ASST CIT CIR 2, THANE V. SALASAR DEVELOPERS, THANE

ITA 4511/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1464 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2004-2005
• Appeal Filed On: 30-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H N SINGH
• Assessee Lawyers: V IRAG H SHAH
• Keywords: Gift; Depreciation; Search and seizure; Opportunity of being heard; Rule of consistency; Period of limitation; Retrospective amendment; Additional evidence; Validity of assessment; Competent authority; Block assessment; Reason to believe; Documents seized
• Section: 143(3); 133A; 153A; 234B; 32; 131; 37; 132; 28; 139

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI , . . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI N.K. PRADHAN, ACCOUNTANT MEMBER ITA NOS.4511 TO 4513/MUM/2014 ASSESSMENT YEARS: 2004-05 TO 2006-07 ACIT, CIRCLE-2, THANE / VS. M/S SALASAR DEVELOPERS, GROUND FLOOR, VRINDAVAN, SALASAR BRIJBHOOMI, TEMBA HOSPITAL ROAD, BHAYANDAR(W), DIST:-THANE-401101 ( ' / REVENUE) ( #$ % /ASSESSEE) PAN. NO . AAKFS6465R #$ % / ASSESSEE BY SHRI VIRAG H. SHAH ' / REVENUE BY SHRI H.N. SINGH CIT-DR & ' ' % ( / DATE OF HEARING : 23/03/2017 ' % ( / DATE OF ORDER: 04/04/2017 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THIS BUNCH OF THREE APPEALS IS BY THE REVENUE AGAI NST THE IMPUGNED ORDERS ALL DATED 21/03/2014 OF THE LD. FIRST M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 2 APPELLATE AUTHORITY, MUMBAI. THE REVENUE HAS CHALLE NGED ANNULLING THE ORDER BY THE LD. COMMISSIONER OF INCO ME TAX (APPEAL) U/S 153A R.W.S 143(3) OF THE INCOME TAX AC T, 1961 (HEREINAFTER THE ACT), AS ILLEGAL BY HOLDING THAT N O SEARCH AND SEIZURE ACTION WAS INITIATED IN THE CASE OF ASSESSE E FIRM AS THE SAME IS A SEPARATE JURISDICTION PERSON FROM ITS PARTNERS ON WHOSE RESIDENTIAL PREMISES SEARCH AND SEIZURE AC TION U/S 132 OF THE ACT WAS CARRIED OUT IN THEIR INDIVIDUAL CAPACITY. 2. DURING HEARING, THE LD. CIT-DR, SHRI H.N. SINGH , ADVANCED ARGUMENTS, WHICH IS IDENTICAL TO THE GROUN D RAISED BY FURTHER SUBMITTING THAT THE ADDITION WAS WRONGLY ANNULLED BY THE LD. COMMISSIONER OF INCOME TAX (APP EAL) AND IT WAS WRONGLY OBSERVED THAT NO REFERENCE HAS B EEN MADE TO ANY DOCUMENT/INCRIMINATING MATERIAL FOUND D URING COURSE OF SURVEY U/S 133A OF THE ACT AT THE ASSESSE ES BUSINESS PREMISES. THE LD. CIT-DR ALSO FILED WRITT EN SUBMISSIONS, RUNNING INTO FIVE PAGES. 2.1. ON THE OTHER HAND, SHRI, VIRAG H. SHAH, LD. COUNSEL FOR THE ASSESSEE, DEFENDED THE IMPUGNED ORD ER. IT WAS CONTENDED THAT NO SEARCH AND SEIZURE ACTION WAS CARRIED OUT IN THE CASE OF THE PRESENT ASSESSEE AND RATHER SEIZURE ACTION WAS CARRIED OUT AT THE RESIDENTIAL P REMISES OF THE PARTNERS OF THE ASSESSEE FIRM. IT WAS ALSO SUB MITTED THAT NO INCRIMINATING MATERIAL WAS FOUND, WHICH RELATES TO THE ASSESSEE, DURING SEARCH ACTION IN THE HANDS OF THE PARTNERS. RELIANCE WAS PLACED UPON THE CASES, WHICH HAVE BEEN M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 3 REFERRED IN TO THE IMPUGNED ORDER ALONG WITH THE DE CISION OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF M/S CHD DEVELOPERS LTD. (ITA NO.2902 AND 4694/DEL./2010) OR DER DATED 26/09/2012, WHICH WAS AFFIRMED BY HON'BLE DEL HI HIGH COURT VIDE ORDER DATED 22/01/2014 (2014) 43 TAXMAN.COM 249(DEL.); 362 ITR 177 (DEL.) ; (2014) 2 66 CTR 360 (DEL.). 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS/WRIT TEN SUBMISSIONS OF THE DEPARTMENT AND PERUSED THE MATER IAL AVAILABLE ON RECORD. WE FIND THAT THE CASE OF THE A SSESSEE IS SQUARELY COVERED BY THE DECISION OF THE TRIBUNAL IN THE CASE OF DCIT VS M/S BALALJI UNIVERSAL TRADELINK PVT. LTD . IN ITA NO.2183/MUM/2013 (ASSESSMENT YEAR-2004-05), ITA NOS.2184 TO 2186/MUM/2013 (ASSESSMENT YEARS 2005-06 TO 2007-08) AND ITA NOS.2906 TO 2908/MUM/2013(ASSESSMENT YEARS- 2005-06 TO 2007-08) ORDER DATED 31/10/2016. THE RELEVANT PORTI ON OF THE ORDER IS REPRODUCED HEREUNDER FOR READY REFEREN CE AND ANALYSIS:- THE ASSESSEE AS WELL AS REVENUE IS IN CROSS APPEAL FOR THE ASSESSMENT YEARS 2005-06, 2006-07 AND 2007-08, WHER EAS, THE ASSESSEE IS IN APPEAL FOR A.Y. 2004-05, AGAINST THE IMPUGNED ORDERS ALL DATED 17/01/2013 OF THE LD. FIRST APPELL ATE AUTHORITY, MUMBAI. 2. FIRST, WE SHALL TAKE UP THE APPEAL OF THE ASSESS EE (ITA NO.2183/MUM/2013) CONFIRMING THE ORDER FRAMED BY TH E LD. ASSESSING OFFICER U/S 143(3) R.W.S. 153A OF THE ACT . IN THIS APPEAL, THE ASSESSEE HAS CHALLENGED EXECUTION OF WARRANTS A ND ALSO WHETHER VALID SEARCH WAS INITIATED IN THIS CASE. H OWEVER, SINCE, VALIDITY OF SEARCH HAS BEEN CHALLENGED, THEREFORE, THE OUTCOME OF THIS APPEAL WILL BE APPLICABLE TO THE IMPUGNED APPE ALS. M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 4 2.1. DURING HEARING, THE LD. COUNSEL FOR THE ASSES SEE, SHRI MANISH SANGHVI, STRONGLY ADVOCATED THAT PANCHN AMA DOES NOT CONTAIN THE NAME OF THE ASSESSEE FOR WHICH OUR ATTE NTION WAS INVITED TO THE PANCHNAMA, PREPARED IN THE NAME OF SHRI MANOJ PUNAMIYA & GROUP, BY ASSERTING THAT UNDER THE INCO ME TAX ACT, 1961, THERE IS NO CONCEPT OF GROUP. IT WAS CANVASS ED THAT THE INVENTORY OF ACCOUNTS, BOOKS, ETC, PREPARED ON 24/1 2/2009, AND PROHIBITORY ORDERS U/S 132(3) OF THE ACT WERE ALSO ONLY IN THE NAME OF SHRI MANOJ PUNAMIYA ALONE AND NOT THE PRESENT AS SESSEE. IT WAS CLARIFIED THAT THE ASSESSEE HAS NO NEXUS WITH THE P REMISES SEARCHED/SURVEYED BY THE DEPARTMENT. IT WAS EMPATHE TICALLY CONTENDED THAT NONE OF THE DOCUMENTS, CLAIMED TO BE SEIZED, BELONGS TO THE ASSESSEE. IT WAS ASSERTED THAT NO SE ARCH WAS EVER CONDUCTED UPON THE ASSESSEE, HENCE, THE PROCEEDINGS U/S 153A OF THE ACT ARE BAD IN LAW AND VOID. THE LD. COUNSEL FO R THE ASSESSEE TOOK US TO VARIOUS PAGES OF THE PAPER BOOK AND ALSO THE COPY OF PANCHNAMA DRAWN BY THE DEPARTMENT. THE LD. COUNSEL ALSO INVITED OUR ATTENTION TO THE FINDING CONTAINED IN THE IMPUG NED ORDER (AS MENTIONED AT PAGE-4), WHEREIN, THE ASSESSEE IN RESP ONSE TO LETTER DATED 18/08/2011 ASKED THE AUTHORITIES TO PROVIDE T HE ASSESSEE, THE COPY OF THE SEARCH WARRANT, IF ANY, ISSUED AGAINST THE ASSESSEE. 2.2. ON THE OTHER HAND, SHRI N. P. SINGH, LD. CIT- DR, STRONGLY DEFENDED THE CASE OF THE REVENUE BY CONTEN DING THAT SEARCH AND SEIZURE OPERATION WAS VALIDLY CARRIED OU T BY THE DEPARTMENT AND THE SEARCH WARRANTS WERE ALSO EXECUT ED. THE CASE WAS HEARD AT LENGTH ON 17/02/2016. AT THIS STAGE, S INCE THE JURISDICTIONAL ISSUE WAS RAISED BY THE ASSESSEE, TH E LD. CIT-DR SOUGHT TIME TO SEEK COMMENTS FROM THE ASSESSING OFF ICER. AT THE TIME OF HEARING ON 03/03/2016, THE LD. CIT-DR FILED A REPLY DATED 01/03/2016, DULY SIGNED BY THE DCIT, CENTRAL CIRCLE -7(1)(MUMBAI), WHEREIN, IT HAS BEEN REPLIED AS UNDER:- IN THIS CONNECTION, THIS IS TO INFORM YOU THAT, I HAVE VERIFIED FROM MY OFFICE RECORD AND IT IS SEEN THAT THE ABOVE DOCUMENTS ARE NOT AVAILABLE. THE ONLY MATERIAL AVAI LABLE IS PERTAINING TO THE SURVEY ACTION U/S 133A OF THE I.T . ACT ON THE ASSESSEE ON 31/10/2009. 2.3. HOWEVER, THE LD. CIT-DR CONTENDED THAT WARRAN TS WERE ISSUED AGAINST THE ASSESSEE. IN REPLY, THE LD. COU NSEL FOR THE ASSESSEE REITERATED THAT ISSUE IS WHETHER VALID SEARCH WAS I NITIATED AGAINST THE ASSESSEE. IT WAS ALSO CLARIFIED FROM PAGE 58 OF THE PAPER BOOK THAT THE AUTHORIZATION IS WITH RESPECT TO FLAT NO.504 (PAGE- 59 OF THE PAPER BOOK) WHICH BELONGS TO SHRI MANOJ PUNAMIYA AND NOT THE AS SESSEE. AGAIN QUERY WAS RAISED BY THE BENCH WHETHER SEARCH WAS CO NDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE? THE LD. CIT-DR STICK TO THE REPLY OF THE LD. ASSESSING OFFICER DATED 01/03/2016, BY A SSERTING THAT M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 5 WARRANTS WERE ISSUED TO THE ASSESSEE ALSO, THEREFOR E, THE SEARCH IS VALID. IN REPLY, THE LD. COUNSEL FOR THE ASSESSEE CHALLENGED THE ASSERTION OF THE LD. CIT-DR BY EXPLAINING THAT EVEN IT IS PRESUMED, THOUGH NOT ADMITTED THAT WARRANTS WERE ISSUED BY TH E DEPARTMENT AGAINST THE ASSESSEE, THAT WARRANT, IF ANY, NEITHER WAS EXECUTED TO THE ASSESSEE NOR ANY SEARCH WAS INITIATED AGAINST THE A SSESSEE, PURSUANT TO SUCH WARRANT, AND FURTHER THE PANCHNAMA DOES NOT CONTAIN THE NAME OF THE ASSESSEE. 2.4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRI EF, ARE THAT THE ASSESSEE COMPANY, AT THE RELEVANT TIME, WAS ENGAGED IN THE BUSINESS OF TRADING/MANUFACTURING RECYCLED PLASTIC GRINDING, RECYCLED PLASTIC, AGGLOMERATES, PLATINUM BARS, SILVER IGNOTS, GOLD BA R, GOLD JEWELLERY, CUT AND POLISH DIAMONDS, RECYCLED PLASTIC GRANULES, ETC . THE ASSESSEE DECLARED INCOME OF RS.4,325/- IN ITS RETURN FILED O N 20/10/2004, ACCOMPANIED BY AUDITED STATEMENT OF ACCOUNTS, WHIC H WAS ACCEPTED BY INTIMATION U/S 143(1) OF THE ACT DATED 01/07/200 5. 2.5. AN ACTION U/S 132 OF THE ACT WAS CARRIED OUT AT THE RESIDENTIAL PREMISES OF ONE SHRI MANOJ PUNAMIYA (IN HIS INDIVIDUAL/PERSONAL CAPACITY) ON 31/10/2009 AND THE REAFTER ON 24/12/2009, WHEREIN, SEVENTEEN PAPERS, WERE CLAIMED TO BE FOUND AND SEIZED. THE COPY OF PANCHANAMA ALONG WITH INVENTORY OF PAPERS, FOUND AND SEIZED, IS MATTER OF RECORD. PURSUANT TO SAID A CTION, NOTICE U/S 153A WAS ISSUED ON 27/12/2010. THE ASSESSEE CHALLENGED THE INITIATION OF PROCEEDINGS U/S 153A OF THE ACT. IT IS NOTEWORTHY T HAT AS ABUNDANT CAUTION, THE ASSESSEE FILED RETURN IN RESPONSE TO N OTICE U/S 153A ON 24/08/2011, DECLARING TOTAL INCOME AT RS.4,325/-, A S WAS ORIGINALLY DECLARED IN RETURN OF INCOME FILED U/S 139(1) OF TH E ACT. THE ASSESSMENT WAS COMPLETED PURPORTEDLY U/S 143(3) R.W .S. 153A ON 29/12/2011 MAKING CERTAIN ADDITIONS. 2.6. THE VALIDITY OF INITIATION OF PROCEEDINGS U/S 153A OF THE ACT WERE CHALLENGED BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) BY CONTENDING THAT 153A NOTICE CAN BE ISS UED ONLY IN THE CASES, WHERE ACTION 132 IS INITIATED AND/OR WHERE B OOKS OF ACCOUNTS ETC ARE REQUISITIONED U/S 132A OF THE ACT. THE STAND OF THE ASSESSEE WAS THAT, NEITHER ANY SEARCH ACTION WAS INITIATED AGAIN ST THE ASSESSEE NOR ANY BOOKS OF ACCOUNTS, ETC WERE REQUISITIONED U/S 1 32A OF THE ACT, THEREFORE, PROCEEDINGS U/S 153A MAY BE DROPPED. HO WEVER, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AFFIRMED THE S TAND TAKEN IN THE ASSESSMENT ORDER. THE ASSESSEE IS IN FURTHER APPEAL BEFORE THIS TRIBUNAL. 2.7. AT THE BEGINNING OF THE HEARING, THE LD. COUN SEL FOR THE ASSESSEE TOOK A PRELIMINARY OBJECTION THAT WARRANTS WERE NEVER EXECUTED AGAINST THE PRESENT ASSESSEE. THE LD. CIT- DR SOUGHT TIME TO M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 6 REPLY TO THE PRELIMINARY OBJECTION RAISED BY THE AS SESSEE. WE ARE REPRODUCING HEREUNDER THE REPLY DATED 01/03/2016 OF THE LD. ASSESSING OFFICER, PURSUANT TO THE QUERY OF THE BENCH, (FILED BY THE LD. CIT-DR) FOR READY REFERENCE AND ANALYSIS:- OFFICE OF THE DEPUTY COMMISSIONER OF INCOME- TAX CENTRAL CIRCLE-7(1), ROOM NO.653, 6TH FLOOR, AAYAKARBHAVAN , M . K . ROAD , MUMBAI - 400020 TEL : 022 - 22086216 NO . DCIT/CC . 7(1 ) / JUDICIAL/2015 - 16 DATED : 01 / 03/2016 THE COMMISSIONER OF INCOME TAX (DR) ITAT - 2, 'B' BENCH, MUMBAI. SIR, SUB: APPEAL IN THE CASE OF M/S. BALAJI UNIVERSAL TRADE LINK P. LTD. A.Y. 2004-05 TO 2006-07 ITA NOS. 2183 TO 2186/M/ 13 AND 2906 TO 2908/M/ 13 PAN: AABCL0236H - REGARDING. REF: NO. CIT(DR)/ITAT-2/B-BENCH/20 15-16 DATED 18.02.201 6 NO. CIT(DR)/ITAT-2/B-BENCH/2015-16 DATED 25.02.2016 KINDLY REFER TO THE ABOVE. IN YOUR ABOVE REFERRED LETTER IT IS MENTIONED THAT IN CONNECTION WITH THE APPEAL PROCEEDINGS BEFORE ITAT, 'B' BENCH MUMBAI IN THE ABOVE MENTIONED CASE, THE FOLLOWING DOCUMENTS ARE REQUIRED BY YOU : I) A COPY OF THE DULY EXECUTED WARRANT OF AUTHORIZA TION U/S. 132(1) OF THE ACT READ WITH RULE 112(1) O F THE I. T. RULES IN FORM NO. 45, MENTIONING THE NAME AND ADDRESS OF THE ASSESSEE. II) A COPY OF THE 'PANCHNAMA' PREPARED ON THE CONCL USION OF THE SEARCH AT THE PREMISES OF THE ASSESSEE . IN THIS CONNECTION, THIS IS TO INFORM YOU THAT, I H AVE VERIFIED FROM MY OFFICE RECORD AND IT IS SEEN THAT THE ABOVE DOCUMENTS ARE NOT AVAILABLE. THE ONL Y MATERIAL AVAILABLE IS PERTAINING TO THE SURVEY ACTION U/S. 133A OF THE 1. T. ACT ON THE ASS ESSEE ON 31.10.2009. YOURS FAITHFULLY, ( SUNIL S DESHPANDE ) DEPUTY COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-7( 1), MUMBAI. COPY TO: THE PR.CIT CENTRAL - 4, MUMBAI THE ADDL. CIT CENTRAL RANGE - 7, MUMBAI. DEPUTY COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-7( 1), MUMBAI . M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 7 1. 2.8. IF THE AFORESAID LETTER IS ANALYZED, IT IS NO TED THAT THE LD. CIT-DR ASKED THE CONCERNED DCIT, CENTRAL CIRCLE -7(1), MUMBAI, TO PROVIDE THE COPY OF THE DULY EXECUTED WARRANT OF AUTHORIZATION U/S 132(1) OF THE ACT R.W.R. 112(1) OF THE INCOME TAX R ULES,1962 IN FORM NO.45 MENTIONING THE NAME AND ADDRESS OF THE ASSESS EE AND A COPY OF THE PANCHNAMA PREPARED ON THE CONCLUSION OF THE SEARCH AT THE PREMISES OF THE ASSESSEE. VIDE AFORESAID LETTER, ON VERIFICATION OF RECORD, THE LD. DCIT INFORMED THAT ABOVE DOCUMENTS ARE NOT AVAILABLE ON RECORD AND THE ONLY MATERIAL AVAILABLE PERTAINS TO SURVEY ACTION U/S 133A OF THE ACT ON THE ASSESSEE ON 31/10/2009. WE HAVE CAREFULLY PERUSED THE DOCUMENTS PRODUCED BEFORE US AND WE HAVE OBSERVED THAT THE WARRANT OF AUTHORIZATION U/S 132 OF THE ACT READ WITH RULE 112 (1) OF THE INCOME TAX RULES, 1962 (HE REINAFTER THE RULES) WAS DULY PREPARED BY THE DIT(INV.)-II, MUM BAI ON 31-10- 2009 WHICH CARRIES THE NAME OF THE ASSESSEE COMPANY AND IS PLACED AT PAGE 58-59 OF PAPER BOOK AND WAS EXECUTED ON 31- 10-2009 . THE SAID SEARCH WARRANT IS EXECUTED ON THE PREMISES FLA T NO. 504, WING A, VARDHMAN HEIGHTS , BYCULLA(EAST), MUMBAI WHICH I S RESIDENTIAL PREMISES OF MR MANOJ B PUNAMIA . THE SAID SEARCH WA RRANT CARRIES THE NAME OF THE ASSESSEE COMPANY. THE SAID SEARCH W ARRANT WAS SEEN BY MRS LATA PUNAMIA ON 31-10-2009 WHO IS WIFE OF MR. MANOJ B. PUNAMIA AND WAS NOT DIRECTOR OF THE ASSESSEE COM PANY ON THE DATE OF SEARCH . THE SEARCH COMMENCES WITH THE EXEC UTION OF SEARCH WARRANT AND CONCLUDES WITH THE DRAWING OF PANCHNAMA . HOWEVER, WE HAVE OBSERVED THAT PANCHNAMA WERE NOT DRAWN IN THE NAME OF THE ASSESSEE COMPANY AS IT CARRIES THE NAME OF MANOJ B . PUNAMIA & GROUP WHICH ARE PLACED AT PAPER BOOK PAGE 9-19. SE ARCH IS A SERIOUS INVASION IN THE LIFE OF THE TAX-PAYER AND C ANNOT BE CONCLUDED IN A CASUAL MANNER. THE REVENUE HAS DRAWN SEARCH WA RRANT IN THE CASE OF THE ASSESSEE COMPANY AS SET OUT ABOVE, BUT CONCLUSION OF THE SEARCH IS REFLECTED BY THE PANCHNAMA, WHICH HAS NOT BEEN DRAWN AGAINST THE ASSESSEE. THE REVENUE HAS DRAWN PANCHNA MA AGAINST MANOJ PUNIMIA AND GROUP WHILE THERE IS NO CONCEPT OF GROUP UNDER THE PROVISIONS OF THE ACT . 