Appeal details
Counselvise Citation
[2018] 126 COUNSELVISE.COM (IT) 3357 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
5 month(s) 24 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
15-02-2018
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Assessment Year
2006-2007
Appeal Filed On
22-08-2017
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI O. P. KANT, ACCOUNTANT MEMBER I.T.AS. NO.5395 & 5396/DEL/2017 ASSESSMENT YEARS: 2006-07 & 2007-08 ANURAG DALMIA, 2 ND FLOOR, INDRAPRAKASH BUILDING, 21, BARAKHAMBA ROAD, NEW DELHI. V. DCIT, CENTRAL CIRCLE-26, NEW DELHI. TAN/PAN: AADPD 3439P (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI V. K. BINDAL, ADV. RESPONDENT BY: SMT. APARNA KARAN, CIT(DR) DATE OF HEARING: 19 12 2017 DATE OF PRONOUNCEMENT: 15 02 2018 O R D E R PER AMIT SHUKLA, J.M.: THE AFORESAID APPEALS HAVE BEEN FILED BY THE ASSESS EE AGAINST THE SEPARATE IMPUGNED ORDER DATED 11.08.2017 , PASSED BY THE LD. CIT(APPEALS)-29, NEW DELHI, FOR THE QUANTUM OF ASSESSMENT PASSED U/S.153A/143(3) FOR THE ASSESSMENT YEARS 2006 -07 & 2007-08. SINCE ISSUES INVOLVED IN BOTH THE APPEALS A RE COMMON, ARISING OUT OF IDENTICAL SET OF FACTS, THEREFORE, SAME W ERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS CON SOLIDATED ORDER. 2. WE WILL FIRST TAKE UP THE APPEAL FOR THE ASSESS MENT YEAR 2006-07, WHEREIN FOLLOWING GROUNDS HAVE BEEN RAISED . I.T.A. NO.5395 & 5396/DEL/2017 2 1. THE IMPUGNED APPELLATE / ASSESSMENT ORDERS ARE BAD IN LAW AND ON FACTS AS THOSE HAVE BEEN PASSED DISREGARDING THE CODIFIED LAW AND AS HAS BEEN LAID DOWN BY THE JURISDICTIONAL COURTS BESIDES IGNORING THE SUBMISSIONS OF THE APPELLANT BEFORE THE SAID AUTHOR ITIES. THUS, THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW MUST BE AN NULLED. 2. THE CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE ASSESSMENT ORDER PASSED ON THE BASIS OF AN ILLEGAL AND INVALID NOTICE ISSUED U/S 143(2) OF THE ACT FOR THE FIRST TIME ON 21/10/2013 THOUGH THE SAME SHOULD HAVE BEEN ISSUED STATUTORILY BY 30/09/2013 A S THE RETURN OF INCOME WAS FILED BEFORE 31/03/2013. THE APPELLANT N EVER RECEIVED ANY NOTICE BEFORE THE SAID DATE AS HAS BEEN ALLEGED BY THE CIT(A) BY REFERRING TO THE ASSESSING OFFICER. THUS THE ASSESS MENT SHOULD BE ANNULLED. 3. THAT THE IMPUGNED ASSESSMENT ORDER DATED 23/03/2 015 IS BARRED BY LIMITATION AS THE TIME TO PASS THE ASSESSMENT OR DER HAD ALREADY EXPIRED ON 31/03/2014 BUT THE PROPOSAL FOR REFERENC E TO SEEK INFORMATION FROM THE FOREIGN JURISDICTIONS U/S 153B ( 1) EXPLANATION (VIII) OF THE ACT WAS MADE BY THE ASSESSING OFFICER FIRST TIME VIDE HIS LETTERS DATED 27/02/2015, I.E. MUCH AFTER EXPIRY OF THE TIME TO PASS THE ASSESSMENT ORDER. THUS THE ASSESSMENT ORDER SHO ULD BE ANNULLED. 4. WITHOUT PREJUDICE TO THE ABOVE GROUND, THE APPEL LANT WAS NOT INFORMED IN ANY MANNER BEFORE THE ALLEGED EXTENSION OF LIMITATION PERIOD BY THE ASSESSING OFFICER. THUS, THIS ALLEGED EXTENSION OF THE LIMITATION PERIOD IN ABSENCE OF THE PRINCIPLES OF N ATURAL JUSTICE AND FAIR PLAY IS BAD IN LAW AND THE IMPUGNED ASSESSMENT ORDE R DESERVES TO BE ANNULLED. 5. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ASSESSMENT ORDER PASSED U/S 153 A OF THE ACT MAKING ADDITION I S BAD IN LAW AS NO INCRIMINATING MATERIAL IN ANY MANNER IN RESPECT OF THE SAME WAS FOUND IN AND SEIZED FROM THE PREMISES OF THE APPELLANT DU RING THE COURSE OF SEARCH U/S 132 OF THE ACT ON 20/01/2012 AS THE EARL IER ASSESSMENT I.T.A. NO.5395 & 5396/DEL/2017 3 PROCEEDING WAS ALREADY COMPLETED AND NOT ABATED. TH US, THE ASSESSMENT ORDER SHOULD BE ANNULLED. 6. THAT IN LAW AND ON FACTS, SOME UNAUTHORIZED AND UNVERIFIED MATERIAL SOURCED FROM A THIRD COUNTRY BY THE REVENU E AUTHORITIES CANNOT BE MADE A BASIS TO PASS AN ASSESSMENT ORDER U/S 153 A OF THE ACT IN THE CASE OF THE APPELLANT AND WHICH NEEDS TO BE CANCELLED. 7. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 27,91,72,017/- MADE U/S 69 OF THE ACT IS UNEXPLAINED INVESTMENT IN RE LATION TO AN ALLEGED OFFSHORE BANK ACCOUNT WITH HSBC BANK, GENEVA, SWITZ ERLAND WITHOUT HAVING ON RECORD ANY LEGALLY ACCEPTABLE AND CREDIBL E EVIDENCE TO SUPPORT THE SAME. THE APPELLANT PRAYS THAT NE ADDIT ION SHOULD BE DELETED. 8. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE CIT(A) ERRED IN NOT APPRECIATING THAT THE IMPUG NED ASSESSMENT FRAMED IN PURSUANCE TO SHOW CAUSE NOTICE ISSUED TO A PERMANENT ACCOUNT NUMBER NOT BELONGING TO NE APPELLANT VITIAT ES THE ASSESSMENT. ACCORDINGLY, THE ASSESSMENT ITSELF IS INVALID AND N ON-EST WHICH SHOULD BE CANCELLED. 9. THAT THE ALLEGATION OF THE ASSESSING OFFICER THA T THE ASSESSEE HAS NOT COMPLIED WITH NOTICE ISSUED U/S 142(1) OF THE I NCOME-TAX ACT, 1961 ON 18 TH JULY, 2013 IS CONTRARY TO THE FACTS OF THE CASE AN D DESERVES TO BE EXPUNGED. 2. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE, SHRI V.K . BINDAL FIRST PRESSING THE LEGAL ISSUE RAISED VIDE GRO UND NO. 5, SUBMITTED THAT HERE IN THIS CASE, THE ADDITION WHICH HAS BEEN MADE BY THE ASSESSING OFFICER IS NOT BASED ON ANY INC RIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH, AND THER EFORE, NO ADDITION COULD HAVE BEEN MADE IN THE ASSESSMENT FRAMED I.T.A. NO.5395 & 5396/DEL/2017 4 U/S.153A/143(3) FOR THE IMPUGNED ASSESSMENT YEAR, AS ON THE DATE OF SEARCH, I.E., 20.01.2012, THE ASSESSMENT FOR T HE ASSESSMENT YEAR 2006-07 WAS NOT PENDING AND HAD ATTAIN ED FINALITY. ACCORDINGLY, IN VIEW OF THE VARIOUS JUDGME NTS OF THE HON'BLE JURISDICTIONAL HIGH COURT, ESPECIALLY IN TH E CASE OF CIT VS. KABUL CHAWALA (2016) 380 ITR 570; AND PR. CIT VS. MEETA GUTGUTIA, PROP. M/S. FERNS N PETALS, IN ITA NO. 30 6 AND 310/2010 , THE ADDITIONS MADE FOR THE ASSESSMENT YEARS WHICH ARE UNABATED ASSESSMENTS ARE BEYOND THE SCOPE OF ASSESSME NT U/S 153A. SINCE THE AFORESAID ISSUE RAISED BY THE LEARNED COUN SEL BEFORE US GOES TO THE VERY ROOT OF THE ADDITION, THEREF ORE, WE ARE TAKING UP THIS ISSUE FIRST. 3. THE BRIEF FACTS AND BACKGROUND OF THE CASE ARE THA T, THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM SALA RY, SHORT TERM CAPITAL GAIN AND INCOME FROM OTHER SOURCES. HE HAS FI LED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006-07 IN TH E MONTH OF JULY, 2006, DECLARING TOTAL INCOME OF RS.27,86,027/- . THE SAID RETURN WAS DULY ACCEPTED AND PROCESSED U/S. 143(1) V IDE INTIMATION DATED 25.05.2007. THEREAFTER NO NOTICE U/S. 143(2) WAS ISSUED AND ACCORDINGLY, SUCH A RETURN OF INCOME STOOD FINALLY ASSESSED AND HAD ATTAINED FINALITY UNDER THE PROVISION S OF THE INCOME TAX ACT. A SEARCH AND SEIZURE ACTION U/S. 132( 1) WAS CARRIED OUT IN THE PREMISES OF THE ASSESSEE AND GROUP CASES ON 20.01.2012 AND IN PURSUANCE TO SUCH ACTION, NOTICES U/S.153A WERE ISSUED ON 17.10.2012 FOR THE SIX ASSESSMENT YEAR S PRIOR TO THE YEAR IN WHICH SEARCH TOOK PLACE. IN RESPONSE TO SU CH NOTICE FOR THE IMPUGNED ASSESSMENT YEAR ASSESSEE FILED THE RETURN OF INCOME DECLARING THE SAME INCOME AS WAS SHOWN IN THE ORIGINA L RETURN OF INCOME. AS REGARD THE NATURE OF ADDITION IN DISPUTE QUA THE SCOPE I.T.A. NO.5395 & 5396/DEL/2017 5 OF SECTION 153A, IT IS BORNE OUT FROM THE IMPUGNED ASSE SSMENT ORDER, THE APPELLATE ORDER AND THE RECORDS