES BY THE AO IN RESPECT OF BUSINESS INCOME. 75 . THI S ISSUE ADMITTEDLY IS EXACTLY SIMILAR TO THE GROUND IN EARLIER THREE YEARS AND, THEREFORE, IN VIEW OF THE FINDING GIVEN THEREIN, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. ACCORDINGLY, GROUND NO. 3 TO 3.4 IS TREATED AS ALLOWED. 76 . IN GROUND NO. 4, THE ASSESSEE HAS CHALLENGED THE DISALLOWANCE OF DEPRECIATION IN RESPECT OF BLOCK OF ASSETS OF RESIDENTIAL FLATS OF RS. 1,51,189/ - . 7 7 . BEFORE US, THE LD. COUNSEL SUBMITTED THAT ALL THESE AMOUNTS ARE DULY RECORDED IN THE BOOKS OF ACCOUNTS AND NOTHING INCRI MINATING IS FOUND IN THE CASE OF SEARCH, THEREFORE, IN VIEW OF THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF ALL CARGO LOGISTIC, SUCH AN ADDITION CANNOT BE MADE IN THE IMPUGNED ASSESSMENT PROCEEDINGS. 7 8 . AFTER CONSIDERING THE SUBMISSIO NS OF BOTH THE PARTIES AND ON PERUSAL OF THE IMPUGNED ORDER, WE FIND THAT THE ASSESSEE HAD SHOWN CERTAIN RESIDENTIAL FLATS AS PART OF BLOCK OF ASSETS ON WHICH DEPRECIATION @ 5% HAVE BEEN CLAIMED. ONE OF THE PROPERTY WAS LET OUT AND INCOME THEREFORE WAS ALS O OFFERED AS INCOME . THE ASSESSEES CASE HAS BEEN THAT SINCE THE SAID ASSET APPEARS IN THE BLOCK OF ASSET THEREFORE, DEPRECIATION CANNOT BE DISALLOWED. THE LD. CIT(A) HAS CONFIRMED THE DISALLOWANCE OF DEPRECIATION ON THE GROUND THAT THE ASSESSEE HAS RECEIV ED RENT FROM A FLAT WHICH HAS BEEN OFFERED AS INCOME FROM HOUSING PROPERTY AND DEDUCTION U/S 24 HAS BEEN CLAIMED. CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 33 79 . WE FIND THAT THIS ISSUE IS NOT ARISING OUT OF ANY EVIDENCE OR INCRIMINATING MATERIAL FOUND AT THE TIME OF SEARCH. THEREFORE, CONSISTENT WITH THE VIEW TAKEN IN THE EARLIER APPEAL, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. ACCORDINGLY, GROUND NO. 4 IS TREATED AS ALLOWED. 80 . IN GROUND NO. 5, THE ASSESSEE HAS CHALLENGED THE RE - COMPUTATION OF DEDUCTION U/S 80HHC & 80IA IN CASE THERE IS A POSITIVE INCOME. 8 1 . AFTER GIVING EFFECT TO THIS ORDER, ACCORDINGLY, WE DIRECT THE AO THAT IN CASE THERE IS A POSITIVE INCOME AFTER GIVING EFFECT TO THIS ORDER, DEDUCTION U/S 80HHC & 80IA SHOULD BE ALLOWED. 8 2 IN G ROUND NO. 6, THE ASSESSEE HAS CHALLE NGED THE ISSUE OF PROVISION FOR GRATUITY OF RS. 8,32,063/ - AND PROVISION FOR LEAVE ENCASHMENT OF RS. 1,08,834/ - WHICH HAS BEEN ADDED TO THE BOOK PROFIT IN THE COMPUTATION MADE U/S 115JB BY THE AO. 8 3 . THIS ISSUE IS SIMILAR TO THE GROUNDS RAISED IN ASSESS EES APPEAL, THEREFORE, IN VIEW OF THE FINDING GIVEN THEREIN, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. 84 . IN GROUND NO. 6.5, THE ASSESSEE HAS CHALLENGED THE ADDITION ON ACCOUNT OF PROVISION , WHETHER TO BE REDUCED FROM THE BOOK PROFIT IN THE COMP UTATION U/S 115JB. 8 5 . THIS ISSUE IS AGAIN SIMILAR TO THE GROUNDS RAISED IN EARLIER YEARS AND FURTHER IT IS NOT ARISING OUT OF ANY INCRIMINATING MATERIAL FOUND AT THE TIME OF SEARCH, THEREFORE, THIS ADDITION IS AGAIN BEYOND THE SCOPE OF SECTION 153A. ACCO RDINGLY, GROUND NO. 6.1 IS TREATED AS ALLOWED. CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 34 86 . IN GROUND NO. 6.2, THE ASSESSEE HAS CHALLENGED COMPUTATION OF BROUGHT FORWARD LOSSES WHILE COMPUTING THE BOOK PROFIT. 