2.9. FROM THE AFORESAID FACTUAL MATRIX, FOLLOWING QUESTION ARISE FOR OUR CONSIDERATION (I) WHETHER A VALID SEARCH WAS CONDUCTED AGAINST TH E ASSESSEE. 2.10. IN THE LIGHT OF THE AFORESAID QUESTION, NOW, WE SHALL DEAL WITH THE FACTS AVAILABLE ON RECORD BY KEEPING THEM IN JUXTAPOSITION WITH THE PROVISIONS OF SECTION 153A O F THE ACT. SECTION 153A IS REPRODUCED HEREUNDER:- 153A. (1)] NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECT ION 153, IN THE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER SECTI ON 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISIT IONED UNDER SECTION 132A AFTER THE 31ST DAY OF MAY, 2003, THE ASSESSING OFFICER SHALL M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 8 (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FU RNISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETU RN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSME NT YEARS REFERRED TO IN CLAUSE (B), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURN ISHED UNDER SECTION 139; (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSE SSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITI ON IS MADE : PROVIDED THAT THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING W ITHIN SUCH SIX ASSESSMENT YEARS: PROVIDED FURTHER THAT ASSESSMENT OR REASSESSMENT, IF ANY, RELATING T O ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SI X ASSESSMENT YEARS REFERRED TO IN THIS SUB-SECTION PENDING ON THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION U NDER SECTION 132A, AS THE CASE MAY BE, SHALL ABATE : PROVIDED ALSO THAT THE CENTRAL GOVERNMENT MAY BY RULES 8 MADE BY IT AND PUBLISHED IN THE OFFICIAL GAZETTE (EXCEPT IN CA SES WHERE ANY ASSESSMENT OR REASSESSMENT HAS ABATED UNDER THE SEC OND PROVISO), SPECIFY THE CLASS OR CLASSES OF CASES IN WHICH THE ASSESSING OFFICER SHALL NOT BE REQUIRED TO ISSUE NOTICE FOR ASSESSING OR RE ASSESSING THE TOTAL INCOME FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECEDI NG THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED OR REQUISITION IS MADE. (2) IF ANY PROCEEDING INITIATED OR ANY ORDER OF ASS ESSMENT OR REASSESSMENT MADE UNDER SUB-SECTION (1) HAS BEEN AN NULLED IN APPEAL OR ANY OTHER LEGAL PROCEEDING, THEN, NOTWITHSTANDIN G ANYTHING CONTAINED IN SUB-SECTION (1) OR SECTION 153, THE AS SESSMENT OR REASSESSMENT RELATING TO ANY ASSESSMENT YEAR WHICH HAS ABATED UNDER THE SECOND PROVISO TO SUB-SECTION (1), SHALL STAND REVIVED WITH EFFECT FROM THE DATE OF RECEIPT OF THE ORDER OF SUCH ANNUL MENT BY THE 9 [PRINCIPAL COMMISSIONER OR COMMISSIONER: PROVIDED THAT SUCH REVIVAL SHALL CEASE TO HAVE EFFECT, IF S UCH ORDER OF ANNULMENT IS SET ASIDE. EXPLANATION.FOR THE REMOVAL OF DOUBTS, IT IS HEREB Y DECLARED THAT, (I) SAVE AS OTHERWISE PROVIDED IN THIS SECTION, SE CTION 153B AND SECTION 153C, ALL OTHER PROVISIONS OF THIS ACT SHALL APPLY TO THE ASSESSMENT MADE UNDER THIS SECTION; (II) IN AN ASSESSMENT OR REASSESSMENT MADE IN RESPE CT OF AN ASSESSMENT YEAR UNDER THIS SECTION, THE TAX SHALL BE CHARGEABL E AT THE RATE OR RATES AS APPLICABLE TO SUCH ASSESSMENT YEAR. THE SCOPE AND EFFECT OF INSERTION OF SECTION 153A A ND AMENDMENT MADE IN VARIOUS SECTIONS HAS BEEN ELABORATED BY FIN ANCE ACT 2003 AND M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 9 DEPARTMENTAL CIRCULAR NO.7 OF 2003 DATED 05/09/2003 . THE FINANCE ACT, 2003 HAS PROVIDED THAT THE PROVISIONS OF THIS CHAPT ER SHALL APPLY WHERE A SEARCH IS INITIATED U/S 132 OR BOOKS OF ACCOUNT, OT HER DOCUMENTS OR ANY ASSET ARE REQUISITIONED U/S 132A AFTER 31/05/2003 B Y INSERTING A NEW SECTION 153A IN THE ACT. IT IS PERTINENT TO MENTION HERE THAT THE WORD USED IN SECTION 153A OF THE ACT WHICH CONFERS JURISDICTI ON TO ISSUE NOTICE AND FRAME ASSESSMENT, IS INITIATED. OF COURSE, IT ME ANS A VALID INITIATION, WITH WHICH THERE CAN BE NO QUARREL INASMUCH AS THE WARRA NT OF AUTHORIZATION STANDS ALREADY EXECUTED BY THE COMPETENT AUTHORITY AND BEARS THE NAME OF THE ASSESSEE-COMPANY AMONG THE PERSONS TO BE SEA RCHED. THE NEW SECTION 153A PROVIDES THE PROCEDURE FOR COMPLETION OF ASSESSMENT, WHERE A VALID SEARCH IS INITIATED U/S 132. IN SUCH CASES, THE ASSESSING OFFICER SHALL ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FURNISH WITHIN SUCH PERIOD AS MAY BE SPECIFIED IN THE NOTICE, RETURN OF INCOME IN RESPECT OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSME NT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH WAS CONDUCTED U/S 132 OR REQUISITION WAS MADE U/S 132A OF THE ACT. THUS, IT CAN BE SAID THAT THE PROVISION OF SECTION 153A OF THE ACT MAKES IT CLEAR THAT IN THE CASE OF A PERSON ON WHOM A VALID SEARCH IS INITIATED U/S 132 OR BOOKS O F ACCOUNTS OR OTHER DOCUMENTS OR ANY ASSET ARE REQUISITIONED U/S 132A, THE ASSESSING OFFICER SHALL ISSUE A NOTICE UPON SUCH PERSON. THE EXPRESS ION CLEARLY RELATES TO A PERSON IN RESPECT OF WHOM SEARCH U/S 132 HAS BEEN I NITIATED OR AS SECTION 153A AFTER 31 ST DAY OF MARCH 2003. THE RATIO LAID DOWN IN RAMESH D . PATEL (2014) 362 ITR 492(GUJ.) SUPPORTS OUR VIEW. IN THAT EVENT THE ASSESSING OFFICER SHALL:- (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO F URNISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETURN OF IN COME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS REFERRED TO IN CLAUSE (B), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRE SCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRES CRIBED AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APP LY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139; (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSE SSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE. 2.11. FROM THE AFORESAID PROVISION, IT IS CLEAR TH AT THE FIRST REQUIREMENT IS VALID INITIATION OF SEARCH. THE REVE NUE HAS EXECUTED WARRANT OF AUTHORIZATION IN THE NAME OF THE ASSESSE E COMPANY ON 31-10- 2009 WHICH IS PLACED AT PAPER BOOK PAGE 58-59. THE PANCHNAMA WAS PREPARED IN THE NAME OF SHRI MANOJ PUNAMIYA & GROUP , PROHIBITORY ORDER U/S 132(3) WAS ALSO IN THE NAME OF SHRI MANOJ PUNAM IYA ALONE, NO MATERIAL WAS UNEARTHED BY THE DEPARTMENT LINKING TH E ASSESSEE WITH THE PREMISES SO SEARCHED BY THE DEPARTMENT AND NO DOCUM ENT WAS SEIZED FROM THE FLAT OF SHRI MANOJ PUNAMIYA WHICH BELONGS TO THE ASSESSEE COMPANY. IT IS ALSO SEEN THAT THE PREMISES SEARCHED DID NOT BELONG TO THE ASSESSEE COMPANY AS THE SAME IS RESIDENTIAL PREMISE S OF MR. MANOJ B M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 10 PUNMIA . THE ASSESSEE COMPANY WAS ALSO SUBJECTED TO SURVEY ACTION U/S 133A OF THE ACT AT ITS BUSINESS PREMISES ON 31-10-2 009 SIMULTANEOUSLY. 2.12. NOW, WE SHALL DISCUSS CERTAIN CASE LAWS. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS KABUL CHAWLA (ITA 707/2014) ORDER DATED 28/08/2015 MADE AN ELABORATE DISCUSSION ON THE ISSU E AND AFTER CONSIDERING VARIOUS DECISIONS LIKE CIT VS ANKITECH PVT. LTD. (2011) 11 TAXMAN.COM 100(DEL.), CIT VS ANIL KUMAR BHATIA (201 3) 352 ITR 493 (DEL.), MADUGULA VENU VS DIT (2013) 29 TAXMAN.COM 2 00(DEL.), CIT VS CHETAN DAS LAXMAN DAS, ORDER DATED 07/08/2012 (ITA NO.2021/2010)(DEL.), RANBAXY LABORATORIES LTD. VS C IT (2011) 12 TAXMAN.COM 74 (DEL.), JAI STEEL INDIA JODHPUR VS AC IT (2013) 36 TAXMAN.COM 523(RAJ.), HONBLE BOMBAY HIGH COURT IN ITA NO.36/2009 IN THE CASE OF CIT VS M/S MURLI AGRO PRODUCTS LTD, M/S CANARA HOUSING DEVELOPING COMPANY VS DCIT (ITA NO.38/2014) ORDER D ATED 25/07/2014 FROM HONBLE KARNATAKA HIGH COURT, PR. CIT VS KURE LE PAPER MILLS PVT. LTD. (ITA NO.369 OF 20015) ORDER DATED 06/07/2015, CIT V S CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD. (2015) 5 8 TAXMAN.COM 78(BOM.), ALL CARGO GLOBAL LOGISTIC LTD. VS DCIT (2 012) 23 TAXMAN.COM 103(BOM.)(SB), HELD THAT NO ADDITION COULD BE MADE SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING SEARCH. 2.13. IN ANOTHER CASE, THE HONBLE BOMBAY HIGH COU RT IN CIT VS TIRUPATI OIL CORPORATION (248 ITR 194) (BOM.), W HEREIN, SEARCH WAS CARRIED OUT AT THE RESIDENCE OF THE PARTNER BUT BLO CK ASSESSMENT WAS MADE U/S 158BC, 158BD OF THE ACT, UPON THE FIRM, THE HON BLE HIGH COURT HELD THAT PROCEDURE LAID DOWN U/S 158 BD HAS TO BE FOLLO WED, THUS, THE RATIO LAID DOWN BY HONBLE JURISDICTIONAL HIGH COURT SUPPORTS THE CASE OF THE ASSESSEE. THE RATIO LAID DOWN IN J.M. TRADING CORP ORATION VS ACIT (2008) 20 SOT 489 (MUM.), WHICH WAS UPHELD BY THE HONBLE JURISDICTIONAL HIGH COURT IN ITA NO. 589 OF 2009 HOLDING THAT PROVISI ONS OF SECTION 153A ARE ONLY APPLICABLE IN A CASE, WHERE VALID SEARCH IS CO NDUCTED AGAINST THE ASSESSEE U/S 132 OF THE ACT, SUPPORTS THE CASE OF T HE ASSESSEE. 2.14. FOR FAIR CONCLUSION, WE ARE ALSO REPRODUCED HEREUNDER THE PROVISION OF SECTION 132 AND 132 A OF THE ACT F OR READY REFERENCE:- 132. (1) WHERE THE [PRINCIPAL DIRECTOR GENERAL OR] DIREC TOR GENERAL OR [PRINCIPAL DIRECTOR OR] DIRECTOR OR THE [PRINCIPAL CHIEF COMMISSIONER OR] CHIEF COMMISSIONER OR [PRINCIPAL C OMMISSIONER OR] COMMISSIONER OR ADDITIONAL DIRECTOR OR ADDITION AL COMMISSIONER OR JOINT DIRECTOR OR JOINT COMMISSIONE R IN CONSEQUENCE OF INFORMATION IN HIS POSSESSION, HAS R EASON TO BELIEVE THAT (A) ANY PERSON TO WHOM A SUMMONS UNDER SUB-SECTION (1) OF SECTION 37 OF THE INDIAN INCOME-TAX ACT, 1922 (11 OF 1922), OR UNDER SUB- SECTION (1) OF SECTION 131 OF THIS ACT, OR A NOTICE UNDER SUB-SECTION (4) OF SECTION 22 OF THE INDIAN INCOME-TAX ACT, 192 2, OR UNDER SUB- SECTION (1) OF SECTION 142 OF THIS ACT WAS ISSUED T O PRODUCE, OR CAUSE M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 11 TO BE PRODUCED, ANY BOOKS OF ACCOUNT OR OTHER DOCUM ENTS HAS OMITTED OR FAILED TO PRODUCE, OR CAUSE TO BE PRODUC ED, SUCH BOOKS OF ACCOUNT OR OTHER DOCUMENTS AS REQUIRED BY SUCH SUMM ONS OR NOTICE, OR (B) ANY PERSON TO WHOM A SUMMONS OR NOTICE AS AFORE SAID HAS BEEN OR MIGHT BE ISSUED WILL NOT, OR WOULD NOT, PRODUCE OR CAUSE TO BE PRODUCED, ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS W HICH WILL BE USEFUL FOR, OR RELEVANT TO, ANY PROCEEDING UNDER TH E INDIAN INCOME- TAX ACT, 1922 (11 OF 1922), OR UNDER THIS ACT, OR (C) ANY PERSON IS IN POSSESSION OF ANY MONEY, BULLI ON, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING AND SUCH MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING REPRESENTS EITHER WHOLLY OR PARTLY INCOME OR PROPERTY WHICH HAS NOT BEEN, OR WOULD NOT BE, DISCL OSED FOR THE PURPOSES OF THE INDIAN INCOME-TAX ACT, 1922 (11 OF 1922), OR THIS ACT (HEREINAFTER IN THIS SECTION REFERRED TO AS THE UND ISCLOSED INCOME OR PROPERTY), THEN, (A) THE [PRINCIPAL DIRECTOR GENERAL OR] DIRECTOR GE NERAL OR 61 [PRINCIPAL DIRECTOR OR] DIRECTOR OR THE [PRINCIPAL CHIEF COMM ISSIONER OR] CHIEF COMMISSIONER OR [PRINCIPAL COMMISSIONER OR] COMMISSIONER, AS THE CASE MAY BE, MAY AUTHORISE ANY ADDITIONAL DIRECTOR OR ADDITIONAL COMMISSIONER OR JOINT DIRECT OR, JOINT COMMISSIONER, ASSISTANT DIRECTOR OR DEPUTY DIRECTOR , ASSISTANT COMMISSIONER OR DEPUTY COMMISSIONER OR INCOME-TAX O FFICER, OR (B) SUCH ADDITIONAL DIRECTOR OR ADDITIONAL COMMISSI ONER OR JOINT DIRECTOR, OR JOINT COMMISSIONER, AS THE CASE MAY BE , MAY AUTHORISE ANY ASSISTANT DIRECTOR OR DEPUTY DIRECTOR, ASSISTAN T COMMISSIONER OR DEPUTY COMMISSIONER OR INCOME-TAX OFFICER, (THE OFFICER SO AUTHORISED IN ALL CASES BEING HEREI NAFTER REFERRED TO AS THE AUTHORISED OFFICER) TO (I) ENTER AND SEARCH ANY BUILDING, PLACE, VESSEL, VEHICLE OR AIRCRAFT WHERE HE HAS REASON TO SUSPECT THAT SUCH BOOKS OF A CCOUNT, OTHER DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUA BLE ARTICLE OR THING ARE KEPT; (II) BREAK OPEN THE LOCK OF ANY DOOR, BOX, LOCKER, SAFE, ALMIRAH OR OTHER RECEPTACLE FOR EXERCISING THE POWERS CONFERRED BY C LAUSE (I) WHERE THE KEYS THEREOF ARE NOT AVAILABLE; (IIA) SEARCH ANY PERSON WHO HAS GOT OUT OF, OR IS A BOUT TO GET INTO, OR IS IN, THE BUILDING, PLACE, VESSEL, VEHICLE OR AIRCRAF T, IF THE AUTHORISED OFFICER HAS REASON TO SUSPECT THAT SUCH PERSON HAS SECRETED ABOUT HIS PERSON ANY SUCH BOOKS OF ACCOUNT, OTHER DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING; (IIB) REQUIRE ANY PERSON WHO IS FOUND TO BE IN POSS ESSION OR CONTROL OF ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE FORM OF ELECTRONIC RECORD AS DEFINED IN CLAUSE (T) OF SUB-S ECTION (1) OF SECTION 2 OF THE INFORMATION TECHNOLOGY ACT, 2000 (21 OF 20 00), TO AFFORD THE M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 12 AUTHORISED OFFICER THE NECESSARY FACILITY TO INSPEC T SUCH BOOKS OF ACCOUNT OR OTHER DOCUMENTS; (III) SEIZE ANY SUCH BOOKS OF ACCOUNT, OTHER DOCUME NTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING FOUND AS A RESULT OF SUCH SEARCH: PROVIDED THAT BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING, BEING STOCK-IN-TRADE OF THE BUSINESS, FOUND AS A RE SULT OF SUCH SEARCH SHALL NOT BE SEIZED BUT THE AUTHORISED OFFICER SHAL L MAKE A NOTE OR INVENTORY OF SUCH STOCK-IN-TRADE OF THE BUSINESS; (IV) PLACE MARKS OF IDENTIFICATION ON ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR MAKE OR CAUSE TO BE MADE EXTRACTS OR C OPIES THEREFROM; (V) MAKE A NOTE OR AN INVENTORY OF ANY SUCH MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING : [ PROVIDED THAT WHERE ANY BUILDING, PLACE, VESSEL, VEHICLE OR AIRCRAFT REFERRED TO IN CLAUSE (I) IS WITHIN THE AREA OF JUR ISDICTION OF ANY [PRINCIPAL CHIEF COMMISSIONER OR] CHIEF COMMISS IONER OR[PRINCIPAL COMMISSIONER OR] COMMISSIONER, BUT SUC H [PRINCIPAL CHIEF COMMISSIONER OR] CHIEF COMMISSIONER OR [PRINC IPAL COMMISSIONER OR] COMMISSIONER HAS NO JURISDICTION O VER THE PERSON REFERRED TO IN CLAUSE (A) OR CLAUSE (B) OR CLAUSE ( C), THEN, NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 120 , IT SHALL BE COMPETENT FOR HIM TO EXERCISE THE POWERS UNDER THIS SUB-SECTION IN ALL CASES WHERE HE HAS REASON TO BELIEVE THAT ANY D ELAY IN GETTING THE AUTHORISATION FROM THE [PRINCIPAL CHIEF COMMISSIONE R OR] CHIEF COMMISSIONER OR [PRINCIPAL COMMISSIONER OR] COMMISS IONER] HAVING JURISDICTION OVER SUCH PERSON MAY BE PREJUDI CIAL TO THE INTERESTS OF THE REVENUE : PROVIDED FURTHER THAT WHERE IT IS NOT POSSIBLE OR PRACTICABLE TO TA KE PHYSICAL POSSESSION OF ANY