ACIT, New Delhi V. MKR Construction (P) Ltd., New Delhi

ITA 5444/DEL/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2727 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 9 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 21-06-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 04-10-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: H K CHAUDHARY
• Keywords: Unexplained cash credit; Search and seizure; Document seized; Opportunity of being heard; Accommodation entries; Assessment record; Right to appeal
• Section: 153A; 10B; 132; 68

Judgement Text

ITA NO. 5444/DEL/2013 CO NO.128/DEL/2014 ASSESSMENT Y EAR: 2004 - 05 PAGE 1 OF 15 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E BENCH NEW DELHI) BEFORE SHRI G.D. AGRAWAL, PRESIDENT & SHRI AMIT SHUKLA , JUDICIAL MEMB E R I N ITA NO. 5444 /DEL/201 3 CO. NO. 1 28/DEL/2014 ASSESSMENT YEAR: 20 0 4 - 0 5 ACIT CENTRAL CIRCLE - 2, ROOM NO. 355, 3 RD FLOOR, ARA CENTRE, JHANDEWALAN EXTN. NEW DELHI VS. MKR CONSTRUCTION (P)LTD., 2042, KATRA TOBACCO, KHARI BAOLI, NEW DELHI (APPLICANT) (RESPONDENT) (PAN: A ADCM6195J ) ASSESSEE BY: SHRI SURESH GUPTA, CA REVENUE BY: SH RI H.K. CHAUDHARY, CIT DR DATE OF HEARING 22 / 0 6 /201 7 DATE OF PRONOUNCEMENT 1 0 / 0 7 /201 7 ORDER PER AMIT SHUKLA, JUDICIAL MEMBER : THE AFORESAID APPEAL AND CROSS OBJECTION HAS BEEN FILED BY THE REVENUE AS WELL AS BY THE ASSESSEE AGAINST IMPUGNED ORDER DATED 24 . 7 .201 3 , PASSED BY THE LD. CIT (APPEALS) - 1 , NEW DELHI FOR THE QUANTUM OF ASSESSMENT PASSED U/S 143 (3) READ WITH SECTION 153 A FOR THE A.Y. 200 4 - 0 5 . 2. IN THE GROUNDS OF APPEAL THE REVENUE HAS RAISED FOLLOWING GROUNDS: - PAGE 2 OF 15 1 .THAT THE COMMISSIONER OF INCOME TAX (APPEALS) EARED IN LAW IN DELETED ADDITION OF UNEXPLAINED CASH CREDIT OF RS.3,28,07,000/ - RECEIVED AS SHARE APPLICATION MONEY, SHARE PREMIUM AN SHARE CAPITAL . 2. THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING ADDITION OF RS. 1,64,035/ - BEING 0.5% OF THE AMOUNT, PAID AS COMMISSION OF LIEU OF ACCOMMODATION ENTRY. 3(A) THE ORDER OF THE CIT (A) IS E RRONEOUS AND NOT TENABLE IN LAW AND ON FACTS, B) THE APPELLANT CRAVES LEAVES TO ADD, ALTER OR AMEND ANY/A// OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARING OF THE APPEAL. 3. WHERE AS IN THE C ROSS O BJECTION S THE ASSESSEE HAS RAISED FOLLOWING GROUNDS: - THE LD. CIT (A) HAS ERRED IN LAW AND ON FACTS IN NOT QUASHING THE ADDITION OF RS.3,29,71,035/ - U/S 68 OF THE IT ACT. ON THE GROUND THAT THE ABOVE ADDITIONS WERE NOT BASED ON ANY INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH ON THE RESPONDENT ASSESSEE WHEN THE ORIGINAL ASSESSMENT PROCEEDINGS IN THE CASE HAD NOT ABATED AS PER PROVISO TO SECTION 153 A( 1) OF THE IT ACT. 4 . SINCE THE CROSS OBJECTIONS RAISED BY THE ASSESSEE GOES TO THE VERY LEGALITY/ ROOT OF THE ADDITION MADE IN THE ASSESSMENT ORDER PASSED U/S 153A , THEREFORE , AT THE OUTSET WE ARE PROCEEDING TO ADJUDICAT E THE CROSS OBJECTIONS OF THE ASSESSEE. THE BRIEF FACTS QUA THE LEGAL