8 7 . THIS AGAIN IS SIMILAR TO THE GROUND RAISED IN EARLIER YEARS, THEREFORE, IN VIEW O F THE FINDING GIVEN THEREIN, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. 88 . IN G ROUND NO. 6.3, THE ASSESSEE HAS CHALLENGED , WHETHER THE PROVISION FOR WEALTH - TAX IS TO BE REDUCED WHILE COMPUTING THE BOOK PROFIT. THIS ISSUE IS SIMILAR TO THE ISSUE RAI SED IN AY 2003 - 04 WHEREIN WE HAVE DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE ON THE GROUND THAT SAME IS BEYOND THE SCOPE OF ASSESSMENT U/S 153A AS NOTHING INCRIMINATING WAS FOUND PERTAINING TO THIS AMOUNT IN THE COURSE OF SEARCH. ACCORDINGLY, GROUND NO. 6.3 IS TREATED AS ALLOWED. 8 9 . RESULTANTLY, APPEAL OF THE ASSESSEE FOR AY 2004 - 05 STANDS PARTLY ALLOWED. 9 0 . NOW, WE WILL TAKE - UP REVENUES APPEAL BEING ITA NO. 4572/MUM/2011 FOR AY 2004 - 05, VIDE WHICH FOLLOWING GROUNDS HAVE BEEN RAISED : - I WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS JUSTIFIED IN DELETING THE ADDITIONS OF RS. 1,57,450/ - MADE ON ACCOUNT OF UNDISCLOSED INCOME FROM THE HINDUSTAN MILLS PROJECT. II. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) IS JUSTIFIED IN DELETING THE ADDITIONS OF RS. 12,18,000/ - MADE ON ACCOUNT OF UNDISCLOSED RENT INCOME FROM M/S DURABLE TRADING CO. PVT LTD. III. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD . CIT(A) IS JUSTIFIED IN ALLOWING THE ASSESSEE TO REDUCE AN AMOUNT OF RS. 4,17,698/ - CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 35 FROM THE TOTAL INCOME AS BEING PROVISION WRITTEN BACK DURING THE YEAR. 9 1 . ALL THE AFORESAID GROUNDS, ADMITTEDLY, ARE SIMILAR TO THE GROUND RAISED IN THE EARLIER YEARS, THEREFORE, IN VIEW OF THE FINDING GIVEN THEREIN, ALL THESE GROUNDS ARE DECIDED AGAINST THE REVENUE MAINLY ON THE GROUND THAT NONE OF THE ADDITIONS ARE ARISING OUT OF ANY MATERIAL FOUND AT THE TIME OF SEARCH AND ARE DULY RECORDED IN THE BOOKS OF ACCOUNTS W HICH WE RE SUBJECTED TO THE SCRUTINY U/S 143(3). THEREFORE, SUCH ADDITIONS CANNOT BE ROPED IN, THE ASSESSMENT MADE U/S 153A AS THE ASSESSMENT FOR ASSESSMENT YEAR 2004 - 05 WAS UNABATED ASSESSMENT IN VIEW OF THE SECOND PROVISO TO SECTION 153 A . ACCORDINGLY, THE REVENUES APPEAL IS TREATED AS DISMISSED. TO SUM - UP: ASSESSEES APPEALS FOR AYS 2001 - 02 TO AY 2004 - 05 STANDS PARTLY ALLOWED AND REVENUES APPEALS AYS 2001 - 02 TO AY 2004 - 05 STANDS DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER , 2015. ( ) ( ) ( G S PANNU ) ( AMIT SHUKLA ) ACCOUNTANT MEMBER JUDICIA L MEMBER MUMBAI, DATE: 30 TH SEPTEMBER , 2015 / COPY TO: - 1 ) / THE APPELLANT. 2 ) / THE RESPONDENT. 3) THE CIT (A) - 4 1 , MUMBAI. 4 ) THE CIT CENTRAL - III , MUMBAI. CAPRIHANS INDIA LTD. ITA S 4248 TO 4251 /M/1 1 ITAS 4569 TO 45 72/M/11 36 5 ) , , / THE D.R. C BENCH, MUMBA I. 6 ) \ COPY TO GUARD FILE. / BY ORDER / / TRUE COPY / / / , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI * . . *CHAVAN, SR.PS