Rayapati Venkata Koteswara Prasad, Guntur V. THE ACIT, Vijayawada

ITA 566/VIZ/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6634 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 10 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 14-07-2016
• Assessment Year: 2001-2002
• Appeal Filed On: 28-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R GOVINDARAJAN
• Keywords: Unexplained cash credit; Search and seizure; Period of limitation; Deemed dividend; Block assessment; Revised return
• Section: 143(3); 153A; 148; 263; 132

Judgement Text

ITA NO.566/VIZAG/2014 SRI RAYAPATI VENKATA KOTESWARA PRASAD, GUNTUR 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . . ' , % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./I.T.A.NO.566/VIZAG/2014 ( / ASSESSMENT YEARS: 2001-02) SRI RAYAPATI VENKATA KOTESWARA PRASAD GUNTUR ACIT, CENTRAL CIRCLE, VIJAYAWADA [PAN NO. AFTPR6672K ] ( ' / APPELLANT) ( ()' / RESPONDENT) / APPELLANT BY : SHRI G.V.N. HARI, AR / RESPONDENT BY : SHRI R. GOVINDA RAJAN, DR / DATE OF HEARING : 21.09.2017 / DATE OF PRONOUNCEMENT : 27.09.2017 / O R D E R PER D.S. SUNDER SINGH, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) {CIT(A)}, GUNT UR VIDE ITA NOS.644, 647 & 648/CIT(A)/GNT/2007-08 DATED 25.2.20 14 FOR THE ASSESSMENT YEAR 2001-02. ITA NO.566/VIZAG/2014 SRI RAYAPATI VENKATA KOTESWARA PRASAD, GUNTUR 2 2. IN THIS CASE THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME OF ` 3,32,697/- ON 12.12.2001 FOR THE ASSESSMENT YEAR 2 0001- 02. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 143(3) R.W.S. 153A OF THE ACT ON 31.12.2007 AND DURING THE ASSESS MENT PROCEEDINGS THE ASSESSING OFFICER MADE THE ADDITION OF ` 11,65,000/- AS UNEXPLAINED CASH CREDITS AND THE DISALLOWANCE OF INTEREST OF ` 1,79,585/-. BOTH THE ABOVE ENTRIES WERE RECORDED IN THE REGULAR BOOKS OF ACCOUNTS AND NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING TH E COURSE OF SEARCH. 3. IN THE ABOVE APPEAL, THE RETURN WAS PROCESSED U/ S 143(1) OF THE ACT AND THE A.O. HAS NOT MADE ANY ASSESSMENT U/S 14 3(3) OF THE ACT. SEARCH AND SEIZURE OPERATIONS WERE CONDUCTED IN THI S CASE ON 08/02/2006 AND THE DUE DATE FOR ISSUING THE NOTICE U/S 143(2) OF THE ACT GOT EXPIRED BEFORE THE DATE OF SEARCH. THE ASSESSEE HAS FILED APPEAL IN FORM 36 RAISING 3 GROUNDS ON MERITS CHALLENGING THE ADDITION MADE BY THE A.O., WHICH ARE AS UNDER: 1. THE LEARNED CIT(A) IS NOT JUSTIFIED IN CONFIRMING T HE ADDITION OF ` 11,65,000/- TOWARDS UNEXPLAINED CREDITS, WITHOUT APPRECIATING T HE FACTS OF THE CASE. 2. THE LEARNED CIT(A) IS NOT JUSTIFIED IN CONFIRMING T HE ADDITION OF ` 1,79,585/- TOWARDS INTEREST ON THE ABOVE CREDITS, WITHOUT APPR ECIATING THE FACTS OF THE CASE. 3. THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE A BOVE TWO ADDITIONS IN AN ASSESSMENT U/S 143(3) R.W.S. 153A, IN THE ABSENCE O F ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. ITA NO.566/VIZAG/2014 SRI RAYAPATI VENKATA KOTESWARA PRASAD, GUNTUR 3 4. FOR THE ABOVE, AND ANY GROUND OR GROUNDS THAT MAY B E URGED DURING THE COURSE OF HEARING, IT IS PRAYED THAT THE HONBLE CI T(A) BE PLEASED TO DIRECT THE LEARNED ASSESSING OFFICER TO DELETE THE ABOVE TWO A DDITIONS. 4. THE ASSESSEE HAS FILED A PETITION FOR ADMISSION OF ADDITIONAL GROUND ON 26.8.2017 RAISING THE FOLLOWING ADDITIONAL GROUN D: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, WHETHER THE ADDITIONS OF ` 11,65,000/- TOWARDS UNEXPLAINED CREDITS AND ` 1,79,585/- TOWARDS DISALLOWANCE OF INTEREST ARE BEYOND THE SCO PE OF ADDITIONS THAT CAN BE MADE IN AN ASSESSMENT U/S 143(3) R.W.S. 153A OF THE INCOME TAX ACT, 1961? 5. AFTER CONSIDERING THE PETITION FILED BY THE ASSE SSEE FOR ADMISSION OF ADDITIONAL GROUND AND AFTER HEARING THE LD. D.R., T HE ADDITIONAL GROUND IS ADMITTED, SINCE THE ADDITIONAL GROUND IS A LEGAL GR OUND, WHICH GOES TO THE ROOT OF ASSESSMENT. DURING THE APPEAL HEARING, LD. A.R. ARGUED THAT THE ASSESSEE FILED THE RETURN OF INCOME WHICH WAS PROCESSED U/S 143(1) OF THE ACT AND NO NOTICE U/S 143(2) OF THE ACT WAS ISSUED. THE TIME LIMIT FOR ISSUE OF NOTICE GOT EXPIRED BY THE TIME SEARCH CONDUCTED IN THE CASE OF THE ASSESSEE. A SEARCH & SEIZURE OPERATION WAS CONDUCT ED IN THIS CASE ON 8.2.2006. THE LD. A.R. ARGUED THAT THE A.O. CANNOT PROCEED TO MAKE ASSESSMENT U/S 153A OF THE ACT IN THE CASE OF COMPL ETED ASSESSMENT WITHOUT THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH AND SEIZURE OPERATION. IN THE CASE OF THE ASSESSEE, TH E ASSESSMENT WAS COMPLETED ON THE BASIS OF ENTRIES RECORDED IN THE R EGULAR BOOKS OF ITA NO.566/VIZAG/2014 SRI RAYAPATI VENKATA KOTESWARA PRASAD, GUNTUR 4 ACCOUNTS AND NO ADDITION WAS MADE ON THE BASIS OF T HE MATERIAL FOUND DURING THE COURSE OF SEARCH. SINCE THERE WAS NO MA TERIAL ON RECORD TO SHOW THAT THE ASSESSMENT WAS COMPLETED ON THE BASIS OF SEIZED MATERIAL, THE ASSESSING OFFICER SHOULD NOT HAVE MADE THE ADDI TIONS IN THE ASSESSMENT. THEREFORE, THE LD. A.R. REQUESTED TO S ET ASIDE THE ORDER OF THE LOWER AUTHORITIES AND ALLOW THE APPEAL OF THE A SSESSEE. THE LD. A.R. RELIED ON THE ORDER OF THIS TRIBUNAL IN THE CASE OF P. RAMA RAJU VS. DCIT, CENTRAL CIRCLE-1, VISAKHAPATNAM IN ITA NOS.424, 425 & 426/VIZAG/2013 DATED 31.7.2017. 6. ON THE OTHER HAND, THE LD. D.R. ARGUED THAT AFTE R THE INTRODUCTION OF PROVISIONS OF SECTION 153A & 153C OF THE ACT, TH E ISSUE WITH REGARD TO MAKING ASSESSMENT ON THE BASIS OF SEIZED MATERIAL N OT IN ACCORDANCE WITH THE SPIRIT OF INTRODUCTION OF NEW PROVISIONS FOR FRAMING THE SEARCH ASSESSMENTS. THE LD. D.R. FURTHER ARGUED THAT MAKI NG THE ASSESSMENTS ON THE BASIS OF THE SEIZED MATERIAL IS RELATABLE TO THE EARLIER BLOCK ASSESSMENTS MADE U/S 158BC & 158BD IN CHAPTER XIV-B OF THE ACT. AFTER THE INTRODUCTION OF SECTION 153A/153C OF THE ACT, THE A.O. IS LEGALLY BOUND TO TAKE UP THE ASSESSMENTS IRRESPECTIVE OF SE IZED MATERIAL OR INCRIMINATING MATERIAL. THE LD. D.R. FURTHER SUBMIT TED THAT IN THE STATEMENT OF FACTS FILED ALONG WITH FORM 35 BEFORE FIRST APPELLATE AUTHORITY, THE ASSESSEE HIMSELF REFERRED THAT THE A SSESSMENT WAS MADE ITA NO.566/VIZAG/2014 SRI RAYAPATI VENKATA KOTESWARA PRASAD, GUNTUR 5 ON THE SEARCH & SEIZURE OPERATION, THUS THE LD. A.R .S ARGUMENT THAT THE ASSESSMENT WAS NOT BASED ON THE INCRIMINATING MATER IAL IS INCORRECT. HENCE, THE LD. D.R. ARGUED THAT THE CASE SHOULD BE REMITTED BACK TO THE FILE OF THE LD. CIT(A) TO VERIFY WHETHER THE ASSESS MENT WAS MADE ON THE BASIS OF INCRIMINATING MATERIAL OR NOT? RESPONDING TO THE ARGUMENT OF THE LD. D.R, THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ADDITIONS WERE MADE PURELY ON THE ENTRIES MADE IN THE BOOKS OF ACCOUNTS BUT NOT BASED ON ANY INCRIMINATING MATERIAL. THE ASSESSING OFFICER HAS N OT REFERRED ANY OF THE SEIZED MATERIAL IN THE ASSESSMENT ORDER, HENCE IT N OT NECESSARY TO REMIT THE MATTER BACK TO THE FILE OF THE LD.CIT(A). 7. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. IN THIS CASE, SEARCH U/S 132 OF THE ACT WAS CARRIED OUT ON 8.2.2006 AND BY THE TIME SEARCH WAS CONDUCTED, THE TIME LIMIT FOR ISSUE OF NOTICE U/S 143(2) OF THE ACT GOT EXPIRED. THE RETURN WAS PROCESSED U/ S 143(1) OF THE ACT. THEREFORE, THE ASSESSMENT WAS COMPLETED IN RESPECT OF ASSESSMENT FOR THE ASSESSMENT YEAR 2001-02. THIS TRIBUNAL IN THE C ASE OF Y.V. ANJANEYULU VS. DCIT (CENTRAL CIRCLE), VIJAYAWADA IN ITA NOS.513 & 514/VIZAG/2013 HELD THAT THERE IS NO CASE FOR MAKIN G ADDITION U/S 153BA ITA NO.566/VIZAG/2014 SRI RAYAPATI VENKATA KOTESWARA PRASAD, GUNTUR 6 R.W.S. 143(3) OF THE ACT, IF NO INCRIMINATING MATER IAL WAS FOUND DURING THE COURSE OF SEARCH IN COMPLETED ASSESSMENTS. THI S TRIBUNAL WHILE PASSING THE ORDER IN THE CITED CASE HAS RELIED ON T HE DECISION OF ITAT SPECIAL BENCH IN THE CASE OF ALL CARGO GLOBAL LOGIS TICS LIMITED VS. DCIT (2012) 137 ITD 287 AND THE DECISION OF HONBLE A.P. HIGH COURT IN THE CASE OF CIT VS. M/S. AMR INDIA LIMITED IN ITTA NO.3 54 OF 2014 DATED 12.6.2014. FOR READY REFERENCE, WE EXTRACT RELEVAN T PARAGRAPH OF THE ORDER OF THIS TRIBUNAL CITED SUPRA AS UNDER: 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THIS CASE, SEARCH WAS CONDUCTED ON 2 2.8.2008 AND THE ASSESSMENT UNDER THE CONSIDERATION IS THE A.Y. 200 5-06. TIME LIMIT FOR ISSUE OF NOTICE U/S 143(2) OF THE ACT IS EXPIRED ON 31.3.2007. SINCE THE PERIOD OF LIMITATION FOR ISSUE OF NOTICE U/S 143(2) OF THE ACT HAS BEEN EXPIRED, THE ASSESSMENT DEEMED TO HAVE BEEN COMPLET ED AND REACHED FINALITY. AS PER THE JUDICIAL PRECEDENTS AND THE R ULING OF THIS TRIBUNAL IN THE CASE LAW CITED (SUPRA), THE COORDINATE BENCH HELD T HAT WHERE THE ASSESSMENT HAVE BEEN REACHED FINALITY CANNOT BE TIN KERED WITH UNLESS THERE WAS A SEIZED DOCUMENT INDICATING UNDISCLOSED INCOME OR THE ASSET. FOR READY REFERENCE, WE EXTRACT THE RELEVANT PARA O F THE ORDER CITED (SUPRA): 11. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MAT ERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. THE ONLY ISSUE THAT ARISES FOR OUR CONSIDERATION IS WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE A.O. IS RIGHT IN MAK ING ADDITIONS WITHOUT ANY SEIZED MATERIALS IN RESPECT OF ASSESSMENT YEARS FOR WHICH THE ASSESSMENT PROCEEDINGS HAVE BEEN CONCLUDED AS ON TH E DATE OF SEARCH. THE LD. A.R. FOR THE ASSESSEE, SUBMITTED THAT THE I SSUE HAS BEEN ALREADY CONSIDERED BY THE COORDINATE BENCH OF VISAKHAPATNAM ITAT IN THE CASE OF SRI HARI PRASAD BHARARIA VS. DCIT IN ITA NOS.435 TO 441/VIZAG/2014, WHEREIN IT HAS BEEN OBSERVED THAT THE A.O. HAS NO J URISDICTION TO MAKE ADDITIONS IN THE ABSENCE OF ANY SEIZED MATERIALS IN THE ASSESSMENTS MADE U/S 143(3) R.W.S. 153A OF THE ACT, FOR THE ASSESSME NT YEARS WHICH ARE CONCLUDED AND NO PROCEEDINGS ARE PENDING AS ON THE DATE OF SEARCH. THE RELEVANT PORTION OF THE ORDER IS EXTRACTED BELOW: ITA NO.566/VIZAG/2014 SRI RAYAPATI VENKATA KOTESWARA PRASAD, GUNTUR 7 12. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MAT ERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. THE FACTUAL MATRIX OF THE CASE IS THAT THERE WAS A SEAR CH ACTION U/S 132 OF THE ACT. CONSEQUENT TO THE SEARCH, THE ASSESSEE CAS E WAS CENTRALIZED AND ACCORDINGLY, NOTICE U/S 153A OF THE ACT WAS ISS UED REQUIRING ASSESSEE TO FILE RETURN FOR 6 ASSESSMENT YEARS IMME DIATELY PRECEDING THE ASSESSMENT YEAR IN WHICH SEARCH IS CONDUCTED. T HE ASSESSEE FILED RETURNS IN RESPONSE TO NOTICE U/S 153A OF THE ACT. THE A.O. COMPLETED THE ASSESSMENT U/S 143(3) R.W.S. 153A OF THE ACT AN D MADE ADDITIONS TOWARDS DEEMED DIVIDEND UNDER THE PROVISIONS OF SEC TION 2(22)(E) OF THE ACT. THE A.O. WAS OF THE OPINION THAT TRANSACTI ONS BETWEEN THE ASSESSEE AND HIS COMPANY IS COMING WITHIN THE DEFIN ITION OF DEEMED DIVIDEND UNDER THE PROVISIONS OF SECTION 2(22)(E) O F THE ACT. IT IS THE CONTENTION OF THE ASSESSEE THAT THE ASSESSMENT ORDE R PASSED BY THE A.O. U/S 143(3) R.W.S. 153A OF THE ACT, FOR THE ASS ESSMENT YEARS 2005- 06 TO 2009-10 IS NULL AND VOID AS THE A.O. HAS MADE ADDITIONS TOWARDS DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT WITHOUT ANY INCRIMINATING MATERIALS. THE ASSESSEE FURTHER CONTENDED THAT AS P ER SECTION 153A OF THE ACT, DE-NOVO ASSESSMENT CAN BE MADE ONLY IN RES PECT OF ASSESSMENT YEAR FOR WHICH THE ASSESSMENT PROCEEDING S HAS BEEN ABATED AND THAT IN RESPECT OF ASSESSMENT YEARS FOR WHICH THE ASSESSMENT HAD ALREADY BEEN COMPLETED, NO ADDITIONS CAN BE MADE U/S 153A OF THE ACT UNLESS THERE WAS INCRIMINATING MATE RIAL FOUND DURING THE COURSE OF SEARCH. 13. THE A.O. HAS PASSED ASSESSMENT ORDERS U/S 153A OF THE ACT, FOR ALL THE SIX ASSESSMENT YEARS, IMMEDIATELY PRECEDING THE YEAR IN WHICH THE SEARCH WAS CONDUCTED. ACCORDING TO THE A.O., AS PER THE PROVISIONS OF SECTION 153A OF THE ACT, THERE IS NO LIMITATION OR RESTRICTION PROVIDED IN THE NEW PROCEDURE OF SEARCH ASSESSMENT ON THE POWER S OF THE A.O. FOR MAKING ASSESSMENT/RE-ASSESSMENT AND THE A.O. IS NOT REQUIRED TO CONFINE HIS ASSESSMENTS ON THE MATERIALS FOUND DURI NG THE COURSE OF SEARCH AS WAS THE CASE IN THE OLD PROCEDURE OF BLOC K ASSESSMENTS. IT IS THE CONTENTION OF THE ASSESSEE THAT THE A.O. CANNOT DISTURB THE COMPLETED ASSESSMENT UNLESS THERE WAS A SEIZED MATE RIAL. THE ASSESSEE FURTHER CONTENDED THAT WHERE ASSESSMENTS A RE NOT PENDING AS ON THE DATE OF SEARCH AND TIME LIMIT FOR ISSUE OF N OTICE U/S 143(2) OF THE ACT HAS BEEN EXPIRED, IRRESPECTIVE OF THE FACT THAT THOSE ASSESSMENTS HAVE BEEN COMPLETED U/S 143(1) OR 143(3 ) OF THE ACT, THEN THE A.O. HAS NO POWER TO RE-ASSESS THE INCOME OF THOSE COMPLETED ASSESSMENT YEARS. WE FIND FORCE IN THE A RGUMENTS OF THE ASSESSEE, FOR THE REASON THAT THE COORDINATE BENCH OF THIS TRIBUNAL IN ITA NOS.300 TO 305/VIZAG/2012, IN CASE OF L. SURYAK ANTHAM VS. ACIT, HAS CONSIDERED SIMILAR ISSUE AND HELD THAT THE A.O. HAD NO JURISDICTION TO MAKE ADDITIONS U/S 153A OF THE ACT, FOR THE ASSE SSMENTS WHICH ARE NOT PENDING AS ON THE DATE OF SEARCH AND ALSO THE T IME LIMIT FOR ISSUE OF NOTICE U/S 143(2) OF THE ACT HAS BEEN EXPIRED. THE RELEVANT PORTION OF THE ORDER IS EXTRACTED BELOW: ITA NO.566/VIZAG/2014 SRI RAYAPATI VENKATA KOTESWARA PRASAD, GUNTUR 8 19. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MAT ERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE FACTUAL MATRIX OF THE CASE IS THAT THER E WAS A SEARCH ACTION U/S 132 OF THE ACT. DURING THE COURSE OF SEA RCH, INCRIMINATING DOCUMENTS FOUND REVEALS THAT THE ASSESSEE HAS INFLA TED LABOUR CHARGES FOR THE ASSESSMENT YEARS 2008-09 & 2009-10. BASED ON THE DOCUMENTS FOUND DURING SEARCH, THE ASSESSEE HAS ACCEPTED THAT HE HAS INFLATED 10% LABOUR CHARGES AND WHICH IS COM MON IN THIS LINE OF BUSINESS. CONSEQUENT TO SEARCH ACTION U/S 132 OF THE ACT, THE ASSESSEE CASE HAS BEEN CENTRALIZED AND ACCORDIN GLY FRESH ASSESSMENT PROCEEDINGS HAVE BEEN INITIATED BY ISSUI NG NOTICE U/S 153A/153C OF THE ACT FOR THE SIX ASSESSMENT YEARS I MMEDIATELY PRECEDING THE ASSESSMENT YEAR IN WHICH SEARCH WAS C ONDUCTED. THE ASSESSEE HAS FILED REVISED RETURNS IN RESPONSE TO NOTICE U/S 153A OF THE ACT AND ADMITTED THE ADDITIONAL INCOME DISCLOSED DURING THE COURSE OF SEARCH. THE CASE HAS BEEN SELECTED F OR SCRUTINY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSEE WAS ASKED TO PRODUCE BOOKS OF ACCOUNTS AND RELEVANT BIL LS & VOUCHERS IN SUPPORT OF EXPENDITURE CLAIMED. IN RESPONSE, THE AS SESSEE FILED WRITTEN SUBMISSION AND STATED THAT THE BOOKS OF ACC OUNTS ARE NOT AVAILABLE AND HENCE CANNOT BE FURNISHED. THEREFORE , THE A.O. ISSUED A SHOW CAUSE NOTICE AND ASKED TO EXPLAIN WHY THE NET PROFIT FROM THE BUSINESS SHALL NOT BE ESTIMATED. IN RESPON SE TO SHOW CAUSE NOTICE, THE ASSESSEE HAS FILED A WRITTEN REPL Y AND CONTENDED THAT THE INCOME FOR THE ASSESSMENT YEAR 2004-05, 20 05-06 AND 2007-08 CANNOT BE TINKERED WITH, AS THERE WAS NO IN CRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH FOR THE ABOVE ASSESSMENT YEARS AND AS SUCH NO ADDITIONS CAN BE MA DE TO THE RETURNED INCOME. IT IS FURTHER SUBMITTED THAT AS P ER SEC. 153A OF THE ACT, DE-NOVO ASSESSMENT CAN BE MADE ONLY IN RES PECT OF THE ASSESSMENT YEAR FOR WHICH THE ASSESSMENT PROCEEDING S HAD BEEN ABATED AND THAT IN RESPECT OF ASSESSMENT YEARS FOR WHICH THE ASSESSMENT HAD ALREADY BEEN REACHED A FINALITY, SUC H ASSESSMENT COULD NOT BE MADE U/S 153A OF THE ACT UNLESS THERE WAS SEIZED MATERIALS. 20. THE A.O. HAS PASSED REASSESSMENT ORDERS U/S 153 A/153C OF THE ACT FOR ALL THE SIX ASSESSMENT YEARS IMMEDIATEL Y PRECEDING THE YEAR IN WHICH SEARCH WAS CONDUCTED. ACCORDING TO T HE A.O., AS PER THE PROVISIONS OF SECTION 153A OF THE ACT, THERE IS NO LIMITATION OR RESTRICTION PROVIDED IN THE NEW PROCEDURE OF SEARCH ASSESSMENTS ON THE POWERS OF A.O. FOR MAKING ASSESSMENT/REASSESSME NT AND THE A.O. IS NOT REQUIRED TO CONFINE HIS ASSESSMENTS ON THE MATERIAL FOUND DURING THE COURSE OF SEARCH AS WAS THE CASE I N THE OLD PROCEDURE OF BLOCK ASSESSMENTS. THE NEW PROCEDURE OF BLOCK ASSESSMENT WAS EXPLAINED BY WAY OF PROVISIONS OF SE CTION 153A OF THE ACT. AS PER SECTION 153A OF THE ACT, THE A.O. SHALL ASSESS OR REASSESS THE TOTAL INCOME OF THE SPECIFIED SIX ASSE SSMENT YEARS ITA NO.566/VIZAG/2014 SRI RAYAPATI VENKATA KOTESWARA PRASAD, GUNTUR 9 IRRESPECTIVE OF THE FACT THAT THE ASSESSMENT OF THE SAID YEARS WERE COMPLETED OR PENDING AS ON THE DATE OF SEARCH. THE REFORE, THE A.O. HAS REASSESSED THE INCOME OF SIX ASSESSMENT YEARS A ND RECOMPUTED THE PROFITS AFRESH AFTER CONSIDERING THE RELEVANT F ACTS AVAILABLE ON RECORD. IT WAS THE CONTENTION OF THE ASSESSEE THAT THE A.O. CANNOT DISTURB THE COMPLETED ASSESSMENTS UNLESS THERE WAS A SEIZED MATERIAL. THE ASSESSEE FURTHER CONTENDED THAT WHERE ASSESSMENTS ARE NOT PENDING AS ON THE DATE OF SEARCH AND TIME L IMIT FOR ISSUE OF NOTICES U/S 143(2) OF THE ACT HAS BEEN EXPIRED, IRR ESPECTIVE OF THE FACT THAT THOSE ASSESSMENTS HAVE BEEN COMPLETED U/S 143(1) OR 143(3) OF THE ACT, THEN THE A.O. HAS NO POWER TO RE ASSESS THE INCOME OF THOSE COMPLETED ASSESSMENT YEARS. 21. WE FIND FORCE IN THE ARGUMENTS OF THE ASSESSEE FOR THE REASON THAT THE ISSUE NO LONGER RES INTEGRA, AS THE ISSUE HAS BEEN ALREADY DECIDED BY THE ITAT, SPECIAL BENCH AND HELD THAT WHERE THE ASSESSMENTS ARE NOT PENDING AS ON THE DATE OF SEARC H, THE A.O. LOSSES JURISDICTION U/S 153A OF THE ACT TO REASSESS THE INCOME OF THOSE COMPLETED ASSESSMENTS. THOUGH THE PROVISIONS OF SECTION 153A OF THE ACT DOES NOT SPECIFY ABATED AND COMPLET ED ASSESSMENTS, THE NATURAL MEANING ASSIGNED TO IT SHO ULD BE GIVEN TO INTERPRET THE PROVISIONS IN SUCH A WAY THAT WHICH S HALL NOT CAUSE UNDUE HARDSHIP TO THE TAX PAYERS. THE PROVISIONS OF SECTION 153A OF THE ACT EXPLAINED THE PROCEDURE OF ASSESSMENTS, ABA TED ASSESSMENTS AND THE MANNER IN WHICH THE ASSESSMENT SHOULD BE FRAMED, WHICH WAS FURTHER SUPPORTED BY CIRCULAR NO. 7 OF 2003 ISSUED BY THE CBDT. WHEN THE LAW HAS EXPLAINED THE POSITI ON OF ABATED ASSESSMENTS, THEN THE SAME WAY THE COMPLETED ASSESS MENT SHOULD BE TREATED SO AS TO UNDERSTAND THAT THOSE ASSESSMEN TS ARE REACHED FINALITY AND WHICH CANNOT BE TINKERED WITH UNLESS T HERE WAS A SEIZED DOCUMENT. THEREFORE, WE ARE OF THE CONSIDERED OPINI ON THAT WHERE SEARCH IS INITIATED, ALL PENDING ASSESSMENTS ARE ME RGE INTO ONE AND ONLY ONE ASSESSMENT FOR EACH ASSESSMENT YEAR SHALL BE MADE SEPARATELY ON THE BASIS OF FINDINGS OF SEARCH AND O THER MATERIAL EXISTING OR BROUGHT ON RECORD BY THE A.O. IN RESPE CT OF NON ABATED OR COMPLETED ASSESSMENTS, THE ASSESSMENT WILL BE MA DE ON THE BASIS OF BOOKS OF ACCOUNTS OR OTHER RELEVANT DOCUME NTS FOUND DURING THE COURSE OF SEARCH, BUT NOT PRODUCED IN TH E COURSE OF ORIGINAL ASSESSMENT. 22. IN THE PRESENT CASE ON HAND, ON PERUSAL OF THE D OCUMENT AVAILABLE ON RECORD, WE FIND THAT THE ASSESSMENT FO R THE ASSESSMENT YEAR 2004-05 TO 2007-08 WERE NOT PENDING AS ON THE DATE OF SEARCH. THE FACT THAT THE ASSESSMENT HAS BEEN COMP LETED U/S 143(1) & 143(3) OF THE ACT ARE NOT MATERIAL. THE TI ME LIMIT FOR ISSUE OF NOTICE U/S 143(2) OF THE ACT HAS BEEN EXPIRED. O N FURTHER VERIFICATION OF THE DOCUMENTS AVAILABLE ON RECORD, WE FIND THAT THERE WAS NO INCRIMINATING DOCUMENTS FOUND DURING THE COU RSE OF SEARCH ITA NO.566/VIZAG/2014 SRI RAYAPATI VENKATA KOTESWARA PRASAD, GUNTUR 10 IN RESPECT OF ASSESSMENT YEAR 2004-05 TO 2007-08. THEREFORE, WE ARE OF THE OPINION THAT THE A.O. WAS NOT CORRECT IN REASSESSING THE TOTAL INCOME OF THE ASSESSMENT YEAR 2004-05 TO 2007 -08 IN THE ABSENCE OF ANY SEIZED MATERIALS. ACCORDINGLY, WE D IRECT THE A.O. TO DELETE THE ADDITIONS MADE FOR THE ASSESSMENT YEAR 2 004-05, 2005- 06 & 2007-08. 23. IT IS PERTINENT TO DISCUSS HEREIN THE CASE LAWS RELIED UPON BY THE ASSESSEE. THE ASSESSEE HAS RELIED UPON THE ITA T, SPECIAL BENCH DECISION IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT (2012) 137 ITD 287. THE COORDINATE BENCH OF THIS T RIBUNAL, WHILE DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE HELD A S UNDER: IN ASSESSMENTS THAT ARE ABATED, THE AO ARETAINS TH E ORIGINAL JURISDICTION AS WELL AS JURISDICTION CONFERRED ON H IM U/S 153A FOR WHICH ASSESSMENTS SHALL BE MADE FOR EACH OF THE SIX ASSESSMENT YEARS SEPARATELY. IN OTHER CASES, IN ADDITION TO TH E INCOME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT U/S 153A WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL, WHICH IN THE C ONTEXT OF RELEVANT PROVISIONS MEANS (I) BOOKS OF ACCOUNT, OTHER DOCU MENTS, FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT, AND (II) UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH. 24. THE ASSESSEE RELIED UPON, A.P. HIGH COURT DECIS ION IN THE CASE OF CIT VS. M/S. AMR INDIA LTD. IN ITTA NO.354 OF 2014 DATED 12.6.2014. THE HONBLE HIGH COURT HELD THAT THE A.O . HAS NO JURISDICTION TO RE-AGITATE THE ASSESSMENTS WHICH WE RE ALREADY COMPLETED AND SUBSIDING. THE RELEVANT PORTION IS E XTRACTED BELOW: WE HAVE HEARD SRI J.V. PRASAD, LEARNED COUNSEL FOR THE APPELLANT, AND GONE THROUGH THE IMPUGNED JUDGEMENT AND ORDER O F THE LEARNED TRIBUNAL. IT APPEARS THAT THE LEARNED TRIBUNAL FOUND ON FACT T HAT AFTER COMPLETION OF ASSESSMENT PROCEEDINGS AND AFTER REAC HING FINALITY THEREON, THE ASSESSING OFFICER TRIED TO REAGITATE T HE ASSESSMENTS. ACCORDING TO US, THE LEARNED TRIBUNAL HAS RIGHTLY H ELD THAT THE ASSESSING OFFICER HAS NO JURISDICTION TO REAGITATE THE ASSESSMENTS WHICH WERE ALREADY COMPLETED AND SUBSISTING. WE TH EREFORE DO NOT FIND ANY ELEMENT OF LAW TO BE DECIDED IN THIS APPEA L. HENCE, THE APPEAL IS DISMISSED. THERE WILL BE NO O RDER AS TO COSTS. 25. THE ASSESSEE HAS RELIED UPON THE COORDINATE BEN CH DECISION OF ITAT, VISAKHAPATNAM IN THE CASE OF A.T. RAYUDU I N ITA NO.373 TO 379/VIZAG/2014. THE COORDINATE BENCH, UNDER SIMILAR CIRCUMSTANCES ITA NO.566/VIZAG/2014 SRI RAYAPATI VENKATA KOTESWARA PRASAD, GUNTUR 11 HELD THE ISSUE IN FAVOUR OF THE ASSESSEE. THE RELE VANT PORTION IS REPRODUCED HEREUNDER: 22. IN THIS REGARD, IT IS ALSO PERTINENT TO REFER TO THE FOLLOWING OBSERVATIONS MADE BY THE SPECIAL BENCH IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD (SUPRA):- 57 (F) IN THE CASE OF PARASHURAM POTTERY WORKS CO. LTD VS. ITO (106 JTR 57)(SC), IT HAS BEEN MENTIONED IN THE LAST PARAGRAP H OF THE JUDGMENT THAT THE COURT HAS TO BEAR IN MIND THAT THE POLICY OF LA W IS THAT THERE MUST BE A POINT OF FINALITY IN ALL LEGAL PROCEEDINGS, THAT ST ALE ISSUES SHOULD NOT BE REACTIVATED BEYOND A PARTICULAR STAGE AND THAT LAPS E OF TIME MUST INDUCE REPOSE IN AND SET AT REST JUDICIAL AND QUASI JUDICI AL CONTROVERSIES AS IT MUST IN OTHER SPHERES OF HUMAN ACTIVITY. OUR DECISION IS IN CONSONANCE WITH THIS OBSERVATION. THE DECISION RENDERED BY THE SPECIAL BENCH THAT THE ASSESSING OFFICER CAN MAKE ADDITIONS IN THE CASE OF CONCLUDED ASSESSM ENTS ON THE BASIS OF INCRIMINATING MATERIALS IS ALSO BASED UPON THE DECI SION RENDERED BY HONBLE SUPREME COURT IN THE CASE OF PARASHURAM POTTERY WOR KS CO. LTD (SUPRA). 23. WE HAVE EARLIER NOTICED THAT THE HON'BLE JURIS DICTIONAL ANDHRA PRADESH HIGH COURT HAS ALSO UPHELD BY THE ORDERS PASSED BY THE TRIBUNAL BY FOLLOWING THE DECISION RENDERED BY THE SPECIAL BENCH IN THE C ASE OF ALL CARGO GLOBAL LOGISTICS LTD (SUPRA) IN THE FOLLOWING CASES: - (A) SREE LALITHA CONSTRUCTIONS (J1TA NO 368 OF 2014) (B) M/S. HYDERABAD HOUSE PVT LTD (ITTA NO.266 OF 2 013) (C)M/S. AMR INDIA LTD (FITA NO.357 /V/2014) FURTHER WE AGREE WITH THE CONTENTIONS OF THE ASSESS EE THAT THE DECISION RENDERED BY THE JURISDICTIONAL HIGH COURT IN THE CA SE OF GOPAL DAS BHADRUKA (SUPRA) HAVE BEEN RENDERED ON THE FACTS PREVAILING IN THOSE CASES, SINCE THE ISSUE RELATING TO CONCLUDED ASSESSMENTS AND PENDING ASSESSMENTS WAS NOT BEFORE THE I1ON'BLE ANDHRA PRADESH HIGH COURT ON TH E CONTRARY, THE ABOVE SAID THREE DECISIONS OF THE JURISDICTIONAL HIGH COU RT COMES TO THE SUPPORT OF THE ASSESSEE'S CONTENTIONS WITH REGARD TO THE LEGAL PROPOSITION AGITATED BEFORE US, BESIDES THE DECISIONS RENDERED BY VARIOU S OTHER HIGH COURTS. ACCORDINGLY, WE ARE OF THE VIEW THAT THE SCOPE OF E NQUIRY IN THE CASE OF UNABATED ASSESSMENTS, I.E., THE ASSESSMENT YEARS IN WHICH PROCEEDINGS ARE NOT PENDING, IS THAT THE UNDISCLOSED INCOME SHOULD BE ASCERTAINED ONLY ON THE BASIS OF MATERIALS FOUND DURING THE COURSE OF S EARCH. IF NO INCRIMINATING MATERIAL SHOWING ANY UNDISCLOSED INCOME WAS FOUND I N THE CASE OF CONCLUDED PROCEEDINGS, THEN THE QUESTION OF MAKING ANY ADDITION DOES NOT ARISE. IN THAT CASE, THE ASSESSING OFFICER SHOULD C OMPLETE THE ASSESSMENT OF THOSE YEARS BY DETERMINING THE VERY SAME TOTAL INCO ME THAT WAS ASSESSED IN THE EARLIER PROCEEDING. ITA NO.566/VIZAG/2014 SRI RAYAPATI VENKATA KOTESWARA PRASAD, GUNTUR 12 24. IN VIEW OF THE ABOVE, WE ARE UNABLE TO AGREE W ITH THE CONTENTIONS OF LD STANDING COUNSEL THAT THE ASSESSING OFFICER W OULD GET UNFETTERED POWERS IN THE CASE OF UNABATED ASSESSMENTS, ONCE TH EY WERE REOPENED US 153A OF THE ACT. IN OUR VIEW, IN THE CASE OF UNA BATED ASSESSMENTS, THE TOTAL INCOME SHOULD BE DETERMINED BY THE ASSESSING OFFICER BY COMBINING THE INCOME ALREADY ASSESSED/DISCLOSED IN THE RETURN OF INCOME AND THE UNDISCLOSED INCOME, IF ANY, FOUND DURING THE COURSE OF SEARCH PROCEEDING. EVEN OTHERWISE, IT IS SETTLED PROPOSITION OF LAW TH AT THE ASSESSEE IS ENTITLED TO TAKE SUPPORT OF THE DECISION IN HIS FAVOUR, WHEN TWO CONTRADICTORY VIEWS HAVE BEEN EXPRESSED BY THE HIGH COURTS. IN THE INST ANT CASE THE HONBLE JURISDICTIONAL HIGH COURT COMES TO THE SUPPORT OF T HE ASSESSEE IN RESPECT OF THE LEGAL PROPOSITION IN ADDITION TO THE DECISIO N RENDERED BY THE HON'BLE BOMBAY HIGH COURT. ACCORDINGLY, WE FIND MERIT IN TH E CONTENTIONS OF THE ASSESSEE ON THE LEGAL ISSUE. 26. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO RESPECTFULLY FOLLOWING THE COORDINATE BENCH DECISIO N IN THE CASE OF ALL CARGO LOGISTICS PVT. LTD. (SUPRA), WE ARE OF TH E OPINION THAT THE A.O. HAS MADE REASSESSMENT U/S 153A/153C OF THE ACT ON THE BASIS OF INFORMATION/MATERIAL AVAILABLE IN THE RETURN OF INCOME, WITHOUT REFERRING TO ANY SEIZED MATERIAL. THEREFORE, FOLLO WING THE SPECIAL BENCH DECISION (SUPRA) WE HOLD THAT THE A.O. HAD NO JURISDICTION TO MAKE ADDITIONS U/S 153A OF THE ACT FOR THE ASSESSME NTS WHICH ARE NOT PENDING AS ON THE DATE OF SEARCH. IN THIS CASE , THE SEARCH WAS CONDUCTED ON 14.7.2009. THE ASSESSMENT FOR THE ASS ESSMENT YEARS 2004-05 TO 2007-08, WERE NOT PENDING AS ON THE DATE OF SEARCH. THE TIME LIMIT FOR ISSUE OF NOTICE UNDER SEC. 143(2 ) HAS BEEN EXPIRED. THEREFORE, THE A.O. HAS NO JURISDICTION TO REASSESS THE INCOME FOR THE ASSESSMENT YEAR 2004-05 TO 2007-08 I N THE ABSENCE OF ANY INCRIMINATING MATERIALS. HENCE, WE DELETE T HE ADDITIONS MADE BY THE A.O. FOR THE ASSESSMENT YEAR 2004-05, 2 005-06 & 2007-08. ACCORDINGLY, THE GROUND RAISED BY THE ASS ESSEE IS ALLOWED. 14. IN THIS VIEW OF THE MATTER AND CONSIDERING FACTS AND CIRCUMSTANCES OF THIS CASE AND ALSO RESPECTFULLY FOLLOWING THE DE CISION OF CO-ORDINATE BENCH OF VISAKHAPATNAM, IN THE CASE OF L. SURYAKANT HAM VS. ACIT, IN ITA NOS.300 TO 305/VIZAG/2012, WE ARE OF THE VIEW T HAT THE A.O. HAS MADE REASSESSMENT U/S 153A/153C OF THE ACT, ON THE BASIS OF INFORMATION/MATERIAL AVAILABLE IN THE RETURN OF INC OME, WITHOUT REFERRING TO ANY SEIZED MATERIAL. THEREFORE, FOLLOWING THE SP ECIAL BENCH DECISION (SUPRA) WE HOLD THAT THE A.O. HAD NO JURISDICTION T O MAKE ADDITIONS U/S 153A OF THE ACT, FOR THE ASSESSMENTS WHICH ARE NOT PENDING AS ON THE DATE OF SEARCH. THE ASSESSMENT FOR THE ASSESSMENT Y EARS 2005-06 TO 2009-10 WERE NOT PENDING AS ON THE DATE OF SEARCH. THE TIME LIMIT FOR ISSUE OF NOTICE UNDER SEC. 143(2) HAS BEEN EXPIRED. THEREFORE, THE A.O. HAS NO JURISDICTION TO REASSESS THE INCOME FOR THE ASSESSMENT YEAR ITA NO.566/VIZAG/2014 SRI RAYAPATI VENKATA KOTESWARA PRASAD, GUNTUR 13 2005-06 TO 2009-10 IN THE ABSENCE OF ANY INCRIMINAT ING MATERIALS. THE CIT(A) HAS RIGHTLY DELETED THE ADDITIONS. WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF CIT(A). HENCE, WE INCLI NED TO UPHOLD CIT(A) ORDER AND DIRECT THE A.O. TO DELETE THE ADDITIONS M ADE TOWARDS DEEMED DIVIDEND FOR THE ASSESSMENT YEAR 2005-06 TO 2009-10 . 12. IN THIS CASE, SEARCH WAS TAKEN PLACE ON 24.7.200 8. AS ON THE DATE OF SEARCH, THE ASSESSMENTS FOR THE ASSESSMENT YEARS 2004-05 & 2005-06 ARE ALREADY CONCLUDED AND THERE IS NO PENDING PROCE EDING FOR THOSE ASSESSMENT YEARS. THE TIME LIMIT FOR ISSUE OF NOTI CE U/S 143(2) OF THE ACT, FOR THE ASSESSMENT YEARS 2004-05 & 2005-06 HAS BEEN EXPIRED. THE A.O. MADE ADDITIONS TOWARDS DEEMED DIVIDEND U/S 2(22)(E) OF THE ACT WITHOUT ANY INCRIMINATING MATERIALS AND ALSO BASED ON THE B OOKS OF ACCOUNTS AND FINANCIAL STATEMENTS, WHICH WERE ALREADY PART OF RE GULAR RETURN OF INCOME FILED BY THE ASSESSEE U/S 139(1) OF THE ACT, FOR TH OSE ASSESSMENT YEARS. THEREFORE, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO RESPECTFULLY FOLLOWING THE DECISION OF COORDINATE B ENCH OF ITAT, VISAKHAPATNAM IN THE CASE OF SRI HARI PRASAD BHARAR IA VS. DCIT (SUPRA), WE ARE OF THE VIEW THAT THE A.O. HAS NO JURISDICTIO N TO MAKE ADDITIONS IN RESPECT OF CONCLUDED ASSESSMENTS IN THE ABSENCE OF ANY INCRIMINATING MATERIALS FOUND DURING THE COURSE OF SEARCH. IN THI S CASE, UNDOUBTEDLY THE A.O. HAS MADE ADDITIONS TOWARDS DEEMED DIVIDEND ON THE BASIS OF FINANCIAL STATEMENTS FILED BY THE ASSESSEE ALONG WITH REGULAR RETURN OF INCOME WITHOUT ANY MATERIAL FOUND DURING THE COURSE OF SEA RCH. THEREFORE, WE DIRECT THE A.O. TO DELETE ADDITIONS MADE TOWARDS DE EMED DIVIDEND U/S 2(22)(E) OF THE ACT FOR THE ASSESSMENT YEARS 2004-0 5 & 2005-06. 8. THE SIMILAR ISSUE HAS BEEN CONSIDERED BY THE HON BLE ITAT KOLKATA BENCH IN THE CASE OF SMT. YAMINI AGARWAL VS. DCIT ( CENTRAL CIRCLE)-3, KOLKATA REPORTED IN 83 TAXMAN.COM 209 AFTER CONSIDE RING THE DECISION OF SPECIAL BENCH RULING IN THE CASE OF ALL CARGO LOTIS TICS AND THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CANARA HOUSING AND THE BOMBAY HIGH COURT DECISION IN THE CASE OF ANIL KUMA R BHATIA EXPRESSED A VIEW THAT IN RESPECT OF ASSESSMENTS COMPLETED PRI OR TO THE DATE OF SEARCH THE SCOPE OF PROCEEDINGS U/S 153A OF THE ACT HAS TO BE CONFINED ITA NO.566/VIZAG/2014 SRI RAYAPATI VENKATA KOTESWARA PRASAD, GUNTUR 14 ONLY TO THE MATERIAL FOUND IN THE COURSE OF SEARCH. FOR THE SAKE OF CONVENIENCE, WE EXTRACT THE RELEVANT PARA-25 & 26 O F THE CITED ORDER. 25. WE THEREFORE HOLD THAT THE SCOPE OF THE PROCEEDING S U/S.153A IN RESPECT OF ASSESSMENT YEAR FOR WHICH ASSESSMENT HAVE ALREADY B EEN CONCLUDED AND WHICH DO NOT ABATE U/S.153A OF THE ACT, THAT THE ASSESSMENT WILL HAVE TO BE CONFINED TO ONLY INCRIMINATING MATERIAL FOUND AS A RESULT OF SEARCH. THE NEXT ASPECT TO BE CONSIDERED IS AS TO WHEN RETURNS OF INCOME FILED U/S.139 OF THE A CT ARE SHOWN TO HAVE BEEN ACCEPTED WITHOUT AN INTIMATION U/S.143(1) OF THE ACT OR WITH OUT ANY NOTICE ISSUED U/S.143(2) OF THE ACT WITHIN THE TIME LIMIT CONTEMPLATED BY THE P ROVISO THERETO, CAN BE SAID TO BE ASSESSMENT PROCEEDINGS CONCLUDED THAT HAVE NOT ABAT ED U/S.153A OF THE ACT. SECTION 153A OF THE ACT, USES THE EXPRESSING 'PENDING ASSES SMENT OR REASSESSMENT'. WHEN A RETURN IS FILED AND WHEN NEITHER AN ACKNOWLEDGEMENT OR INTIMATION U/S.143(1)OF THE ACT IS ISSUED NOR A NOTICE U/S.143(2) OF THE ACT IS ISSUED WITHIN THE TIME LIMIT LAID DOWN IN THE PROVISO TO SECC.143(2) OF THE ACT, THE PROCE EDINGS INITIATED BY FILING THE RETURN ARE CLOSED. IN THE PRESENT CASE, THE PERIOD FOR ISS UING THE NOTICE U/S 143(2) ELAPSED. THEREFORE THE PROCESS HAS ATTAINED THE FINALITY WHI CH CAN ONLY BE ASSAILED U/S 148 OR 263 OF THE ACT. IT CAN THUS BE CONCLUDED THAT MAKIN G OF AN ADDITION IN AN ASSESSMENT UNDER SECTION 153A OF THE ACT, WITHOUT THE BACKING OF INCRIMINATING MATERIAL, IS UNSUSTAINABLE EVEN IN A CASE WHERE THE ORIGINAL ASS ESSMENT ON THE DATE OF SEARCH STOOD COMPLETED BY ABSENCE OF ISSUE OF INTIMATION UNDER S ECTION 143(1) OF THE ACT OR BY NOT ISSUING NOTICE U/S.143(2) OF THE ACT WITHIN THE TIM E LIMIT LAID DOWN IN THE PROVISO TO SEC.143(2) OF THE ACT, RESULTS IN AN ASSESSMENT PRO CEEDINGS AND WHERE SUCH ASSESSMENT PROCEEDINGS ARE COMPLETED PRIOR TO THE D ATE OF SEARCH THEN THEY DO NOT ABATE IN TERMS OF THE SECOND PROVISO TO SECTION 153 A(1) OF THE ACT. THE DECISION OF THE ITAT KOLKATA BENCH RENDERED IN THE CASE OF SHRI BIS HWANATH GARODIA (SUPRA) ON IDENTICAL FACTS OF THE CASE AS THAT OF THE ASSESSEE IN THE PRESENT CASE, CLEARLY SUPPORTS OUR CONCLUSIONS AS ABOVE. 26. IN THE LIGHT OF THE DISCUSSION ABOVE, OUR CONCLUSI ON IS THAT IN THE PRESENT CASE, THE ISSUE DEALT WITH BY THE AO IN THE ASSESSMENT ORDER U/S.153A OF THE ACT, COULD NOT AND OUGHT NOT TO HAVE BEEN EXAMINED BY THE AO IN THE AS SESSMENT PROCEEDINGS U/S.153A OF THE ACT AS THE SAID ISSUE STOOD CONCLUDED WITH THE ASSESSEE'S RETURN OF INCOME BEING ACCEPTED PRIOR TO THE DATE OF SEARCH AND NO NOTICE HAVING BEEN ISSUED U/S.143(2) OF THE ACT WITHIN THE TIME LIMIT LAID DOWN IN THAT SECTION . SUCH ASSESSMENT DID NOT ABATE ON THE DATE OF SEARCH WHICH TOOK PLACE ON 28.3.2008. I N RESPECT OF ASSESSMENTS COMPLETED PRIOR TO THE DATE OF SEARCH THAT HAVE NOT ABATED, T HE SCOPE OF PROCEEDINGS U/S.153A OF THE ACT HAS TO BE CONFINED ONLY TO MATERIAL FOUND I N THE COURSE OF SEARCH. SINCE NO MATERIAL WHATSOEVER WAS FOUND IN THE COURSE OF SEAR CH, THE ADDITIONS MADE BY THE AO IN THE ORDER OF ASSESSMENT FOR BOTH THE ASSESSMENT YEARS COULD NOT HAVE BEEN SUBJECT MATTER OF PROCEEDINGS U/.S.153A OF THE ACT. CONSEQU ENTLY, THE SAID VARIOUS ADDITIONS MADE IN THE ORDERS OF ASSESSMENT OUGHT NOT TO HAVE OR COULD NOT BE MADE BY THE AO. GR.NO.1 RAISED BY THE ASSESSEE IN BOTH THE APPEALS ARE ACCORDINGLY ALLOWED. ITA NO.566/VIZAG/2014 SRI RAYAPATI VENKATA KOTESWARA PRASAD, GUNTUR 15 9. THE ITAT, VISAKHAPATNAM ALLOWED THE APPEAL ON SI MILAR FACTS IN THE CASE OF P. RAMA RAJU VS. DCIT CENTRAL CIRCLE-1, VIS AKHAPATNAM IN ITA NOS.424, 425 & 426/VIZAG/2013 DATED 31.7.2017 FOLLO WING THE CASE OF Y.V. ANJANEYULU VS. DCIT, CENTRAL CIRCLE, VIJAYAWAD A (SUPRA) 10. THE LD. D.RS ARGUMENT THAT THE ASSESSEE HAS AC CEPTED THAT THE ADDITIONS WERE MADE DURING THE COURSE OF SEARCH & S EIZURE OPERATION RELATING TO UNSECURED LOANS IS NOT ACCEPTABLE SINCE IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS NOT BROUGHT ON REC ORD ANY EVIDENCE FOUND DURING THE COURSE OF SEARCH RELATING TO THE A DDITIONS MADE. ON VERIFICATION OF THE ASSESSMENT ORDER, IT IS EVIDENT THAT THE ADDITION WAS MADE ON THE BASIS OF THE ENTRIES MADE IN THE REGULA R BOOKS OF ACCOUNTS BUT THERE WAS NO REFERENCE WITH REGARD TO THE SEIZE D MATERIAL. HENCE, THE RELIANCE OF THE LD. D.R. ON STATEMENT OF FACTS THAT THE ASSESSMENT WAS MADE ON THE BASIS OF SEIZED MATERIAL IS NOT COR RECT. LD. D.R. FURTHER ARGUED THE LEGAL POSITION SUBSEQUENT TO THE INTRODU CTION OF PROVISIONS U/S 153A OF THE ACT AND 153C OF THE ACT FOR SEARCH ASSE SSMENTS THE INCRIMINATING MATERIAL NOT NECESSARY IS NOT TENABLE . THIS ISSUE HAS BEEN CONSIDERED BY THE SPECIAL BENCH IN THE CASE OF ALL CARGO LOGISTICS LIMITED CITED (SUPRA) AND ANSWERED THAT THE ASSESSMENT U/S 153A OF THE ACT WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL. TH EREFORE, THE ARGUMENT OF THE LD. D.R. LACKS MERIT ON THIS ISSUE. AS DISC USSED EARLIER, IN THIS ITA NO.566/VIZAG/2014 SRI RAYAPATI VENKATA KOTESWARA PRASAD, GUNTUR 16 APPEAL NO ADDITION WAS MADE ON THE BASIS OF SEIZED MATERIAL AND THE ASSESSMENT GOT COMPLETED AND THE ASSESSEES CASE IS SQUARELY COVERED BY THE DECISION OF THIS TRIBUNAL CITED (SUPRA) AND THE DECISION OF HONBLE SPECIAL BENCH IN THE CASE OF ALL CARGO GLOBAL LOGIS TICS LIMITED. THEREFORE, WE SET ASIDE THE ORDERS OF THE LD. CIT(A ) AND ALLOW THE APPEAL OF THE ASSESSEE. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT O N 27 TH SEPT17. SD/- SD/- ( . ) ( . . ' ) (V. DURGA RAO) (D.S. SUNDER SINGH) /JUDICIAL MEMBER /ACCOUNTANT MEMBER # /VISAKHAPATNAM: ' /DATED : 27.09.2017 VG/SPS )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT SRI RAYAPATI VENKATA KOTESWARA P RASAD, C/O C.M. RAO & CO., CHARTERED ACCOUNTANTS, 5-87-22, 1 ST FLOOR, SAI BALAJI HOUSE, MAIN ROAD, LAKSHMIPURAM, GUNTUR-7 2. / THE RESPONDENT THE ACIT, CENTRAL CIRCLE, VIJAY AWADA 3. + / THE CIT(CENTRAL), HYDERABAD 4. + ( ) / THE CIT (A), GUNTUR 5. # . , . , # / DR, ITAT, VISAKHAPATNAM 6 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM