DCIT, New Delhi V. M/s. N.R. Sponge Pvt. Ltd.,

ITA 5051/DEL/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3013 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 29-06-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 12-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Search and seizure; Share purchase agreement; Additional evidence
• Section: 143(3); 142(1); 153A; 115JB; 68; 132

Judgement Text

1 ITA NOS. 5051/DEL/2014 & ORS. IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SHRI N. K. SAINI, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER ITA NO. 5051/DEL/201 4 ( A.Y 2004-05) AND ITA NO. 5052/DEL/201 4 ( A.Y 2006-07) DCIT CENTRAL CIRCLE-16 NEW DELHI (APPELLANT) VS M/S N. R. SPONGE PVT. LTD. VILLAGE BAHESAR, SILTARA INDL. GROWTH CENTRE, PHASE-II, SILTARA, RAIPUR, CHATTISGARH, AABCN7720L (RESPONDENT) C.O NO. 175/2017 ( A.Y 2004-05) AND C.O NO. 171/2017 ( A.Y 2006-07) M/S N. R. SPONGE PVT. LTD. VILLAGE BAHESAR, SILTARA INDL. GROWTH CENTRE, PHASE-II, SILTARA, RAIPUR, CHATTISGARH, AABCN7720L (APPLICANT) VS DCIT CENTRAL CIRCLE-16 NEW DELHI (RESPONDENT) APPELLANT/RESPONDENT BY MS. SHEFALI SWROOP. SR. DR RESPONDENT/APPLICANT BY SH. RAJIV SAXENA, ADV, M/S SUMANGALA SAXENA, ADV ORDER PER SUCHITRA KAMBLE, JM THIS APPEALS AND CROSS OBJECTIONS ARE FILED BY THE REVENUE AND ASSESSEE AGAINST THE ORDERS DATED 20/06/2014 PASSED BY CIT(A )-XXX1, NEW DELHI. DATE OF HEARING 08.02.2018 DATE OF PRONOUNCEMENT 23.03.2018 2 ITA NOS. 5051/DEL/2014 & ORS. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- ITA NO. 5051/DEL/2014 ( A.Y 2004-05) L. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN LAW AND ON FACTS AS WELL IN DELETING THE ADDITION OF RS.3,08,00,000/ - MADE BY THE A.O ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE IN COME TAX ACT, 1961. 2 . THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS AS WELL IN NOT INVOKING HER POWER U/S 250(4) TO CAU SE AN ENQUIRY ON THE ISSUE SO AS TO BRING ON RECORD ALL MATERIAL AND RELEVANT FACTS. 3(A) THE ORDER OF THE CIT(A) IS ERRONEOUS AND NOT T ENABLE IN LAW AND ON FACT. GROUNDS OF CROSS OBJECTION (C. O NO. 175/DEL/2017) 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS ) HAS GROSSLY ERRED IN UPHOLDING THE ADDITION MADE IN THE ORDER O F ASSESSMENT FRAMED U/S 153A OF THE ACT FAILING TO APPRECIATE THAT SINCE NO INCRIMINATING MATERIAL WAS FOUND AS A RESULT OF SEARCH AS SUCH, ADDITION MADE WAS OUTSIDE THE SCOPE OF SECTION 153A OF THE ACT AS SUCH, INITIATION OF PROC EEDINGS U/S 153A OF THE ACT AS WELL AS THE ADDITION MADE IN THE ORDER OF ASSESS MENT WERE WITHOUT JURISDICTION. ITA NO. 5052/DEL/2014 ( A.Y 2006-07) L. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ER RED IN LAW AND ON FACTS AS WELL IN DELETING THE ADDITION OF RS.2,44,70,000/ - MADE BY THE A.O ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE IN COME TAX ACT, 1961. 2 . THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS AS WELL DELETING THE ADDITION OF RS.5,62,00,000/- M ADE BY THE A.O ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE INCOME TAX ACT, 1961. 3. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERR ED IN LAW AND ON FACTS AS WELL IN NOT INVOKING HER POWER U/S 250(4) TO CAU SE AN ENQUIRY ON THE ISSUE SO AS TO BRING ON RECORD ALL MATERIAL AND RELEVANT FACTS. 3(A) THE ORDER OF THE CIT(A) IS ERRONEOUS AND NOT TENABLE IN LAW AND ON FACTS. GROUNDS OF CROSS OBJECTION (C. O NO. 171/DEL/2017) 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) HAS GROSSLY ERRED IN 3 ITA NOS. 5051/DEL/2014 & ORS. UPHOLDING THE ADDITION MADE IN THE ORDER OF ASSESSM ENT FRAMED U/S 153A OF THE ACT FAILING TO APPRECIATE THAT SINCE NO INCRIMI NATING MATERIAL WAS FOUND AS A RESULT OF SEARCH AS SUCH, ADDITION MADE WAS OUTSI DE THE SCOPE OF SECTION 153A OF THE ACT AS SUCH, INITIATION OF PROCEEDINGS U/S 153A OF THE ACT AS WELL AS THE ADDITION MADE IN THE ORDER OF ASSESSMENT WER E WITHOUT JURISDICTION. 3. WE ARE TAKING UP THE APPEAL FOR A.Y. 2004-05 AS THE ISSUES ARE IDENTICAL IN BOTH THE APPEALS. THE ASSESSEE COMPANY IS ENGAGE D IN THE BUSINESS OF MANUFACTURING OF SPONGE IRON. A SEARCH AND SEIZURE OPERATION U/S 132 OF THE INCOME TAX ACT, 1961 WAS CONDUCTED BY THE INVESTIGA TION WING OF THE DEPARTMENT IN THE BUSINESS PREMISES OF THE ASSESSEE ON 26.03.2010. THE CASE OF THE ASSESSEE WAS CENTRALIZED U/S 127 OF THE ACT VIDE ORDER DATED 17.08.2011 AND THE JURISDICTION OVER THE ASSESSEES CASE WAS A SSIGNED TO THE ASSESSING OFFICER, CENTRAL CIRCLE- 16, NEW DELHI. THEREAFTER, A NOTICE U/S 153A OF THE ACT DATED 5.9.2011 WAS ISSUED CALLING UPON THE ASSESSEE TO PREPARE AND FILE A TRUE AND CORRECT RETURN OF ITS TOTAL INCOME ASSESSABLE F OR THE ASSESSMENT YEAR UNDER CONSIDERATION. SINCE THE ASSESSEE DID NOT COMPLY WI TH THIS NOTICE, THEREFORE, THE ASSESSING OFFICER ISSUED A NOTICE U/S 142(1) OF THE ACT DATED 28.9.2011 ALONGWITH A DETAILED QUESTIONNAIRE CALLING FOR THE VARIOUS INFORMATION AND DOCUMENTS. IN RESPONSE TO THIS ALSO, THE ASSESSEE N EITHER FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION NOR ANY INFORMATION OR DOCUMENT TILL THE DATE OF COMPLIANCE I.E. 7.10.2011 . HOWEVER, SUBSEQUENTLY ON 12.12.2011, THE ASSESSEE FILED A REPLY STATING THAT ITS RETURN ALREADY FILED FOR THE ASSESSMENT YEAR 2004-05 BE TREATED AS RETURN IN COMPLIANCE TO THE NOTICE U/S 153A OF THE ACT. ACCORDINGLY, THE ASSESSING OFF ICER TREATED THIS RETURN AS RETURN FILED IN COMPLIANCE TO THE NOTICE U/S 153A O F THE ACT WHEREIN THE ASSESSEE DECLARED A LOSS OF RS.32,795/-. SUBSEQUENT LY, NOTICES U/S 143(2) AND 142(1) OF THE ACT DATED 12.12.2011 WAS ISSUED BY TH E ASSESSING OFFICER REQUIRING THE ASSESSEE TO FILE THE INFORMATION AS C ALLED FOR VIDE NOTICE U/S 142(1) DATED 28.9.2011. IN RESPONSE TO THE SAME, TH E AR OF THE ASSESSEE ATTENDED THE ASSESSMENT PROCEEDINGS AND FILED INFOR MATION AND EXPLANATIONS WHICH WERE CONSIDERED BY THE ASSESSING OFFICER AND THE CASE WAS DISCUSSED. 4 ITA NOS. 5051/DEL/2014 & ORS. THEREUPON, THE ASSESSMENT WAS COMPLETED IN TERMS OF AN ORDER U/S 153A/143(3) DATED 30.12.2011 AT A TOTAL INCOME OF R S.3,07,67,210/- AS AGAINST THE RETURNED BUSINESS LOSS OF RS.32,795/- W HEREIN THE ASSESSING OFFICER MADE AN ADDITION OF RS.3,08,00,000/- U/S 68 OF THE IT ACT, 1961. 4 BEING AGGRIEVED BY THIS, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE. 5. THE LD. DR RELIED UPON THE ORDER OF THE ASSESSIN G OFFICER. THE LD. DR SUBMITTED THAT THE CIT(A) DID NOT APPRECIATE THE FA CT THE ASSESSEE DID NOT FILE ANY DETAILS BEFORE THE ASSESSING OFFICER DESPITE GI VING AMPLE OPPORTUNITY. THE LD. DR RELIED UPON THE DECISIONS OF THE HONBLE DEL HI HIGH COURT IN CASE OF SMT. DAYAWANTI VS. CIT (2017) 390 ITR 496, CIT VS. ANIL KUMAR BHATIA 252 ITR 493, FILATEX INDIA LTD. VS. CIT 49 TAXMANN.COM 465 AND ASHOK CHADDHA VS. ITO 337 ITR 399. 6. THE LD. AR SUBMITTED THAT THE ORIGINAL RETURN OF INCOME WAS FILED WITHIN THE DUE DATE BY THE ASSESSEE DECLARING INCOME OF RS .(-)32,795 FOR A.Y. 2004-05 AND UNDER NORMAL PROVISION NIL FOR A.Y.2006-07. HOW EVER, FOR A.Y. 2006-07 INCOME WAS DECLARED U/S 115JB OF THE ACT AT RS.1,17 ,65,845/-. THERE WAS NO ASSESSMENT MADE U/S 143(3) OF THE ACT IN BOTH THE A SSESSMENT YEARS. THE SEARCH WAS CONDUCTED ON 26.03.2010 U/S 132(1) OF TH E ACT AT THE PREMISES OF THE ASSESSEE, BUT NO INCRIMINATING MATERIAL WAS FOU ND FROM THE PREMISES OF THE ASSESSEE. THE LD. AR FURTHER SUBMITS THAT THERE WAS NO ASSESSMENT OR REASSESSMENT PENDING AS ON SEARCH DATE. IN BOTH TH E ASSESSMENT YEARS, NOTICE U/S 143(A) OF THE ACT WAS ISSUE DON 05.09.2011. ASS ESSMENT WAS MADE U/S 153A ON 30.12.2011. THE LD. AR SUBMITS THAT THE ADD ITIONS MADE IN THE ORDER OF THE ASSESSMENT FOR BOTH THE YEARS WERE NOT BASED ON ANY MATERIAL FOUND AS A RESULT OF SEARCH. THE LD. AR SUBMITS THAT THE CIT(A ) HAS DELETED THE ADDITION MADE BY THE ASSESSING OFFICER, HOWEVER, THE GROUND OF THE ASSESSEE THAT THE ADDITION MADE IN THE ORDER OF THE ASSESSMENT WAS BE YOND THE SCOPE OF SECTION 153A OF THE ACT WAS DISMISSED BY THE CIT(A). THE LD . AR RELIED UPON THE 5 ITA NOS. 5051/DEL/2014 & ORS. DECISION OF THE HONBLE DELHI HIGH COURT IN CASE OF CIT VS. KABUL CHAWLA (2016) 380 ITR 573 WHEREIN THE HONBLE HIGH COURT HELD THA T IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CA N BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE. THE LD. AR FURTHER SUBMITTED THAT SINCE NONE OF THE ADDITIONS MADE BY THE ASSESSING OFFICER WAS BASED ON ANY INCRIMINATING MATERIAL FOUND AS A RESU LT OF SEARCH, AS, SUCH, THE ADDITIONS MADE IS OUTSIDE THE SCOPE OF SECTION 153A OF THE ACT AND, AS SUCH, IT IS PRAYED THAT THE APPEAL OF THE REVENUE BE DISMISS ED AND CROSS OBJECTIONS FILED BY THE ASSESSEE BE ALLOWED. THE LD. AR FURTHER SU BMITTED THAT THE CIT(A) AFTER CALLING THE REMAND REPORT OF THE ASSESSING OFFICER ADMITTED THE ADDITIONAL EVIDENCES AND AFTER CONSIDERING THE SAME DELETED TH E ADDITIONS AND THERE WAS NO MATERIAL BROUGHT BY THE REVENUE TO INFER THAT TH E FINDINGS OF THE CIT(A) ARE PERVERSE. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORDS. THE CIT(A) HELD AS UNDER:- 16. I HAVE CONSIDERED THE FACTS OF THE CASE, WRITT EN SUBMISSION OF THE APPELLANT, FINDINGS OF THE ASSESSING OFFICER, REMAN D REPORT OF THE ASSESSING OFFICER AND THE REJOINDER OF THE APPELLANT. I HAVE ALSO PERUSED THE CASE LAWS RELIED UPON BY THE APPELLANT IN SUPPORT OF ITS CASE . IN THE INSTANT CASE, DURING THE COURSE OF APPEAL PROCEEDINGS, THE APPELL ANT FILED FOLLOWING ADDITIONAL EVIDENCES IN SUPPORT OF THE SHARE CAPITA L AND SHARE PREMIUM RECEIVED DURING THE YEAR: .. THE ABOVE EVIDENCES COULD NOT BE FILED DURING THE C OURSE OF ASSESSMENT PROCEEDINGS FOR THE REASONS EXPLAINED BY THE APPELL ANT IN ITS APPLICATION UNDER RULE 46A. ALL THESE EVIDENCES, ALONGWITH WRIT TEN SUBMISSIONS OF THE APPELLANT WERE SENT TO THE ASSESSING OFFICER FOR HI S EXAMINATION AND TO OFFER HIS COMMENTS. IN HIS REMAND REPORT, THE ASSESSING O FFICER DID NOT GIVE ANY 6 ITA NOS. 5051/DEL/2014 & ORS. ADVERSE COMMENTS ON THESE ADDITIONAL EVIDENCES. THE ASSESSING OFFICER MERELY REPEATED THE CONTENTS OF THE ASSESSMENT ORDE R ON THIS ISSUE IN HIS REMAND REPORT. THE DOCUMENTS FILED AS ADDITIONAL EV IDENCES GAVE COMPLETE DETAILS OF THE SUBSCRIBERS AND THE ASSESSING OFFICE R COULD HAVE MADE ENQUIRIES AND VERIFIED THE IDENTITY AND CREDITWORTH INESS OF THE SUBSCRIBERS AND GENUINENESS OF THE TRANSACTIONS. WHAT WAS LEAST EXPECTED FROM THE ASSESSING OFFICER WAS TO CONDUCT AN ENQUIRY FROM TH E DEPARTMENTS OWN SOURCES TO VERIFY THE VERACITY OF THE ADDITIONAL EV IDENCE WITH REGARD TO STATUS OF PAN OF THE SHARE APPLICANTS AND THE DETAI LS WHILE FILING OF THEIR INCOME-TAX RETURNS. SURPRISINGLY, THIS WAS ALSO NOT DONE BY THE ASSESSING OFFICER. INSTEAD OF EXAMINING THE VERACITY OF THE A DDITIONAL EVIDENCES WHICH WERE CRUCIAL TO THE DISPOSAL OF THE APPEAL THAT HAD A DIRECT BEARING ON THE QUANTUM OF THE CLAIM MADE BY THE APPELLANT, THE ASS ESSING OFFICER EXACTLY AFTER 1 YEAR AND 3 MONTHS SENT A REPORT REPRODUCING THE PROVISIONS OF THE RULE 46A AND EXTRACTING THE CONTENTS OF THE ASSESSM ENT ORDER. 16.1 THEREFORE, IN THE ABSENCE OF ANY COMMENTS BY THE ASSESSING OFFICER ON THE EVIDENCE WHICH WAS CRUCIAL TO THE DISPOSAL O F THE APPEAL, IN SPITE OF OPPORTUNITY GIVEN AND SUFFICIENT TIME ALLOWED TO HI M, I PROCEED TO DECIDE THE ISSUE OF SHARE CAPITAL AND SHARE PREMIUM RECEIVED B Y THE APPELLANT DURING THE YEAR UNDER CONSIDERATION ON MERITS ON THE BASIS OF ADDITIONAL EVIDENCE FILED UNDER RULE 46A. ON CONSIDERING THE ADDITIONAL EVIDENCES FILED BY THE APPELLANT UNDER RULE 46A, THE FACTS ARE NOW APPAREN T ON RECORD WHICH ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE CREDITORS AND PROVE THE GENUINENESS OF THE TRANSACTIONS. THEREFORE, THE ADD ITION MADE BY THE ASSESSING OFFICER U/S 68 IN RESPECT OF SHARE CAPITA L AND SHARE PREMIUM RECEIVED BY THE APPELLANT CANNOT BE SUSTAINED AS TH E APPELLANT HAS DISCHARGED ITS ONUS OF PROVING THE IDENTITY OF THE SUBSCRIBERS, CREDITWORTHINESS OF THE SUBSCRIBERS AND