VALUABLE ARTICLE OR THIN G AND REMOVE IT TO A SAFE PLACE DUE TO ITS VOLUME, WEIGHT OR OTHER PHY SICAL CHARACTERISTICS OR DUE TO ITS BEING OF A DANGEROUS NATURE, THE AUTHORISED OFFICER MAY SERVE AN ORDER ON THE OWNER OR THE PERSON WHO IS IN IMMEDIATE POSSESSION OR CONTROL THEREOF T HAT HE SHALL NOT REMOVE, PART WITH OR OTHERWISE DEAL WITH IT, EXCEPT WITH THE PREVIOUS PERMISSION OF SUCH AUTHORISED OFFICER AND SUCH ACTI ON OF THE AUTHORISED OFFICER SHALL BE DEEMED TO BE SEIZURE OF SUCH VALUABLE ARTICLE OR THING UNDER CLAUSE (III): PROVIDED ALSO THAT NOTHING CONTAINED IN THE SECOND PROVISO SHALL APPLY IN CASE OF ANY VALUABLE ARTICLE OR THING, BEI NG STOCK-IN-TRADE OF THE BUSINESS: PROVIDED ALSO THAT NO AUTHORISATION SHALL BE ISSUED BY THE ADDITI ONAL DIRECTOR OR ADDITIONAL COMMISSIONER OR JOINT DIRECT OR OR JOINT COMMISSIONER ON OR AFTER THE 1ST DAY OF OCTOBER, 20 09 UNLESS HE HAS BEEN EMPOWERED BY THE BOARD TO DO SO. M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 13 [(1A) WHERE ANY [PRINCIPAL CHIEF COMMISSIONER OR] C HIEF COMMISSIONER OR [PRINCIPAL COMMISSIONER OR] COMMISS IONER, IN CONSEQUENCE OF INFORMATION IN HIS POSSESSION, HAS R EASON TO SUSPECT THAT ANY BOOKS OF ACCOUNT, OTHER DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING IN RES PECT OF WHICH AN OFFICER HAS BEEN AUTHORISED BY THE [PRINCIPAL DIRE CTOR GENERAL OR] DIRECTOR GENERAL OR [PRINCIPAL DIRECTOR OR] DIRECTO R OR ANY OTHER [PRINCIPAL CHIEF COMMISSIONER OR] CHIEF COMMISSIONE R OR [PRINCIPAL COMMISSIONER OR] COMMISSIONER OR ADDITIO NAL DIRECTOR OR ADDITIONAL COMMISSIONER OR JOINT DIRECTOR OR JOI NT COMMISSIONER TO TAKE ACTION UNDER CLAUSES (I) TO (V ) OF SUB-SECTION (1) ARE OR IS KEPT IN ANY BUILDING, PLACE, VESSEL, VEHICLE OR AIRCRAFT NOT MENTIONED IN THE AUTHORISATION UNDER SUB-SECTIO N (1), SUCH [PRINCIPAL CHIEF COMMISSIONER OR] CHIEF COMMISSIONE R OR [PRINCIPAL COMMISSIONER OR] COMMISSIONER MAY, NOTWI THSTANDING ANYTHING CONTAINED IN SECTION 120 , AUTHORISE THE SAID OFFICER TO TAKE ACTION UNDER ANY OF THE CLAUSES AFORESAID IN RESPEC T OF SUCH BUILDING, PLACE, VESSEL, VEHICLE OR AIRCRAFT.] (2) THE AUTHORISED OFFICER MAY REQUISITION THE SERV ICES OF ANY POLICE OFFICER OR OF ANY OFFICER OF THE CENTRAL GOVERNMENT , OR OF BOTH, TO ASSIST HIM FOR ALL OR ANY OF THE PURPOSES SPECIFIED IN SUB-SECTION (1) OR SUB-SECTION (1A) AND IT SHALL BE THE DUTY OF EVE RY SUCH OFFICER TO COMPLY WITH SUCH REQUISITION. (3) THE AUTHORISED OFFICER MAY, WHERE IT IS NOT PRA CTICABLE TO SEIZE ANY SUCH BOOKS OF ACCOUNT, OTHER DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING, FOR R EASONS OTHER THAN THOSE MENTIONED IN THE SECOND PROVISO TO SUB-SECTIO N (1), SERVE AN ORDER ON THE OWNER OR THE PERSON WHO IS IN IMMEDIAT E POSSESSION OR CONTROL THEREOF THAT HE SHALL NOT REMOVE, PART WITH OR OTHERWISE DEAL WITH IT EXCEPT WITH THE PREVIOUS PERMISSION OF SUCH OFFICER AND SUCH OFFICER MAY TAKE SUCH STEPS AS MAY BE NECESSARY FOR ENSURING COMPLIANCE WITH THIS SUB-SECTION. EXPLANATION.FOR THE REMOVAL OF DOUBTS, IT IS HEREB Y DECLARED THAT SERVING OF AN ORDER AS AFORESAID UNDER THIS SUB-SEC TION SHALL NOT BE DEEMED TO BE SEIZURE OF SUCH BOOKS OF ACCOUNT, OTHE R DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING UNDER CLAUSE (III) OF SUB-SECTION (1). (4) THE AUTHORISED OFFICER MAY, DURING THE COURSE O F THE SEARCH OR SEIZURE, EXAMINE ON OATH ANY PERSON WHO IS FOUND TO BE IN POSSESSION OR CONTROL OF ANY BOOKS OF ACCOUNT, DOCUMENTS, MONE Y, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING AND AN Y STATEMENT MADE BY SUCH PERSON DURING SUCH EXAMINATION MAY THEREAFT ER BE USED IN EVIDENCE IN ANY PROCEEDING UNDER THE INDIAN INCOME- TAX ACT, 1922 (11 OF 1922), OR UNDER THIS ACT. EXPLANATION.FOR THE REMOVAL OF DOUBTS, IT IS HEREB Y DECLARED THAT THE EXAMINATION OF ANY PERSON UNDER THIS SUB-SECTIO N MAY BE NOT MERELY IN RESPECT OF ANY BOOKS OF ACCOUNT, OTHER DO CUMENTS OR ASSETS FOUND AS A RESULT OF THE SEARCH, BUT ALSO IN RESPEC T OF ALL MATTERS M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 14 RELEVANT FOR THE PURPOSES OF ANY INVESTIGATION CONN ECTED WITH ANY PROCEEDING UNDER THE INDIAN INCOME-TAX ACT, 1922 (1 1 OF 1922), OR UNDER THIS ACT. (4A) WHERE ANY BOOKS OF ACCOUNT, OTHER DOCUMENTS, M ONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING ARE OR IS FOUND IN THE POSSESSION OR CONTROL OF ANY PERSON IN THE COURSE O F A SEARCH, IT MAY BE PRESUMED (I) THAT SUCH BOOKS OF ACCOUNT, OTHER DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING BELONG OR BELONGS TO SUCH PERSON; (II) THAT THE CONTENTS OF SUCH BOOKS OF ACCOUNT AN D OTHER DOCUMENTS ARE TRUE ; AND (III) THAT THE SIGNATURE AND EVERY OTHER PART OF SU CH BOOKS OF ACCOUNT AND OTHER DOCUMENTS WHICH PURPORT TO BE IN THE HANDWRIT ING OF ANY PARTICULAR PERSON OR WHICH MAY REASONABLY BE ASSUME D TO HAVE BEEN SIGNED BY, OR TO BE IN THE HANDWRITING OF, ANY PART ICULAR PERSON, ARE IN THAT PERSON'S HANDWRITING, AND IN THE CASE OF A DOCUMENT STAMPED, EXECUTED OR ATTESTED, THAT IT WAS DULY STAMPED AND EXECUTED OR ATTESTED BY THE PERSON BY WHOM IT PURPORTS TO HAVE BEEN SO EXECUTED OR ATTESTED. (5) [***] (6) [***] (7) [***] (8) THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS SEIZED UNDER SUB- SECTION (1) OR SUB-SECTION (1A) SHALL NOT BE RETAIN ED BY THE AUTHORISED OFFICER FOR A PERIOD EXCEEDING THIRTY DA YS FROM THE DATE OF THE ORDER OF ASSESSMENT UNDER SECTION 153A OR CLAUSE (C) OF SECTION 158BC UNLESS THE REASONS FOR RETAINING THE SAME ARE RECO RDED BY HIM IN WRITING AND THE APPROVAL OF THE [PRINCIPAL C HIEF COMMISSIONER OR] CHIEF COMMISSIONER, [PRINCIPAL COM MISSIONER OR] COMMISSIONER, [PRINCIPAL DIRECTOR GENERAL OR DI RECTOR GENERAL OR [PRINCIPAL DIRECTOR OR] DIRECTOR FOR SUCH RETENT ION IS OBTAINED : PROVIDED THAT THE [PRINCIPAL CHIEF COMMISSIONER OR] CHIEF COMMISSIONER, [PRINCIPAL COMMISSIONER OR] COMMISSIONER,[PRINCIPAL DIRECTOR GENERAL OR] DIRECT OR GENERAL OR [PRINCIPAL DIRECTOR OR] DIRECTOR SHALL NOT AUTHO RISE THE RETENTION OF THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS FOR A P ERIOD EXCEEDING THIRTY DAYS AFTER ALL THE PROCEEDINGS UNDER THE IND IAN INCOME-TAX ACT, 1922 (11 OF 1922), OR THIS ACT IN RESPECT OF T HE YEARS FOR WHICH THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS ARE RELEVAN T ARE COMPLETED. (8A) AN ORDER UNDER SUB-SECTION (3) SHALL NOT BE IN FORCE FOR A PERIOD EXCEEDING SIXTY DAYS FROM THE DATE OF THE ORDER. (9) THE PERSON FROM WHOSE CUSTODY ANY BOOKS OF ACCO UNT OR OTHER DOCUMENTS ARE SEIZED UNDER SUB-SECTION (1) OR SUB-S ECTION (1A) MAY MAKE COPIES THEREOF, OR TAKE EXTRACTS THEREFROM, IN THE PRESENCE OF THE AUTHORISED OFFICER OR ANY OTHER PERSON EMPOWERE D BY HIM IN THIS M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 15 BEHALF, AT SUCH PLACE AND TIME AS THE AUTHORISED OF FICER MAY APPOINT IN THIS BEHALF. (9A) WHERE THE AUTHORISED OFFICER HAS NO JURISDICTI ON OVER THE PERSON REFERRED TO IN CLAUSE (A) OR CLAUSE (B) OR CLAUSE ( C) OF SUB-SECTION (1), THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS, OR ANY MON EY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING (HEREA FTER IN THIS SECTION AND IN SECTIONS 132A AND 132B REFERRED TO AS THE ASSETS) SEIZED UNDER THAT SUB-SECTION SHALL BE HANDED OVER BY THE AUTHORISED OFFICER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER S UCH PERSON WITHIN A PERIOD OF SIXTY DAYS FROM THE DATE ON WHICH THE L AST OF THE AUTHORISATIONS FOR SEARCH WAS EXECUTED AND THEREUPO N THE POWERS EXERCISABLE BY THE AUTHORISED OFFICER UNDER SUB-SEC TION (8) OR SUB- SECTION (9) SHALL BE EXERCISABLE BY SUCH ASSESSING OFFICER. (10) IF A PERSON LEGALLY ENTITLED TO THE BOOKS OF A CCOUNT OR OTHER DOCUMENTS SEIZED UNDER SUB-SECTION (1) OR SUB-SECTI ON (1A) OBJECTS FOR ANY REASON TO THE APPROVAL GIVEN BY THE [PRINCI PAL CHIEF COMMISSIONER OR] CHIEF COMMISSIONER, [PRINCIPAL CO MMISSIONER OR] COMMISSIONER, [PRINCIPAL DIRECTOR GENERAL OR] D IRECTOR GENERAL OR [PRINCIPAL DIRECTOR OR] DIRECTOR UNDER S UB-SECTION (8), HE MAY MAKE AN APPLICATION TO THE BOARD STATING THE REIN THE REASONS FOR SUCH OBJECTION AND REQUESTING FOR THE RETURN OF THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS AND THE BOARD MAY, AFTER GIVING THE APPLICANT AN OPPORTUNITY OF BEING HEARD, PASS SUCH ORDERS AS IT THINKS FIT. (11) [***] (11A) [***] (12) [***] [(13) THE PROVISIONS OF THE CODE OF CRIMINAL PROCED URE, 1973 (2 OF 1974), RELATING TO SEARCHES AND SEIZURE SHALL APPLY , SO FAR AS MAY BE, TO SEARCHES AND SEIZURE UNDER SUB-SECTION (1) OR SU B-SECTION (1A).] (14) THE BOARD MAY MAKE RULES IN RELATION TO ANY SE ARCH OR SEIZURE UNDER THIS SECTION ; IN PARTICULAR, AND WITHOUT PRE JUDICE TO THE GENERALITY OF THE FOREGOING POWER, SUCH RULES MAY P ROVIDE FOR THE PROCEDURE TO BE FOLLOWED BY THE AUTHORISED OFFICER (I) FOR OBTAINING INGRESS INTO ANY BUILDING, PLAC E, VESSEL, VEHICLE OR AIRCRAFT TO BE SEARCHED WHERE FREE INGRESS THERETO IS NOT AVAILABLE ; (II) FOR ENSURING SAFE CUSTODY OF ANY BOOKS OF ACC OUNT OR OTHER DOCUMENTS OR ASSETS SEIZED. EXPLANATION 1.FOR THE PURPOSES OF SUB-SECTION (9A) , 'EXECUTION OF AN AUTHORISATION FOR SEARCH' SHALL HAVE THE SAME ME ANING AS ASSIGNED TO IT IN EXPLANATION 2 TO SECTION 158BE . EXPLANATION 2.IN THIS SECTION, THE WORD 'PROCEEDIN G' MEANS ANY PROCEEDING IN RESPECT OF ANY YEAR, WHETHER UNDER TH E INDIAN INCOME- TAX ACT, 1922 (11 OF 1922), OR THIS ACT, WHICH MAY BE PENDING ON THE DATE ON WHICH A SEARCH IS AUTHORISED UNDER THIS SEC TION OR WHICH MAY HAVE BEEN COMPLETED ON OR BEFORE SUCH DATE AND INCLUDES ALSO M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 16 ALL PROCEEDINGS UNDER THIS ACT WHICH MAY BE COMMENC ED AFTER SUCH DATE IN RESPECT OF ANY YEAR. 132A. (1) WHERE THE [PRINCIPAL DIRECTOR GENERAL OR] DIRE CTOR GENERAL OR 75 [PRINCIPAL DIRECTOR OR] DIRECTOR OR THE [PRINCIPAL CHIEF COMMISSIONER OR] CHIEF COMMISSIONER OR 7 [PRINCIPAL COMMISSIONER OR] COMMISSIONER, IN CONSEQUENCE OF IN FORMATION IN HIS POSSESSION, HAS REASON TO BELIEVE THAT (A) ANY PERSON TO WHOM A SUMMONS UNDER SUB-SECTION (1) OF SECTION 37 OF THE INDIAN INCOME-TAX ACT, 1922 (11 OF 1922), OR UNDER SUB- SECTION (1) OF SECTION 131 OF THIS ACT, OR A NOTICE UNDER SUB-SECTION (4) OF SECTION 22 OF THE INDIAN INCOME-TAX ACT, 192 2, OR UNDER SUB- SECTION (1) OF SECTION 142 OF THIS ACT WAS ISSUED T O PRODUCE, OR CAUSE TO BE PRODUCED, ANY BOOKS OF ACCOUNT OR OTHER DOCUM ENTS HAS OMITTED OR FAILED TO PRODUCE, OR CAUSE TO BE PRODUC ED, SUCH BOOKS OF ACCOUNT OR OTHER DOCUMENTS, AS REQUIRED BY SUCH SUM MONS OR NOTICE AND THE SAID BOOKS OF ACCOUNT OR OTHER DOCUMENTS HA VE BEEN TAKEN INTO CUSTODY BY ANY OFFICER OR AUTHORITY UNDER ANY OTHER LAW FOR THE TIME BEING IN FORCE, OR (B) ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS WILL BE USEFUL FOR, OR RELEVANT TO, ANY PROCEEDING UNDER THE INDIAN INCOME -TAX ACT, 1922 (11 OF 1922), OR UNDER THIS ACT AND ANY PERSON TO W HOM A SUMMONS OR NOTICE AS AFORESAID HAS BEEN OR MIGHT BE ISSUED WILL NOT, OR WOULD NOT, PRODUCE OR CAUSE TO BE PRODUCED, SUCH BOOKS OF ACCOUNT OR OTHER DOCUMENTS ON THE RETURN OF SUCH BOOKS OF ACCO UNT OR OTHER DOCUMENTS BY ANY OFFICER OR AUTHORITY BY WHOM OR WH ICH SUCH BOOKS OF ACCOUNT OR OTHER DOCUMENTS HAVE BEEN TAKEN INTO CUSTODY UNDER ANY OTHER LAW FOR THE TIME BEING IN FORCE, OR (C) ANY ASSETS REPRESENT EITHER WHOLLY OR PARTLY IN COME OR PROPERTY WHICH HAS NOT BEEN, OR WOULD NOT HAVE BEEN, DISCLOSED FOR THE PURPOSES OF THE INDIAN INCOME-TAX ACT, 1922 (11 OF 1922), OR TH IS ACT BY ANY PERSON FROM WHOSE POSSESSION OR CONTROL SUCH ASSETS HAVE BEEN TAKEN INTO CUSTODY BY ANY OFFICER OR AUTHORITY UNDE R ANY OTHER LAW FOR THE TIME BEING IN FORCE, THEN, THE [PRINCIPAL DIRECTOR GENERAL OR] DIRECTOR GENERAL OR [PRINCIPAL DIRECTOR OR] DIRECTOR OR THE [PRINCIP AL CHIEF COMMISSIONER OR] CHIEF COMMISSIONER OR [PRINCIPAL C OMMISSIONER OR] COMMISSIONER MAY AUTHORISE ANY ADDITIONAL DIREC TOR, ADDITIONAL COMMISSIONER, JOINT DIRECTOR, JOINT COMM ISSIONER, ASSISTANT DIRECTOR OR DEPUTY DIRECTOR, ASSISTANT CO MMISSIONER OR DEPUTY COMMISSIONER OR INCOME-TAX OFFICER (HEREAFTE R IN THIS SECTION AND IN SUB-SECTION (2) OF SECTION 278D REFERRED TO AS THE REQUISITIONING OFFICER) TO REQUIRE THE OFFICER OR A UTHORITY REFERRED TO IN CLAUSE (A) OR CLAUSE (B) OR CLAUSE (C), AS THE C ASE MAY BE, TO DELIVER SUCH BOOKS OF ACCOUNT, OTHER DOCUMENTS OR A SSETS TO THE REQUISITIONING OFFICER. M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 17 (2) ON A REQUISITION BEING MADE UNDER SUB-SECTION ( 1), THE OFFICER OR AUTHORITY REFERRED TO IN CLAUSE (A) OR CLAUSE (B) O R CLAUSE (C), AS THE CASE MAY BE, OF THAT SUB-SECTION SHALL DELIVER THE BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS TO THE REQUISITIONING OFF ICER EITHER FORTHWITH OR WHEN SUCH OFFICER OR AUTHORITY IS OF T HE OPINION THAT IT IS NO LONGER NECESSARY TO RETAIN THE SAME IN HIS OR IT S CUSTODY. (3) WHERE ANY BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS HAVE BEEN DELIVERED TO THE REQUISITIONING OFFICER, THE P ROVISIONS OF SUB- SECTIONS (4A) TO (14) (BOTH INCLUSIVE) OF SECTION 1 32 AND SECTION 132B SHALL, SO FAR AS MAY BE, APPLY AS IF SUCH BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS HAD BEEN SEIZED UNDER SUB-SECTI ON (1) OF SECTION 132 BY THE REQUISITIONING OFFICER FROM THE CUSTODY OF THE PERSON REFERRED TO IN CLAUSE (A) OR CLAUSE (B) OR CLAUSE ( C), AS THE CASE MAY BE, OF SUB-SECTION (1) OF THIS SECTION AND AS IF FO R THE WORDS 'THE AUTHORISED OFFICER' OCCURRING IN ANY OF THE AFORESA ID SUB-SECTIONS (4A) TO (14), THE WORDS 'THE REQUISITIONING OFFICER ' WERE SUBSTITUTED. 2.15. IN THE PRESENT APPEAL, VALID SEARCH WAS NOT CARRIED OUT AGAINST THE ASSESSEE. CONDUCT OF SEARCH PROCEEDINGS IS AN ELABORATE PROCEDURE ENUMERATED U/S 132 OF THE ACT WHICH IN CL AUSE-I, CATEGORICALLY AUTHORIZES THE OFFICER TO ENTER AND S EARCH ANY BUILDING, PLACE, VESSEL, ETC, WHERE HE HAS REASON TO BELIEF THAT THE BOOKS OF ACCOUNTS, MONEY, BULLION, JEWELLERY OR THINGS BELON GING TO THE ASSESSEE ARE KEPT. BEFORE US, THE ASSESSEE HAS CLA IMED THAT NOTHING PERTAINING TO THE ASSESSEE WAS RECOVERED FROM THE P REMISES OF SHRI MANOJ PUNAMIYA, SEARCHED BY THE REVENUE. IN SUCH A SITUATION, THE DECISION FROM HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS M/S J.M. TRADING CORPORATION (ITA NO.589 OF 2009) O RDER DATED 29/06/2009, WHEREIN, THERE WAS CATEGORICAL FINDING BY THE TRIBUNAL THAT INITIATION OF SEARCH WAS NON-COMPLIANCE OF THE PROV ISIONS OF THE ACT. AS NO VALID SEARCH WAS CONDUCTED AT THE PREMISES OF THE ASSESSEE AS THE PREMISES OCCUPIED BY THE ASSESSEE WAS NOT EVEN ENTERED UPON BY THE SEARCH PARTY. IN THAT SITUATION, THE HONBLE H IGH COURT HELD THAT THE SEARCH WAS ILLEGAL AND INVALID. THE RATIO LAID DO WN IN ACIT VS M/S S.P. COLD STORAGE (ITA NOS.142 TO 147/BLPR/2012) OR DER DATED 30/10/2015, WHEREIN, SURVEY U/S 133A WAS CONDUCTED IN THE CASE OF ASSESSEE FIRM AND NO SEARCH, AS CONTEMPLATED U/S 13 2 OF THE ACT, WAS EVER CONDUCTED AT THE BUSINESS PREMISES OF THE FIRM NOR ANY REQUISITION WAS MADE U/S 132A, THEREFORE, THE JURIS DICTION ASSUMED BY THE ASSESSING OFFICER U/S 153A OF THE ACT WAS HELD TO BE NULL AND VOID, SUPPORTS THE CASE OF THE ASSESSEE. FOR THE SAKE OF REPETITION, IT IS WORTH MENTIONING THAT HONBLE DELHI HIGH COURT IN C IT VS KABUL CHAWLA (SUPRA) AND HONBLE JURISDICTIONAL HIGH COUR T AFTER CONSIDERING THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL I N ALL CARGO GLOBAL LOGISTIC LTD. VS DCIT (SUPRA) AND CIT VS MURLI AGRO PRODUCTS LTD.(SUPRA) IN CIT VS CONTINENTAL WAREHOUSING CORPO RATION (NHAVA SHEVA) LTD. (2015) 58 TAXMAN.COM78 (BOM.) HAS MADE ELABORATE DISCUSSION AND CONCLUDED THAT IN THE ABSENCE OF ANY INCRIMINATING M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 18 MATERIAL, NO ASSESSMENT/REASSESSMENT U/S 153A CAN B E MADE. IN THE LIGHT OF THE FOREGOING DISCUSSION, IT IS EVIDENTLY CLEAR THAT AN ASSESSMENT U/S 153A IS DIFFERENT FROM REGULAR ASSES SMENT. THE SECTION CAN BE INVOKED ONLY WHEN A VALID SEARCH IS INITIATED U/S 132 OR BOOKS OF ACCOUNTS, OTHER DOCUMENTS OR ANY ASSETS AR E REQUISITIONED U/S 132A AFTER 31/05/2003. THE PROVISION OF SECTION 153A SHOULD BE READ IN CONJUNCTION WITH THE PROVISION CONTAINED IN SECTION 132(1), THE REASON BEING THAT THE LATER DEALS WITH SEARCH AND S EIZURE AND THE FORMER DEALS WITH ASSESSMENT IN CASE OF SEARCH, THU S, THE TWO ARE INEXTRICABLY LINKED WITH EACH OTHER, WHICH IMPLIES THAT EXISTENCE OF BOOKS OF ACCOUNTS, INCRIMINATING DOCUMENTS, OR UNAC COUNTED ASSETS IS OR ARE SINE QUA NON FOR MAKING THE ADDITIONS IN THE ASSESSMENTS UNDER THIS PROVISION. THEREFORE, IF NOTHING IS FOUND DURI NG THE COURSE OF SEARCH, THE ADDITIONS IN THE ASSESSMENT OR REASSESS MENT U/S 153A IS NOT ONLY ERRONEOUS BUT ALSO SERVES NO PURPOSE. IT C AN BE PRCISED THAT THE ASSESSMENT OR REASSESSMENT U/S 153A ARISES ONLY , WHEN A VALID SEARCH HAS BEEN INITIATED AND CONDUCTED. THE PROV ISIONS OF SECTION 153A OF THE ACT MAKES IT CLEAR THAT ONLY IN THE CAS E OF A PERSON ON WHOM, A VALID SEARCH IS INITIATED, U/S 132 OR BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED U/S 132A AFTER 31/05/2003, THE ASSESSING OFFICER SHALL AFTER ISSUING NOTICE AS SESS OR REASSESS THE TOTAL INCOME OF SUCH PERSON FOR SIX ASSESSMENT YEAR S IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO PREVIOUS YEAR, IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE. TH E LEGISLATIVE INTENT IS CLEAR FROM THE USE OF EXPRESSION SUCH PERSON I N SECTION 153A(1)(A) OF THE ACT. THE EXPRESSION CLEARLY RELATES TO A PER SON IN RESPECT OF WHOM SEARCH U/S 132 HAS BEEN VALIDLY INITIATED AS P ER SECTION 153A ITSELF PROVIDES. OUR VIEW FIND SUPPORTS FROM HONBL E ORISSA HIGH COURT IN SIKSHA O ANUSANDHAN VS CIT (2011) 336 ITR 112 (ORISSA). THE HONBLE HIGH COURT HELD AS UNDER:- 8. SECTION 132 PRESCRIBES THAT THE COMPETENT AUTHORIT IES ARE EMPOWERED TO PERMIT THE AUTHORIZED OFFICERS TO ENTE R, SEARCH, BREAK OPEN, SEIZE, PLACE MARKS OF IDENTIFICATION AN D TAKE OTHER STEPS AS CONTEMPLATED UNDER SUB-CLAUSES (I) TO (V). HOWEVER, SUCH POWERS CAN BE EXERCISED AGAINST A PERSON UPON FULFI LMENT OF CERTAIN CONDITIONS. FIRSTLY, THE COMPETENT AUTHORIT Y MUST HAVE INFORMATION IN ITS POSSESSION AND, SECONDLY, ON THE BASIS OF SUCH INFORMATION IT MUST HAVE REASON TO BELIEVE THAT THE CONDITIONS AS STIPULATED IN SUB-CLAUSES (A), (B) AND (C) OF SECTI ON 132(1) OF THE INCOME-TAX ACT, 1961 EXIST. SUB-CLAUSES (A), (B) AN D (C) OF SECTION 132(1) SPEAK OF ANY PERSON. SEARCH AND SEIZURE CANN OT BE SUSTAINED UNLESS IT IS CLEARLY SHOWN THAT IT WAS DO NE BY THE AUTHORITY DULY AUTHORIZED, AND ALL THE CONDITIONS P RECEDENT IN RELATION THERETO EXISTED. THUS, BEFORE ISSUANCE OF SEARCH WARRANT IN ORDER TO TAKE RECOURSE UNDER SECTION 132 OF THE INCOME-TAX ACT, 1961, THE AUTHORITY COMPETENT TO ISSUE SEARCH WARRA NT MUST BE SATISFIED THAT SEARCH UNDER SECTION 132(1) IS NEEDE D IN RESPECT OF A DEFINITE PERSON. SATISFACTION REQUIRED UNDER SECT ION 132(1) OF THE M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 19 ACT 1961 IS QUA THE PERSON WHOSE NAME APPEARS IN TH E WARRANT OF AUTHORIZATION. IF SEARCH AS CONTEMPLATED UNDER SECT ION 132 OF THE INCOME-TAX ACT, 1961 IS CONDUCTED IN THE PREMISES O F A PERSON WITHOUT ANY WARRANT OF AUTHORIZATION IN THE NAME OF THE PERSON SEARCHED, OR ON THE BASIS OF A WARRANT OF AUTHORIZA TION IN THE NAME OF SOME OTHER PERSONS, THAT WOULD BE A CLEAR C ASE OF NON- APPLICATION OF MIND OF THE EMPOWERED INCOME-TAX AUT HORITIES AND SUCH A SEARCH CANNOT BE HELD TO BE VALID. IT IS SO, BECAUSE THE BELIEF WHICH FORMS THE FOUNDATION OF SEARCH RELATES TO A DEFINITE PERSON WHO IS TO BE SUBJECTED TO SEARCH. IF THE CON TRARY IS THE FACT SITUATION, THE SAME WOULD AMOUNT TO SERIOUS LAPSES AND WOULD BE IN CLEAR VIOLATION OF THE PROVISIONS CONTAINED IN S ECTION 132(1) OF THE INCOME-TAX ACT, 1961, AS IT DOES NOT STAND THE TEST OF SECTION 132 OF THE INCOME-TAX ACT, 1961. THEREFORE, THE MOS T SERIOUS CONTENT OF THE WARRANT OF AUTHORIZATION IS THE NAME AND DESCRIPTION OF THE PERSON WHOSE PREMISES, ETC., ARE SOUGHT TO BE SEARCHED. 9. THE PUNJAB AND HARYANA HIGH COURT IN JAGMOHAN MAHAJAN V. CIT [1976] 103 ITR 579 (PUNJ. & HAR.), HELD THAT A SEARCH AUTHORIZED IN THE ABSENCE OF MATERIAL NECESS ARY TO FORM THE REQUISITE BELIEF UNDER SECTION 132(1) ON THE BA SIS OF BLANK WARRANT OF AUTHORIZATION SIGNED BY THE COMMISSIONER OF INCOME- TAX WAS ILLEGAL AND NO ORDER UNDER SECTION 132(5) O N THE BASIS OF SUCH A SEARCH COULD BE MADE. 10. THE DELHI HIGH COURT IN AJIT JAINS CASE [2000] 242 ITR 302 (DELHI) HELD THAT IT IS AXIOMATIC THAT SEARCH UNDER SECTION 132 HAS TO BE A VALID SEARCH. AN ILLE GAL SEARCH IS NO SEARCH AND AS A NECESSARY COROLLARY IN SUCH A CASE CHAPTER XIV-B WOULD HAVE NO APPLICATION. THIS JUDGMENT OF THE DEL HI HIGH COURT HAS BEEN UPHELD BY THE APEX COURT IN UNION OF INDIA V. AJIT JAIN [2003] 260 ITR 80 (SC). THE DELHI HIGH COURT IN CIT V. M.S. ROHINI S. WALIA [2007] 289 ITR328 (DELHI), HELD THAT IT WOULD BE A FUTILE EXERCISE TO ENTERTAIN APPEALS WHERE ADMITTED LY NO SEARCH WARRANT WAS ISSUED IN THE CASE OF THE ASSESSEES AND THE TRIBUNAL HELD THAT UNLESS A SEARCH WARRANT WAS ISSUED, THE A SSESSING OFFICER COULD NOT INVOKE THE PROVISIONS OF SECTION 158BC OF THE INCOME-TAX ACT, 1961 FOR INITIATION OF BLOCK ASSESS MENT PROCEEDINGS AGAINST THE ASSESSEES. 11. THUS, WE ARE OF THE VIEW THAT IN ABSENCE OF ANY SE ARCH WARRANT IN THE NAME OF AN ASSESSEE, SEARCH CONDUCTE D IN ITS PREMISES IS NOT A VALID SEARCH AS CONTEMPLATED UNDE R SECTION 132 OF THE INCOME-TAX ACT, 1961. 12. TO DEAL WITH THE SECOND QUESTION, IT IS ALSO NECES SARY TO EXAMINE WHAT IS CONTEMPLATED IN SECTION 153A. THE R ELEVANT PROVISIONS OF SECTION 153A ARE QUOTED BELOW : '153A. ASSESSMENT IN CASE OF SEARCH OR REQUISITION. NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 20 SECTION 148, SECTION 149, SECTION 151 AND SECTION 1 53, IN THE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER THE 31ST DAY OF MAY, 2003, THE ASSESSING OFFICER SHALL (A)ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FUR NISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING W ITHIN SIX ASSESSMENT YEARS REFERRED TO IN CLAUSE (B), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETT ING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDIN GLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139 ; (B)ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSES SMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE :' (UNDERLINED FOR EMPHASIS) 13.THE PROVISIONS OF SECTION 153A OF THE INCOME TAX ACT, 1961, MAKE IT CLEAR THAT ONLY IN THE CASE OF A PERS ON ON WHOM A SEARCH IS INITIATED UNDER SECTION 132 OR BOO KS OF ACCOUNT OR OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER 31 ST MARCH, 2003, THE ASSESSING OFFICER SHALL AFTER ISSUING NOTICE AS SESS OR REASSESS THE TOTAL INCOME OF SUCH PERSON FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSME NT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SE ARCH IS CONDUCTED OR REQUISITION MADE. THE LEGISLATIVE INTE NT IS CLEAR FROM THE USE OF EXPRESSION SUCH PERSON IN C LAUSE (A) OF SECTION 153A. THE EXPRESSION CLEARLY RELATES TO A PERSON IN RESPECT OF WHOM SEARCH UNDER SECTION 132 HAS BEEN INITIATED AS SECTION 153A ITSELF PROVIDES. TH US TO EXERCISE POWERS UNDER SECTION 153A IN THE CASE OF A PERSON THE MANDATORY REQUIREMENT IS THAT THERE MUST BE INITIATION OF A SEARCH AS CONTEMPLATED UNDER SECTIO N 132 OR REQUISITION UNDER SECTION 132A IN RESPECT OF SUC H PERSON. THE WORD PERSON APPEARING IN SECTION 132 AND IN SECTION 153A IS ONE AND THE SAME PERSON. THUS T HE PERSON, IN RESPECT OF WHOM SEARCH UNDER SECTION 132 IS INITIATED, MUST BE THE SAME PERSON AGAINST WHOM NOT ICE UNDER SECTION 153A IS TO BE ISSUED FOR MAKING ASSESSMENT/REASSESSMENT UNDER THAT SECTION. THE HONBLE APEX COURT IN THE CASE OF UNION OF INDI A V. AJIT JAIN ((2003) 260 ITR 80(SC), (2003) 129 TAXMAN 74(SC) ) HELD THAT INITIATION OF VALID SEARCH IS A PRE- M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 21 REQUISITE FOR FRAMING SEARCH ASSESSMENT U/S 158BC O F THE ACT , HELD AS UNDER: AS THE TITLE OF CHAPTER XIV-B SUGGESTS, THESE ARE SPECIAL PROCEDURES FOR ASSESSMENT OF SEARCH CASES AND, THER EFORE, A SEARCH UNDER SECTION 132 IS A PRE-REQUISITE FOR INV OKING THE PROVISIONS OF THIS CHAPTER. IT IS AXIOMATIC THAT SE ARCH UNDER SECTION 132, AS CONTEMPLATED HAS TO BE A VALID SEAR CH. AN ILLEGAL SEARCH IS NO SEARCH AND AS A NECESSARY CORO LLARY, IN SUCH A CASE CHAPTER XIV-B WOULD HAVE NO APPLICATION . IN THE INSTANT CASE, HAVING COME TO THE CONCLUSION THA T THE SEARCH CONDUCTED WAS WITHOUT JURISDICTION AND WAS, THUS, VOID AB INITIO, THE IMMINENT CONSEQUENCE WOULD BE T HAT THE PROVISIONS OF CHAPTER XIV-B COULD NOT BE INVOKED AG AINST THE RESPONDENT, PURSUANT TO THE SEARCH OF HIS ROOM AT CHENNAI. CONSEQUENTLY, THE BLOCK ASSESSMENT ORDER C OULD NOT BE SUSTAINED AND WAS, ACCORDINGLY, QUASHED. FURTHER, RATIO LAID DOWN IN CIT VS RAMESH D. PATEL (2014) 362 ITR 492 (GUJ.), ABHAY KUMAR SHROFF VS CIT (2007) 29 0 ITR 114 (JHAR.), SPACEWOOD FURNISHERS PVT LTD. VS DGIT (2012) 340 IT R 393 (BOM.) AND CIT VS SMT. SHAILA AGARWAL (2012) 346 ITR 130 ( ALL.) SUPPORTS THE CASE OF THE ASSESSEE. THE RATIO LAID DOWN BY HONBL E APEX COURT IN UNION OF INDIA VS AJIT JAIN 260 ITR 80(SC), CIT VS MS. ROHINI VALIA 289 ITR 328 (DEL.), JINDAL STAINLESS LTD. VS ACIT 120 I TD 301 (DEL.), JAYANTILAL DAMJIBHAI & ORS. VS DIT (2008) 219 CTR 2 6, ALSO SUPPORTS THE CASE OF THE ASSESSEE. WE ARE OF THE VIEW THAT S EARCH ACTION IS IN THE NATURE OF ENFORCEMENT WHICH INVOLVES INVASION IN TH E PRIVACY OF THE ASSESSEE; SUCH ACTION HAS TO BE IN FULL CONFORMITY WITH RELEVANT LEGAL PROVISION. SUCH JURISDICTION OR ACTION CANNOT BE VA LIDATED IN CASUAL OR LAX MANNER. WE FULLY APPRECIATE THE MANDATE OF THE SUPE RIOR COURTS WHILE CONSIDERING THE VALIDITY OF ASSESSMENT IN SUCH TYPE OF CASES. THE MUMBAI BENCH OF THE TRIBUNAL IN J.M. TRADING CORPOR ATION VS ACIT 20 SOT 489 (MUM.) HELD THAT WHERE A SEARCH IS CARRIED OUT AT THE PREMISES OWNED BY THE ASSESSEE BUT RENTED OUT TO OTHER CONCE RN, THE SAME DOES NOT RESULT INTO A VALID SEARCH U/S 132 OF THE ACT U PON THE ASSESSEE. THE APPEAL OF THE REVENUE WAS DISMISSED BY HONBLE BOMB AY HIGH COURT VIDE ORDER DATED 29/06/2009 CIT VS J.M. TRADING CO RPORATION (ITA NO.589 OF 2009) AND MADE FOLLOWING OBSERVATIONS. . THE TRIBUNAL HAS CATEGORICALLY RECORDED A FINDI NG OF FACT OF INITIATION OF THE SEARCH THAT NON COMPLI ANCE TO THE PROVISIONS OF THE ACT BY THE AUTHORIZED OFFI CER, SUCH SEARCHES ARE INVALID AND ILLEGAL. NO SEARCH W AS CONDUCTED AGAINST THE ASSESSEE AS THE PREMISES OCCUPIED BY THE ASSESSEE WERE NOT ENTERED UPON AND SEARCHED BY THE AUTHORIZED OFFICER. M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 22 2.16. THE ITAT, BANGALORE IN D T S RAO V. ACIT (20 07) 106 ITD 569(BANG. TRIB) WHICH WAS AFFIRMED BY HON'BLE K ARNATAKA HIGH COURT IN THE CASE OF (2012) 23 TAXMANN.COM 352(KAR. HC), HELD AS UNDER: 28. IN VIEW OF EXPLANATION 2 TO SECTION 158BE, EXECUTION OF SEARCH WARRANT IS TO BE INFERRED FROM THE DATE RECO RDED IN RESPECT OF CONCLUSION OF SEARCH IN THE LAST PANCHNAMA. PANCHNA MA IS NOT DEFINED IN THE IT ACT. HOWEVER, SECTION 100 OF CR.P C GOVERNS THE CONDUCTING OF SEARCH. AS PER SECTION 100(4) OF CR.P C THE AUTHORIZED OFFICER TO MAKE SEARCH IS REQUIRED TO CALL UPON TWO OR MORE INDEPENDENT AND RESPECTABLE INHABITANT OF THE LOCAL ITY IN WHICH THE PLACE TO BE SEARCHED IS SITUATED. SEARCH IS TO BE M ADE IN THE PRESENCE OF THESE TWO RESPECTABLE INHABITANTS LIST OF THINGS TO BE SEIZED AND PLACED WHERE THESE HAVE BEEN FOUND IS TO BE PREPARED AND SUCH LIST IS TO BE SIGNED BY THE AUTHORIZED OFF ICER AND THE TWO WITNESSES. COPY OF THE LIST PREPARED IS TO BE DELIV ERED TO THE OCCUPANT OF THE PREMISES. RECORDING OF THE NAMES OF THE OFFICER AUTHORIZED TO SEARCH, THE BUILDING OR PREMISES TO B E SEARCHED, THE DESIGNATION OF THE OFFICER WHO AUTHORIZED THE SEARC H, NAME AND ADDRESSES OF TWO RESPECTABLE PERSONS CALLED TO WITN ESS THE SEARCH, TIME OF COMMENCEMENT OF SEARCH AND CONCLUSION OR SU SPENSION OF SEARCH, LIST OF VALUABLES, DOCUMENTS ETC. FOUND AS WELL AS SEIZED RECORDING OF STATEMENT IF ANY PERSON DURING SEARCH AND MENTION OF ANY RESTRAINT ORDER OR PROHIBITORY ORDER, ARE RECOR DED IN THE PRESCRIBED FORMAT AND SUCH DOCUMENT IS KNOWN AS PAN CHNAMA. PANCHNAMA IS PREPARED EVEN IF SEARCH IS TEMPORARILY SUSPENDED. PANCHNAMA IS DEFINITELY PREPARED AT THE CONCLUSION OF SEARCH. IN CASE AN ORDER UNDER SECTION 132(3) IS PASSED, THEN THE SAME IS MENTIONED IN THE PANCHNAMA. NORMALLY ORDER UNDER SE CTION 132(3) IS PASSED IN RESPECT OF A ROOM, SHOP, OFFICE OR AN ALMIRAH OR LOCKERS ETC. SUCH ROOM, LOCKER OR ALMIRAH ETC. IS SEALED. P ROHIBITORY ORDER UNDER SECTION 132(3) IS IN RESPECT OF A SPECIFIC PO RTION OF AN AREA OR SPACE WHICH CAN BE SEALED AND TO WHICH LEGAL ACCESS OF ENTRY CANNOT BE MADE EXCEPT WITH THE KNOWLEDGE OF AUTHORI ZED OFFICER. WHEN SUCH SEALED ROOM, ALMIRAH ETC. IS OPENED AGAIN THEN THE SAME IS ALSO DONE IN THE PRESENCE OF TWO WITNESSES. SUCH PROCEEDINGS ARE ALSO RECORDED IN THE PANCHNAMA AT THE CONCLUSION AN D IF PROHIBITORY ORDER IS AGAIN TO BE PASSED THEN THE SAME IS MENTIO NED IN THE PANCHNAMA. WHEN THE PROHIBITORY ORDER UNDER SECTION 132(3) IS FINALLY LIFTED THEN PANCHNAMA IS DRAWN. *** *** 37. PANCHNAMA IS NOT DEFINED UNDER INCOME-TAX ACT. HOW EVER, BOARD HAS ISSUED TAX PAYERS CHARTER. IN RESPECT OF CHARTER OF RIGHTS AND DUTIES OF PERSONS SEARCHED, THE BOARD HAS MENTI ONED THAT SUCH PERSON HAS A RIGHT TO HAVE A COPY OF PANCHNAMA TOGE THER WITH ALL THE ANNEXURE. DUTY OF THE PERSON SEARCHED IS TO AFF IX HIS SIGNATURE ON THE RECORDED STATEMENT, INVENTORIES AND THE PANC HNAMA. RULE 112 OF THE INCOME-TAX RULES PROVIDES THE PROCEDURE TO BE FOLLOWED IN M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 23 SEARCH. COMBINED READING OF RULE 112 AND THE TAX PA YERS CHARTER MAKES IT CLEAR THAT PANCHNAMA REFERRED IN EXPLANATI ON 2 TO SECTION 158BE IS THAT PANCHNAMA COPY OF WHICH IS GIVEN TO T HE PARTY SEARCHED. IN THE INSTANT CASE, THERE ARE THREE PANC HNAMAS DATED 6- 2-1996, 19-2-1996 AND 25-4-1996. AS STATED EARLIER ORDER UNDER SECTION 132(3) WAS NOT VALID ON 25-4-1996. WHEN ORD ER UNDER SECTION 132(3) WAS NOT EXTENDED BEYOND SIXTY DAYS T HEN LIFTING OF SUCH PROHIBITORY ORDER VIDE PANCHNAMA DATED 24-4-19 96 HAS NO LEGAL SANCTION, WHEN VIOLATION OF ORDER UNDER SECTI ON 132(3) CAN RESULT INTO PUNISHMENT WITH RIGOROUS IMPRISONMENT T HEN, COMMUNICATION OF EXTENSION OF ORDER UNDER SECTION 1 32(3) IS A MUST. HENCE, PANCHNAMA DATED 25-4-1996 IS NOT A VALID PAN CHNAMA. 38. SEARCH COMES TO AN END WHEN THE LAST PANCHNAMA IS DRAWN. IT IS DATE OF SUCH PANCHNAMA WHICH IS RELEVANT FOR DET ERMINING THE PERIOD OF LIMITATION FOR PASSING THE ORDER UNDER SE CTION 158BC BY THE ASSESSING OFFICER. ACCORDINGLY, THE ASSESSING O FFICER IS REQUIRED ONLY TO FIND OUT THE DATE WHEN THE LAST PANCHNAMA W ITH REFERENCE TO LAST AUTHORISATION IS DRAWN AND NOTHING BEYOND THAT . HENCE, THE TRIBUNAL CAN EXAMINE THE DATE WHEN LAST PANCHNAMA W AS DRAWN. IT WILL BE RELEVANT TO QUOTE FROM PG. 51 IN THE CASE O F PROMAIN LTD. (SUPRA) : 'IT IS, HOWEVER, PERTINENT TO MENTION ABOUT THE SIG NIFICANCE OF THE PANCHNAMA. THE PANCHNAMA IS A DOCUMENT WHICH IS PRE PARED IN THE PRESENCE OF PANCHAS (RESPECTABLE LOCAL WITNESSES) C ONTAINING THE ITEMS FOUND AND SEIZED IN THE COURSE OF SEARCH. SO THE AS SESSING OFFICER MUST SATISFY HIMSELF FOR THE PURPOSE OF CALCULATING THE PERIOD LIMITATION THAT DOCUMENT IN QUESTION IS IN REALITY A PANCHNAMA . THERE MAY BE A CASE WHERE INVENTORY IS PREPARED IN RESPECT OF BOOK S OF ACCOUNT OR VALUABLE ARTICLES FOUND IN THE COURSE OF SEARCH BUT TAKING OF OR REMOVAL OF SUCH BOOKS OF ACCOUNT OR VALUABLE ARTICLE IS NOT PRACTICABLE. THE AUTHORIZED OFFICER MAY ISSUE A RESTRAINT ORDER UNDE R THE PROVISO TO SECTION 132(1). SUCH RESTRAINT IS DEEMED TO BE A SE IZURE AS PER THE SAID PROVISO. HENCE, IN SUCH A CASE, THE PREPARATION OF INVENTORY AND PANCHNAMA WOULD BE RELEVANT AND ANY ACTION OF THE A UTHORIZED OFFICER LIFTING THE RESTRAINT ORDER WOULD, IN OUR OPINION, BE IRRELEVANT. THE REASON IS THAT WHATEVER THE SEARCH PARTLY WAS REQUI RED IN LAW TO DO HAD BEEN DONE AND NOTHING MORE WAS REQUIRED. THE RE STRAINT ORDER IS PASSED NOT BECAUSE ANYTHING WAS TO BE DONE BUT BECA USE IT WAS NOT PRACTICABLE TO TAKE PHYSICAL POSSESSION AND REMOVE THE MATERIAL TO A SAFE PLACE AT THE RELEVANT TIME. AS HELD BY THE HON BLE BOMBAY HIGH COURT IN THE CASE OF CIT V. MRS. SANDHYA P. NAIK [2002] 253 ITR 534, THE AUTHORIZED OFFICER CANNOT KEEP THE SEARCH PROCE EDINGS IN OPERATION BY PASSING A RESTRAINT ORDER UNDER SECTION 132(3) S O AS TO CIRCUMVENT THE PROVISIONS OF SECTION 132(3), READ WITH SECTION 132(5). HOWEVER, THE SITUATION WOULD BE DIFFERENT WHERE A P ROHIBITORY ORDER UNDER SECTION 132(3) IS ISSUED BECAUSE SUCH ORDER, UNLIKE- A RESTRAINT ORDER, DOES NOT AMOUNT TO SEIZURE AS PER SUB-SECTIO N (3) OF SECTION 132. SUCH ORDERS ARE ISSUED WHERE IT IS NOT PRACTICABLE TO SEIZE. SO AN ACT OF SEIZURE REMAIN TO BE PERFORMED AND, THEREFORE, SEAR CH CANNOT BE SAID TO BE CONCLUDED. HENCE, IN SUCH CASE, SEARCH WOULD BE CONCLUDED WHEN THE PROHIBITORY ORDER IS LIFTED AND THE BOOKS OF AC COUNT/VALUABLE ARTICLES ARE ACTUALLY SEIZED AND THE PANCHNAMA IS P REPARED. IN SUCH CASE, IT IS THIS PANCHNAMA (IF IT IS THE LAST ONE) WHICH IS RELEVANT FOR M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 24 CALCULATING THE PERIOD OF LIMITATION. ACCORDINGLY, WE HOLD THAT THE TRIBUNAL CAN EXAMINE THE RECORD OF SEARCH WITH A VI EW TO FIND OUT THE FACTUM OF LAST PANCHNAMA AS DISCUSSED ABOVE.' SECTION 153B OF THE ACT AS APPLICABLE TO THE RELEVA NT YEAR STIPULATE THAT TIME LIMIT FOR COMPLETION OF THE ASSESSMENT U/S 153A OF THE ACT SHALL BE COMPUTED BASED ON THE CONCLUSION OF THE SEARCH AS RECORDED I N THE LAST OF THE PANCHNAMA DRAWN AS UNDER: 153BTIME-LIMIT FOR COMPLETION OF ASSESSMENT UNDER SECTION 153A *** (2) THE AUTHORISATION REFERRED TO IN CLAUSE ( A ) AND CLAUSE ( B ) OF SUB- SECTION (1) SHALL BE DEEMED TO HAVE BEEN EXECUTED, ( A ) IN THE CASE OF SEARCH, ON THE CONCLUSION OF SEARCH AS RECORDED IN THE LAST PANCHNAMA DRAWN IN RELATION TO ANY PERSON IN WHOSE CASE THE WARRANT OF AUTHORISATION HAS BEEN ISSUED; 2.17. THUS, THE SEARCH WILL BE DEEMED TO BE CONCLU DED ON THE BASIS OF LAST PANCHNAMA DRAWN IN RELATION TO T HE PERSON IN WHOSE CASE THE WARRANT OF AUTHORIZATION HAS BEEN ISSUED A ND IN THE INSTANT CASE , WE HAVE OBSERVED THAT NO PANCHNAMA WAS DRAWN AGAINST THE ASSESSEE SO IT CAN BE CONCLUDED THAT SEARCH AGAINST THE ASSESSEE GOT VITIATED AS NO PANCHNAMA WAS EVER PREPARED AGAI NST THE ASSESSEE. THE SEARCH IS A SERIOUS INVASION INTO THE PRIVACY OF THE PERSON INFRINGING ON FUNDAMENTAL RIGHTS AS ENSHRINE D IN ARTICLE 21 OF THE CONSTITUTION OF INDIA AND THE SAME CANNOT BE LI GHTLY CARRIED OUT BY THE STATE IN AN CASUAL OR LAX MANNER. THE REVENUE H AS PREPARED THE PANCHNAMA IN THE NAME OF MANOJ B PUNMIA AND GROUP WHILE THERE IS NO CONCEPT OF WORD GROUP IN THE ACT IN CONTEXT OF SEARCH PROCEEDINGS. 2.18. HON'BLE SUPREME COURT IN THE CASE OF VLS FIN ANCE LIMITED V. CIT(2016) 68 TAXMANN.COM368(SC) HAS HELD THAT LIMITATION PROVISIONS FOR COMPLETING ASSESSMENTS ARE TO BE STR ICTLY CONSTRUED AS UNDER: THE COUNSEL FOR THE APPELLANTS ARE JUSTIFIED IN THE IR CONTENTION THAT THE PROVISION RELATING TO LIMITATION NEED TO BE STR ICTLY CONSTRUED. IN THE CASE OF K.M. SHARMA V. ITO [2002] 254 ITR 772/1 22 TAXMAN 426 (SC) , THIS PRINCIPLE IS LAID DOWN IN THE FOLLOWING WORD S: '13. FISCAL STATUTE, MORE PARTICULARLY A PROVISION SUCH AS THE PRESENT ONE REGULATING PERIOD OF LIMITATION MUST RECEIVE STRICT CONSTRUCTION. THE LA W OF LIMITATION IS INTENDED TO GIVE CERTAINTY AND FINALI TY TO LEGAL PROCEEDINGS AND TO AVOID EXPOSURE TO RISK OF LITIGATION TO LITIGANT FOR INDEFINITE PERIOD ON FUT URE UNFORESEEN EVENTS. PROCEEDINGS, WHICH HAVE M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 25 ATTAINED FINALITY UNDER EXISTING LAW DUE TO BAR OF LIMITATION CANNOT BE HELD TO BE OPEN FOR REVIVAL UNLESS THE AMENDED PROVISION IS CLEARLY GIVEN RETROSPECTIVE OPERATION SO AS TO ALLOW UPSETTING OF PROCEEDINGS, WHICH HAD ALREADY BEEN CONCLUDED AND ATTAINED FINALITY.' 2.19. THE HONBLE DELHI HIGH COURT HAS IN THE CASE OF MDLR RESORTS PRIVATE LIMITED V. CIT (2013) 40 TAXMANN.CO M 365(DELHI) HAS HELD THE DEFECT IN THE PANCHANAMA AS CURABLE AND NO T AFFECTING THE VALIDITY OF SEARCH BUT HAS ALSO HELD IN THE SAID JU DGMENT AS UNDER: THE EFFECT OF THE SAID LAPSE ON MERITS OR TO THE V ALUE OR DEGREE OF IMPORTANCE TO BE GIVEN TO THE MATERIAL SEIZED IS A MATTER OF APPRAISAL AND MERITS AND NOT A QUESTION TO BE EXAMINED AND ANSWERED IN THESE WRIT PETITIONS. THE VIEW, WE HAVE TAKEN FINDS SUPPORT FR OM THE DECISIONS OF THE SUPREME COURT IN ITO V. SETH BROS. [1969] 74 ITR 836 AND POORAN MAL V. DIRECTOR OF INSPECTION [1974] 93 ITR 505 (SC) . REFERENCE CAN ALSO BE MADE TO THE DECISION OF THIS COURT IN CITV. S. K. KATYAL [2009] 308 ITR 168/177 TAXMAN 380 WHEREIN THE EXPRESSION 'PANCHNAMA' WAS ELUCIDATED AND EXPLAINED IN THE FOLLOWING WORDS: '15. THESE PROVISIONS DEMONSTRATE THAT A SEARCH AND SEIZURE UNDER THE SAID ACT HAS TO BE CARRIED OUT IN THE PRESENCE OF AT LEAST TWO RESPECTABLE INHABITANTS OF THE LOCALITY WHERE THE SEARCH AND SEIZURE IS CONDUCTED. THESE RESPECTABLE INHABITANTS ARE WITNESSES TO THE SEARCH AND SEIZURE AND ARE KNOWN AS 'PANCHAS'. THE DOCUMENTATI ON OF WHAT THEY WITNESS IS KNOWN AS THE PANCHNAMA. THE WO RD 'NAMA', REFERS TO A WRITTEN DOCUMENT. ITS TYPE IS U SUALLY DETERMINED BY THE WORD WHICH IS COMBINED WITH IT AS A SUFFIX. EXAMPLES BEING, NIKAH-NAMA (THE WRITTEN MUS LIM MARRIAGE CONTRACT), HIBA-NAMA (GIFT DEED, THE WORD HIBA MEANING - GIFT), WASIYAT-NAMA (WRITTEN WILL) AND SO ON. SO A PANCHNAMA IS A WRITTEN RECORD OF WHAT THE PANCH H AS WITNESSED. IN MOHAN LAL V. EMPEROR AIR 1941 BOM. 14 9, IT WAS OBSERVED THAT 'THE PANCHNAMA IS MERELY A RECORD OF WHAT A PANCH SEES'. SIMILARLY, THE GUJARAT HIGH COU RT IN THE CASE OF VALIBHAI OMARJI V. STATE AIR 1963 GUJ 1 45 NOTED THAT 'A PANCHANAMA IS ESSENTIALLY A DOCUMENT RECORDING CERTAIN THINGS WHICH OCCUR IN THE PRESENC E OF PANCHAS AND WHICH ARE SEEN AND HEARD BY THEM.' AGAI N IN THE STATE OF MAHARASHTRA V. KACHARADAS D. BHALGAR (1978) 80 BOM LR 396, A PANCHNAMA WAS STATED TO BE 'A M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 26 MEMORANDUM OF WHAT HAPPENS IN THE PRESENCE OF THE PANCHAS AS SEEN BY THEM AND OF WHAT THEY HEAR'. 16. WE HAVE EXAMINED THE MEANING OF THE WORD PANCHNAMA IN SOME DETAIL BECAUSE IT IS USED IN EXPLANATION 2(A) TO SECTION 158BE OF THE SAID ACT A LTHOUGH IT HAS NOT BEEN DEFINED IN THE ACT. A PANCHNAMA, AS WE HAVE SEEN IS NOTHING BUT A DOCUMENT RECORDING WHAT HAS HAPPENED IN THE PRESENCE OF THE WITNESSES (PANCHAS) . A PANCHNAMA MAY DOCUMENT THE SEARCH PROCEEDINGS, WITH OR WITHOUT ANY SEIZURE. A PANCHNAMA MAY ALSO DOCUMENT THE RETURN OF THE SEIZED ARTICLES OR THE REMOVAL OF SEA LS. BUT, THE PANCHNAMA THAT IS MENTIONED IN EXPLANATION 2(A) TO SECTION 158BE IS A PANCHNAMA WHICH DOCUMENTS THE CONCLUSION OF A SEARCH. CLEARLY, IF A PANCHNAMA DOES NOT, FROM THE FACTS RECORDED THEREIN, REVEAL THAT A SEARCH WAS AT ALL CARRIED OUT ON THE DAY TO WHICH I T RELATES, THEN IT WOULD NOT BE A PANCHNAMA RELATING TO A SEARCH AND, CONSEQUENTLY, IT WOULD NOT BE A PANCHNAMA OF THE TYPE WHICH FINDS MENTION IN THE SAID EXPLANATION 2(A) TO SECTION 158 BE.' INCIDENTALLY IN THE INSTANT APPEAL , THERE IS NO PA NCHNAMA DRAWN BY THE REVENUE AGAINST THE PRESENT ASSESSEE WHICH IS AN AD MITTED POSITION. KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF CONSIDERED VIEW THAT THE SEARCH PROCEEDINGS IN THE CASE OF PRESENT ASSESSEE GOT VITIATED DUE TO NON-PREPARATION OF THE PANCHNAMA IN THE NAME OF THE ASSESSEE WHICH EVIDENCES CONCLUSION OF THE SEARCH AND WHICH EFFECTIVELY DECIDES AGAINST WHOM THE REVENUE HAS CONDUCTED SEARCH SO MUCH SO FURTHER ACTIONS ARE REQUIRED TO I NITIATE ASSESSMENT PROCEEDINGS U/S 153A OF THE ACT FOR THE LAST SIX YE ARS AGAINST THE PERSON SO SEARCHED WITHIN THE TIME STIPULATED U/S 153B OF THE ACT. EVEN HONBLE DELHI HIGH COURT IN THE CASE OF MDLR RESORTS PRIVAT E LIMITED(SUPRA) HAS QUOTED RELEVANT EXTRACT FROM DECISION OF THE HONBL E DELHI HIGH COURT IN THE CASE OF CIT V. S. K. KATYAL [2009] 308 ITR 168/ 177 TAXMAN 380(DELHI) WHEREBY THE HONBLE COURT HAS CLEARLY ST ATED IN PARA 24 THAT IF A PANCHNAMA DOES NOT, FROM THE FACTS RECORDED THERE IN, REVEAL THAT A SEARCH WAS AT ALL CARRIED OUT ON THE DAY TO WHICH I T RELATES, THEN IT WOULD NOT BE A PANCHNAMA RELATING TO A SEARCH AND, CONSEQ UENTLY, IT WOULD NOT BE A PANCHNAMA OF THE TYPE WHICH FINDS MENTION IN T HE SAID EXPLANATION 2(A) TO SECTION 158 BE. THUS, IN THE ABSENCE OF PAN CHNAMA BEING DRAWN AGAINST THE ASSESSEE, NO INCRIMINATING MATERIAL HAV ING BEEN FOUND PERTAINING TO THE ASSESSEE AND ALSO THE PREMISES SE ARCHED DID NOT BELONGED TO THE ASSESSEE, IT COULD BE CONCLUDED BAS ED ON THE CUMULATIVE EFFECT OF ALL THE ABOVE-STATED RELEVANT FACTS THAT NO VALID SEARCH WAS CONDUCTED AGAINST THE ASSESSEE AND THE ASSESSMENT U /S 153A OF THE ACT IS BAD IN LAW HENCE LIABLE TO BE QUASHED. WHY, DES PITE A SEARCH, WE OBSERVE A NOTICE U/S 153C AS WELL AS A SURVEY BEI NG CONDUCTED ON THE ASSESSEE IN THE PRESENT CASE. M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 27 3. NOW, WE SHALL TAKE UP THE CROSS APPEALS FOR A.Y. 2005-06, 2006-07 AND 2007-08. IN THESE APPEALS ALSO, THE IDENTICAL J URISDICTIONAL ISSUE HAS BEEN RAISED BY THE ASSESSEE AND THE REVENUE HAS CHA LLENGED RESTRICTING THE DISALLOWANCE MADE ON ACCOUNT OF UNEXPLAINED PUR CHASES TO 50%, THEREOF, IN VIEW OF THE FOREGOING DISCUSSION MADE I N A.Y. 2004-05, SINCE, WE HAVE DECLARED THE PROCEEDINGS U/S 153A AS NULL A ND VOID, THESE APPEALS FOR IMPUGNED ASSESSMENT YEARS HAVE ALSO REM AINED FOR ACADEMIC INTEREST ONLY. SINCE, THE BASIS FOR MAKING THE ASSESSMENT/REASSESSMENT HAS BEEN DECLARED AS NULL A ND VOID, THEREFORE, THE SAME RATIO WILL BE APPLICABLE TO THE APPEALS OF THE REVENUE ALSO, CONSEQUENTLY, DISMISSED, THEREFORE, THESE APPEALS A RE ALSO DECIDED IN FAVOUR OF THE ASSESSEE. 4. SO FAR AS MERITS OF THE CASE IS CONCERNED, WE HA VE OBSERVED THAT THERE WAS A SEARCH CONDUCTED AGAINST THE ASSESSEE C OMPANY BY REVENUE ON 31-10-2009 WHICH WAS HELD BY US TO BE VI TIATED. THERE WAS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE O F SEARCH FOR THE IMPUGNED ASSESSMENT YEAR. THE ASSESSEE COMPANY HAD FILED RETURN OF INCOME ON 20-10-2004 U/S 139(1) OF THE ACT. THE TIM E LIMIT FOR SERVICE OF NOTICE U/S 143(2) OF THE ACT FOR THE SAID RELEVANT PERIOD WAS TILL THE EXPIRY OF TWELVE MONTHS FROM THE END OF THE MONTH IN WHICH THE RETURN IS FURNISHED I.E. UP-TO 31-10-2005. THE SEARCH WAS INI TIATED ON 31-10-2009 AND HENCE THE PERIOD WITH IN WHICH REVENUE COULD HA VE ISSUED NOTICE U/S 143(2) OF THE ACT TO FRAME ASSESSMENT UNDER SECTION 143(3) OF THE ACT HAS ALREADY EXPIRED AND HENCE THE ASSESSMENT FOR TH E IMPUGNED ASSESSMENT YEAR IS A CONCLUDED ASSESSMENT AS STIPUL ATED U/S 153A OF THE ACT ON THE DATE OF SEARCH ON 31-10-2009. THUS, AS PER MANDATE OF SECTION 153A OF THE ACT THE CONCLUDED ASSESSMENT CA N BE RE-OPENED FOR FRAMING ASSESSMENT U/S 153A OF THE ACT PROVIDED THE RE IS AN INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH. SINCE, IN THE INSTANT CASE NO INCRIMINATING MATERIAL WAS DURING T HE COURSE OF SEARCH AGAINST THE ASSESSEE COMPANY FOR THE IMPUGNED ASSES SMENT YEAR, NO ADDITIONS CAN BE SUSTAINED. OUR VIEW IS FORTIFIED B Y THE DECISION OF HON'BLE JURISDICTION HIGH COURT OF BOMBAY IN THE CA SE OF CIT V. CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) L IMITED (2015) 58 TAXMANN.COM 78 (BOM.) AND DECISION OF HON'BLE DELH I HIGH COURT IN THE CASE OF CIT V. KABUL CHAWLA (2015) 61 TAXMANN.COM 4 12(DELHI) WHEREBY THE HON'BLE HIGH COURT HAS DULY CONSIDERED THE RATI O OF THE DECISION LAID DOWN BY HON'BLE BOMBAY HIGH COURT IN THE CASE OF CO NTINENTAL WAREHOUSING CORPORATION(NHAVA SHEVA) LIMITED(SUPRA) WHEREBY SUMMARY OF LEGAL POSITION WAS STIPULATED AS UNDER: SUMMARY OF THE LEGAL POSITION 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, REA D WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN T HE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UN DER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 28 SECTION 153 A(1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE S EARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE O F THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RE SPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEA RCH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INC OME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WILL BE ONLY ONE ASSESSMENT ORDER IN R ESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSE D INCOME WOULD BE BROUGHT TO TAX'. IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH, OR OTHER POST- SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE A O WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSE SSMENT 'CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SE IZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONL Y ON THE BASIS OF SEIZED MATERIAL.' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESS MENT CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATABLE TO ABAT ED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD ' REASSESS' TO COMPLETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE J URISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SE CTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARAT ELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OT HER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE AO. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON THE BASI S OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DIS COVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DI SCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. CONCLUSION 38. THE PRESENT APPEALS CONCERN AYS, 2002-03, 2005-06 AND 2006- 07.ON THE DATE OF THE SEARCH THE SAID ASSESSMENTS A LREADY STOOD COMPLETED. SINCE NO INCRIMINATING MATERIAL WAS UNEA RTHED DURING THE SEARCH, NO ADDITIONS COULD HAVE BEEN MADE TO TH E INCOME ALREADY ASSESSED. M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 29 39. THE QUESTION FRAMED BY THE COURT IS ANSWERED IN FA VOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 40. THE APPEALS ARE ACCORDINGLY DISMISSED BUT IN THE C IRCUMSTANCES NO ORDERS AS TO COSTS. 3.1 IN THE LIGHT OF THE FOREGOING DISCUSSION , SO F AR AS MERITS OF THE ADDITIONS IS CONCERNED , WE ARE OF THE VIEW THAT TH AT THE ADDITION MADE ON ACCOUNT OF SUNDRY CREDITORS CANNOT BE SUSTA INED AS THE ASSESSMENT FOR THE IMPUGNED ASSESSMENT YEAR IS A CO NCLUDED ASSESSMENT AS ON THE DATE OF SEARCH AND NO INCRIMIN ATING MATERIAL HAS BEEN FOUND DURING THE COURSE OF SEARCH. SO FAR AS INTEREST U/S 234B OF THE ACT IS CONCERNED , IT IS CONSEQUENTIAL IN NATURE. SINCE, WE HAVE DECIDED THE PROCEEDINGS AS NULL AND VOID, ON THE JURISDICTIONAL ISSUE ITSELF, AS WELL ON MERITS THE ASSESSEE DESERVES TO SUCCEED. 5. OUR DECISION IN ITA NO. 2183/MUM/2013 FOR THE AS SESSMENT YEAR 2004-05 SHALL APPLY MUTATIS MUTANDIS TO THE AP PEALS FOR THE ASSESSMENT YEAR 2005-06, 2006-07 AND 2007-08. FINALLY, ALL THE APPEALS ARE DISPOSED OF IN TERMS O F FOREGOING DISCUSSION, CONSEQUENTLY THE APPEALS OF THE ASSESSE E ARE ALLOWED AND THAT OF THE REVENUE ARE DISMISSED. 2.3. IN THE AFORESAID ORDER, AN ELABORATE DISCUSSION HAS BEEN MADE BY THE ASSESSEE, CONSIDERING VARIOUS JUDICIAL PRONOUNCEMENT INCLUDING THE DECISION FROM HONBLE DELHI HIGH COUR T HAS IN THE CASE OF MDLR RESORTS PRIVATE LIMITED V. CIT (2013) 40 TAXMANN.COM 365(DELHI) HAS HELD THE DEFEC T IN THE PANCHANAMA AS CURABLE AND NOT AFFECTING THE VALIDIT Y OF SEARCH BUT HAS ALSO HELD IN THE SAID JUDGMENT AS UN DER: THE EFFECT OF THE SAID LAPSE ON MERITS OR TO THE V ALUE OR DEGREE OF IMPORTANCE TO BE GIVEN TO THE MATERIAL SEIZED IS A MATTER OF APPRAISAL AND MERITS AND NOT A QUESTION TO BE EXAMINED AND ANSWERED IN THESE WRIT PETITIONS. THE VIEW, WE HAVE TAKEN FINDS SUPPORT FR OM THE DECISIONS OF THE SUPREME COURT IN ITO V. SETH BROS. [1969] 74 ITR 836 AND POORAN MAL V. DIRECTOR OF INSPECTION [1974] 93 ITR 505 (SC) . REFERENCE CAN ALSO BE MADE TO THE DECISION OF THIS COURT IN CITV. S. K. KATYAL [2009] 308 ITR M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 30 168/177 TAXMAN 380 WHEREIN THE EXPRESSION 'PANCHNAMA' WAS ELUCIDATED AND EXPLAINED IN THE FOLLOWING WORDS: '15. THESE PROVISIONS DEMONSTRATE THAT A SEARCH AND SEIZURE UNDER THE SAID ACT HAS TO BE CARRIED OUT IN THE PRESENCE OF AT LEAST TWO RESPECTABLE INHABITANTS OF THE LOCALITY WHERE THE SEARCH AND SEIZURE IS CONDUCTED. THESE RESPECTABLE INHABITANTS ARE WITNESSES TO THE SEARCH AND SEIZURE AND ARE KNOWN AS 'PANCHAS'. THE DOCUMENTATI ON OF WHAT THEY WITNESS IS KNOWN AS THE PANCHNAMA. THE WO RD 'NAMA', REFERS TO A WRITTEN DOCUMENT. ITS TYPE IS U SUALLY DETERMINED BY THE WORD WHICH IS COMBINED WITH IT AS A SUFFIX. EXAMPLES BEING, NIKAH-NAMA (THE WRITTEN MUS LIM MARRIAGE CONTRACT), HIBA-NAMA (GIFT DEED, THE WORD HIBA MEANING - GIFT), WASIYAT-NAMA (WRITTEN WILL) AND SO ON. SO A PANCHNAMA IS A WRITTEN RECORD OF WHAT THE PANCH H AS WITNESSED. IN MOHAN LAL V. EMPEROR AIR 1941 BOM. 14 9, IT WAS OBSERVED THAT 'THE PANCHNAMA IS MERELY A RECORD OF WHAT A PANCH SEES'. SIMILARLY, THE GUJARAT HIGH COU RT IN THE CASE OF VALIBHAI OMARJI V. STATE AIR 1963 GUJ 1 45 NOTED THAT 'A PANCHANAMA IS ESSENTIALLY A DOCUMENT RECORDING CERTAIN THINGS WHICH OCCUR IN THE PRESENC E OF PANCHAS AND WHICH ARE SEEN AND HEARD BY THEM.' AGAI N IN THE STATE OF MAHARASHTRA V. KACHARADAS D. BHALGAR (1978) 80 BOM LR 396, A PANCHNAMA WAS STATED TO BE 'A MEMORANDUM OF WHAT HAPPENS IN THE PRESENCE OF THE PANCHAS AS SEEN BY THEM AND OF WHAT THEY HEAR'. 16. WE HAVE EXAMINED THE MEANING OF THE WORD PANCHNAMA IN SOME DETAIL BECAUSE IT IS USED IN EXPLANATION 2(A) TO SECTION 158BE OF THE SAID ACT A LTHOUGH IT HAS NOT BEEN DEFINED IN THE ACT. A PANCHNAMA, AS WE HAVE SEEN IS NOTHING BUT A DOCUMENT RECORDING WHAT HAS HAPPENED IN THE PRESENCE OF THE WITNESSES (PANCHAS) . A PANCHNAMA MAY DOCUMENT THE SEARCH PROCEEDINGS, WITH OR WITHOUT ANY SEIZURE. A PANCHNAMA MAY ALSO DOCUMENT THE RETURN OF THE SEIZED ARTICLES OR THE REMOVAL OF SEA LS. BUT, THE PANCHNAMA THAT IS MENTIONED IN EXPLANATION 2(A) TO SECTION 158BE IS A PANCHNAMA WHICH DOCUMENTS THE CONCLUSION OF A SEARCH. CLEARLY, IF A PANCHNAMA DOES NOT, FROM THE FACTS RECORDED THEREIN, REVEAL THAT A SEARCH WAS AT ALL CARRIED OUT ON THE DAY TO WHICH I T RELATES, THEN IT WOULD NOT BE A PANCHNAMA RELATING TO A SEARCH AND, CONSEQUENTLY, IT WOULD NOT BE A PANCHNAMA OF THE TYPE WHICH FINDS MENTION IN THE SAID EXPLANATION 2(A) TO SECTION 158 BE.' M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 31 2.4. IN THE APPEAL BEFORE US, THE WARRANT OF AUTHORIZATION, AUTHORIZING SUCH SEARCH AND SEIZURE ACTION WAS NEVER EXECUTED AT THE BUSINESS PREMISES OF THE ASSESSEE FIRM. DISREGARDING THE PROVISIONS OF LAW NOTICE U/S 153A OF THE ACT WAS ISSUED TO THE ASSESSEE FIRM TO WHICH TH E ASSESSEE FILED THE RETURN OF INCOME, UNDER PROTEST, CLAIMING THE SAME DEDUCTION U/S 80IB(10) OF THE ACT. SO FAR AS, LEGAL ISSUE/JURISDICTIONAL ISSUE IS CONCERNED, WE ARE OF THE VIEW THAT THE CASE OF THE ASSESSEE SQUARELY COVERED IN I TS FAVOUR BY THE AFORESAID DECISION OF THE TRIBUNAL, THEREFOR E, WE FIND NO MERIT IN THE APPEALS OF THE REVENUE. 3. SO FAR AS, THE MERITS OF THE CASE IS CONCERNED, THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE DEC ISION OF THE TRIBUNAL OF DELHI BENCH IN THE CASE OF ACIT VS M/S CHD DEVELOPERS LTD. (ITA NO.2902/DEL./2010 AND 4694/DEL./2010) ORDER DATED 26/09/2012, WHICH IS REPRODUCED HEREUNDER FOR READY REFERENCE AND ANALYS IS:- THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 23RD MARCH 2010 BY THE ORDER OF THE LD. CIT(A), NEW DELHI FOR A.Y. 2006-07, WHEREAS THE ASSESSEE HAS CHALLENGED THE IMPUGNED OR DER DATED 11-8- 2010 PASSED BY THE LD. FIRST APPELLATE AUTHORITY, N EW DELHI FOR A.Y. 2007-08. SINCE THE FACTS AND THE ISSUES ARE COMMON, BOTH THESE APPEALS WERE HEARD TOGETHER. THEREFORE, THESE CAN BE DISPOSED OFF BY A COMMON OR DER, MORE SO WHEN BOTH THE APPEALS PERTAIN TO THE SAME ASSESSEE. 2. FIRST WE SHALL TAKE UP THE APPEAL OF THE REVENUE (A.Y. 2006-07), WHEREIN FIRST GROUND RAISED IS THAT THE LD. FIRST A PPELLATE AUTHORITY ERRED ON FACTS AND IN LAW IN ALLOWING ADDITIONAL EV IDENCE FILED DURING FIRST APPELLATE STAGE CONTRAVENING RULE 46A OF THE RULES. M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 32 2.1. THE CRUX OF ARGUMENTS ON BEHALF OF THE REVENUE IS THAT OPPORTUNITY WAS NOT GRANTED TO THE ASSESSING OFFICE R TO GO THROUGH THE ADDITIONAL EVIDENCE FILED BEFORE THE LD. CIT(A), TH EREFORE, IT IS VIOLATION OF THE RULES. ON THE OTHER HAND, LEARNED COUNSEL FOR THE ASSESSEE DEFENDED THE CONCLUSION DRAWN IN THE IMPUG NED ORDER, BY INVITING OUR ATTENTION TO PAGES 37 & 38 OF THE PAPE R BOOK, EVIDENCING THAT IF COMMON AREA OF STAIRCASE IS EXCLUDED FROM T HE TOTAL BUILT UP AREA, SUCH AREA REMAINS TO THE EXTENT OF 1386.03 SQ . FT. ONLY. 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS IN BRIEF AR E THAT THE ASSESSEE CLAIMED DEDUCTION U/S 80-IB(10) AMOUNTING TO RS. 1, 86,02,270/- ON THE TOTAL SUM OF RS. 7,88,82,014/-. THE ASSESSEE FI LED PROFIT AND LOSS A/C, BALANCE-SHEET AND AUDIT REPORT IN FORM NO. 10- CCB FOR CLAIMING SUCH DEDUCTION FOR KRISHNA LOK PROJECT. THE ASSESSE E WAS ALSO ASKED TO FURNISH SUCH INFORMATION AS CONTAINED IN PAGES 1 & 2 OF THE ASSESSMENT ORDER. THE ASSESSEE VIDE REPLY DATED 10- 12-2008 FURNISHED THE SUBMISSIONS AND THE DOCUMENTS FILED BY THE ASSE SSEE WERE EXAMINED. WE FURTHER FIND THAT IN THE IMPUGNED ORDE R, THERE IS NO MENTION OF THE FACT THAT SUCH ADDITIONAL DOCUMENTS WERE FILED BY THE ASSESSEE WHICH WERE NOT FILED BEFORE THE ASSESSING OFFICER. THEREFORE, THE ASSERTION OF THE LD. SR. DR THAT THE IS VIOLATI ON OF RULE 46A IS WITHOUT ANY BASIS. EVEN OTHERWISE, THE LD. CIT(A) H AS CO-TERMINUS POWER THAT OF THE ASSESSING OFFICER. AS PER SUB-SEC TION (4), THE CIT(A) BEFORE DISPOSING OFF ANY APPEAL MAY MAKE ANY INQUIR Y AS HE THINKS FIT OR MAY DIRECT THE ASSESSING OFFICER TO MAKE FURTHER INQUIRY AND REPORT THE RESULT OF THE SAME TO HIM. IT IS NOT THE CASE T HAT THE LD. CIT(A) IS NOT EMPOWERED TO DECIDE THE APPEAL WITHOUT CONSULTI NG/ CONFRONTING THE ASSESSING OFFICER . IT IS NOT THE CASE THAT ANY NEW EVIDENCE WAS ADMITTED BY THE LD. CIT(A). THE EVIDENCE IN THE FOR M OF COMPUTATION OF BUILT UP AREA WAS FURNISHED DURING ASSESSMENT PROCE EDINGS ITSELF AND THE LD. DR HAS NOT SPECIFICALLY POINTED OUT AS TO W HICH WAS THE ADDITIONAL EVIDENCE FILED BEFORE THE LD. FIRST APPE LLATE AUTHORITY. THEREFORE, WE FIND NO JUSTIFICATION TO INTERFERE WI TH THE CONCLUSION DRAWN BY THE LD. CIT(A) AND FURTHER FIND NO JUSTIFI CATION IN THE ASSERTION OF THE REVENUE THAT THERE IS ANY VIOLATIO N OF RULE 46A. THEREFORE, THIS GROUND OF THE REVENUE IS BASED ON A SSUMPTION AND PRESUMPTION, CONSEQUENTLY DISMISSED. 3. NEXT GROUND PERTAINS TO DELETION OF ADDITION OF RS. 77,18,098/- MADE ON ACCOUNT OF DISALLOWANCE OF DEDUCTION CLAIME D U/S 80-IB(10), ALLEGEDLY IGNORING THE PLAN SUBMITTED BY THE ASSESS EE TO THE MATHURA VARINDAVAN AUTHORITY AND THE TOTAL BUILT UP ARE OF TYPE A FLAT BEING MORE THAN 1500 SQ. FT. THE ASSERTION OF THE LD. SR. DR SHRI R.B. MEENA IS IDENTICAL TO THE GROUND RAISED BY SUBMITTING THA T THE BUILT UP AREA OF M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 33 TYPE A FLAT IS MORE THAN 1500 SQ. FT., THEREFORE, THE ASSESSEE IS NOT ENTITLED TO DEDUCTION. 3.1. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE TOOK US TO VARIOUS PAGES OF THE PAPER BOOK, INCLUDING SANCTION PLAN APPROVED BY COMPETENT AUTHORITY BY FURTHER SUBMITTING THAT THE COMMON AREA TO THE TUNE OF 8.172 SQ. MTS. WHICH PERTAINS TO STAIR CASE IS NOT PART OF THE BUILT UP AREA OF THE FLAT AS THE SAME IS USED BY AL L THE RESIDENTS, BEING THE COMMON AREA, AND IF THIS AREA IS REDUCED FROM T HE TOTAL AREA IT COMES BELOW THE PRESCRIBED LIMIT OF 1500 SQ. FT. 3.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO PERUSED THE SANCTION PLAN AND AREA OF EACH UNIT LIKE BED ROOMS, TOILET, KITCH EN, DRAWING ROOM, BALCONY, POWER ROOM AND STORE ETC. WE FIND THAT IF THE TOTAL AREA AS PER APPROVED PLAN IS EXAMINED, IT COMES TO 1386.03 SQ. FT. (AS PER SANCTION PLAN), AND THE TOTAL SALEABLE AREA/ SUPER AREA IS 1492.43 SQ. FT., WHICH IN ALL FAIRNESS IS BELOW THE PRESCRIBED LIMIT OF 1500 SQ. FT. SO FAR AS THE COMMON AREA OR STAIR CASE IS CONCERNED, IT CANNOT BE INCLUDED IN THE BUILT UP AREA OF AN INDIVIDUAL UNIT AS THE SAME IS TO BE USED BY ALL THE RESIDENTS/ INHABITANTS. IF THE DEFI NITION OF BUILT UP AREA AS MENTIONED IN SUB-CLAUSE (A) OF SUB-SECTION (14) OF SECTION 80-IB, IS ANALYZED, IT SPEAKS ABOUT THE INNER MEASU REMENT OF THE RESIDENTIAL UNIT AT THE FLOOR LEVEL, INCLUDING THE PROJECTIONS AND BALCONIES, AS INCREASED BY THE THICKNESS OF THE WAL LS BUT DOES NOT INCLUDE THE COMMON AREA SHARED WITH OTHER RESIDENTI AL UNITS. THE STAIR CASE DEFINITELY COMES UNDER THE COMMON POOL USED BY ALL THE INHABITANTS, THEREFORE, IT CANNOT BE INCLUDED IN TH E BUILT UP AREA. EVEN OTHERWISE THE ASSESSING OFFICER NOTED FROM THE DETA ILS SUBMITTED BY THE ASSESSEE THAT THREE TYPES OF FLATS WERE SOLD BY THE ASSESSEE AND IN THE TYPE A CATEGORY THE AREA IS 1386.03 SQ. FT., WHEREAS IN TYPE B THE TOTAL AREA IS 1122.48 SQ. FT., AND IN TYPE C FLAT, THE TOTAL AREA IS 811.84 SQ. FT. PER FLAT. THESE DETAILS WERE SUBMITT ED BY THE ASSESSEE VIDE LETTER DATED 12-12-2008 BEFORE THE LD. CIT(A) AND EARLIER BEFORE THE ASSESSING OFFICER. SUCH DETAILS HAVE BEEN REPRO DUCED AT PAGE 4 OF THE IMPUGNED ORDER. THERE IS A FACTUAL RECORDING TH AT STAIR CASE IS COMMON AREA BETWEEN THE TWO ADJACENT FLATS MEASURIN G 8.172 SQ. MTS. AND IF THIS AREA IS REDUCED FROM THE TOTAL AREA OF THE UNIT THEN CERTAINLY IT COMES BELOW THE PRESCRIBED LIMIT OF 1500 SQ. FT. THIS BEING THE FIRST YEAR OF CLAIMING DEDUCTION U/S 80-IB(10) OF THE ACT , WHEREIN THE ASSESSING OFFICER HIMSELF NOTED THAT ASSESSEES 48 UNITS OF TYPE-A FLATS; 90 UNITS OF TYPE-B & TYPE-C UNITS WERE UNDER CONSTRUCTION, THE ASSESSING OFFICER HIMSELF COMPUTED THE BUILT UP ARE A BY INCLUDING THE STAIR CASE AREA, THEREFORE, IT EXCEEDED THE PRESCRI BED LIMIT. SUCH FACTUAL FINDING RECORDED IN THE IMPUGNED ORDER WAS NOT CONTROVERTED M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 34 BY THE REVENUE BY BRINGING ANY POSITIVE MATERIAL ON RECORD. IN VIEW OF THESE FACTS WE ARE OF THE CONSIDERED OPINION THAT T HE ASSESSEE IS CLEARLY ENTITLED FOR SUCH DEDUCTION. THEREFORE, WE FIND NO JUSTIFICATION TO INTERFERE WITH THE CONCLUSION DRAWN IN THE IMPUG NED ORDER, WHICH IS AFFIRMED. 4. THE NEXT GROUND PERTAINS TO DELETION OF ADDITION OF RS. 60,58,419/- MADE ON ACCOUNT OF APPORTIONMENT OF EXPENSES IN THE RATIO OF TURN OVER TO DIFFERENT UNITS. THE CRUX OF THE ARGUMENTS ON BEHALF OF THE REVENUE IS THAT NO PART OF THE HEAD OFFICE EXPENSES PERTAINING TO MANAGEMENT WERE DEBITED TO KRISHNA LOK UNIT. IN NUT SHELL THE ASSESSMENT ORDER WAS DEFENDED ON THE ISSUE. 4.1. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE TOOK US TO VARIOUS PAGES OF THE PAPER BOOK BY SUBMITTING THAT THE EXPENSES WERE BOOKED SEPARATELY IN THE BOOKS OF ACCOUNT, WHICH AR E AUDITED ONE. OUR ATTENTION WAS ALSO INVITED TO PAGE 36 WHEREIN B REAK UP OF THE EXPENSES HAS BEEN GIVEN. A QUERY WAS RAISED BY THE BENCH WHETHER SUCH BREAK UP WAS SUBMITTED BEFORE THE ASSESSING OF FICER. IT WAS UNCONTROVERTEDLY EXPLAINED THAT THIS BREAK UP WAS V ERY MUCH AVAILABLE BEFORE THE ASSESSING OFFICER . 4.2. WE HAVE PERUSED PAGE 36 WHICH IS PART OF THE S YNOPSIS AS PER WHICH (SCHEDULE J), THE ADMINISTRATIVE AND OTHER EXPENSES PERTAINS TO HEAD OFFICE. KRISHNA LOK A/C AND REMAINING HAS B EEN DULY EXPLAINED. WHEREAS IN SCHEDULE K THE SELLING EXPE NSES, WHICH INCLUDE ADVERTISEMENT AND PUBLICITY; SALES PROMOTIO N & BOOKING; AND SELLING EXPENSES HAVE BEEN BIFURCATED, WHEREAS IN S CHEDULE L, FINANCIAL EXPENSES LIKE BANK INTEREST AND COLLECTIO N CHARGES, INTEREST AND OTHERS HAVE BEEN MENTIONED, THEREFORE, THE CONT ENTION OF THE REVENUE THAT THESE EXPENSES WERE NOT BIFURCATED IS WITHOUT ANY BASIS. EVEN FROM THE ASSESSMENT ORDER (PAGE 6), THERE IS A CATEGORICAL FINDING THAT THE ASSESSEE COMPANY HAS NOT TAKEN ANY LOAN SECURED OR UNSECURED FOR KRISHNA LOK AND THE LEDGER PRINT OUT OF THE CURRENT ACCOUNT MAINTAINED WITH ORIENTAL BANK OF COMMERCE A ND PUNJAB NATIONAL BANK WERE FURNISHED DURING ASSESSMENT PROC EEDINGS WHICH CLEARLY INDICATES THAT THE TOTAL RECEIPT FROM KRISH NA LOK PROJECT SALE IS UTILIZED FOR THE PURPOSE OF MEETING EXPENSES OF KRI SHNA LOK AND NONE OF THE LOANS FROM HEAD OFFICE WERE TRANSFERRED TO K RISHNA LOK. THERE IS A FURTHER FINDING THAT THERE IS NO QUESTION OF T RANSFER ANY FINANCIAL EXPENSES TO KRISHNA LOK AND FURTHER THE ADMINISTRAT IVE AND OTHER EXPENSES WHICH INCLUDE SALARY, BONUS OTHER PERQUISI TES, EMPLOYEES WELFARE AND THE RATES AND TAXES, GENERAL EXPENSES, NEWS PAPER AND PERIODICALS, LEGAL AND PROFESSIONAL EXPENSES, POSTA GE & TELEPHONE CHARGES, POWER FUEL AND WATER CHARGES, PRINTING & S TATIONERY, VEHICLE M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 35 REPAIR & MAINTENANCE EXPENSES ETC. ARE INCURRED SEP ARATELY AND DEBITED SEPARATELY TO KRISHNA LOK RESTAURANT AND OT HER PROJECTS. SUCH EXPENSES ARE BUSINESS SPECIFIC AND NOT COMMONLY INC URRED. ON CAREFUL SCRUTINY OF ALLOCATED EXPENSES, WE FIND THAT THE EX PENSES IN THE NATURE OF AUDIT FEE AND DIRECTOR REMUNERATION ARE FOR THE ASSESSEE AS A WHOLE AND NOT SPECIFIC TO THE BUSINESS. CONSEQUENTL Y, THE EXPENSES OF RS. 33,660/- AND RS. 58,630 RESPECTIVELY ARE ALLOCA TED TO KRISHNA PROJECT, THEREFORE, ADDITION TO THE EXTENT OF RS. 2 ,92,290/- IS SUSTAINED. THE DELETION OF ADDITION OF BALANCE EXPENSES OF RS. 57,66,129/- IS UPHELD. THIS GROUND IS, THEREFORE, ALLOWED PARTLY. 5. THE LAST GROUND PERTAINS TO DELETION OF ADDITION OF RS. 7,425/- MADE ON ACCOUNT OF EXTRA DEPRECIATION ON COMPUTER PERIPH ERALS/ ACCESSORIES IGNORING THAT THE RULE ONLY ALLOWS FOR COMPUTER AND COMPUTER SOFTWARE FOR SUCH DEPRECIATION. 5.1. LD. SR. DR DEFENDED THE CONCLUSION DRAWN IN TH E ASSESSMENT ORDER, WHEREAS THE LEARNED COUNSEL FOR THE ASSESSEE DEFENDED THE IMPUGNED ORDER. 5.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND F OUND THAT THE ASSESSEE CLAIMED RS. 16,500/- TO FIXED ASSETS IN TH E BLOCK OF COMPUTERS AND COMPUTER PERIPHERALS WHICH AS PER THE ASSESSEE ARE DEPRECIABLE @ 60%, WHICH WAS DENIED BY THE ASSESSING OFFICER . WE FIND THAT THE LD. CIT(A) CONSIDERED THE ISSUE IN A JUSTIFIED MANN ER AND DELETED THE ADDITION OF RS. 7425/-. WE FIND NO JUSTIFICATION TO INTERFERE WITH THE SAME AS NOTHING CONTRARY WAS BROUGHT TO OUR NOTICE. 6. GROUND NO. 5 IS GENERAL IN NATURE AND REQUIRES N O DELIBERATION FROM OUR SIDE. 7. FINALLY, THE APPEAL OF THE REVENUE IS PARTLY ALL OWED. 8. NOW WE SHALL TAKE UP THE APPEAL OF THE ASSESSEE (ITA NO. 4694/DEL/10 FOR A.Y. 2007-08). THOUGH THE ASSESSEE HAS RAISED AS MANY AS SEVEN GROUNDS OF APPEAL, BUT IF ALL THE GRO UNDS ARE SUMMARIZED, THE ONLY GROUND REMAINS WHICH PERTAINS TO THE DISALLOWANCE OF DEDUCTION U/S 80-IB(10). LEARNED CO UNSEL FOR THE ASSESSEE ALSO FAIRLY EXPLAINED THAT THE ISSUE PERTA INS TO ONLY 80-IB (10) AND THE REMAINING GROUNDS ARE ONLY ARGUMENTATI VE. 8.1. THE CRUX OF ARGUMENT ON BEHALF OF THE ASSESSEE IS THAT THE VIDE LETTER DATED 5-11-2008 THE ASSESSEE HAD APPLIED FOR COMPLETION CERTIFICATE BUT THE COMPLETION CERTIFICATE WAS NOT ISSUED TO THE ASSESSEE M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 36 WHICH IS BEYOND THE CONTROL AND POWER OF THE ASSESS EE. OUR ATTENTION WAS ALSO INVITED TO PAGE 22 OF THE PAPER BOOK CONTA INING A CERTIFICATE SIGNED BY THE ARCHITECT OF THE ASSESSEE I.E. CANDID DESIGN CONSORTIUM PVT. LTD., IN WHICH THE TOTAL AREA OF THE TYPE-A FL AT HAS BEEN MENTIONED AT 1492.43 SQ. FT. LD. COUNSEL SUBMITTED THAT FOR A.Y. 2006- 07 DEDUCTION WAS ALLOWED TO THE ASSESSEE AND IT IS THE SAME SANCTION PLAN WHICH COULD NOT BE DENIED FOR THE NEXT YEAR. I T WAS EMPATHETICALLY ARGUED THAT THE TOTAL BUILT UP AREA IS BELOW THE PRESCRIBED LIMIT OF 1500 SQ. FT. AND THERE IS NO VI OLATION OF THE ACT. IT WAS ALSO PLEADED THAT THE PROJECT WAS APPROVED ON 1 6-3-2005 WHICH IS WELL BEFORE 1-4-2005 AND THE ASSESSEE WAS TO COMPLE TE THE PROJECT ON OR BEFORE 31-3-2009. THE LD. COUNSEL ALSO RELIED ON THE DECISIONS OF VISAKHAPATNAM & DELHI BENCHES OF THE ITAT AS ALSO T HE DECISION OF HONBLE GUJARAT HIGH COURT, WHICH WE WILL DISCUSS W HILE COMING TO A PARTICULAR CONCLUSION. THE CRUX OF THE ARGUMENT IS THAT REQUIREMENT OF COMPLETION CERTIFICATE WAS MERELY DIRECTORY AND NOT MANDATORY. RELIANCE WAS PLACED UPON THE DECISION DATED 29-2-20 12 OF HONBLE KARNATAKA HIGH COURT (ITA NO. 138 OF 2010) TO THE E FFECT THAT IT IS PROSPECTIVE IN NATURE. 8.2. ON THE OTHER HAND, LD. SR. DR TOOK US TO VARIO US PAGES OF THE ASSESSMENT ORDER BY SUBMITTING THAT THE CASE LAWS R ELIED UPON BY THE ASSESSEE ARE NOT APPLICABLE TO THE FACTS OF THE PRE SENT APPEAL AND EVEN NO SUCH CERTIFICATE WAS ISSUED TO THE ASSESSEE TILL DATE, THEREFORE, DEDUCTION WAS RIGHTLY DENIED TO THE ASSESSEE. 8.3. IN REPLY, THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT FOR A.Y. 2006-07 ON IDENTICAL FACTS DEDUCTION WAS GRANT ED TO THE ASSESSEE ON SOME OF THE FLATS, THEREFORE, FOR THE SAKE OF CO NSISTENCY NO U TURN IS PERMISSIBLE FOR THE NEXT YEAR, SPECIALLY WHEN TH E FACTS ARE SAME. 8.4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS IN BRIEF AR E THAT THE ASSESSEE DECLARED TAXABLE INCOME OF RS. 5,97,15,620/- IN ITS RETURN FILED ON 31- 10-2007. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. THE ASSESSEE CLAIMED DEDUCTION OF RS. 5,19,92,472/- U/S 80-IB(10). THE ASSESSING OFFICER ASKED THE ASSESSEE TO GIVE JUSTIF ICATION FOR CLAIMING SUCH DEDUCTION. LD. ASSESSING OFFICER DENIED THE CL AIM ON TWO COUNTS- FIRSTLY, THE BUILT UP AREA OF THE UNIT IS ABOVE PRE SCRIBED LIMIT OF 1500 SQ. FT. AND SECONDLY FOR EARLIER ASSESSMENT ORDER I DENTICAL DEDUCTION WAS CLAIMED BY THE ASSESSEE AND THE ASSESSEE VIOLAT ED THE CONDITIONS STIPULATED U/S 80-IB(10) IN TYPE A FLATS. ULTIMATE LY, THE LD. ASSESSING OFFICER DENIED SUCH DEDUCTION TO THE ASSESSEE. THE ASSESSEE FILED VARIOUS DOCUMENTS BEFORE THE ASSESSING OFFICER AND THE SAME WERE EXAMINED BY HER. FINALLY THE LD. ASSESSING OFFICER CONCLUDED THAT THE M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 37 CONDITIONS LAID DOWN U/S 80-IB(10) WERE NOT SATISFI ED, THEREFORE, THE CLAIM OF DEDUCTION COULD NOT BE ALLOWED TO THE ASSE SSEE. 8.5. ON APPEAL BEFORE THE LD. CIT(A) THE CLAIM OF THE ASSESSEE WAS EXAMINED AND ULTIMATELY THE ASSESSMENT ORDER WAS UP HELD. THE AGGRIEVED ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNA L. 8.6. IF THE TOTALITY OF FACTS AVAILABLE ON RECORD A ND THE ASSERTION MADE BY THE LD. RESPECTIVE COUNSELS ARE KEPT IN JUXTAPOS ITION, BROADLY THE LD. CIT(A) IS INFLUENCED BY THE SALE TRANSACTIONS WITH RAJASTHAN GLOBAL SECURITIES LTD., WHEREIN PURSUANT TO SUMMONS U/S 13 1 ISSUED TO RAJASTHAN GLOBAL SECURITIES LTD., IT WAS CONFIRMED THAT THE AMOUNT OF RS. 5,36,89,920/- WAS PAID TO THE ASSESSEE AS ADVAN CE FOR PURCHASE OF 37 FLATS IN KRISHNALOK PROJECT. HOWEVER, WHAT IT MA Y THE MOOT ISSUE TO BE ADJUDICATED BY US PERTAINS TO SEC. 80- IB(10). W E FURTHER FIND THAT AS CONTAINED IN PARA 1.2 (PAGE 5) OF THE IMPUGNED O RDER, THE LD. CIT(A) HAS EXAMINED THE SUBMISSIONS OF THE ASSESSEE AND THE REASON OF DENIAL OF DEDUCTION TO THE ASSESSEE BY THE LD. A SSESSING OFFICER. THE RELEVANT PORTION FROM THE IMPUGNED ORDER IS REPRODU CED HEREUNDER: IT WAS FURTHER SUBMITTED THAT ADDL. CIT WRONGLY TR IES TO PROVE THAT SALE WITH M/S. RAJASTHAN GLOBAL SECURITIES LTD . (RGSL) ARE NOT ACCOUNTED FOR PROPERLY AND UNDUE PROFIT HAS ARI SEN ON ACCOUNT OF 80-IB WHEREAS THESE ARE NORMAL BUSINESS TRANSACTIONS UNDERTAKEN BY ASSESSEE COMPANY WITH M/S RAJASTHAN G LOBAL SECURITIES LTD. HAVING NO MUTUAL RELATION WHATSOEVE R. THE ASSESSING OFFICER HAS OBJECTED TO THE ISSUE OF PREF ERENTIAL SHARES AND ITS VALUATION. THE ASSESSEE COMPANY HAS ISSUED PREFERENTIAL SHARES TO VARIOUS PERSONS AS PER SEBI GUIDELINES AN D APPROVAL OF BOMBAY STOCK EXCHANGE. THE ASSESSEE COMPANY IS A LISTED COMPANY AND DOES NOT AH ANY DISCRETION ABOUT THE IS SUE PRICE AND REQUIRE TO ISSUE SHARES THROUGH PREFERENTIAL AL LOTMENT ONLY AT THE RATE AS PER SEBI GUIDELINES AND APPROVED BY STOCK EXCHANGE. DURING THE YEAR THE ASSESSEE COMPANY HAS CALCULATED AVERAGE MARKET PRICE AS PER GENERAL MEETING, CERTIF ICATION BY STATUTORY AUDITOR ETC., HAS SUBMITTED TO BOMBAY STO CK EXCHANGE AND HAS ISSUED THE PREFERENTIAL SHARE AFTER GETTING APPROVAL FROM BOMBAY STOCK EXCHANGE. THESE ARE NORMAL BUSINESS TRANSACTIONS BECAUSE THESE ARE ISSUED AS PER SEBI A ND STOCK EXCHANGE GUIDELINES. THESE SHARES ARE ISSUED TO A N UMBER OF COMPANIES AND INDIVIDUALS AND NOT ONLY TO RGSL. VAL UATION OF THESE SHARES ARE DONE AS PER SEBI AND STOCK EXCHANG E GUIDELINES WHICH WERE AS PER AVERAGE MARKET RATS AN D APPROVED BY BOARD OF DIRECTORS AND GENERAL MEETING OF CHD, S TATUTORY AUDITOR AND BOMBAY STOCK EXCHANGE APPROVAL. THERE I S NO CLOSE M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 38 OR REMOTE NEXUS BETWEEN CHD AND RGSL. THERE IS NO C OMMON RELATION AMONG THE DIRECTORS OR MAJOR SHARE HOLDERS . SINCE CHD IS LISTED COMPANY IT HAS NO CONTROL OVER MARKET RAT E OR GUIDELINES OF SEBI AND STOCK EXCHANGE. IT IS IMMATE RIAL FOR CHD WHAT ITS SHAREHOLDER DOES WITH THEIR INVESTMENT S. AS REGARD ASSESSING OFFICER S OBSERVATION THAT THE ASSESSEE HAS BOOKED SUBSTANTIAL SALES WITH RESPECT TO NON 80-IB PROJECT AND HAS BOOKED SUBSTANTIAL SALES WITH RESPECT TO 80-IB PROJ ECT, IT WAS SUBMITTED THAT THESE ARE NORMAL BUSINESS TRANSACTIO NS WHICH CHD HAS UNDERTAKEN DURING THIS YEAR FOR EARNING PRO FITS IN 80- IB PROJECT AS WELL AS NON 80-IB PROJECTS. 8.7. IF THE AFORESAID IS ANALYZED, WE FIND THAT THE GRIEVANCE OF THE REVENUE IS THAT THE SALES MADE TO M/S RAJASTHAN GLO BAL SECURITIES LTD. ARE NOT PROPERLY ACCOUNTED FOR AND UNDUE PROFIT HAS ARISEN ON ACCOUNT OF SEC. 80-IB, WHEREAS THE CL AIM OF THE ASSESSEE IS THAT IT IS A NORMAL BUSINESS TRANSACTIO N AND THE ASSESSEE HAS NO MUTUAL RELATION WHAT-SO-EVER WITH M /S RAJASTHAN GLOBAL SECURITIES LTD. SO FAR AS THE BUIL T UP AREA IS CONCERNED, AS HAS BEEN ALLEGED BY THE REVENUE THAT IT IS BEYOND THE PRESCRIBED LIMIT OF 1500 SQ. FT., WE HAVE PERUS ED THE SANCTION PLAN, SUBMISSIONS BEFORE THE ASSESSING OFFICER AS W ELL AS BEFORE THE LD. CIT(A) AND THE BREAK UP DIMENSIONS ADDUCED BY THE ASSESSEE. SUCH BREAK UP EVEN HAS BEEN REPRODUCED AT PAGES 7 & 8 OF THE IMPUGNED ORDER, AS PER WHICH THE TOTAL ARE A HAS BEEN CLAIMED BY THE ASSESSEE AT 1492.43 SQ. FT. 8.8. ANOTHER POINT MENTIONED IN THE ASSESSMENT ORDE R FOR DENYING DEDUCTION BY THE ASSESSING OFFICER IS THAT THE ASSESSEE DID NOT FILE THE BIFURCATION. HOWEVER, WE FIND THAT SUCH BIFURCATION WAS DULY FILED BY THE ASSESSEE THAT TOO ROOM-WISE OF ALL THE UNITS. STILL THE DEDUCTION WAS DENIED ON TH E PRESUMPTION THAT THE BASIS OF ARRIVING AT SUCH FIGURE WAS NOT A DDUCED BY THE ASSESSEE. WE ARE NOT IN AGREEMENT WITH THE FINDING OF THE ASSESSING OFFICER ON TWO COUNTS- FIRSTLY, THE APPRO VAL WAS GRANTED BY THE COMPETENT AUTHORITY; AND SECONDLY SU CH BIFURCATION IS AS PER SANCTIONED PLAN WHICH WAS FIL ED BEFORE THE ASSESSING OFFICER. UNCONTROVERTEDLY SUCH BIFURCATIO N WAS FILED DURING ASSESSMENT STAGE, FIRST APPELLATE STAGE AND EVEN BEFORE US. IT IS ALSO NOT IN DISPUTE THAT THE APPROVAL WAS GRANTED BY THE COMPETENT AUTHORITY TO THE ASSESSEE ON 16-3-2005 ME ANING THEREBY THE PROJECT WAS APPROVED BEFORE THE AMENDME NT INSERTED/ SUBSTITUTED BY FINANCE (NO.2) ACT OF 2004 , W.E.F. 1-4- 2005. PRIOR TO ITS SUBSTITUTION, SUB-SECTION (10), AS AMENDED BY M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 39 THE FINANCE ACT, 2000, W.E.F. 1-4-2001 AND FINANCE ACT 2003 WITH RETROSPECTIVE EFFECT FROM 1-4-2002, READ AS UN DER: (10) THE AMOUNT OF PROFITS IN CASE OF AN UNDERTAKI NG DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BEFORE THE 3 1ST DAY OF MARCH, 2005 BY A LOCAL AUTHORITY, SHALL BE HUNDRED PER CENT OF THE PROFITS DERIVED IN ANY PREVIOUS YEAR RELEVANT T O ANY ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF, - (A) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEVELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER, 1998; (B) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WH ICH HAS A MINIMUM AREA OF ONE ACRE; AND (C) THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT-UP ARE A OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITIES OF DELHI OR MUMBAI OR WITHIN TWEN TY-FIVE KILOMETERS FROM THE MUNICIPAL LIMITS OF THESE CITIE S AND ONE THOUSAND AND FIVE HUNDRED SQUARE FEET AT ANY OTHER PLACE. 8.9. IF THE AFORESAID POSITION OF LAW EXISTING AT T HE TIME WHEN THE PLAN WAS SANCTIONED/ APPROVAL WAS GRANTED TO THE AS SESSEE IS ANALYZED , THERE WAS NO CONDITION LIKE PRODUCTION O F COMPLETE CERTIFICATE. THIS IS A SETTLED LEGAL PROPOSITION OF LAW THAT THE LAW EXISTING AT THE PARTICULAR POINT OF TIME WILL BE AP PLICABLE UNLESS AND UNTIL IT IS SPECIFICALLY MADE RETROSPECTIVE BY THE LEGISLATURE. THE SUBSTITUTION SO MADE, IS THEREFORE, APPLICABLE PROSPECTIVELY AND NOT RETROSPECTIVELY. THERE IS AN UNCONTROVERTED FACT THAT APPROVAL WAS GRANTED TO THE ASSESSEE ON 16-3-2005, CONSEQUENTLY THE ASSESSEE WAS EXPECTED TO COMPLETE THE PROJECT ON OR BEFORE 31-3-2009. NOW THE QUESTION ARISES WHE THER THE PROJECT WAS COMPLETED BY THE ASSESSEE WITHIN TIME. AS IS EVIDENT FROM THE LETTER OF THE ASSESSEE DATED 5-11-2008 ADD RESSED TO THE VICE CHAIRMAN MATHURA VRINDAVAN DEVELOPMENT AUTHORI TY, ON WHICH THE SEAL AND SIGNATURE OF THE CONCERNED AUTHO RITY IS AFFIXED (PAGE 28 OF THE PAPER BOOK), IT HAS BEEN SP ECIFICALLY REQUESTED THAT THE CONSTRUCTION HAS BEEN COMPLETED AND FURTHER REQUEST HAS BEEN MADE FOR GRANT OF COMPLETION CERTI FICATE OF PHASE-I, MEANING THEREBY, IF NOT EARLIER, THE PROJE CT WAS PRESUMED TO BE COMPLETE AS ON 5-11-2008 BECAUSE THE CONCERNED DEVELOPMENT AUTHORITY HAS NEITHER SAID THAT THE PRO JECT WAS NOT COMPLETE NOR COMPLETION CERTIFICATE WAS ISSUED TO T HE ASSESSEE. M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 40 IN THE ABSENCE OF ANY VARIATION OR ALLEGATION IF SU CH CERTIFICATE IS NOT ISSUED TO THE ASSESSEE, WHETHER THE ASSESSEE CA N BE PENALIZED FOR THE ACT OF AN AUTHORITY ON WHICH IT HAS NO CONT ROL, THE OBVIOUS REPLY IS THAT FOR THE FAULT OF OTHERS ANYBODY SHOUL D NOT BE PENALIZED, MORE SPECIFICALLY WHEN THE PROJECT WAS A PPROVED ON 16-3-2005. THEREFORE, THE LAW APPLICABLE AS ON DATE WILL BE APPLICABLE TO THE ASSESSEE. IT IS NOT EXPECTED THAT THE ASSESSEE WILL DEMOLISH THE CONSTRUCTION WORK WHICH IS ALREAD Y IN PROGRESS AND AGAIN COMPLY WITH THE DIRECTION OF THE LAW WHIC H WAS INSERTED ON A LATER DATE WHICH IS PROSPECTIVE IN NA TURE. IF THE INTENTION OF THE LEGISLATURE WOULD HAVE BEEN TO MAK E IT EFFECTIVE FROM RETROSPECTIVE EFFECT, NOTHING PREVENTS THE LEG ISLATURE TO DO SO. 8.10. IF THE ISSUE IS ANALYZED IN THE LIGHT OF CASE LAWS CITED BEFORE US, WE FIND THAT THE HONBLE KARNATAKA HIGH COURT V IDE JUDGMENT DATED 29TH FEBRUARY 2012 IN THE CASE OF CI T & ANOTHER VS. M/S ANRIYA PROJECT MANAGEMENT SERVICES PVT. LTD. (ITA NO. 138 OF 2010), CONSIDERED THE DECISION LIKE CIT & ORS. VS. G.R. DEVELOPERS (ITA NO. 355/2009) AND HELD THA T DEFINITION OF BUILT UP AREA WAS INSERTED BY FINANCE (NO.2) ACT OF 2004, WHICH CAME INTO EFFECT FROM 1-4-2005, IS PROSPECTIV E IN NATURE AND HAS NO APPLICATION TO THE HOUSING PROJECTS WHIC H WERE APPROVED BY LOCAL AUTHORITY PRIOR TO THAT DATE, STR ONGLY SUPPORTS THE CASE OF THE ASSESSEE. IT WAS HELD BY THE HONBL E HIGH COURT THAT THE ASSESSEE WAS ENTITLED TO HUNDRED PER CENT BENEFIT OF SEC. 80-IB(10). 8.11. ANOTHER CASE CITED WAS FROM VISAKHAPATNAME BE NCH OF THE ITAT IN THE CASE OF M/S VISHNU BUILDERS VS. ACIT (I TA NOS. 178, 179 & 180/VIZAG/2011), ORDER DATED 27TH JULY 2011. IN THAT CASE ALSO, COMPLETION CERTIFICATE WAS NOT FILED BEFORE T HE ASSESSING OFFICER AND THE PROOF OF MUNICIPAL TAX ASSESSMENT O F VARIOUS FLAT OWNERS ESTABLISHING THAT THE HOUSING PROJECT WAS CO MPLETED BEFORE SEPTEMBER 2008 WAS FILED. SINCE THERE WAS NO PRACTICE OF ISSUING THE PROJECT COMPLETION CERTIFICATE, THEREFO RE, IT WAS HELD THAT IT WAS NOT A CONDITION PRECEDENT OF FILING THE COMPLETION CERTIFICATE FOR ALLOWING DEDUCTION U/S 80-IB(10) OF THE ACT. 8.12. IN THE CASE OF CIT VS. TARNETAR CORPORATION ( TAX APPEAL NO. 1241 OF 2011), THE HONBLE GUJARAT HIGH COURT V IDE JUDGMENT DATED 12-9-2012, OBSERVED THAT THE CONFIRM ATION ISSUED BY MUNICIPAL AUTHORITIES WAS FILED ON 15-2-2006 AND WAS REJECTED ON 1-7-2006. THE ASSESSEE ALSO PAID PENALT Y FOR REGULARIZATION OF THE UNITS. SINCE CONSTRUCTION WAS COMPLETED M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 41 WELL BEFORE 31ST MARCH 2008, THE OUTER LIMIT FOR SU CH CONSTRUCTION AND THE PERMISSION WAS NOT GRANTED BY THEY MUNICIPAL AUTHORITY, IT WAS HELD THAT FULFILLING OF EVERY CONDITION IS NOT MANDATORY AND IF THERE IS A SUBSTANTIAL COMP LIANCE, THE MINOR DEVIATION THEREOF WOULD NOT VITIATE THE VERY PURPOSE OF DEDUCTION. 8.13. THE ITAT DELHI BENCH G IN THE CASE OF ACIT VS. SURENDRA DEVELOPERS ETC. (ITA NOS. 2743 TO 2745 & I TA NOS. 3056 TO 3058/DEL/2010) VIDE ORDER DATED 1-8-2012, H ELD THAT WHEREIN THE ASSESSEE APPLIED FOR COMPLETION CERTIFI CATE BEFORE THE LOWER AUTHORITIES IN TIME AND SUCH CERTIFICATE WAS NOT ISSUED BY THE LOCAL AUTHORITY, SUCH NON-ISSUANCE WAS BEYON D THE CONTROL OF THE ASSESSEE. WHILE COMING TO THIS CONCLUSION TH E BENCH ALSO CONSIDERED ANOTHER CASE OF M/S GIRIJA COLONIZERS (I TA NOS. 2417 TO 2422/DEL/11 ORDER DATED 9-12-2011). 8.14. THE LD. SR. D.R. ALSO PLACED RELIANCE UPON TH E DECISION OF THE TRIBUNAL OF CHENNAI BENCH IN ACIT VS. VISWAS PR OMOTERS P. LTD. (2010) 005 ITR (TRIB) 0449 ON THE ISSUE OF BUI LT UP AREA NOT EXCEEDING 1500 SQ. FT. IT WAS HELD THAT IF THIS CON DITION IS NOT FULFILLED, THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTI ON. HOWEVER, WE FIND THAT IN THE PRESENT APPEAL, THE BUILT UP AREA IS BELOW THE PRESCRIBED LIMIT OF 1500 SQ. FT. THEREFORE, THIS DE CISION MAY NOT HELP THE REVENUE BEING DISTINGUISHABLE ON FACTS. 8.15. IF THIS ISSUE IS ANALYZED WITH THE VIEW POINT OF RULE OF CONSISTENCY, WE ARE OF THE CONSIDERED OPINION THAT THOUGH THE PRINCIPLE OF RES-JUDICATA IS NOT APPLICABLE TO THE INCOME-TAX PROCEEDINGS, YET FOR THE SAKE OF CONSISTENCY AND FO R THE PURPOSES OF FINALITY IN ALL LITIGATIONS, INCLUDING LITIGATIO N ARISING OUT OF FISCAL STATUTES, EARLIER DECISIONS ON THE SAME QUES TION SHOULD NOT BE REOPENED UNLESS SOME FRESH FACTS ARE BROUGHT ON RECORD IN SUBSEQUENT ASSESSMENT YEAR. FOR A.Y. 2006-07, EVEN THE LD. CIT(A) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE, WHICH WAS CONFIRMED BY THE TRIBUNAL (SUPRA), THEREFORE, UNLES S AND UNTIL ANY NEW MATERIAL FACTS ARE BROUGHT ON RECORD, THE R EVENUE IS NOT PERMITTED TO TAKE A U TURN, WHILE DENYING THE CLA IMED DEDUCTION TO THE ASSESSEE, THAT TOO ON SAME FACTS A ND CIRCUMSTANCES. OUR VIEW IS FORTIFIED BY THE DECISIO N OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. A.R .J. SECURITY PRINTERS 264 ITR 276 (DEL.); AND THE RATIO LAID DOW N IN CIT VS. NEO POLY PACK (P) LTD. 245 ITR 492 (DEL.); BERGER P AINTS INDIA LTD. VS. CIT 266 ITR 99 (SC); CIT VS. LAGAN KALA UP VAN 259 ITR 489 (DEL.); AND UNION OF INDIA & OTHERS VS. KAU MUDINI M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 42 NARAYAN DALAL & ANOTHER 249 ITR 219 (SC). FROM THIS ANGLE ALSO, THE ASSESSEE IS HAVING A STRONG CASE IN ITS F AVOUR. 8.16. LEAVE APART, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE IS EXPECTED TO COMPLETE THE PROJECT AS PER THE APPROVED PLAN AT A PARTICULAR POINT OF TIME AND THE ASSESSEE IS NOT EXPECTED TO DO OR TO FULFILL THE CONDITIONS WHICH A RE NOT IN EXISTENCE AT THE RELEVANT POINT OF TIME OR MADE COM PULSORY AFTER MAKING SOME AMENDMENT IN THE ACT FROM THE FUTURE DA TE. SINCE THE ASSESSEE WAS TO COMPLETE THE PROJECT ON OR BEFO RE 31-3-2009 AND REQUEST WAS DULY MADE WITH THE COMPETENT AUTHOR ITY ON 5- 11-2008 MENTIONING THAT THE PROJECT HAS BEEN COMPLE TED AND COMPLETION CERTIFICATE MAY BE ISSUED AND IF THE SAM E IS NOT ISSUED BY THE COMPETENT AUTHORITY THE ASSESSEE SHOULD NOT BE PENALIZED FOR THE SAME UNLESS AND UNTIL SOME CONTRARY FACTS A RE BROUGHT ON RECORD EVIDENCING THAT THE ASSESSEE CONTRAVENED THE CONDITIONS CONTAINED IN THE APPROVAL GRANTED BY SUCH COMPETENT AUTHORITY. AS PER SUB-SECTION (10) OF SEC. 80-IB, THE HOUSING PROJECT WHICH WERE APPROVED BEFORE 31ST DAY OF MARCH, 2008, THE B ENEFIT WILL BE HUNDRED PER CENT SUBJECT TO FULFILLMENT OF CERTA IN CONDITIONS. HOWEVER, THIS CONDITION WAS SUBSTITUTED BY THE FINA NCE (NO.2) ACT OF 2009 WITH EFFECT FROM 1-4-2009, WHICH HAS BE EN FURTHER EXPLAINED BY SUB-CLAUSE (II) TO THE EXPLANATION REG ARDING COMPLETION CERTIFICATE. HOWEVER, SINCE THE APPROVAL WAS GRANTED TO THE ASSESSEE ON 1-4-2005, THEREFORE, THE ASSESSE E IS NOT EXPECTED TO FULFILL THE CONDITIONS WHICH WERE NOT O N THE STATUTE WHEN SUCH APPROVAL WAS GRANTED TO THE ASSESSEE. THE REFORE, THE APPEAL OF THE ASSESSEE DESERVES TO BE ALLOWED. 9. FINALLY, THE APPEAL OF THE REVENUE IS ALLOWED IN PART AND THAT OF THE ASSESSEE IS ALLOWED. IN THE AFORESAID ORDER, THE TRIBUNAL MADE AN ELABOR ATE DISCUSSION, CONSIDERING THE LEGAL POSITION AS WELL AS VARIOUS CASE LAWS AND THEN REACHED TO A PARTICULAR CONCLUSI ON. THIS DECISION OF THE TRIBUNAL WAS CHALLENGED BY THE REVE NUE BEFORE HON'BLE DELHI HIGH COURT, WHEREIN, VIDE ORDE R DATED 22/01/2014, THE SAME WAS AFFIRMED (2014) 43 TAXMAN. COM 2049 (DEL.) ; (2014) 362 ITR 177 (DEL.). IF THE AFO RESAID ORDER IS KEPT IN JUXTAPOSITION WITH THE FACTS OF THE PRES ENT APPEAL, M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 43 WE FIND THAT THE ASSESSEE OBTAINED APPROVAL FROM TH E LOCAL AUTHORITY, BEING MIRA BHAYANDER MUNICIPAL CORPORATI ON (MBMC) ON 28/05/2003. THE ASSESSEE ACCORDINGLY CLAI MED DEDUCTION U/S 80IB(10) OF THE ACT IN ITS RETURN. TH E ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT REJE CTING THE CLAIMED DEDUCTION. THE ASSESSEE GOT SUBSTANTIA L RELIEF FROM THE LD. COMMISSIONER OF INCOME TAX (APPEAL) AN D THE ORDER WAS CHALLENGED BY THE REVENUE BEFORE THE TRIB UNAL. IN THE MEANTIME, SEARCH AND SEIZURE ACTION TOOK PLACE AT THE RESIDENTIAL PREMISES OF THE PARTNERS OF THE ASSESSE E FIRMS, WITHOUT TAKING SIMILAR ACTION AT THE BUSINESS PREMI SES OF THE ASSESSEE FIRM. THERE IS NO DISPUTE TO THE FACT THAT THE PROJECT OF THE ASSESSEE WAS APPROVED ON 28/05/2003 BY THE COMPETENT AUTHORITY AND THE AMENDMENT OF THE BUILT UP AREA OF THE UNIT WAS BROUGHT ON THE STATUTE BOOK AT A LATER STAGE, MEANING THEREBY, THE PROJECT WAS APPROVED BE FORE THE AMENDMENT INSERTED/SUBSTITUTED BY THE FINANCE (NO.2 ) ACT OF 2004, W.E.F. 01/04/2005. PRIOR TO SUBSTITUTION, SUB- SECTION (10) AS AMENDED BY THE FINANCE ACT, 2000, W .E.F. 01/04/2001 AND FINANCE ACT, 2003 WITH RETROSPECTIVE EFFECT FROM 01/04/2002 READS AS UNDER:- (10) THE AMOUNT OF PROFITS IN CASE OF AN UNDERTAKI NG DEVELOPING AND BUILDING HOUSING PROJECTS APPROVED BEFORE THE 3 1ST DAY OF MARCH, 2005 BY A LOCAL AUTHORITY, SHALL BE HUNDRED PER CENT OF THE PROFITS DERIVED IN ANY PREVIOUS YEAR RELEVANT TO AN Y ASSESSMENT YEAR FROM SUCH HOUSING PROJECT IF, - (A) SUCH UNDERTAKING HAS COMMENCED OR COMMENCES DEV ELOPMENT AND CONSTRUCTION OF THE HOUSING PROJECT ON OR AFTER THE 1ST DAY OF OCTOBER, 1998; M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 44 (B) THE PROJECT IS ON THE SIZE OF A PLOT OF LAND WH ICH HAS A MINIMUM AREA OF ONE ACRE; AND (C) THE RESIDENTIAL UNIT HAS A MAXIMUM BUILT-UP ARE A OF ONE THOUSAND SQUARE FEET WHERE SUCH RESIDENTIAL UNIT IS SITUATED WITHIN THE CITIES OF DELHI OR MUMBAI OR WITHIN TWENTY-FIVE KILOMETERS FROM THE MUNICIPAL LIMITS OF THESE CITIES AND ONE T HOUSAND AND FIVE HUNDRED SQUARE FEET AT ANY OTHER PLACE. 3.1. EVEN OTHERWISE, WE ARE OF THE CONSIDERED OPIN ION THAT THE ASSESSEE IS EXPECTED TO COMPLETE THE PROJE CT AS PER THE APPROVED PLAN AT A PARTICULAR POINT OF TIME AND THE ASSESSEE IS NOT EXPECTED TO DO OR TO FULFILL THE CO NDITIONS WHICH WERE NOT IN EXISTENCE AT THE RELEVANT POINT O F TIME OR MADE COMPULSORY AFTER MAKING SOME AMENDMENT IN THE ACT ON A LATER DATE. SINCE THE PROJECT OF THE ASSESSEE WAS APPROVED BY THE COMPETENT AUTHORITY ON 28/05/2003, ACCORDINGLY COMPLETED WITHIN THE SPECIFIED TIME AND MADE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT, THEREFO RE, THE ASSESSEE IS NOT EXPECTED TO FULFILL THE CONDITIONS, WHICH WERE INSERTED IN THE ACT ON A LATER DATE. THE ASSESSEE W AS EXPECTED TO CONSTRUCT/DEVELOP THE PROJECT ACCORDING TO THE APPROVED PLAN. THE ASSESSEE CANNOT DREAM THAT AT A LATER STAGE, AMENDMENT WILL BE BROUGHT INTO THE ACT AND ACCORDINGLY THE ASSESSEE SHALL FULFILL THE CONDITIO NS, WHICH WERE EVEN NOT IN EXISTENCE, WHEN THE PLAN WAS APPRO VED, THEREFORE, ON MERITS ALSO, THE ASSESSEE IS HAVING A GOOD CASE IN ITS FAVOUR. THE ASSESSEE HAS ALREADY PRODUCED TH E DOCUMENTARY EVIDENCES IN SUPPORT OF ITS CLAIM BEFOR E THE ASSESSING OFFICER. THE ASSESSEE HAD FULFILL ALL THE CONDITIONS AS SPECIFIED U/S 80IB(10) OF THE ACT, THUS, ON MERI T ALSO, WE M/S SALASAR DEVELOPERS ITA NO.4511 TO 4513/MUM/2014 45 FIND NO INFIRMITY IN THE ORDER OF THE LD. COMMISSIO NER OF INCOME TAX (APPEAL). FINALLY, ALL THE APPEALS OF THE REVENUE ARE DISMISS ED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT 04/04/2017. SD/- SD/ - ( N.K. PRADHAN ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER & MUMBAI; * DATED : 04/04/2017 F{X~{T? P.S / +' %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. ,-./ / THE APPELLANT 2. 0./ / THE RESPONDENT. 3. 1 1 & 2% ( ,- ) / THE CIT, MUMBAI. 4. 1 1 & 2% / CIT(A)- , MUMBAI 5. 4'5 % , 1 ,-( , 6 , & / DR, ITAT, MUMBAI 6. 7# 8 / GUARD FILE. / BY ORDER, 04-% % //TRUE COPY// / (DY./ASSTT. REGISTRAR) , & / ITAT, MUMBAI,