ISSUES RAISED IN THE CROSS OBJECTION ARE THAT, THE ASSESSEE COMPANY HAD FILED ITS RETURN OF INCOME FOR THE A.Y. 2004 - 05 U/S 139(1) ON 1.11.2004, DECLARING NIL INCOME. SUCH RETURN OF INCOME WAS DULY ACCOMPANIED BY STATEMENT OF TAXABLE INCOME AS WELL AS AUDIT REPORT AND OTHER FINANCIAL STATEMENTS. IT H AS BEEN INFORMED BY PAGE 3 OF 15 THE L D. COUNSEL FOR THE ASSESSEE THAT NO NOTICE U/S 143(2) WAS ISSUE D WITHIN THE STATUTORY TIME LIMIT , HENCE THE RETURN OF INCOME STOOD FINALLY ASSESSED AND HAD ATTAINED FINALITY. LATER ON , A SEARCH AND SEIZURE ACTION U/S 132(1) WAS CAR RIED OUT IN MAHESH MEHTA GROUP CASES ON 30.6.2009 , IN WHICH THE ASSESSEE COMPANY WAS ALSO COVERED. AT THE TIME OF SEARCH THE ASSESSMENT FOR THE A.Y. 2004 - 05 HAD ATTAINED FINALITY AND WAS NOT PENDING AND HENCE IN TERMS OF SECOND PROVISO TO SECTION 153A IT R EMAIN ED UNABATED. THE LD. COUNSEL POINTED OUT THAT THE IMPUGNED ADDITION S WHICH HA VE BEEN MADE IN THE IMPUGNED ASSESSMENT ORDER RELATES TO UNEXPLAINED CASH CREDITS ON ACCOUNT OF SHARE APPLICATION MONEY WHICH HAS BEEN ADDED BY THE AO U/S 68 , BE I N G SUMS AGGR EGATING TO RS. 3,28,07,000/ - AND EXPENDITURE ON COMMISSION @0.5% ON AD HOC BASIS , O N THE GROUND THAT ASSESSEE MUST HAVE PAID COMMISSION FOR ACCOMMODATION ENTRIES . BOTH THESE ADDITIONS ARE NOT BASED ON ANY MATERIAL OR INFORMATION GATHERED DURING THE COURSE OF SEARCH , BUT FROM THE RECORDS ALREADY DISCLOSED IN THE BALANCE SHEETS . EVEN IN THE IMPUGNED ASSESSMENT ORDER THERE IS NO WHISPER ABOUT ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH IN RELATION TO THE SHARE APPLICATION MONEY OR ANY EVIDENCE THAT IT S SOME BOGUS TRANSACTIONS OR IT HAS BEEN RECEIVED THROUGH ACCOMMODATION ENTRIES. HE POINTED OUT THAT EVEN IN THE ORDER OF THE LEARNED CIT (APPEALS) THERE IS A CATEGORICAL FINDING THAT NO EVIDENCE WAS FOUND IN THE COURSE OF SEARCH TO INDICATE THAT SHARE APPLICATION MONEY WAS NON GENUINE . I N SUPPORT , HE DREW OUR ATTENTION TO FINDING OF THE LD . CIT (APPEALS) GIVEN IN PARA 4.2 AT PAGE 19 OF THE APPELLATE ORDER. THUS HE SUBMITTED THAT, W HENCE THERE IS NO INCRIMINATING MATERIAL RELATING TO IMPUGNED ADDITION MADE BY THE ASSESSING OFFICER FOUND DURING THE PAGE 4 OF 15 COURSE OF SEARCH , THEN SUCH AN ADDITION CANNOT BE MADE IN THE ASSESSMENT FRAMED U/S 153A. 5. AS REQUIRED BY THE B ENCH THE LD. COUNSEL WAS ASKED TO PROVIDE THE COPY OF PANCHNAMA AS WE LL AS COPY OF STATEMENT RECORDED U/S 132(4) , TO VERIFY WHETHER ANY INCRIMINATING DOCUMENTS WERE FOUND OR SEIZED RELATING TO SHARE APPLICATION MONEY QUA THE ASSESSMENT YEAR 2004 - 05. IN RESPONSE THE LD. COUNSEL HAD SUBMITTED THE PHOTO COP IES OF PANCHNAMA A S WELL AS INVENTORY OF MATERIAL SEIZED OR FOUND AS WELL AS STATEMENT RECORDED U/S 132(4) OF SHR I MAHESH MEHTA. FROM THE PANCHNAMA HE POINTED OUT NOTHING RELATING TO SHARE APPLICATION MONEY WAS FOUND DURING SEARCH. HE ALSO DREW OUR ATTENTION TO VARIOUS QUES TIONS AND ANSWERS IN THE STATEMENT RECORDED DURING SEARCH AND SUBMITTED THAT NEITHER THERE IS ANY REFERENCE O F SHARE APPLICATION MONEY NOR ANYTHING IS MENTIONED ABOUT THE ASSESSEE COMPANY LINKING WITH ANY DOCUMENT SEIZED FOR THE A.Y. 2004 - 05. IN THE STATEM ENT, THE DISCLOSURE OF S UM OF RS. 60.80 CRORE WAS MADE IN THE CASE OF VARIOUS ASSESSEES BUT NOTHING HAS BEEN FOUND OR SURRENDERED RELATING TO ANY ASSESSEE NOR THERE DO ANY MENTION ABOUT SHARE APPLICATION MONEY. THUS, HE SUBMITTED THAT THE ASSESSEE S CONTEN TION THAT NOTHING INCRIMINATING HAS BEEN FOUND IN THE SEARCH RELATING TO THE IMPUGNED ADDITION FOR THE PRESENT ASSESSMENT YEAR IS SUBSTANTIATED FROM RECORD, THEREFORE NO ADDITION CAN BE MADE WITHIN THE SCOPE OF ASSESSMENT U/S 153A. IN SUPPORT OF THIS PROPOSITION, HE STRONGLY RELIED UPON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWALA (2016) 380 ITR 570 ; AND LATEST HON'BLE DELHI HIGH COURT DECISION OF IN THE CASE OF PR. CIT VS. MEETA GUTGUTIA , PROP. M/S. FERNS N PETAL S, IN ITA NO. 306 AND 310/2010 , VIDE JUDGMENT AND ORDER DATED 25.5.2017 . H E SUBMITTED PAGE 5 OF 15 THAT IN THE LATEST JUDGMENT , THE HON'BLE HIGH COURT HAVE CONSIDERED NOT ONLY THE DECISION OF HON'BLE DELHI HIGH COURT IN THE VARIOUS CASES ON THIS POINT BUT ALSO JUDGMENT S OF THE VARIOUS OTHER HIGH COURTS. 6 . ON THE OTHER HAND THE LD. CIT DR, STRONGLY OBJECTED TO THE FILING OF THE C ROSS O BJECTION BY THE ASSESSEE AND SUBMITTED THAT SAME IS NOT MAINTAINABLE , BECAUSE THE ASSESSEE HAD NOT R A I SED THIS GROUND BEFORE THE LEARNE D CIT (APPEALS) AND ONCE THIS ISSUE HAS N OT BEEN CHALLENGED BEFORE THE L D . CIT (APPEALS) NOR ANY SPECIFIC GROUND HAS BEEN RAISED THAT THE IMPUGNED ADDITION IS BEYOND THE SCOPE OF ASSESSMENT U/S 153A , THE ASSESSEE CANNOT C HALLENGE THIS ISSUE BY WAY OF CROSS OBJECTION. THUS , HE STRONGLY OBJECTED TO THE GROUNDS RAISED IN THE CROSS OBJECTION. ON MERITS, H E SUBMITTED THAT ONCE THE ASSESSING OFFICER IS REQUIRED UNDER THE LAW TO ASSESS OR REASSESS FOR THE ASSESSMENT YEARS COVERED U/S 153A , THEN ASSESSING OFFICER H AS ALL THE POWERS TO EXAMINE ALL THE ISSUES , INCLUDING THE ISSUES ARISING OUT OF FROM THE ORIGINAL RETURN OF INCOME O R ASSESSMENT. THE ASSESSING OFFICER HAS UNFETTERED POWER U/S 153A TO ASSESS OR REASSESS THE INCOME OF THE ASSESSEE AND IN SUPPORT HE STRONG LY RELIED UPON THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANIL KUMAR BHATIA REPORTED IN 352 ITR 493 AND DREW OUR ATTENTION AND OBSERVATION OF HON'BLE HIGH COURT GIVEN IN PARA S 20 AND 21. HE SUBMITTED THAT THIS DECISION OF HON'BLE D ELHI HIGH COURT SHOULD PREVAIL OVER THE SUBSEQUENT DECISIONS. HE FURTHER RELIED UPON THE DECISION AND JUDGMENT OF HON'BLE KERALA HIGH COURT IN THE CASE OF E.N. GOPAKUMAR VS. CIT (C) 390 ITR 131 WHEREIN JUDGMENT OF ANIL KUMAR BHATIA (SUPRA) HAS BEEN FOLLOWED. PAGE 6 OF 15 7 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL REFERRED TO BEFORE US. FIRST OF ALL, WE SHALL ADDRESS THE OBJECTIONS RAISED BY THE LEARNED CIT DR THAT ONCE ANY I SSU E HAS NOT BEEN CHALLENGED BEFORE THE FIRST APPELLATE AUTHORITY, THEN THE ASSESSEE IS PRECLUDED FROM RAISING ANY SUC H ISSUE BY WAY OF C ROSS O BJECTIONS. FROM THE GROUNDS RAISED IN THE C ROSS O BJECTIONS , IT CAN BE SEEN THE ASSESSEE HAS RAISED PURELY A LEGAL IS SUE WITH GOES TO THE VERY ROOT TO THE ADDITION WHETHER CAN BE MADE IN THE ASSESSMENT MADE U/S 153A. SUCH LEGAL ISSUE IS OSTENSIBLY BORNE OUT FROM THE RECORDS AND DOES NOT REQUIRE ANY INVESTIGATION OF FACTS OR RECORDING OF EVIDENCE. EVEN IF IT IS A NEW PLEA TAKEN BY THE RESPONDENT , THEN IF SUCH A PLEA IS PURELY JURISDICTIONAL OR A LEGAL GROUND THEN SAME CAN BE RAISED BY THE ASSESSEE BY WAY OF C ROSS O BJECTIONS. THE RESPONDENT CAN ALWAYS SUPPORT THE JUDGMENT OF FIRST APPELLATE AUTHORITY ON ANY GROUND EVEN IF SUCH GROUND HAS NOT BEEN RAISED BEFORE SUCH AUTHORITY, HOWEVER WITH A CAVEAT THAT IT IS PURELY LEGAL ISSUE AND DOES NOT REQUIRE ANY INVESTIGATION OF FACTS. EXACTLY SIMILAR ISSUE HAS BEEN CONSIDERED BY THE HON'BLE DELHI HIGH COURT IN T HE CASE OF FAST BOOKING (INDIA) PVT. LTD. IN ITA NO. 334 TO 338, 339, 342/2015 VIDE JUDGMENT AND ORDER DATED 2.9.2015 , WHEREIN THEIR LORDSHIPS HAD OBSERVED AND HELD AS UNDER: - 13 . IN THE IMPUGNED ORDER, THE ITAT RELIED ON THE DECISION OF THIS COURT IN RE GENCY CREATIONS LTD. (SUPRA) AND ALLOWED THE REVENUES APPEALS. THE ITAT RESTORED THE ORDER OF THE AO DISALLOWING THE CLAIM MADE BY THE ASSESSEE UNDER SECTION IOB OF THE ACT. WHILE TAKING UP THE CROSS - OBJECTIONS, ALTHOUGH THE DELAY IN FILING WAS CONDONED, THE ITAT DECLINED TO PERMIT THE ASSESSEE TO MAINTAIN THE CROSS OBJECTIONS BY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THE ITAT IN ITO V. NEETEE CLOTHING (P)LTD. [2010] 129 TTJ 342 (ITAT [DEL]), ON THE GROUND PAGE 7 OF 15 THAT SINCE THE ASSESSEE HAD NOT URGED T HE PLEA OF BEING ENTITLED TO THE BENEFIT UNDER SECTION 10 A OF THE AC T BEFORE THE CIT (A), IT COULD N OT BE PERMITTED TO URGE SUCH PLEA FOR THE FIRST TIME BEFORE THE ITAT. 14. HAVING HEARD THE LEARNED COUNSEL FOR THE PARTIES, THE COURT IS OF THE VIEW THAT I TAT WAS IN ERROR IN DECLINING TO EXAMINE THE CROSS OBJECTIONS FILED BY THE APPELLANT ASSESSEE. THE POWERS OF THE ITAT WHILE HEARING APPEALS AND CROSS OBJECTIONS HAVE BEEN EXPLAINED BY THIS COURT IN CIT V. EDWARD KEVENTER (SUCCESSORS) PVT. LTD. (1980) 123 I TR 200 IN THE FOLLOWING WORDS: 'NOW, ADVERTING TO THE RIGHTS OF THE RESPONDENT IN AN APPEAL, WE START WITH THE BASIC IDEA THAT, IF A PARTY APPEALS, HE IS THE PARTY WHO COMES BEFORE THE APPELLATE TRIBUNAL TO REDRESS A GRIEVANCE ALLEGED BY HIM. IF THE OTHER SIDE HAS A GRIEVANCE, HE HAS A RIGHT TO FILE A CROSS - APPEAL (AND UNDER THE CIVIL PROCEDURE CODE AND THE I.T. ACT OF 1961, A MEMORANDUM OF OBJECTIONS). BUT, IF NO SUCH THING IS DONE, HE IS DEEMED TO BE SATISFIED WITH THE DECISION. HE IS, THEREFORE, ENTITLED TO SUPPORT THE JUDGMENT OF THE FIRST OFFICER ON ANY GROUND BUT HE IS NOT ENTITLED TO RAISE A GROUND WHICH WILL WORK ADVERSELY TO THE APPELLANT. IN FACT SUCH A GROUND MAY BE A TOTALLY NEW GROUND, IF IT IS PURELY ONE OF LAW, AND DOES NOT NECESSITATE THE REC ORDING OF ANY EVIDENCE, EVEN THOUGH THE NATURE OF THE OBJECTION MAY BE SUCH THAT IT IS NOT ONLY A DEFENCE TO THE APPEAL ITSELF BUT GOES FURTHER AND MAY AFFECT THE VALIDITY OF THE ENTIRE PROCEEDINGS. BUT THE ENTERTAINMENT OF SUCH A GROUND WOULD BE SUBJECT T O THE RESTRICTION THAT EVEN IF IT IS ACCEPTED, IT SHOULD BE GIVEN EFFECT TO ONLY FOR THE PURPOSE OF SUSTAINING THE ORDER IN APPEAL AND DISMISSING THE APPEAL AND CANNOT BE MADE USE OF, TO DISTURB OR TO SET ASIDE, THE ORDER IN FAVOUR OF THE APPELLANT (SEE BA MASI V. CIT). THIS LIBERTY TO THE RESPONDENT IS RESERVED BY RULE 27 OF THE TRIBUNAL RULES. WE HAVE NEXT TO CONSIDER THE POWERS OF THE TRIBUNAL WHILE DISPOSING OF THE APPEAL. RULE 12, EARLIER REFERRED TO, ALSO LAYS PAGE 8 OF 15 DOWN THAT THE TRIBUNAL, IN DECIDING AN APP EAL, IS NOT CONFINED TO THE GROUNDS SET FORTH IN THE MEMORANDUM OF APPEAL OR THOSE WHICH THE APPELLANT MAY URGE WITH ITS LEAVE. IT CAN DECIDE THE APPEAL ON ANY GROUND PROVIDED ONLY THAT THE AFFECTED PARTY HAS AN OPPORTUNITY OF BEING HEARD ON THAT GROUND. B UT IT HAS BEEN LAID DOWN IN A NUMBER OF CASES THAT THIS RULE DOES NOT ENABLE THE TRIBUNAL TO RAISE A GROUND, OR PERMIT THE PARTY WHO HAS NOT APPEALED TO RAISE A GROUND, WHICH WILL WORK ADVERSELY TO THE APPELLANT AND RESULT IN AN ENHANCEMENT.' 15. THE SUPRE ME COURT IN NTPC V. CIT (L998) 229 ITR 383 SC HAS ALSO EXPLAINED THAT THE POWER OF THE TRIBUNAL IN DEALING WITH THE APPEALS UN DER SECTION 254 OF THE ACT IS ' EXPRESSED IN THE WIDEST POSSIBLE TERMS'. IT WAS FURTHER OBSERVED AS UNDER: '5 . THE PURPOSE OF THE ASSESSMENT PROCEEDINGS BEFORE THE TAXING AUTHORITIES IS TO ASSESS CORRECTLY THE TAX LIABILITY OF AN ASSESSEE IN ACCORDANCE WITH LAW. IF, FOR EXAMPLE, AS A RESULT OF A JUDICIAL DECISION GIVEN WHILE THE APPEAL IS PENDING BEFORE THE TRIBUNAL, IT IS FOUND THAT A NON - TAXABLE ITEM IS TAXED OR A PERMISSIBLE DEDUCTION IS DENIED, WE DO NOT SEE ANY REASON WHY THE ASSESSEE SHOULD BE PREVENTED FROM RAISING THAT QUESTION BEFORE THE TRIBUNAL FOR THE FIRST TIME, SO LONG AS THE RELEVANT FACTS ARE ON RECORD, IN RESPECT OF T HAT ITEM. WE DO NOT SEE ANY REASON TO RESTRICT THE POWER OF THE TRIBUNAL UNDER SECTION 254 ONLY TO DE CIDE THE GROUNDS WHICH ARISE FROM THE ORDER OF / THE COMMISSIONER OF INCOME - TAX (APPEALS). BOTH THE ASSESSEE AS WELL AS THE DEPARTMENT HAS A RIGHT TO FILE AN APPEAL/CROSS - OBJ ECTIONS BEFORE THE TRIBUNAL. WE FAIL TO SEE WHY THE TRIBUNAL SHOULD BE PREVENTED FROM CONSIDERING QUESTIONS OF LAW ARISING IN ASSESSMENT PROCEEDINGS ALTHOUGH NOT RAISED EARLIER.' 16 . IT IS POINTED OUT BY LEARNED COUNSEL FOR THE APPELLANT THAT DESPITE BRINGING TO THE NOTICE OF THE ITAT, THE ORDER DATED 4 TH JANUARY 2013 PASSED BY THE COURT IN THE APPLICATIONS FILED BY THE VALIANT COMMUNICATIONS LTD., WHICH HAS BEEN EXTRACTED PAGE 9 OF 15 HEREINBEFORE, THE ITAT IN THE IMPUGNED ORDER DOES NOT ADVERT TO SA ID ORDER AT ALL. 17. THE BASIS OF THIS COURT REMANDING THE MATTERS IN VALIANT COMMUNICATIONS LTD. CASES TO THE ITAT WAS PRECISELY TO CONSIDER WHETHER THE BENEFIT UNDER SECTION 10A COULD BE GRANTED TO THOSE ASSESSEES NOTWITHSTANDING THAT THEY MAY NOT BE ENT ITLED TO THE BENEFIT UNDER SECTION 10B. IT WAS, THEREFORE, OPEN TO THE APPELLANT ASSESSEE HEREIN TO SEEK SUPPORT OF THE ORDER OF THE CIT (A) ON THE GROUND WHICH WAS NOT URGED BEFORE THE CIT (A) AS LONG AS IT WAS NOT GOING TO BE ADVERSE TO THE CASE OF THE A PPELLANT I.E. THE REVENUE BEFORE THE ITAT. THE ITAT IN CONSIDERING SUCH PLEA WAS NOT GOING TO BE PERSUADED TO COME TO A DIFFERENT CONCLUSION AS FAR AS THE APPEAL OF THE REVENUE PERTAINING TO THE BENEFIT UNDER SECTION 10B OF THE ACT WAS CONCERNED. PARTICULA RLY IN THE LIGHT OF THE ORDER PASSED BY THIS COURT ON 4TH JANUARY 2013 IN THE APPLICATIONS FILED BY VALIANT COMMUNICATIONS LTD., THERE SHOULD HAVE BEEN NO DIFFICULTY FOR THE ITAT TO HAVE EXAMINED THE APPELLANT ASSESSEES CROSS OBJECTIONS. 8 . THUS , IN VIEW OF THE AFORESAID PRINCIPLE LAID DOWN BY THE HON'BLE JURISDICTIONAL HIGH COURT , WE HOLD THAT BEING A LEGAL ISSUE RAISED IN THE CROSS OBJECTION THE SAME HAS TO BE ADMITTED AND ADJUDICATED ON MERITS AFTER HEARING BOTH THE PARTIES. 9. NOW COMING ON THE MERITS OF THE GROUNDS RAISED, WE FIND FROM THE PERUSAL OF MATERIAL PLACED ON RECORD IN THE FORM OF PANCHNAMA AND STATEMENT RECORDED U/S 1 3 2( 4 ) , THERE IS NO REFERENCE OF ANY MATERIAL FOUND OR SEIZED RELATING TO SHARE APPLICATION MONEY RECE IVED BY THE ASSESSEE NOR THERE IS A NY WHISPER IN THE STATEMENT RECORDED ON 1.7.2009 OF SH RI MAHESH MEHTA ON SHARE APPLICATION MONEY . IN THE ENTIRE STATEMENT WHATEVER MATERIAL AND DOCUMENTS WHICH HAS BEEN REFERRED , MOSTLY PERTAINS TO ASSESSMENT YEAR S 2008 - 0 9, 2009 - PAGE 10 OF 15 10 AND 2010 - 11 AND NOTHING PERTAINS TO 2004 - 05 . A PART FROM THAT , THERE IS NO REFERENCE AT ALL ABOUT SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE IN THIS YEAR. FROM THE PERUSAL OF THE ASSESSMENT ORDER ALSO , WE FIND THAT NOWHERE THE ASSESSING OFF ICER HAS MENTIONED ANY INCRIMINATING DOCUMENT OR MATERIAL FOUND DURING THE COURSE OF SEARCH SO AS TO REMOTELY SUGGEST THAT THE SHARE APPLICATION MONEY RECEIVED BY THE ASSESSEE DURING THE COURSE OF A.Y. 2004 - 05 IS EITHER BOGUS OR IT WAS RECEIVED THROUGH ANY HAWALA TRANSACTION OR IS BY WAY OF ACCOMMODATION ENTRIES. IN FACT AS POINTED OUT BY THE LD. COUNSEL THE LD . CIT (APPEALS) TOO HAS GIVEN A VERY CATEGORICAL FINDING THAT NO EVIDENCE W AS FOUND IN THE SEARCH TO INDICATE THAT SHARE APPLICATION MONEY WAS NON - GE NUINE . THUS , IT CAN BE SAFELY INFERRED THAT THE ADDITIONS AGGREGATING TO RS. 3,29,71,040/ - IS NOT BASED ON ANY INCRIMINATING MATERIAL OR DOCUMENTS FOUND DURING THE COURSE OF SEARCH INDICAT ING THAT THE SHARE APPLICATION MONEY IS RECEIVED BY THE ASSESSEE ARE BOGUS OR HAVE BEEN RECEIVED BY WAY OF HAWALA TRANSACTION OR THROUGH ACCOMMODATION ENTRIES. THE ASSESSMENT WHICH IS UNABATED AT THE TIME OF SEARCH AND HAD ATTAINED FINALITY, THEN WHILE MAKING THE REASSESSMENT U/S 153A IT IS