GENUINENESS OF THE TRANSACTIONS BY FILING OF THEIR CONFIRMATIONS, COPIES OF SHARE APPL ICATION FORMS, COPIES OF SHARE CERTIFICATES ISSUED, COPIES OF INCOME TAX RET URNS, COPIES OF BANK 7 ITA NOS. 5051/DEL/2014 & ORS. STATEMENTS ETC. THE CASE LAWS RELIED UPON BY THE AP PELLANT ALSO SUPPORT ITS CASE. THERE WAS NO MATERIAL BROUGHT ON RECORD BY TH E ASSESSING OFFICER TO SUPPORT HIS ADDITION OR ANY MATERIAL EVIDENCE CONTR ARY TO THAT OF THE APPELLANT. ACCORDINGLY, CONSIDERING ALL THE FACTS A ND CIRCUMSTANCES OF THE CASE, I HOLD THAT THE AMOUNT OF RS.3,08,00,000/- RA ISED BY THE APPELLANT DURING THE YEAR UNDER CONSIDERATION, AS SHARE CAPIT AL AND SHARE PREMIUM STANDS EXPLAINED AND, THEREFORE, THE ADDITION OF THIS AMOUNT MADE BY THE ASSESSING OFFICER U/S 68 IS DELETED. THE CIT(A) HAS GIVEN A CATEGORICAL FINDING AS TO WH Y THE ADDITIONAL EVIDENCE WAS ACCEPTED BY THE CIT(A) AND ALSO CALLED FOR EXPLANAT ION FROM THE ASSESSING OFFICER BY WAY OF REMAND REPORT. THE DOCUMENTS GAVE THE COMPLETE DETAILS OF THE SUBSCRIBERS AND IT IS PERTINENT TO NOTE THAT TH E ASSESSING OFFICER HAS NOT AT ALL MADE ANY EFFORT TO MAKE ENQUIRIES AND VERIFY TH E AUTHENTICITY OF THE SAME. MERELY REJECTING THE DOCUMENTS DOES NOT AMOUNT THAT ASSESSEE HAS NOT PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF S UBSCRIBERS. IN FACT, THE ASSESSEE HAS GIVEN ALL THE DETAILS AS PER THE REQUI REMENT OF THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF SUBSCRIBERS. TH E CIT(A) HAS GIVEN A DETAILED FINDINGS AND THERE IS NO NEED TO INTERFERE WITH THE SAME. THE LD. DR RELIED UPON THE SEVERAL JURISDICTIONAL HIGH COURT D ECISIONS, BUT THE FACTS IN THE PRESENT CASE ARE DIFFERENT THAN THE DECISIONS RELIE D UPON BY THE LD. DR. IN THE PRESENT CASE, THERE IS NO INCRIMINATING MATERIAL FO UND AND BESIDES THAT THERE ADDITIONAL EVIDENCE HAS PROVE THE CASE OF THE ASSES SEE WHICH WAS NOT VERIFIED BY THE ASSESSING OFFICER IN REMAND REPORT AND THERE FORE, THE CIT(A) HAS RIGHTLY TAKEN COGNIZANCE OF THESE EVIDENCES AND PASSED A JU ST AND PROPER ORDER. THE ISSUES CONTESTED IN APPEAL FOR A.Y. 2006-07 ARE ALS O SIMILAR. THUS, THE APPEALS OF THE REVENUE ARE DISMISSED. 8. AS RELATES TO CROSS OBJECTION, SINCE NONE OF THE ADDITIONS MADE BY THE ASSESSING OFFICER WAS BASED ON ANY INCRIMINATING MA TERIAL FOUND AS A RESULT OF SEARCH, AS SUCH, THE ADDITIONS MADE DOES NOT COME UNDER THE PURVIEW OF 8 ITA NOS. 5051/DEL/2014 & ORS. SECTION 153A OF THE ACT. THE LD. AR RELIED ON THE D ECISION OF THE CIT VS. KABUL CHAWLA (2016) 380 ITR 573 WHEREIN IT IS HELD AS UND ER: 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN T HE AFOREMENTIONED ITA NOS. 707,709 AND 713 OF 2014 OF DECISIONS, THE LEGA L POSITION THAT EMERGES IS AS UNDER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153 A (1) WILL HAVE TO BE MANDATORY ISSUED TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATE LY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES P LACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE O F THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAV E 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 SEAR CH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE TOTAL INC OME OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORD ERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WILL BE ONLY ONE ASSESS MENT ORDER IN RESPECT OF EACH OF THE SIX AYS IN WHICH BOTH THE DISCLOSED AN D THE UNDISCLOSED ICNOEM WOULD BE BROUGHT TO TAX IV. ALTHOUGH SECTION 153A DOES NOT SAY THAT ADDITIONS S HOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE O F THE SEARCH, OR OTHER POST-SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THA T THE ASSESSMENT CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ITA NOS. 707, 709 AND 713 OF 2014 OF ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY 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 REAS SESSMENT CAN BE MADE. THE WORD ASSESS IN SECTION 153A IS RELATABL E TO ABATED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEAR CH) 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 UND ER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND A NY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE AO. 9 ITA NOS. 5051/DEL/2014 & ORS. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153A ONLY ON TH E BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISC OVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCL OSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. 38. THE PRESENT APPEALS CONCERN AYS, 2002-03, 2005-06 A ND 2006-07. ON THE DATE OF THE SEARCH THE SAID ASSESSMENTS ALRE ADY STOOD COMPLETED. SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURIN G THE SEARCH, NO ADDITIONS COULD HAVE BEEN MADE TO THE INCOME ALREAD Y ASSESSED. THUS, ON THE DATE OF SEARCH, ASSESSMENT OR REASSESS MENT FOR BOTH THE YEARS WAS NOT PENDING ON THE DATE OF SEARCH, AS SUCH, NOT HING WAS ABATED ON THE DATE OF SEARCH, AND HENCE IN THE ABSENCE OF ANY INC RIMINATING MATERIAL FOUND FROM THE PREMISES OF THE ASSESSEE, ADDITIONS MADE I N BOTH THE YEARS WERE OUTSIDE THE SCOPE OF SECTION 153A OF THE ACT. THE P RESENT CASE IS SQUARELY COVERED BY THE DECISION OF THE HONBLE JURISDICTION AL HIGH COURT IN CASE OF CIT VS. KABUL CHAWLA (SUPRA). HENCE THE CROSS OBJECTION S OF THE ASSESSEE ARE ALLOWED. 9. IN RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED AND CROSS OBJECTIONS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD MARCH, 2018 . SD/- SD/- (N. K. SAINI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 23/03/2018 R.N COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR 10 ITA NOS. 5051/DEL/2014 & ORS. ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 06/02/2018 PS 2. DRAFT PLACED BEFORE AUTHOR 06/02/2018 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2018 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 23.03.2018 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 2 3 .03.2018 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.