PRODUCED BE FORE US, THAT AN INFORMATION WAS RECEIVED IN THE FORM OF A DOCUMENT COLLECTED BY THE GOVERNMENT OF INDIA AS A PART OF TAX INFORMATION EXC HANGE TREATY. AS PER THE SAID INFORMATION RECEIVED IN FORM O F USB, CERTAIN PERSONS IN INDIA HELD BANK ACCOUNTS WITH HSBC PVT. BA NK (SUISSE), SA, SWITZERLAND. THE SAID DOCUMENTS ALSO CO NTAINED INFORMATION WITH REGARD TO THE ASSESSEE WHICH WAS 11 P AGES DOCUMENT, THE RELEVANT PORTION OF WHICH HAVE BEEN INC ORPORATED BY THE ASSESSING OFFICER IN THE IMPUGNED ASSESSMENT ORDER . THE LEARNED ASSESSING OFFICER HAS VERY METICULOUSLY ANAL YZED THE DOCUMENTS AND NOTED THAT THE DOCUMENTS CONTAINED THE NAME OF THE ASSESSEE THROUGH VARIOUS ENTITIES WHEREIN ASSESSEE WAS LINKED WITH THESE ACCOUNTS IN SOME MANNER OR THE OTHER, LIKE; PORTLAND HOLDING LTD., WHERE IN THE ACCOUNT OF THE SAID ENTITY, ASSESSEE WAS SHOWN AS ONE OF THE BENEFICIAL O WNER OF THE ACCOUNT; SHAGUN-21 , WHEREIN THE ASSESSEE HAS BEEN SHOWN AS PERSON HAVING RIGHT OF INSPECTION; WILLASTON INVESTMENTS LTD ., WHEREIN THE ASSESSEE HAS BEEN FOUND TO BE RELATED TO THIS ACCOUNT BEING BENEFICI AL OWNER; AND CHOTUMAN-1 , WHEREIN AGAIN THE ASSESSEE HAS BEEN SHOWN AS ACCOUNT HOLDER IN THE BANK ACCOUNT RELATING TO THIS ENTITY. THE TOTAL AMOUNT WHICH STOOD DEPOSITED IN THESE BANK ACCO UNTS FOR THE RELEVANT FINANCIAL YEAR, AGGREGATED TO RS. 27, 91,72,017.47, THE DETAILS OF WHICH ARE AS UNDER:- I.T.A. NO.5395 & 5396/DEL/2017 6 ASSESSMENT YEAR 2006-07 CHOTUMAN 21 (EX CHOTUMAN UNTIL 25.11.2005) USD 4,424,363.05 SHAGUN 21 (EX SHAGUN UNTIL 25.11.2005) USD 754,748.52 WILLASTON INVESTMENT LIMITED USD 1,773.43 PORTLAND HOLDINGS LTD USD1,099,700.00 TOTAL USD 6,280,585.32 TOTAL IN RUPEES RS.27,91,72,017.47 1$ = RS.44.45 AS ON 31.03.2006 4. ALL THESE DOCUMENTS WERE IN THE POSSESSION OF THE DEPARTMENT AS IT WAS RECEIVED FROM FT&TR DIVISION O F CBDT, MUCH BEFORE THE DATE OF SEARCH AND BASED ON THIS IN FORMATION ONLY SEARCH AND SEIZURE ACTION WAS CARRIED OUT AT T HE VARIOUS PREMISES OF THE ASSESSEE. AT THE TIME OF SEARCH, AS SESSEE WAS CONFRONTED WITH THE SAID DOCUMENTS AND HIS STATEMEN T ON OATH U/S 132(4) WAS RECORDED ON 20.01.2012, TO VERI FY THE CONTENTS OF THE INFORMATION CONTAINED IN THE SAID D OCUMENTS. THE RELEVANT QUESTION AND ANSWER HAVE BEEN REPRODUC ED BY THE ASSESSING OFFICER IN HIS IMPUGNED ASSESSMENT OR DER. APART FROM THAT, DURING THE COURSE OF THE ASSESSMEN T PROCEEDINGS U/S 153A ALSO, STATEMENT OF THE ASSESSE E WAS RECORDED ON 03.12.2014 WHICH TOO HAS BEEN REPRODUCE D BY THE ASSESSING OFFICER IN HIS ASSESSMENT ORDER. SINC E THESE QUESTION ARE QUITE PERTINENT, THEREFORE, FOR THE SA KE OF READY REFERENCE, THE RELEVANT QUESTIONS ASKED AND ANSWER GIVEN BY THE ASSESSEE ARE REPRODUCED HEREUNDER:- I.T.A. NO.5395 & 5396/DEL/2017 7 Q - 8 HAVE YOU MAINTAINED ANY BANK ACCOUNT ABROAD WITH TH E PARTICULARS AS NAME 'ANURAG DALMIA, NATIONALITY INDIAN, DATE OF BIRTH 1 1.05.1956, PLACE OF BIRTH DELHI AND PROFESSION AS OWNER OF DALMIA BROS.) PVT. LTD. IF YES, FURNISH THE DETAILS THEREOF? ANS. NO I HAVE NOT OPENED ANY ACCOUNT ABROAD WITH THESE PARTICULARS. Q.9 HAVE YOU EVER ANY BANK ACCOUNT ABROAD WITH IDENTIFICATIO N BUP_ SIFIC_PERJD AS 5090157548? ANS. NO Q.10 HAVE YOU EVER OPENED ANY BANK ACCOUNT WITH PER_ID A S 87346 AND PER_ NO. AS 157548? ANS. NO. Q.11 HAVE YOU EVER USED ANY PASSPORT HAVING NO.Z - 040344 AND HA VE YOU USED THIS PASSPORT FOR OPENING ANY ACCOUNT ABROAD? ANS. THIS PASSPORT NO. I DO NOT REMEMBER AND I HAVE NOT OPENED ANY ACCOUNT. DURING THE ASSESSMENT PROCEEDINGS U/S 153A, STATEMENT OF THE ASSESSEE WAS RECORDED ON 03.12.2014 AND THE RELEVAN T PART OF THE QUESTIONS AND ANSWERS OF THIS STATEMENT ARE REPRODUCED A S UNDER: Q.2 DURING THE COURSE OF SEARCH AND SEIZURE OPERATION A ND POST SEARCH PROCEEDINGS, YOUR STATEMENTS WERE RECORDED BY THE AUTHORIZED OFFICERS OF THE DEPARTMENT ON 20.01.2012 AND 21.01.2012. PLEASE CONFIRM THAT THE STATEMENTS RECORDED WERE SIGNED BY YOU AFTER TAKING OATH? ANS. YES I CONFIRM THAT MY STATEMENT WAS RECORDED WHICH WAS SIGNED BY ME AFTER TAKING OATH. Q.3 DURING THE COURSE OF SEARCH DATED 20.01.2012 AT YOU R RESIDENTIAL PREMISES, YOU WERE SHOWN A COPY OF YOUR BANK STATEMENT WITH HSBC SWITZ ERLAND BY THE SEARCH TEAM IN WHICH DETAILS OF THE CLIENT PROFILES LINKED TO YOU WERE GIVEN WITH MAXIMUM AMOUNT LYING WITH THE BANK. ON THIS YOU DENIED TO HAVE ANY THING TO DO WITH THAT. PLEASE CONFIRM THE SAME AND GIVE YOUR COMMENTS. ANS. I DON'T HAVE ANY ACCOUNT WITH HSBC SWITZERLAND. Q4 AS PER THE INFORMATION RECORDED IN THE BANK DOCUMEN T WHICH WAS SHO WN TO YOU DURING THE SEARCH ON 20.01.2012 AND 21.01.2012 THE DATE OF CREATION OF THIS ACCOUNT IS 12.11.2000. WERE YOU IN SWITZERLAND IN F.Y 2000- 01? PLEASE RESPOND TO THIS. ANS. I DON'T REMEMBER WHETHER I WAS THERE OR NOT DURING THE A.Y. 2000 - 01. I.T.A. NO.5395 & 5396/DEL/2017 8 Q.5 THE DOCUMENT PERTAINING TO THE BANK ACCOUNT IN WHIC H YOUR NAME IS APPEARING WAS SHOWN TO YOU ON 20.01.2012/21.01.2012 IN WHICH THE DATE OF CREATION OF ACCOUNT HAS BEEN SHOWN AS 12.11.2000. HAVE YOU MADE ANY EFFORTS AFTER THE DATE OF SEARCH TO VERIFY FROM YOUR RECORDS WHETHER YOU WERE THERE IN SWITZERLAND AT THE TIME WHEN THIS ACCOUNT WAS OPENED? ANS. I DIDN'T MAKE ANY EFFORT TO VERIFY FROM MY RECORDS WHETHER I WAS IN SWITZERLAND ON THAT DATE AS I DON'T HAVE ANY ACCOUNT THERE. Q.6 HAVE YOU EVER SIGNED ANY DOCUMENT PERTAINING TO OPE NING OF ANY ACCOUNT OUTSIDE INDIA ESPECIALLY HSBC BANK GENEVA? ANS. NO I HAVEN'T. Q - 7 HAVE YOU EVER AUTHORIZED ANY PERSON/BANK OFFICIAL/I NSTITUTION TO SIGN ANY DOCUMENT ON YOUR BEHALF FOR THE PURPOSE OF OPENING ANY ACCOU NT OUTSIDE INDIA? ANS. NO. Q - 8 HAVE YOU EVER AUTHORIZED ANY BANK/INSTITUTION/ANY O THER AGENCY TO OPEN/OPERATE ANY BANK ACCOUNT OUTSIDE INDIA? ANS. NO. Q - 9 DID YOU EVER AUTHORIZE ANY PERSON/INSTITUTION/COMPA NY TO SIGN ANY DOCUMENT PERTAINING TO FORMATION OF ANY COMPANY/TRUST/ASSOCI ATION OF PERSONS/SOCIETIES OUTSIDE INDIA INCLUDING BRITISH VIRGIN ISLANDS? ANS. NO, I HAVEN'T. Q. 10 WHEN DID YOU COME TO KNOW ABOUT EXISTENCE OF A BAN K ACCOUNT IN YOUR NAME IN HSBC BANK GENEVA? ANS. I CAME TO KNOW AT THE TIME OF SEARCH WHEN THE BANK DOCUMENT WAS SHOWN TO ME BY THE INCOME TAX AUTHORITIES. Q. 11 AFTER C OMING TO KNOW THAT YOUR NAME IS APPEARING IN A BANK ACCOUNT WITH HSBC WHAT HAVE YOU DONE TO FIND OUT THE VERACITY OF THE DOCUMENT/INFORMATION? ANS. I HAVE DONE NOTHING. Q.12 HAVE YOU MADE ANY COMMUNICATION WITH HSBC BANK PERT AINING TO THIS ACCOUNT AFTER THE DATE OF SEARCH? ANS. NO. Q.13 HAVE YOU MADE ANY COMMUNICATION WITH ANY AGENCY/BAN K/INSTITUTION, OTHER THAN HSBC GENEVA PERTAINING TO THIS BANK ACCOUNT? ANS. NO, I HAVEN'T. I.T.A. NO.5395 & 5396/DEL/2017 9 Q. 14 HAVE YOU FILED ANY CASE CIVIL/CRIMINAL AGAINST HSBC BANK OR ANY OTHER PERSON/INSTITUTIONS RELATING TO THIS BANK ACCOUNT? ANS. NO. Q.15 HAVE YOU SIGNED ANY DOCUMENT OR AUTHORIZED ANYONE T O SIGN ANY DOCUMENT RELATING TO THE FOLLOWING:- (I) PORTLAND HOLDING LIMITED (II) SHAGIM 21(EX SHAGUN UNTIL 25.11.2005.) (III) WILLASTON INVESTMENTS LIMITED (IV) CHOTUMAN 21 (EX CHOTUMAN UNTIL 25.11.2005)? ANS. NO, I HAVEN'T. 1 Q.16 DO YOU HAVE ANY