INCUMBENT UPON THE ASSESSING OFFICER TO MAKE THE ADDITION ONLY ON THE BASIS OF INCRIMINATING DOCUMENTS FOUND DURING THE COURSE OF SEARCH AND NOT ON THE MATERIAL WHICH IS ALREADY A PART OF THE ASSESSMENT RECORDS OR ALREADY ST ANDS ASSESSED. NOW UNDER THE JURISDICTION OF HON'BLE DELHI HIGH COURT IT IS QUITE A SETTLED PROPOSITION THAT IF THE ASSESSMENT WHICH HAVE NOT BEEN ABATED AT THE TIME OF SEARCH THEN NO ADDITION CAN BE MADE IN ABSENCE OF ANY INCRIMINATING MATERIAL AND IN SUC H SITUATION THE COMPLETED ASSESSMENT SHOULD BE REITERATED. THE PRINCIPLE LAID DOWN BY THE HON'BLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWALA HAS BEEN SUMMARIZED AS UNDER: - PAGE 11 OF 15 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERE TO, 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 MANDATORILY ISSUED TO THE PER SON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE 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 AY IN WHICH THE SEARCH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE A FOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED 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 AO WHICH CAN BE RELATED TO THE EVID ENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT 'CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL.' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATABLE TO ABATED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE PAGE 12 OF 15 OF SEARCH) AN D THE WORD 'REASSESS' TO COMPLETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATE LY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER 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 BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSE SSMENT. 10 . TH I S THE JUDGMENT OF THE HON'BLE HIGH COURT HAS BEEN FOLLOWED IN SEVERAL JUDGMENTS NOT ONLY BY THE HON'BLE DELHI HIGH COURT BUT ALSO BY OTHER HON'BLE HIGH COURT LIKE , PR. CIT VS. SOMAYA CONSTRUCTION PVT. LTD. 387 ITR 529 (GUJ), CIT VS. IBC KNOWLEDGE PARK PVT. L T D. 385 ITR 346 (KAR) AND CIT VS. GURINDER SINGH BAWA REPORTED IN 386 ITR 483. IN THE L ATEST JUDGMENT THE HON' BLE DELHI HIGH CO UR T IN PR. CIT VS. MEETA GUTGUTIA , REITERATED THE SAME PRINCIPLE AFTER DISCUSSING AND ANALYZING CATENA OF DECISIONS INCLUDING 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 INCOME TAX - 1 V. DEVANGI ALIAS RUPA {SUPRA), ANOTHER BENCH O F THE GUJARAT HIGH COURT REITERATED THE ABOVE LEGAL POSITION FOLLOWING ITS EARLIER DECISION IN PRINCIPAL COMMISSIONER OF INCOME TAX V. SAUMYA CONSTRUCTION P. LTD. {SUPRA) AND OF THIS COURT IN KABUL CHAWLA PAGE 13 OF 15 (SUPRA). AS FAR AS KARNATAKA HIGH COURT IS CONCERNE D, IT HAS IN CIT V. IBC KNOWLEDGE PARK P. LTD. {SUPRA) FOLLOWED THE DECISION OF THIS COURT IN KABUL CHAWLA (SUPRA) AND HELD THAT THERE HAD TO BE INCRIMINATING MATERIAL QUA EACH OF THE AYS IN WHICH ADDITIONS WERE SOUGHT TO BE MADE PURSUANT TO SEARCH AND SEI ZURE OPERATION. THE CALCUTTA 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 AT TAINED 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. THIS OF COURSE WOULD NOT APPLY IF INCRIMINATING MATERIALS ARE GATHERED IN THE COURSE OF SEARCH OR DURING PRO CEEDINGS UNDER SECTION 153A OF THE ACT WHICH ARE CONTRARY TO AND/OR NOT DISCLOSED DURING THE REGULAR ASSESSMENT PROCEEDINGS. 63. EVEN THIS COURT HAS IN CIT V MAHESH KUMAR GUPTA {SUPRA) AND THE PR. COMMISSIONER OF INCOME TAX - 9 V. RAM AVTAR VERMA {SUPRA) F OLLOWED THE DECISION IN KABUL CHAWLA (SUPRA). THE DECISION OF THIS COURT IN PR. COMMISSIONER OF INCOME TAX V. KURELE PAPER MILLS P. LTD. {SUPRA) WHICH WAS REFERRED TO IN KABUL CHAWLA (SUPRA) HAS BEEN AFFIRMED BY THE S UPREME COURT BY THE DISMISSAL OF THE RE VENU E'S SLP ON 7TH DECEMBER, 20 1 5. 11 . THUS , FOLLOWING THE ABOVE AFORESAID PROPOSITION OF LAW AND ADMITTED FACT OF THE CASE ARE THAT THERE IS NO INCRIMINATING MATERIAL QUA THE ASSESSMENT YEAR FOR WHICH IMPUGNED ADDITION HAS BEEN MADE, WE HOLD THAT SUCH AN ADDITION CANNOT BE ROPED IN IN THE ASSESSMENT ORDER PASSED U/S 153A. ACCORDINGLY , SAME IS DIRECTED TO BE DELETED. SO FAR AS THE RELIANCE PLACED BY THE LEARNED CIT DR ON THE JUDGMENT OF ANIL KUMAR BHATIA, WE FIND THAT THE HON'BLE HIGH COURT ITSELF HAD CLARIFIED THAT THERE IS NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AND THEREFORE , NO EXPRESS OPINION PAGE 14 OF 15 AS TO WHETHER THE ADDITION CAN BE MADE U/S 153A WAS MADE BY THEIR LORDSHIPS . THE RELEVANT OBSE RVATION IN PARA 23 OF THE JUDGMENT IS REPRODUCED HERE UNDER: - WE ARE NOT CONCERNED WITH A CASE WHERE NO INCRIMINATING MATERIAL WAS FOUND DURING THE SEARCH CONDUCTED U/S 132 OF THE ACT. WE, THEREFORE, EXPRESS NO OPINION AS TO WHETHER SECTION 153A CAN BE I NVOKED EVEN IN SUCH A SITUATION. THAT QUESTION IS THEREFORE LEFT OPEN. HENCE , THE RELIANCE PLACED BY THE LEARNED CIT DR ON THIS JUDGMENT IS WHOLLY MISPLACED. 12. ACCORDINGLY , WE ALLOW THE GROUNDS RAISED IN THE C ROSS O BJECTION BY DELETING THE ENTIRE ADDITION MADE BY THE ASSESSING OFFICER ON THE GROUND THAT IT IS BEYOND THE SCOPE OF ASSESSMENT MADE U/S 153A. SINCE WE HAVE QUASHED THE ADDITION ON THE LEGAL GROUND THEREFORE , THE GROUNDS RAISED BY THE REVENUE HAS BEEN RENDE RED INFRUCTUOUS AND PURELY ACADEMIC IN NATURE AND THEREFORE GROUNDS RAISED BY THE REVENUE IS DISMISSED AND REVENUE S OBJECTIONS RAISED BY THE ASSESSEE IS ALLOWED. 13 . IN THE RESULT REVENUE S APPEAL IS DISMISSED AND ASSESSEE S CROSS OBJECTION IS ALLOWED. ORDER P RONOUNCED IN THE OPEN COURT ON 1 0 . 0 7 .201 7. S D / - S D / - ( G.D. AGRAWAL ) (AMIT SHUKLA) (PRESIDENT , ITAT ) (JUDICIAL MEMBER) DATED: 1 0 . 0 7 .2017 PAGE 15 OF 15 NARENDER COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT (APPEALS) 5) DR: ITAT ASSISTANT REGISTRAR DATE DRAFT DICTATED ON 22 .0 6 .2017 DRAFT PLACED BEFORE AUTHOR 2 3 . 0 7 .2017 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. APPROVED DRAFT COMES TO THE SR.PS/PS 1 0 . 7 .2017 KEPT FOR PRONOUNCEMENT ON 1 0 . 7 .2017 FILE SENT TO THE BENCH CLERK 1 0 . 7 .2017 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.