ACCOUNT WITH HSBC? ANS. NO. Q.17 HAVE YOU EVER VISITED HSBC HANK GENEVA? ANS. NO. Q.18 DO YOU THINK YOUR NAME AND ADDRESS OR ANY DOCUMENT PERTAINING TO YOU MAY HAVE BEEN MISUSED/USED WITHOUT YOUR AUTHORIZATION FOR TH E PURPOSE OF OPENING ANY ACCOUNT IN HSBC BANK? ANS. I DON'T KNOW. Q.19 YOU ARE A MAN OF REPUTE WITH HIGH SOCIAL STANDING. YOU AND YOUR FAMILY'S NAME AND ADDRESS HAS BEEN USED IN A BANK ACCOUNT. TH E BANK ACCOUNT HAS GOT CREDIT ENTRIES AS HAS BEEN SHOWN TO YOU DURING THE SEARCH OPERATION. DESPITE ALL THIS YOU HAVE NOT TAKEN ANY ACTION AGAINST THE BANK. YOU EVEN HAVE ST ATED ABOVE THAT YOU HAVE NOT COMMUNICATED WITH THE BANK AFTER COMING TO KNOW OF THE EXISTENCE OF AN ACCOUNT IN YOUR NAME. THIS APPEARS HIGHLY IMPROBABLE. YOUR COM MENTS PLEASE. R ANS. I DON'T KNOW ANYONE IN THE BANK, SO HOW CAN I TALK TO ANYONE. Q.20 FOR COMMUNICATING WITH THE BANK IT IS NOT NECESSARY THAT YOU SHOULD TO KNOW SOMEONE WHO IS WORKING IN THE BANK. IN NORMAL BANKING PROCESSES COMMUNICATION CAN BE SENT TO THE PERSONS AT THE MANAGEMENT OF THE BANK. THE INFORMATION IN THIS REGARD IS GENERALLY AVAILABLE IN THE WEBSITE OF THE BANKS. WHAT DO YOU HAVE TO SAY? ANS. AS I HAVE ALREADY STATED ABOVE THAT I DON'T HAVE ANY ACCOUNT WITH HSB C BANK SO I DIDN'T BOTHER TO GO AHEAD FOR ANYTHING. Q21 ON YOUR STATEMENT RECORDED DURING THE SEARCH ON 21. 01.2012 YOU WERE REQUESTED TO FURNISH THE DETAILS OF YOUR CLIENTS OF SWITZERLAND INCLUDING THE NAME OF THE CLIENTS WHO YOU COULD GATHER THROUGH YOUR VISIT. IN YOUR RE PLY YOU HAVE STATED THAT THE DETAILS WILL BE GIVEN TO YOU IN DUE COURSE. HOWEVER , NO SUCH DETAILS HAS BEEN FURNISHED BY YOU AS ON DATE. WHAT DO YOU HAVE TO SA Y? I.T.A. NO.5395 & 5396/DEL/2017 10 ANS. I WILL CHECKOUT HO W IT HAS BEEN LEFT AND I CAN FURNISH THE DETAILS WI THIN A WEEK. Q.22 ON YOUR STATEMENT RECORDED DURING THE SEARCH ON 21. 01.2012 YOU WERE REQUESTED TO FURNISH THE DETAILS INCLUDING THE ADDRESS, EMAIL ID ETC OF MR. STAPFER WALTER. IN YOUR REPLY YOU HAVE STA TED THAT WHATEVER THE DETAILS I HAVE WILL BE GIVEN LATER. HOWEVER, NO SUCH DETAILS HAVE FILED TILL DATE. WHAT DO YOU H AVE TO SAY? ANS. I HAVE CHECKED AND I DON'T HAVE ANY DETAILS OF THE ABOVE PERSON. Q.23 ON YOUR STATEMENT RECORDED DURING THE SEARCH ON 21.01.2012 YOU WERE REQUESTED TO STATE WHETHER YOU WERE PRESENT IN SWITZERLAND ON 04 .02.2005 AND IF YES, FURNISH THE PURPOSE OF THE VISIT. IN YOUR REPLY YOU HAVE STATED THAT I DON'T REMEMBER BUT WILL TRY TO FIND OUT WILL FURNISH IF AVAILABLE. HOWEVER, NO S UCH DETAILS HAVE BEEN FURNISHED BY YOU AS ON DATE. WHAT DO YOU HAVE TO SAY? ANS. I HAVEN'T BEEN ABLE TO FIND OUT THE DETAILS AS IT P ERTAINS TO VERY LONG TIME. Q.24 ON YOUR STATEMENT RECORDED DURING THE SEARCH ON 21. 01.2012 YOU WERE REQUESTED TO STATE W HETHER YOU WERE PRESENT IN SWITZERLAND ON 27.05.200 5 AND HAVE YOU VISITED ANY BANK IN SWITZERLAND ON THIS DATE FOR WITHDRAWAL OF CASH. TO WHICH YOU HAVE REPLIED THAT DATE I DO NOT REMEMBER. I WILL TRY TO FIND AND GIVE DETAILS IF AVAILABLE. WITHDRAWAL OF MO NEY DOESN'T ARISE AS I DO NOT HAVE ANY BANK ACCOUNT THERE. HOWEVER, NO SUCH DETAILS HAVE BEEN FURNISHED BY YOU TILL DATE. WLWT DO YOU HAVE TO SAY? ANS. I HAVEN'T BEEN ABLE TO FIND OUT AS THE DATES ARE VE RY OLD. Q.25 ON YOUR STATEMENT RECORDED DURING THE SEARCH ON 21.1.2012 YOU WERE REQUESTED TO STATE WHETHER YOU WERE PRESENT IN SWITZERLAND ON 29 .07.2005 AND HAVE YOU VISITED ANY BANK IN SWITZERLAND ON THIS PARTICULAR DATE TO WHICH YOU HAVE REPLIED THAT DATE I DO NOT REMEMBER THE DATE AND WILL TRY TO FIND AND FURNISH DETAILS IF AVAILABLE. BANK VISIT DOESN'T ARISE AS I DO NOT HAVE ANY BANK ACCOU NT THERE. HOWEVER, NO SUCH DETAILS HAVE BEEN FILED TILL DATE. WHAT DO YOU HAVE TO SAY? ANS. I HAVEN'T BEEN ABLE TO FIND OUT AS THE DATES ARE VE RY OLD. I.T.A. NO.5395 & 5396/DEL/2017 11 Q.26 ON YOU R STATEMENT RECORDED DURING THE SEARCH ON 21.01.201 2 YOU WERE REQUESTED TO STATE WHETHER YOU WERE PRESENT IN SWITZERLAND ON 25 .04.2005 AND 04.05.2005 AND HAVE YOU VISITED ANY BANK IN SWITZERLAND ON THESE D ATES. TO WHICH YOU HAVE REPLIED THAT DATE I DO NOT REMEMBER THE DATES. I WILL TRY TO FIND OUT AND GIVE DETAILS IF AVAILABLE. VISITING ANY BANK DOESN'T ARISE AS I DO NOT HAVE ANY BANK ACCOUNT THERE. HOWEVER, NO SUCH DETAILS HAVE BEEN FILED TILL DATE. WHAT DO YOU HAVE TO SAY? ANS. I HAVEN'T BEEN ABLE TO FIN D OUT AS THE DATES ARE VERY OLD. Q.27 ON YOUR STATEMENT RECORDED DURING THE SEARCH ON 21. 01.2012 YOU HAVE STATED THAT MR. VIVEK CHADDHA, A SCHOOL FRIEND OF YOURS, AS PER THE HANK ACCOUNT DETAILS SHOWN TO YOU DURING THE SEARCH MR. VIVEK CHADDHA HAS BEEN SH OWN AS THE ACCOUNT HOLDER IN SHAGUN 21. YOU HAVE BEEN SHOWN AS THE BENEFICIARY/H AVING A RIGHT OF INSPECTION IN THIS ACCOUNT. AFTER COMING TO KNOW OF THIS HAVE YOU MADE ANY COMMUNICATION WITH MR. CHADDHA TO FIND OUT THE VERACITY OF THE BANK DE TAILS SHOWN TO YOU ? ANS. I HAVEN'T BEEN SHOIUN ANY ACCOUNT OF MR. VIVEK CHAD DHAR Q.28 ON YOUR STATEMENT RECORDED DURING THE SEARCH ON 21. 01.2012 YOU HAVE STATED THAT MR. BHAVNESH CHADDHA, IS A SCHOOL FRIEND OF YOURS. THE NAME OF MR. BHAVNESH CHADDHA IS APPEARING AS AN ATTORNEY IN SHAGUN 21, ONE OF THE ACCOUNTS IN WH ICH YOU ARE A BENEFICIARY/ HAVING A RIGHT OF INSPECTION. AF TER COMING TO KNOW OF THIS HAVE YOU MADE ANY COMMUNICATION WITH MR. BHAVNESH CHADDHA TO FIND OUT THE VERACITY OF THE BANK DETAILS SHOWN TO YOU? A NS. I WAS NOT SHOWN THE ACCOUNT OF SHAGUN 21. Q.29 ON YOUR STATEMENT RECORDED DURING THE SEARCH ON 21. 01.2012 YOU HAVE STATED THAT MRS. POONAM CHADDHA, IS WIFE OF MR. BHAVNESH CHADDH A. MR. BHAVNESH CHADDHA IS A SCHOOL FRIEND OF YOURS. THE NAME OF MRS. PO ONAM CHADDHA IS APPEARING AS AN ATTORNEY IN SHAGUN 21, ONE OF THE ACCOUNTS IN WHICH YOU ARE A BENEFICIARY/ HAVING A RIGHT OF INSPECTION. AFTER COMING TO KNOW OF THIS H AVE YOU MADE ANY COMMUNICATION WITH MRS. POONAM CHADDHA TO FIND OUT THE VERACITY O F THE B ANK DETAILS SHOWY TO YOU? ANS. I WAS NOT SHOWN THE ACCOUNT OF SHAGUN 21. Q.30 ALL THE DETAILS STATED ABOVE WERE SHOWN TO YOU DURI NG THE SEARCH AND YOUR STATEMENT HAS BEEN RECORDED ON THESE DETAILS ON 21.01.2012. N OW YOU ARE SAYING THAT NO SUCH DOCUMENT WAS SHOWN TO YOU. ARE YOU TRYING TO MISLEA D THE DEPARTMENT? I.T.A. NO.5395 & 5396/DEL/2017 12 ANS. NO I AM NOT TRYING TO MISLEAD THE DEPARTMENT BECAUS E I REMEMBER THAT I WAS NOT SHOWN THE DOCUMENTS OF SHAGUN 21. Q.31 HOW MANY TIMES HAVE YOU VISITED THE OFFICE OF DCIT, CENTRAL CIRCLE-2/2 6, NEW DELHI OTHER THAN TODAY? ANS. I HAVE VISITED ON 24.11.2014 AND TODAY. Q.32 WHO DID YOU MET ON 24.11.2014? ANS. I DIDN'T MEET ANYONE AS MR. G.P.SINGH, DCIT, CENTRA L CIRCLE- 2/26, NEW DELHI WAS ON LEAVE. Q.33 WHO TOLD YOU THAT MR. G.P.SINGH WAS ON LEAVE. ANS. ALL. DUJARI, MY COUNSEL HAS CHECKED AND TOLD ME. Q.34 DO YOU HAVE ANY IDEA FROM WHOM HE CHECKED? ANS. NO. I DONT HAVE ANY IDEA. Q.35 MR. G.P. SINGH, DC1T, CENTRAL CIRCLE-2/26, NEW DELH I WAS ON ELECTION DUTY AND IN HIS ABSENCE MR. SANJAY KUMAR, DCIT, CENTRAL CIRC LE-22/28, NEW DELHI WAS HOLDING THE CHARGE OF O/O THE CENTRAL CIRCLE-2/26, NEW DELHI. HE HAS STATED THAT NEITHER YOU NOR MR. M.L. DUJARI, YOUR COUNSEL APPEA RED BEFORE HIM ON 24.11.2014. ANS. WE WERE NOT INFORMED ABOUT THIS FACT. Q.36 AS PER LAW WHEN THE SUMMONS FOR PERSONAL APPEARANCE WERE ISSUED YOU WERE REQUIRED TO APPEAR IN THE OFFICE OF THE OFFICER IN- CHARGE OF CENTRAL CIRCLE-2/26, NEW DELHI. HAD YOU OR YOUR COUNSEL WOULD HAVE COME TO THE SAID OFFICE YOU WOULD HAVE COME TO KNOW THAT MR. SANJAY KUMAR IS SI TTING THERE AND THE OFFICE WAS FUNCTIONING NORMALLY. IN VIEW OF THE ABOVE, YOU R SUBMISSION FILED VIDE LETTER 25.11.2014 APPEARS TO BE INCORRECT AND THE FACT OF YOUR APPEARANCE ON 24.11.2014 IS NOT SUBSTANTIATED AT ALL. ARE YOU TRY ING TO INTENTIONALLY TAKE THE DEPARTMENT GRANTED AND OBSTRUCT THE PROCESS OF INVE STIGATION IN YOUR CASE. ANS. I AM NOT TRYING TO OBSTRUCT THE INVESTIGATION AS I HAVE APPEARED TODAY IN COMPLIANCE TO THE SUMMONS AND FOR THAT DATE MY COUN SEL ADVISED ME AS INFORMED ABOVE. Q.37 DO YOU WANT TO SAY ANYTHING ELSE? ANS. NO. I.T.A. NO.5395 & 5396/DEL/2017 13 5. FROM THE PERUSAL OF THE AFORESAID QUESTION AND ANSWER, IT IS CLEARLY EVIDENT THAT, FIRSTLY , NO DOCUMENTS OR ANY INCRIMINATING MATERIAL RELATING TO HSBC ACCOUNTS IN SWITZERLAND WAS FOUND FROM THE POSSESSION AND PREMI SES OF THE ASSESSEE; SECONDLY , IN THE STATEMENT ON OATH RECORDED U/S.132(4) AND ALSO RECORDED DURING THE COURSE OF A SSESSMENT PROCEEDINGS, NOWHERE THE ASSESSEE HAS ADMITTED OF H AVING SUCH BANK ACCOUNTS OR BEING ANY BENEFICIAL OWNER IN THE SAID BANK ACCOUNTS, ALBEIT HE HAS DENIED IN ALL THE QUESTIONS PUT FORTH BY THE INVESTIGATION AUTHORITIES AND THE ASSE SSING OFFICER; AND LASTLY , THE ENTIRE INFORMATION AND MATERIAL WAS IN POSSESSION OF THE DEPARTMENT PRIOR TO THE DATE OF S EARCH. A VERY IMPORTANT FACT NOTED BY THE ASSESSING OFFICER THAT WITH A VIEW TO GET FURTHER DETAILS RELATING TO FOREIGN BAN K ACCOUNT, REFERENCE HAS BEEN SENT TO COMPETENT AUTHORITIES IN SWITZERLAND AND OTHER AUTHORITIES THROUGH FT & TR, DIVISION OF CBDT FOR GETTING THE DETAILS OF THE ACCOUNT AND OTHER DETAILS WHICH ARE YET TO BE RECEIVED. THIS IS EVIDE NT FROM PARAGRAPH 9 OF THE ASSESSMENT ORDER. ALL THESE INFORMATION/DOCUMENTS RECEIVED THROUGH FT&TR, DIVIS ION OF CBDT WERE CONFRONTED TO THE ASSESSEE FIRSTLY DURING THE COURSE OF SEARCH AND AGAIN DURING THE COURSE OF ASS ESSMENT PROCEEDINGS AND ON BOTH THE OCCASIONS ASSESSEE HAS DENIED THE ENTIRE DETAILS OR HAVING ANY KIND OF LINK WITH HSBC ACCOUNT. AFTER DETAILED DISCUSSION, AO HELD THAT TH E AMOUNT AS REFLECTED IN THESE BANK ACCOUNTS AGGREGATING TO RS.27,91,72,017/- IS TO BE TAXED U/S.69. APART FROM THAT HE I.T.A. NO.5395 & 5396/DEL/2017 14 ALSO HELD THAT AMOUNT OF RS.4,88,816/- IS THE INTER EST WHICH HAS BEEN CALCULATED ON SAID DEPOSITS AND THE SAME T OO HAS BEEN ADDED BY HIM U/S.69. 6. BEFORE THE LD. CIT (A), THE ASSESSEE HAD C HALLENGED THE SAME VERY LEGAL ISSUE, THAT NO INCRIMINATING MATERI AL HAS BEEN FOUND DURING THE COURSE OF SEARCH, AND THEREFORE, N O ADDITION COULD HAVE BEEN MADE IN THE ASSESSMENT MADE U/S.153 A, AS THE EARLIER ASSESSMENT HAD ATTAINED FINALITY WHICH REMAINED UNABATED. BEFORE THE LD. CIT (A), RELIANCE WAS PLAC ED UPON THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA (SUPRA). HOWEVER, LD. CIT (A) REJECTED THE ASSESSEES GROUND IN THIS SCORE, AFTER HOLDING AS UNDER:- 9.1 I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES O F THE CASE, SUBMISSIONS/REJOINDER OF THE APPELLANT INTER-ALIA T HE CASE LAWS RELIED UPON BY HIM AND PERUSED THE ASSESSMENT ORDER /REMAND REPORTS OF THE AO. I FIND THAT AN INFORMATION WAS R ECEIVED FROM THE FRENCH GOVERNMENT UNDER DTAA/DTAC BETWEEN INDIA 'AN D OTHER COUNTRIES THAT THE APPELLANT WAS HAVING FOUR BANK A CCOUNTS IN/HSRC BANK GENEVA, SWITZERLAND DETAILS OF THE SAM E ARE MENTIONED BY THE AO IN THE ASSESSMENT ORDER IN DETA IL. 9.2 ON THE BASIS OF INFORMATION RECEIVED A SEARCH ACTIO N WAS CARRIED OUT ON 20.01.2012 AT THE PREMISES OF TH E APPELLANT. IT IS A SETTLED LAW THAT ANY EVIDENCE AV AILABLE HOWSOEVER COLLECTED OR RECEIPT IS A VALID MATERIAL/ EVIDENCE SO LONG AS IT IS RELEVANT INFORMATION RELATED TO THE P ERSON AGAINST WHOM IT IS UTILIZED AS HAS BEEN HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF POORAN MAL ETC. VS. DI RECTOR OF INSPECTION (1974) 93 ITR 505 WHEREIN, IT HAS BEEN H ELD THAT EVEN IF THE SEARCH WAS ILLEGAL THE MATERIAL FOUND A ND SEIZED WOULD BE LIABLE TO BE USED AGAINST THE PERSON FROM WHOSE CUSTODY IT WAS SEIZED. 9.3 I FIND THAT THE STATEMENT HAS BEEN RECORDED ON THE BASIS OF GOOD AND COGENT MATERIAL CONSIDERING THE SPECIFIC I NFORMATION I.T.A. NO.5395 & 5396/DEL/2017 15 CONTAINED IN THE CORROBORATIVE BANK STATEMENTS. I H OLD THAT THE STATEMENT U/S 132(4) OF THE ACT RECORDED ON 20.01.2 012 DO CONSTITUTE INCRIMINATING MATERIAL WITHIN THE MEANIN G OR SECTION 153A OF THE ACT. IT IS SETTLED LAW THAT THE STATEME NT U/S 132(4) IS DEEMED TO BE EVIDENCE UNDER THE ACT. SINCE, THE STA TEMENT U/S 132(4) HAS BEEN CORROBORATED BY OTHER RELEVANT AND SUFFICIENT CORROBORATIVE EVIDENCE, I.E, THE DOCUMENTS RELATED TO FOREIGN BANK ACCOUNTS RECEIVED UNDER EXCHANGE OF INFORMATION, IT MAY BE VALIDLY UTILIZED AS 'INCRIMINATING MATERIAL'. THEREFORE, CO NSIDERING THAT THE ASSESSMENT HAS BEEN MADE NOT MERELY ON BASIS OF THE STATEMENT BUT BASED ON THE INFORMATION AND CONTENTS OF THE IM PUGNED FOREIGN BANK STATEMENT/DOCUMENTS. THEREFORE, I HOLD THAT TH E ASSESSMENT MADE U/S 153A OF THE ACT IS NOT IN CONFLICT WITH TH E JUDGMENTS OF THE HON'BLE COURTS RELIED UPON BY THE APPELLANT INC LUDING THAT OF KABUL CHAWLA AND OTHERS. SO FAR AS DECISION OF ITAT RELIED UPON BY THE APPELLANT IN THE CASE OF SHYAM SUNDER JINDAL IS CONCERNED, THE HON'BLE ITAT HAS SET ASIDE THE ISSUE TO THE FIL E OF THE AO TO BE ADJUDICATED AFRESH AFTER PROVIDING A REASONAB LE OPPORTUNITY OF BEING HEARD AND BY CONFRONTING THE A SSESSEE WITH THE DOCUMENTS WHICH RELATES TO HIM . FURTHER, WHETHER AN AUTHENTIC DOCUMENT CONFRONTED TO THE ASSESSEE OR NO T BUT IN THE PRESENT CASE EVEN DURING THE APPELLATE PROCEEDINGS REMAND REPORTS WERE CALLED FOR FROM THE AO ON VARIOUS ISSUES RAISE D BY THE APPELLANT AND ON THE REMAND REPORTS THE APPELLANT W AS GIVEN PROPER OPPORTUNITY TO FILE REJOINDERS. FURTHER, THE APPELLANT WAS CONFRONTED WITH THE AUTHENTIC DOCUMENT, I.E. THE IN FORMATION RECEIVED FROM THE FRENCH AUTHORITIES WITH REGARD TO THE BANK ACCOUNTS OF THE APPELLANT IN HSBC GENEVA UNDER THE DTAA/DTAC BETWEEN INDIA AND OTHER COUNTRIES, RELIANCE IS PLAC ED ON JUDGEMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF SMT. DAYA WANTI VS CIT ALSO WHICH SUPPORTS THE FACTS OF THE PRESENT CASE. IN VIEW OF THE ABOVE DISCUSSION, APPEAL ON THESE GROUNDS ARC DISMI SSED. [EMPHASIS A DDED IS OURS] 7. FROM THE ABOVE FINDING OF LD. CIT(A), FOLLO WING CONCLUSIONS ARE QUITE PALPABLE:- FIRSTLY , THE INFORMATION WAS RECEIVED FROM THE FRENCH GOVERNMENT UNDER DTAA BETWEEN INDIA AND OTHER I.T.A. NO.5395 & 5396/DEL/2017 16 COUNTRIES, WHEREIN IT WAS FOUND THAT ASSESSEE WAS HAVING FOUR BANK ACCOUNTS IN HSBC BANK, GENEVA, SWITZERLAND. SECONDLY , IT WAS ON THE BASIS OF THE SAID INFORMATION RECEIVED, A SEARCH WAS CARRIED OUT ON 20.01.2012. THIRDLY , HE HAS HELD THAT EVEN IF THE MATERIAL IS NOT FOUND FROM THE SEARCH PROCEEDINGS, THEN ALSO IT IS A SETTLED LAW THAT ANY EVIDENCE AVAILABLE IN WHATSOEV ER MANNER IS A VALID MATERIAL SO LONG AS IT RELEVANT INFORMATION RELATING TO THE PERSON AGAINST WHOM IT IS UTILIZED. FOURTHLY, THE STATEMENT RECORDED AT THE TIME OF SEARCH ITSELF CONSTITUTE INCRIMINATING MATERIAL WITHIN THE MEANING OF SECTION 153A, AND THEREFORE, ASSESSMENT MADE U/S.153A IS NOT IN CONFLICT WITH THE JUDGMENT O F HON'BLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWL A (SUPRA); AND LASTLY , HE HELD THAT DECISION OF THE ITAT DELHI BENCH IN THE CASE OF SHYAM SUNDER JINDAL IN ITA NO.5448/DEL/2016, WHEREIN THE MATTER WAS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER WOULD NOT BE APPL ICABLE, BECAUSE IN THE PRESENT CASE REMAND REPORTS WERE CAL LED FOR ON VARIOUS ISSUES AND PROPER OPPORTUNITY HAS BE EN GIVEN TO THE ASSESSEE TO FILE REJOINDER AND ASSESSE E HAS BEEN CONFRONTED WITH THE AUTHENTIC DOCUMENT, I.E., THE I.T.A. NO.5395 & 5396/DEL/2017 17 INFORMATION RECEIVED FROM THE FRENCH AUTHORITIES WI TH REGARD TO THE BANK ACCOUNTS IN HSBC GENEVA. HE ALSO REFERRED TO THE JUDGMENT OF HON'BLE DELHI HIGH COUR T IN THE CASE OF SMT. DAYAVANTI VS. CIT. 8. BEFORE US, LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT FROM THE PERUSAL OF THE ENTIRE MATERIAL PLACED ON R ECORD AND THE ORDER OF THE ASSESSING OFFICER AS WELL AS LD. C IT (A), IT CAN BE SEEN THAT THE INFORMATION AS RECEIVED IS UNDER D TAA BY THE FOREIGN AUTHORITY WAS MADE AVAILABLE TO THE DEPARTM ENT ON 28.06.2011, I.E., PRIOR TO THE DATE OF SEARCH. THIS FACT, HE SUBMITTED IS ALSO BORNE OUT FROM THE DOCUMENTS SUBM ITTED BY THE LEARNED DEPARTMENT REPRESENTATIVE WHICH IS A LE TTER GIVEN BY THE ASSESSING OFFICER. BASED ON THIS INFORMATION , THE INVESTIGATION WING CARRIED OUT THE SEARCH OPERATION ON THE PREMISES OF THE ASSESSEE ON 20.01.2012 AND DURING T HE COURSE OF SEARCH NO DOCUMENT OR ANY SINGLE MATERIAL WAS FOUND EITHER RELATING TO OPENING OF FOREIGN BANK AC COUNT OR TO LINK ASSESSEE WITH ANY OF THE BANK ACCOUNT OR TO IN FER THAT ASSESSEE WAS ANY KIND OF BENEFICIAL OWNER IN THE BA NK ACCOUNT OF THE VARIOUS ENTITIES. EVEN DURING THE CO URSE OF STATEMENT ON OATH RECORDED U/S. 132(4), THE ASSESSE E HAD DENIED HAVING ANY SUCH BANK ACCOUNTS AND ALSO ANY K IND OF A LINK WITH THESE ENTITIES. ONCE NEITHER ANY MATERIAL HAS BEEN FOUND DURING THE COURSE OF SEARCH NOR THERE IS ANY ADMISSION BY THE ASSESSEE IN THE STATEMENT RECORDED ON OATH, THEN IT CANNOT BE HELD THAT ANY KIND OF INCRIMINATING MATER IAL OR EVIDENCE HAS BEEN FOUND DURING THE COURSE OF SEARCH AND IF I.T.A. NO.5395 & 5396/DEL/2017 18 THAT IS SO, THEN NO ADDITION COULD HAVE BEEN MADE I N THE ASSESSMENT PASSED U/S.153A IN VIEW OF THE SETTLED J UDICIAL PRINCIPLE LAID DOWN BY THE HON'BLE JURISDICTIONAL H IGH COURT IN VARIOUS OTHER HIGH COURTS. IN SUPPORT, HE HAS RE LIED UPON THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CAS E OF PCIT VS. KURELE PAPER MILLS PVT. LTD., (2016) 380 ITR 05 71 (DEL) AND REITERATED THE JUDGMENT OF HON'BLE JURISDICTION AL HIGH COURT IN THE CASE OF KABUL CHAWLA (SUPRA) AND PCIT VS. MEETA GUTGUTIA (SUPRA). HE ALSO PLACED STRONG RELIANCE UPON THE RECENT JUDGMENT OF HON'BLE DELHI HIGH COURT IN T HE CASE OF PCIT VS. BEST INFRASTRUCTURE (INDIA) PVT. LTD ., WHEREIN THE HON'BLE HIGH COURT HAS HELD THAT STATEMENT RECO RDED U/S. 132(4) BY THEMSELVES DOES NOT CONSTITUTE INCRIMINAT ING MATERIAL, AND THEREFORE, THE OBSERVATION MADE BY TH E LD. CIT (A) IS AGAIN CONTRARY TO THE JUDGMENT OF HON'BLE DE LHI HIGH COURT. THUS, HE SUBMITTED THAT ON THIS LEGAL PROPOS ITION ONLY THE ADDITION MADE BY THE ASSESSING OFFICER CANNOT B E SUSTAINED AND DESERVES TO BE QUASHED BEING BEYOND T HE SCOPE OF ASSESSMENT U/S.153A FOR THE IMPUGNED ASSESSMENT YEAR. 9. ON THE OTHER HAND, LD. CIT-DR, SUBMITTED T HAT, HERE IN THIS CASE INFORMATION HAS BEEN RECEIVED FROM THE FO REIGN AUTHORITIES UNDER DTAA AND THOSE INFORMATION CATEGO RICALLY GOES TO SHOW THAT ASSESSEE WAS NOT ONLY BENEFICIAL OWNER OF THE BANK ACCOUNTS OF HSBC, SWITZERLAND BUT HIS NAME ALSO APPEARS ON THOSE DOCUMENTS SOUGHT FROM FOREIGN AUTH ORITIES UNDER DTAA. THE ENTIRE DATA EXTRACTED FROM USB PEN DRIVE, WAS HANDED OVER BY FRENCH COMPETENT AUTHORITY ON I.T.A. NO.5395 & 5396/DEL/2017 19 28.06.2011 TO THE GOVERNMENT OF INDIA WHICH AGAIN H AS BEEN HANDED OVER TO RESPECTIVE DGIT (INV.). IT WAS ON TH E BASIS OF THESE INFORMATION, INVESTIGATION WING OF THE DEPART MENT HAS CARRIED OUT SEARCH IN THE CASE OF THE ASSESSEE AND ITS GROUP CASES. DURING THE COURSE OF SEARCH, ASSESSEE THOUGH HAVE DENIED ANY SUCH FOREIGN BANK ACCOUNT, BUT ONCE THE ASSESSEE WAS SO SURE THAT HE IS NOT THE BENEFICIARY OR THE O WNER OF THESE BANK ACCOUNTS, THEN ASSESSEE SHOULD HAVE SIGN ED THE WAIVER CONSENT LETTER FOR FURTHER INVESTIGATION I N RESPECT OF BANK ACCOUNT HELD IN HSBC BANK. THIS ITSELF GOES TO SHOW THAT ASSESSEE WILLFULLY TRIED NOT TO CO-OPERATE WIT H THE DEPARTMENT AND THAT IS THE REASON WHY FURTHER INFOR MATION HAS BEEN REQUESTED FROM THE SWISS AND FRENCH AUTHOR ITIES SEEKING SPECIFIC INFORMATION, SOME OF WHICH HAS ALR EADY BEEN RECEIVED NOW. ASSESSEES PROFILE HAS FOUND TO BE LI NKED WITH THE FOUR ENTITIES WHICH FACT IS FULLY BORNE OUT FRO M SUCH INFORMATION. IN THE WAKE OF SUCH DEFINITE INFORMATI ON AND LOOKING TO THE FACT THAT THE SEARCH AND SEIZURE HAS BEEN CARRIED OUT IN THE CASE OF THE ASSESSEE, THEN ASSES SING OFFICER HAD NO OPTION BUT TO UTILIZE SUCH VITAL PIECE OF EV IDENCE WHILE FRAMING THE ASSESSMENT U/S.153A ENSUED AFTER SEARCH . WHAT IS RELEVANT TO BE SEEN IS, WHETHER AT THE TIME OF S EARCH THERE WAS ANY INFORMATION OR EVIDENCE WHICH PER SE IS INCRIMINATING OR NOT AND NOT THAT SUCH MATERIAL HAS BEEN FOUND DU RING THE COURSE OF SEARCH. HERE IN THIS CASE, THE MATERIAL W AS AVAILABLE WITH THE DEPARTMENT AND TO UNEARTH OTHER RELEVANT INFORMATION, A SEARCH AND SEIZURE ACTION WAS CARRIE D OUT, I.T.A. NO.5395 & 5396/DEL/2017 20 THEREFORE, SUCH AN INFORMATION IS A VITAL PIECE AN EVIDENCE WHICH CAN BE USED IN A SEARCH PROCEEDINGS EVEN IN A N UNABATED EVIDENCE. SHE ALSO RELIED UPON THE JUDGMEN T OF ANIL KUMAR BHATIA, THAT ONCE THE SEARCH HAS TAKEN PLACE, THEN AO HAS NO OPTION BUT TO MAKE ASSESSMENT EVEN THOUGH NO MATERIAL HAS BEEN FOUND DURING SEARCH. THUS, SHE ST RONGLY RELIED UPON THE ORDER OF THE LD. CIT(A). 10. ALTERNATIVELY, LD. CIT DR SUBMITTED THAT, PRECISELY SIMILAR ISSUE HAD COME UP FOR CONSIDERATION BEFORE THIS TRIBUNAL IN THE CASE OF SHYAM SUNDER JINDAL VS. ACIT (2017) 81 TAXMANN.COM 123 (DEL. TRIBUNAL), WHEREIN THIS TRIBUNAL HAS SET ASIDE THE MATTER TO THE FILE OF TH E ASSESSING OFFICER TO BE ADJUDICATED AFRESH, THEREFORE FOLLOWIN G THE SAME, THIS APPEAL SHOULD ALSO BE REMANDED BACK TO THE FIL E OF THE ASSESSING OFFICER. 11. IN REJOINDER, LEARNED COUNSEL SUBMITTED THAT THE DECISION IN THE CASE OF SHYAM SUNDER JINDAL WAS REL IED UPON BY THE ASSESSEE BEFORE THE LD. CIT (A) AND LD. CIT( A) HAS HELD THAT HERE IN THIS CASE ASSESSEE WAS GIVEN FULL OPPO RTUNITY AND ASSESSING OFFICER HAS GIVEN REMAND REPORT FOR EACH AND EVERY ISSUES. FURTHER THERE IS NO CONTRADICTORY OBSERVATI ON IN THE ASSESSMENT ORDER AS WAS THERE IN THE CASE OF SHYAM SUNDER JINDAL. MOREOVER HERE IN THE CASE, THE ASSESSEE HAS RAISED PRIMARILY THE LEGAL ISSUE THAT THE ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT (A) IS BEYOND I.T.A. NO.5395 & 5396/DEL/2017 21 THE SCOPE OF ASSESSMENT U/S.153A. HENCE THE MATTER SHOULD NOT BE RESTORED BACK TO THE FILE OF THE ASSESSING O FFICER. 12. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE RELEVANT MATERIAL PLACED ON RECORD AND THE FINDING GIVEN IN THE IMPUGNED ORDER WITH RESPECT TO LEGAL ISSUE RAIS ED VIDE GROUND NO.5 BY THE ASSESSEE THAT THE ADDITIONS MADE IN THIS YEAR ARE BEYOND THE SCOPE OF ASSESSMENT U/S.153A, A S NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH FOR THE IMPUGNED ASSESSMENT YEAR; AND THE ASSESSMEN T HAD ATTAINED FINALITY AND WAS NOT ABATED IN TERMS OF 2 ND PROVISO TO SECTION 153A. AS STATED ABOVE, THE ORIGINAL RETURN OF INCOME WAS FILED IN JULY, 2006 AND SAID RETURN WAS DULY AC CEPTED AND PROCESSED U/S. 143(1) VIDE INTIMATION DATED 25.05.2 007. SINCE NO NOTICE U/S. 143(2) WAS ISSUED THEREAFTER O R ANY OTHER PROCEEDINGS HAVE BEEN COMMENCED TO DISTURB SAID RET URN OF INCOME, ACCORDINGLY, IT HAD ATTAINED FINALITY MUCH PRIOR TO THE DATE OF SEARCH WHICH WAS ON 20.01.2012. HENCE IN TE RMS OF 2 ND PROVISO TO SECTION 153A THE ASSESSMENT FOR THE ASSESSMENT YEAR 2006-07 WAS NOT PENDING AND ACCORDI NGLY, HAS TO BE RECKONED AS UNABATED ASSESSMENT. UNDER TH E JURISDICTION OF HON'BLE DELHI HIGH COURT, THE LAW IS WELL SETTLED THAT IN CASE OF UNABATED ASSESSMENT, THE ADDITIONS WHICH CAN BE ROPED-IN, IN THE ASSESSMENTS FRAMED U/S.153A, WO ULD ONLY BE WITH REGARD TO ANY INCRIMINATING MATERIAL OR EVI DENCE UNEARTHED OR FOUND DURING THE COURSE OF SEARCH. IF NO INCRIMINATING MATERIAL HAS BEEN FOUND DURING THE CO URSE OF SEARCH, THEN NO ADDITION CAN BE MADE IN THE ASSESSM ENT I.T.A. NO.5395 & 5396/DEL/2017 22 YEARS WHERE ASSESSMENTS HAD ATTAINED FINALITY. THE RELEVANT OBSERVATIONS AND THE RATIO LAID DOWN WOULD BE DISCU SSED IN THE LATER PART OF THIS ORDER. 13. NOW KEEPING IN VIEW THE BINDING JUDICIAL PR ECEDENTS OF THE JURISDICTIONAL HIGH COURT, WE SHALL PROCEED TO EXAMINE THE FACTS AS ARE AVAILABLE ON RECORD. THE INCOME TA X DEPARTMENT THROUGH ITS FT & TR DIVISION OF CBDT HAD RECEIVED INFORMATION PERTAINING TO FOREIGN BANK ACC OUNTS EITHER HELD BY CERTAIN INDIANS OR WERE BENEFICIARIE S IN THESE BANK ACCOUNTS UNDER THE EXCHANGE OF INFORMATION BET WEEN INDIA AND FRANCE. THE FRENCH AUTHORITIES ON 28.06.2 011 GAVE INFORMATION IN USB THAT CERTAIN PERSONS IN INDIA HE LD BANK ACCOUNTS IN HSBC PVT. BANK (SUISSE), SWITZERLAND. I N THE SAID INFORMATION, THE NAME OF THE ASSESSEE HAD ALSO FIGURED AND 11 PAGES DOCUMENT PERTAINING TO THE ASSESSEE WA S ALSO RECEIVED. THE CONTENTS OF THE DOCUMENTS HAVE BEEN REPRODUCED IN THE ASSESSMENT ORDER. THESE DOCUMENTS REVEALED THAT IN THE BANK ACCOUNTS OF CERTAIN ENTIT IES, THE ASSESSEE WAS EITHER BENEFICIAL OWNER IN THE ACCOUNT OR HAD BEEN SHOWN AS THE PERSON HAVING RIGHT OF INSPECTION OR AS ACCOUNT HOLDER. THE NAME OF THE ENTITIES WHICH HELD THE BANK ACCOUNTS HAVE ALREADY BEEN DISCUSSED ABOVE. THE TOT AL SUMS STANDING IN THE BANK ACCOUNTS FOR THE RELEVANT FINA NCIAL YEAR, AGGREGATED TO RS.27.92 CRORE IN TERMS OF INR. THE D ETAILS OF AMOUNT APPEARING IN THE ACCOUNT OF VARIOUS ENTITIES HAVE ALREADY BEEN INCORPORATED ABOVE. AFTER RECEIVING TH E SAID INFORMATION, THE INVESTIGATION WING OF THE DEPARTME NT CARRIED I.T.A. NO.5395 & 5396/DEL/2017 23 OUT SEARCH AND SEIZURE ACTION IN THE CASE OF THE AS SESSEE AND GROUP CASES ON 20.01.2012, TO FIND OUT THE ASSESSEE S LINK WITH THESE BANK ACCOUNTS AND TO GET SOME CORROBORAT IVE MATERIAL OR DOCUMENTS. DURING THE COURSE OF SEARCH AND SEIZURE ACTION, AS CULLED OUT FROM THE IMPUGNED ORD ERS AS WELL AS THE MATERIAL PLACED ON RECORD, IT IS AN ADMITTED FACT THAT NO DOCUMENTS OR ANY INCRIMINATING MATERIAL WHATSOEVER WAS FOUND OR SEIZED DURING THE COURSE OF SEARCH AND SEI ZURE ACTION SO AS TO REMOTELY SUGGEST THAT EITHER THE ASSESSEE WAS HAVING ANY BANK ACCOUNT IN SWITZERLAND WITH HSBC OR ASSESS EE WAS ANY WAY LINKED TO THESE BANK ACCOUNTS. IN THE STATE MENT RECORDED U/S. 132(4) THE ASSESSEE HAD CATEGORICALLY DENIED HAVING SUCH BANK ACCOUNTS OR HAVING ANY LINK WITH T HE BANK ACCOUNTS OF SUCH ENTITIES. NO MATERIAL OR EVIDENCE WAS FOUND TO REBUT THE DENIAL STATEMENT OF THE ASSESSEE. APAR T FROM THAT, EVEN DURING THE COURSE OF THE ASSESSMENT PROCEEDING S WHEN STATEMENT WAS RECORDED BY THE AO, ASSESSEE CONTINUE D TO DENY SUCH KIND OF TRANSACTION AND EVEN AT THE STAGE OF THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER DID NO T CONFRONT WITH ANY MATERIAL WHICH CAN BE SAID TO HAV E BEEN RECOVERED FROM THE POSSESSION OF THE ASSESSEE IN TH E COURSE OF SEARCH WITH REGARD TO THE DEPOSITS OR ANY KIND OF L INK IN THE FOREIGN BANK ACCOUNTS. THE LD. CIT (A) IN THE IMPUG NED ORDER ALSO (WHICH HAS BEEN INCORPORATED ABOVE) HAS NOT HE LD THAT ANY DOCUMENT OR EVIDENCE QUA ANY LINK WITH THE FOREIGN BANK ACCOUNTS HAS FOUND DURING THE COURSE OF SEARCH, ALBEIT HE HAS GIVEN A FINDING THAT TO THE EFFECT THAT IT WAS ON T HE BASIS OF THE I.T.A. NO.5395 & 5396/DEL/2017 24 INFORMATION RECEIVED WHICH WAS PRECURSOR TO CARRY O UT SEARCH AND SEIZURE ACTION AT THE PREMISES OF THE ASSESSEE AND SUCH AN INFORMATION/MATERIAL EVEN THOUGH NOT FOUND IN TH E COURSE OF SEARCH CAN BE UTILIZED FOR THE PURPOSE OF ASSESS MENT. FOR WHICH REFERENCE WAS TO MADE JUDGMENT OF HON'BLE SUP REME COURT IN THE CASE OF POORANMAL VS. DIT, (1974) 93 I TR 505 (SC). IN THE SAID JUDGMENT, HONBLE SUPREME COURT HE LD THAT IF ANY EVIDENCE OR MATERIAL WHICH HAS BEEN FOUND DU RING THE COURSE OF SEARCH CAN STILL BE USED/UTILISED, EVEN I F SEARCH HAS BEEN HELD TO BE INVALID. NOWHERE HAS IT BEEN LAID D OWN BY THE HONBLE SUPREME COURT THAT ANY MATERIAL OR INFORMAT ION GATHERED PRIOR TO THE SEARCH HAS TO BE RECKONED OR IS DEEMED TO BE FOUND DURING THE COURSE OF SEARCH. IT WAS NEV ER A CASE OF THE DEPARTMENT EITHER BEFORE US OR BEFORE THE FIRST APPELLATE STAGE THAT IN THE POST SEARCH ANYTHING HAS BEEN FOU ND, EXCEPT THAT THE INFORMATION WHICH THOUGH WAS INCRIMINATING AGAINST THE ASSESSEE WAS ALREADY IN THE POSSESSION OF THE D EPARTMENT. LD. CIT (A) THOUGH HAS TRIED TO ROPE IN THE ELEMENT OF INCRIMINATING MATERIAL/EVIDENCE FOUND DURING THE CO URSE OF SEARCH BY HOLDING THAT STATEMENT U/S. 132(4) IT CON STITUTES INCRIMINATING MATERIAL WITHIN THE MEANING AND SCOPE OF SECTION 153A. HOWEVER, SUCH AN OBSERVATION AND THE FINDING IS DE HORS THE FACT AS ADMITTEDLY IN THE STATEMENT RECORDED O N OATH U/S 132(4) AT THE TIME OF SEARCH, ASSESSEE HAS CATEGORICALLY DENIED HAVING SUCH TRANSACTION OR ANY KIND OF LINK WITH THE FOREIGN BANK ACCOUNTS. THUS, THE OBSE RVATION OF THE LD. CIT (A) TO THIS EXTENT IS ERRONEOUS ON FACT S AND HENCE I.T.A. NO.5395 & 5396/DEL/2017 25 CANNOT BE UPHELD. IN THE LETTER FILED BY THE LD. CI T-DR WRITTEN BY THE ASSESSING OFFICER BEFORE US, IT IS CLEARLY E STABLISHED THAT THE INFORMATION WAS RECEIVED BY THE FRENCH AUT HORITY ON 28.06.2011 AND BASED ON THIS INFORMATION THE INVEST IGATION WING HAD CARRIED OUT SEARCH IN THE CASE OF THE ASSE SSEE. THIS FACT ITSELF IS A TESTAMENT THAT THE MATERIAL INFORM ATION WHICH HAS BEEN REFERRED TO IN THE ASSESSMENT ORDER WAS PR IOR TO THE DATE OF SEARCH AND NOT FOUND IN THE COURSE OF SEARC H OR EVEN IN THE POST SEARCH EVENTS. 14. THE INFORMATION WHICH HAS BEEN RECEIVED FRO M THE FOREIGN AUTHORITIES WHEREIN THE NAME OF THE ASSESSE E IS APPEARING AT THE OUTSET APPEARS TO BE INCRIMINATING WHICH WARRANTS NOT ONLY INQUIRY BUT ALSO CAN LEAD TO PRIMA FACIE BELIEF THAT ASSESSEE MAY BE SOMEHOW LINK TO THESE B ANK ACCOUNTS. HOWEVER WHATEVER MAY BE THE INCRIMINATING INFORMATION WHICH CAN IMPLICATE ASSESSEE BUT THE SA ID INFORMATION HAS BEEN RECEIVED AS A RESULT OF SEARCH CARRIED OUT ON 20.01.2012. ONCE ANY DOCUMENT WHICH THOUGH I S IN THE NATURE OF INCRIMINATING MATERIAL BUT IF IT HAS NOT BEEN FOUND IN THE COURSE OF SEARCH, THEN IN VIEW OF THE PRINCIPLE LAID DOWN BY THE HON'BLE JURISDICTIONAL HIGH COURT IN SEVERAL CASES, SUCH AN ADDITION CANNOT BE ROPED IN THE ASSE SSMENT U/S.153A ESPECIALLY IN THE ASSESSMENTS WHICH ARE NO T ABATED. IF THE REVENUE HAD ANY INCRIMINATING MATERIAL ANTEC EDENT TO THE SEARCH, THAT IS, IT WAS FOUND DURING THE COURSE OF SEARCH OR AS A RESULT OF SEARCH, THEN IN THAT CASE REVENUE HAD VARIOUS OTHER COURSES OF ACTION LEFT UNDER THE PROV ISIONS OF I.T.A. NO.5395 & 5396/DEL/2017 26 INCOME TAX ACT, BUT CERTAINLY NOT WITHIN THE AMBIT AND SCOPE OF SECTION 153A READ WITH 2 ND PROVISO THERETO. 15. NOW COMING TO THE RATIOS LAID DOWN BY THE HO NBLE JURISDICTIONAL HIGH COURT, FIRST OF ALL, IN THE CAS E OF KABUL CHAWALA (SUPRA), THE HON'BLE COURT AFTER DISCUSSING THE ISSUE THREADBARE AND ANALYSING THE VARIOUS JUDGMENTS OF D IFFERENT HIGH COURTS LAID DOWN THE FOLLOWING LEGAL PROPOSITI ON IN TERMS OF SCOPE OF ADDITION WHICH CAN BE MADE U/S. 153A(1) WHICH ARE AS UNDER:- 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 THE AFOREMENTIONED DECISIONS, THE LEGAL 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 MAND ATORILY ISSUED TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR REL EVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE D ATE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH A YS WILL HAVE TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT A Y IN WHICH THE SEARCH TAKES PLACE. THE AO HAS THE POWER TO ASS ESS AND REASSESS THE 'TOTAL INCOME' OF THE AFOREMENTIONED S IX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEAR S. IN OTHER WORDS THERE WILL BE ONLY ONE ASSESSMENT ORDER IN RE SPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE DISCLOSED AN D THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX'. I.T.A. NO.5395 & 5396/DEL/2017 27 IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDIT IONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FO UND IN THE COURSE OF THE SEARCH, OR OTHER POST-SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELA TED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMEN T 'CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WI TH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATE RIAL.' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE C OMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSM ENT OR REASSESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECT ION 153 A IS RELATABLE TO ABATED PROCEEDINGS (I.E. THOSE PE NDING ON THE DATE OF SEARCH) AND THE WORD 'REASSESS' TO COMPLETE D ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND TH E ASSESSMENT UNDER 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 ANY OTHER MATERIA L 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 BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UND ISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEAR CH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. THIS JUDGMENT OF THE HON'BLE DELHI HIGH COURT HAS BEE N FOLLOWED IN SEVERAL JUDGMENTS NOT ONLY BY THE HON'BLE DELHI HIG H COURT BUT ALSO BY OTHER HON'BLE HIGH COURT LIKE, PR. CIT VS. SOMAYA CONSTRUCTION PVT. LTD. 387 ITR 529 (GUJ), CIT VS. I BC KNOWLEDGE PARK PVT. LTD. 385 ITR 346 (KAR) AND CIT VS. GURINDER SINGH BAWA REPORTED IN 386 ITR 483. IN THE LATEST I.T.A. NO.5395 & 5396/DEL/2017 28 JUDGMENT THE HON'BLE DELHI HIGH COURT IN PR. CIT VS. MEETA GUTGUTIA, THEIR LORDSHIPS REITERATED THE SAME PRINCIPLE AFTER DISCUSSING AND ANALYZING CATENA OF DECISIONS INCLUDI NG THAT OF ANIL KUMAR BHATIA (SUPRA) AND DAYAWANTI GUPTA. THE HON'BLE HIGH COURT OBSERVED AND HELD AS UNDER:- 62. SUBSEQUENTLY, IN PRINCIPAL COMMISSIONER OF INC OME TAX- 1 V. DEVANGI ALIAS RUPA {SUPRA), ANOTHER BENCH OF T HE GUJARAT HIGH COURT REITERATED THE ABOVE LEGAL POSITION FOLL OWING ITS EARLIER DECISION IN PRINCIPAL COMMISSIONER OF INCOM E TAX V. SAUMYA CONSTRUCTION P. LTD. {SUPRA) AND OF THIS COU RT IN KABUL CHAWLA (SUPRA). AS FAR AS KARNATAKA HIGH COUR T IS CONCERNED, IT HAS IN CIT V. IBC KNOWLEDGE PARK P. L TD. {SUPRA) FOLLOWED THE DECISION OF THIS COURT IN KABUL CHAWLA (SUPRA) AND HELD THAT THERE HAD TO BE INCRIMINATING MATERIA L QUA EACH OF THE AYS IN WHICH ADDITIONS WERE SOUGHT TO BE MAD E PURSUANT TO SEARCH AND SEIZURE OPERATION. THE CALCU TTA HIGH COURT IN CIT-2 V. SALASAR STOCK BROKING LTD. {SUPRA ), TOO, FOLLOWED THE DECISION OF THIS COURT IN KABUL CHAWLA (SUPRA). IN CIT V. GURINDER SINGH BAWA {SUPRA), THE BOMBAY HIGH COURT HELD THAT: 6...ONCE AN ASSESSMENT HAS ATTAINED FINALITY FOR A PARTICULAR YEAR, I.E., IT IS NOT PENDING THEN THE SAME CANNOT BE SUBJECT TO TAX IN PROCEEDINGS UNDER SECTION 153A OF THE ACT. T HIS OF COURSE WOULD NOT APPLY IF INCRIMINATING MATERIALS A RE GATHERED IN THE COURSE OF SEARCH OR DURING PROCEEDINGS UNDER SECTION 153A OF THE ACT WHICH ARE CONTRARY TO AND/OR NOT DI SCLOSED DURING THE REGULAR ASSESSMENT PROCEEDINGS. 63. EVEN THIS COURT HAS IN CIT V MAHESH KUMAR GUPT A {SUPRA) AND THE PR. COMMISSIONER OF INCOME TAX-9 V. RAM AVTAR VERMA {SUPRA) FOLLOWED THE DECISION IN KABUL CHAWLA (SUPRA). THE DECISION OF THIS COURT IN PR. COMMISSI ONER OF INCOME TAX V. KURELE PAPER MILLS P. LTD. {SUPRA) WH ICH WAS REFERRED TO IN KABUL CHAWLA (SUPRA) HAS BEEN AFFIRM ED BY THE SUPREME COURT BY THE DISMISSAL OF THE REVENUE'S SLP ON 7TH DECEMBER, 2015. I.T.A. NO.5395 & 5396/DEL/2017 29 16. THUS, FOLLOWING THE AFORESAID PROPOSITION OF LAW AND ADMITTED FACT OF THE CASE THAT THERE IS NO INCRIMINATING MA TERIAL FOUND DURING THE COURSE OF SEARCH QUA THE ASSESSMENT YEAR FOR WHICH IMPUGNED ADDITION HAS BEEN MADE, WE HOLD THAT SU CH AN ADDITION CANNOT BE ROPED IN IN THE ASSESSMENT ORDER PAS SED U/S 153A. ACCORDINGLY, SAME IS DIRECTED TO BE DELETED. 17. SO FAR AS THE RELIANCE PLACED BY THE LEARNED CIT DR ON THE JUDGMENT OF ANIL KUMAR BHATIA, WE FIND THAT THE HON'BL E HIGH COURT ITSELF HAD CLARIFIED THAT THERE NO INCRIMINATING M ATERIAL WAS FOUND DURING THE COURSE OF SEARCH AND THEREFORE, NO EXPRESS OPINION AS TO WHETHER THE ADDITION CAN BE MADE U/S 153A WAS MADE BY THEIR LORDSHIPS. THE RELEVANT OBSERVATION IN P ARA 23 OF THE JUDGMENT REPRODUCED HERE UNDER, CLARIFIES THIS ASP ECT:- WE ARE NOT CONCERNED WITH A CASE WHERE NO INCRIMIN ATING MATERIAL WAS FOUND DURING THE SEARCH CONDUCTED U/S 132 OF THE ACT. WE, THEREFORE, EXPRESS NO OPINION AS TO WH ETHER SECTION 153A CAN BE INVOKED EVEN IN SUCH A SITUATIO N. THAT QUESTION IS THEREFORE LEFT OPEN. HENCE, THE RELIANCE PLACED BY THE LEARNED CIT-DR ON TH IS JUDGMENT IS WHOLLY MISPLACED. 18. POST THE JUDGMENT OF MEETA GUTGUTIA (SUPRA), AL SO THE SAME PRINCIPLE HAVE BEEN REITERATED IN THE CASE OF PCIT VS. BEST INFRASTRUCTURE (INDIA) PVT. LTD. (SUPRA), WHEREIN THE HON'BLE HIGH COURT HELD THAT DURING THE COURSE OF S EARCH, STATEMENT RECORDED U/S. 132(4) BY THEMSELVES DOES N OT CONSTITUTE INCRIMINATING MATERIAL AND ASSUMPTION OF JURISDICTION BY THE ASSESSING OFFICER U/S.153A SOLEL Y BASED ON I.T.A. NO.5395 & 5396/DEL/2017 30 STATEMENT IS UNSUSTAINABLE WHEN THERE IS NO INCRIMI NATING MATERIAL FOUND DURING THE COURSE OF SEARCH. AGAIN I N THE CASE OF PCIT VS. DHARAMPAL PREMCHAND LTD., IN ITA NO.512 TO 514/206, THE HON'BLE DELHI HIGH COURT HELD THAT RATIO LAID DOWN IN THE CASE OF KABUL CHAWLA, MEETA GUTGUTIA, S TILL HOLDS GROUND AND THE REVENUES CONTENTION THAT THE MATTER SHOULD BE REFERRED TO A LARGER BENCH WAS TURNED DOWN. APAR T FROM THESE JUDGMENTS, THERE ARE CATENA OF OTHER JUDGMENTS OF OTHER HIGH COURTS LAYING DOWN SIMILAR RATIO AND PROPOSITI ON. THE MAIN UNDERLYING PRINCIPLE PERMEATING IN ALL THE JUD ICIAL PRECEDENTS IS THAT, IN THE CASE OF THE UNABATED ASS ESSMENT WHICH HAD ATTAINED FINALITY ON THE DATE OF SEARCH, WHICH ARE RECKONED AS UNABATED ASSESSMENTS, NO ADDITION OVER AND ABOVE THE ORIGINALLY ASSESSED INCOME CAN BE MADE SANS ANY INCRIMINATING MATERIAL FOUND OR UNEARTHED DURING TH E COURSE OF SEARCH. THE PRINCIPLE REITERATED TIME AND AGAIN IS THAT SOMETHING SHOULD BE FOUND AS A RESULT OF SEARCH WHI CH IS INCRIMINATING IN NATURE SO AS TO IMPLICATE THE ASSE SSEE AND ACQUIRE JURISDICTION TO MAKE THE ADDITION, BECAUSE FOR THE COMPLETED ASSESSMENT, OR IN OTHER WORDS, ASSESSMENT WHICH ARE NOT ABATED, THE ASSESSING OFFICER IS REQUIRED T O MAKE RE- ASSESSMENT U/S.153A WHICH IS ONLY POSSIBLE WHEN ANY INCRIMINATING MATERIAL HAS BEEN FOUND DURING THE CO URSE OF SEARCH. IF THE REVENUE HAS ANY INFORMATION IN ITS P OSSESSION PRIOR TO THE DATE OF SEARCH AND NO CORROBORATIVE EV IDENCE WAS FOUND DURING THE COURSE OF SEARCH SO AS TO LINK THE INFORMATION ALREADY IN HAND WITH THE MATERIAL FOUND DURING I.T.A. NO.5395 & 5396/DEL/2017 31 THE COURSE OF SEARCH, THEN SUCH AN INFORMATION FOR MAKING ANY KIND OF ADDITION OSTENSIBLY IS OUTSIDE THE PURV IEW OF SECTION 153A AS PER THE BINDING JUDICIAL PRECEDENTS OF THE HON'BLE JURISDICTIONAL HIGH COURT. WE AGAIN REITERA TE THAT IF THE INCOME TAX DEPARTMENT HAD ANY MATERIAL INFORMAT ION IN ITS POSSESSION RECEIVED FROM ANY EXTERNAL SOURCE AN D IN WAKE OF SUCH AN INFORMATION SEARCH U/S 132 HAS BEEN CARR IED OUT AND NOTHING INCRIMINATING HAS BEEN FOUND HAVING LIV E-LINK NEXUS WITH THE SAID INFORMATION ALREADY IN HAND, TH EN THE REVENUE HAS OTHER COURSES OPEN TO IMPLICATE THE ASS ESSEE OR CARRY OUT FURTHER INQUIRY UNDER THE OTHER PROVISION S OF THE ACT, BUT DEFINITELY NOT U/S.153A. 19. THUS, WE HOLD THAT DESPITE THERE BEING INCR IMINATING MATERIAL IN THE POSSESSION OF THE REVENUE WHICH MAY IMPLICATE ASSESSEE, BUT SAME CANNOT BE USED WITHIN THE SCOPE OF SECTION 153A WHEN NOTHING HAS BEEN FOUND FROM TH E SEARCH, ESPECIALLY WHEN ASSESSEE TOO HAS DENIED ANY SUCH INVOLVEMENT AND THERE IS NO MATERIAL GATHERED DURIN G THE SEARCH TO REBUT SUCH A DENIAL BY THE ASSESSEE. ACCO RDINGLY, THE ADDITION MADE BY THE ASSESSING OFFICER FOR SUM OF RS.28,24,48,860/- IS DELETED. 20. HERE IN THIS CASE AS PER THE ASSESSING OFFI CER STILL CERTAIN INFORMATION ARE YET TO BE RECEIVED AND THE MATERIAL AND INFORMATION AVAILABLE WITH THE DEPARTMENT NEEDS TO BE CORROBORATED AND NEEDS TO BE FURTHER INQUIRED INTO. UNDER THESE CIRCUMSTANCES ALSO IN OUR OPINION SAME CANNOT BE DONE I.T.A. NO.5395 & 5396/DEL/2017 32 WITHIN THE SCOPE OF SECTION 153A AS WE HAVE ALREADY HELD THAT NOTHING HAS BEEN FOUND FROM THE ASSESSEE DURING THE COURSE OF SEARCH, WHICH CAN PREEMPT ANY POST SEARCH INQUIR Y. ALBEIT IN ABATED ASSESSMENTS AO MAY HAVE POWER TO CONDUCT FURTHER INQUIRY BUT NOT IN CASE OF UNABATED ASSESSMENTS. 21. NOW COMING TO THE DECISION OF THE TRIBUNAL IN THE CASE OF SHYAM SUNDER JINDAL VS. CIT (SUPRA), THE HON'BLE TRIBUNAL HAD SET ASIDE THE MATTER TO THE FILE F THE ASSESSIN G OFFICER FOR THE REASON THAT THERE WERE CERTAIN CONTRADICTORY OB SERVATION MADE BY THE ASSESSING OFFICER AS THE REQUISITE INFO RMATION FROM THE SWISS BANK HAS NOT BEEN RECEIVED AND THERE FORE, THE MATTER WAS TO BE ADJUDICATED AFRESH AFTER GIVING PRO PER OPPORTUNITY TO THE ASSESSING OFFICER. HERE IN THIS CASE, APPARENTLY NO SUCH CONTRADICTION APPEARS TO BE THER E IN THE ASSESSMENT ORDER AND IN ANY CASE WHEN ON JURISDICTI ONAL ISSUE, WE HAVE HELD THAT SUCH AN ADDITION ITSELF IS BEYOND THE SCOPE OF SECTION 153A AND FOR COMING TO THIS CONCLU SION WHENCE ALREADY THE FOUNDATIONAL FACTS ARE AVAILABLE ON RECORD, THEN WE DO NOT DEEM FIT/ PROPER TO REMAND THE MATTE R BACK TO THE FILE OF THE ASSESSING OFFICER BECAUSE THAT WOUL D BE PURELY AN ACADEMIC EXERCISE. HENCE, WE REJECT THE CONTENTI ON OF THE LD. CIT-DR THAT THIS MATTER SHOULD BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER IN LINE WITH THE DECISION OF THE TRIBUNAL IN THE CASE OF SHYAM SUNDER JINDAL. 22. BEFORE PARTING, WE ARE MAKING IT VERY CLEA R THAT WE HAVE NOT GIVEN ANY FINDING ON MERITS AND ALSO TO VE RACITY OF I.T.A. NO.5395 & 5396/DEL/2017 33 THE INFORMATION RECEIVED BY THE DEPARTMENT FROM THE FOREIGN AUTHORITIES, AS TO WHETHER ASSESSEE HAS ANY LINK WI TH THE FOREIGN BANK ACCOUNTS OR NOT. SINCE WE HAVE ALREADY QUASHED THE ADDITION ON LEGAL GROUND, THEREFORE, THE OTHER GROUNDS RAISED ON OTHER LEGAL ISSUES AS WELL AS GROUNDS ON MERITS HAVE BEEN RENDERED ACADEMIC AND THE SAME ARE DISMISSED A S INFRUCTUOUS. 23. IN THE RESULT, THE APPEAL OF THE ASSESSEE FOR T HE ASSESSMENT YEAR 2006-07 IS TREATED AS ALLOWED. 24. SO FAR AS THE ASSESSMENT YEAR 2008-09 IS CONCER NED, THE FACTS AND MATERIAL ARE PARI MATERIA AND OUR FINDING GIVEN ABOVE WOULD APPLY MUTATIS MUTANDIS. HERE IN THIS CASE ALSO, THE RETURN WAS FILED ON 27.07.2007 WHICH WAS DULY P ROCESSED U/S. 143(1) OF 27.03.2009 AND HAD ATTAINED FINALITY . SUCH AN ASSESSMENT HAS TO BE RECKONED AS UNABATED ASSESSMEN T AT THE TIME OF SEARCH AND SEIZURE ACTION CARRIED OUT O N 20.01.2012. HERE ALSO THE SAME MATERIAL FACTS WHICH WAS IN THE POSSESSION OF THE DEPARTMENT PRIOR TO THE DATE OF SEARCH HAS BEEN REFERRED AND RELIED UPON BY THE AO AND THE OBSERVATION AND THE FINDING OF THE ASSESSING OFFICE R AS WELL AS OF LD. CIT(A) ARE EXACTLY THE SAME. THUS, IN VIEW O F OUR FINDING GIVEN ABOVE, WE DELETE THE SIMILAR ADDITION OF RS.14,79,99,198/- ON THE GROUND THAT, IT IS BEYOND THE SCOPE OF SECTION 153A. ACCORDINGLY, THE APPEAL FOR THE AS SESSMENT YEAR 2008-09 IS TOO TREATED AS ALLOWED AND OTHER GR OUNDS RAISED ON MERITS HAVE BEEN RENDERED ACADEMIC. I.T.A. NO.5395 & 5396/DEL/2017 34 25. TO SUM UP, BOTH THE APPEALS OF THE ASSESSEE FOR THE ASSESSMENT YEARS 2006-07 & 2008-09 ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH , FEBRUARY, 2018. SD/- SD/- [O.P. KANT] [AMIT SHUKLA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 15 TH FEBRUARY, 2018 PKK:
