Sri Balachamundeswari Cotton Company, Guntur V. THE ACIT, Vijayawada

ITA 571/VIZ/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6637 (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: 2002-2003
• 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; 15

Judgement Text

ITA NO.569, 570 & 571/VIZAG/2014 M/S. BALACHAMUNDESWARI COTTON COMPANY, 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.569, 570 & 571/VIZAG/2014 ( / ASSESSMENT YEARS: 2000-01, 2001-02 & 2002-03) M/S. BALACHAMUNDESWARI COTTON COMPANY GUNTUR ACIT, CENTRAL CIRCLE, VIJAYAWADA [PAN NO. AAIFS2 875B ] ( ' / 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: THESE APPEALS FILED BY THE ASSESSEE ARE DIRECTED A GAINST ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) {CIT(A) }, GUNTUR VIDE ITA NOS.636 TO 642/CIT(A)/GNT/2007-08 DATED 25.2.20 14 FOR THE ASSESSMENT YEARS 2000-01, 2001-02 & 2002-03. ITA NO.569, 570 & 571/VIZAG/2014 M/S. BALACHAMUNDESWARI COTTON COMPANY, GUNTUR 2 ITA 569/VIZAG/2014: 2. IN THIS CASE THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME OF ` 78,657/- ON 31.10.2000 FOR THE ASSESSMENT YEAR 2000-01. THE ASSESSING OFFICER COMPLETED THE ASSES SMENT U/S 143(3) R.W.S. 153A OF THE ACT ON 31.3.2007 AND DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER MADE THE ADDITION OF ` 8,38,016/- AS UNEXPLAINED CASH CREDITS AND DISALLOWANCE OF INT EREST OF ` 1,50,842/-. BOTH THE ABOVE ADDITIONS WERE RECORDED IN THE REGULAR BOOKS OF ACCOUNTS AND NOT BASED ON ANY INCRIMINATIN G MATERIAL FOUND DURING THE COURSE OF SEARCH. ITA 570/VIZAG/2014: 3. IN THIS CASE THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME OF ` 93,513/- ON 25.10.2001. THE ASSESSMENT YEAR INVOL VED IS A.Y. 2001-02. THE ASSESSMENT WAS COMPLETED U/S 143(3) R.W.S. 153A OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLE D AS 'THE ACT') ON 31.12.2007 ON TOTAL INCOME OF ` 3,32,566/-. THE A.O. MADE THE ADDITION OF ` 1,50,842/- RELATING TO THE INTEREST DISALLOWANCE A ND ` 88,194/- RELATING TO THE DISALLOWANCE OF EXPENSES. BOTH THE ENTRIES ARE RECORDED IN THE REGULAR BOOKS OF ACCOUNTS. ITA NO.569, 570 & 571/VIZAG/2014 M/S. BALACHAMUNDESWARI COTTON COMPANY, GUNTUR 3 ITA 571/VIZAG/2014: 4. IN THIS CASE THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME OF ` 1,00,980/- ON 31.12.2002 FOR THE ASSESSMENT YEAR 2 002- 03. THE A.O. COMPLETED THE ASSESSMENT U/S 143(3) R .W.S. 153A OF THE ACT BY AN ORDER DATED 31.12.2007 ON TOTAL INCOM E OF ` 1,97,282/- AND THE A.O. MADE THIS ADDITION OF ` 72,536/- TOWARDS THE INTEREST AND THE DISALLOWANCE OF EXPENSES AMOUNTING TO ` 23,766/-. 5. IN ALL THE ABOVE APPEALS, THE RETURNS WERE PROCE SSED U/S 143(1) OF THE ACT AND THE A.O. HAS NOT MADE ANY ASSESSMENT U/S 143(3) OF THE ACT. SEARCH AND SEIZURE OPERATIONS WERE CONDUCT ED IN THIS CASE ON 08/02/2006 AND THE DUE DATE FOR ISSUING THE NOTI CE 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 CHALL ENGING THE ADDITION MADE BY THE A.O., ARE AS UNDER: 1. THE LEARNED CIT(A) IS NOT JUSTIFIED IN CONFIRMING T HE ADDITION OF ` 8,36,016/- AS UNEXPLAINED CASH CREDITS, AND INTERES T THEREON OF ` 1,50,842/-, WITHOUT APPRECIATING THE FACTS OF THE C ASE. 2. THE LEARNED CIT(A) IS NOT JUSTIFIED IN CONFIRMING T HE ABOVE ADDITION IN AN ASSESSMENT U/S 143(3) R.W.S. 153A, IN THE ABSENCE O F ANY INCRIMINATING MATERIAL FOUND DURING THE SEARCH IN RESPECT OF THES E CREDITS. 3. FOR THE ABOVE AND ANY GROUND OR GROUNDS THAT MAY BE URGED DURING THE COURSE OF APPEAL, IT IS PRAYED THAT THE HONBLE INCO ME TAX APPELLATE TRIBUNAL BE PLEASED TO DIRECT THE LEARNED ASSESSING OFFICER TO DELETE THE ABOVE TWO ADDITIONS. ITA NO.569, 570 & 571/VIZAG/2014 M/S. BALACHAMUNDESWARI COTTON COMPANY, GUNTUR 4 SIMILAR GROUNDS WERE RAISED BY THE ASSESSEE IN ALL THE APPEALS ALONG WITH APPEAL MEMO. 6. THE ASSESSEE HAS FILED A PETITION FOR ADMISSION OF ADDITIONAL GROUND ON 1.9.2017 RAISING THE FOLLOWING ADDITIONAL GROUND FOR BOTH THE ASSESSMENT YEARS: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, WHETHER THE ADDITIONS OF ` 8,38,016/- TOWARDS UNEXPLAINED CREDITS AND ` 1,50,842/- 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? 7. AFTER CONSIDERING THE PETITION FILED BY THE ASSE SSEE FOR ADMISSION OF ADDITIONAL GROUND AND AFTER HEARING TH E LD. D.R., THE ADDITIONAL GROUND IS ADMITTED, SINCE THE ADDITIONAL GROUND IS A LEGAL GROUND, WHICH GOES TO THE ROOT OF ASSESSMENT. THE ASSESSEE RAISED THE SAME ADDITIONAL GROUND FOR ALL THE THREE ASSESS MENT YEARS. DURING THE APPEAL HEARING, LD. A.R. ARGUED THAT IN ALL THE THREE ASSESSMENTS, THE ASSESSEE FILED RETURNS OF INCOME W HICH WERE PROCESSED U/S 143(1) OF THE ACT AND NO NOTICE U/S 1 43(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 SE ARCH & SEIZURE OPERATION WAS CONDUCTED IN THIS CASE ON 8.2.2006. THE LD. A.R. ARGUED THAT THE A.O. CANNOT PROCEED TO MAKE ASSESSM ENTS U/S 153A OF THE ACT IN THE CASE OF COMPLETED ASSESSMENTS WIT HOUT THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH AND SEIZURE ITA NO.569, 570 & 571/VIZAG/2014 M/S. BALACHAMUNDESWARI COTTON COMPANY, GUNTUR 5 OPERATIONS. IN THE CASE OF THE ASSESSEE, THE ASSES SMENTS WERE COMPLETED ON THE BASIS OF ENTRIES RECORDED IN THE R EGULAR BOOKS OF ACCOUNTS AND NO ADDITION WAS MADE ON THE BASIS OF T HE MATERIAL FOUND DURING THE COURSE OF SEARCH. SINCE THERE IS NO MATERIAL ON RECORD TO SHOW THAT THE ADDITIONS WERE MADE ON THE BASIS OF SEIZED MATERIAL, THE ASSESSING OFFICER SHOULD NOT HAVE MAD E THE ADDITIONS IN THE ASSESSMENTS. THEREFORE, THE LD. A.R. REQUESTED TO SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND ALLOW THE APPEA L OF THE ASSESSEE. THE LD. A.R. RELIED ON THE ORDERS 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. 8. ON THE OTHER HAND, THE LD. D.R. ARGUED THAT AFTE R THE INTRODUCTION OF PROVISIONS OF SECTION 153A & 153C O F THE ACT, THE ISSUE WITH REGARD TO MAKING ASSESSMENTS ON THE BASI S OF SEIZED MATERIAL IS NOT IN ACCORDANCE WITH THE SPIRIT OF TH E INTRODUCTION OF NEW PROVISIONS FOR FRAMING THE SEARCH ASSESSMENTS. THE LD. D.R. FURTHER ARGUED THAT MAKING THE ASSESSMENTS ON THE SEIZED MA TERIAL IS RELATABLE TO THE EARLIER BLOCK ASSESSMENTS MADE U/S 158BC & 158BD OF THE ACT IN CHAPTER XIV-B. AFTER THE INTRODUCTIO N OF SECTION 153A AND 153C OF THE ACT, THE A.O. IS LEGALLY BOUND TO T AKE UP THE ASSESSMENTS IRRESPECTIVE OF SEIZED MATERIAL OR INCR IMINATING MATERIAL. ITA NO.569, 570 & 571/VIZAG/2014 M/S. BALACHAMUNDESWARI COTTON COMPANY, GUNTUR 6 THE LD. D.R. FURTHER SUBMITTED THAT IN THE STATEMEN T OF FACTS FILED ALONG WITH FORM 35 BEFORE FIRST APPELLATE AUTHORITY , THE ASSESSEE HIMSELF REFERRED THAT THE ASSESSMENTS WERE MADE ON THE SEARCH & SEIZURE OPERATIONS, THUS THE LD. A.RS ARGUMENT THA T ASSESSMENT WAS NOT BASED ON THE INCRIMINATING MATERIAL IS INCORREC T. HENCE, THE LD. D.R. ARGUED THAT THE CASE SHOULD BE REMITTED BACK T O THE FILE OF THE LD. CIT(A) TO VERIFY WHETHER THE ASSESSMENTS WERE M ADE 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 ADDITION S WERE MADE PURELY ON THE ENTRIES MADE IN THE BOOKS OF ACCOUNTS BUT NOT BASED ON ANY INCRIMINATING MATERIAL. THE ASSESSING OFFICER H AS NOT REFERRED ANY OF THE SEIZED MATERIAL IN THE ASSESSMENT ORDERS, HE NCE IT IS NOT NECESSARY TO REMIT THE MATTER BACK TO THE FILE OF T HE LD.CIT(A). 9. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IN THIS CASE, SEARCH U/S 132 OF THE ACT WAS CARRIED OUT ON 8.2.2006 AND BY THE TIME THE SEARCH WAS CONDUCTED, THE TIME LIMIT FOR ISSUE OF NOTICE U/S 143(2) OF THE ACT GOT EXPIR ED IN ALL THE THREE ASSESSMENTS. THE RETURNS WERE PROCESSED U/S 143(1) OF THE ACT. ITA NO.569, 570 & 571/VIZAG/2014 M/S. BALACHAMUNDESWARI COTTON COMPANY, GUNTUR 7 THEREFORE, THE ASSESSMENTS WERE COMPLETED IN RESPEC T OF ASSESSMENT FOR THE ASSESSMENT YEARS 2000-01 TO 2002-03. THIS TRIBUNAL IN THE CASE OF Y.V. ANJANEYULU VS. DCIT (CENTRAL CIRCLE), VIJAYAWADA IN ITA NOS.513 & 514/VIZAG/2013 HELD THAT THERE IS NO CASE FOR MAKING ADDITION U/S 153BA R.W.S. 143(3) OF THE ACT, IF NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH IN C OMPLETED ASSESSMENTS. THIS TRIBUNAL WHILE PASSING THE ORDER IN THE CITED CASE HAS RELIED ON THE DECISION OF ITAT SPECIAL BENCH IN THE CASE OF ALL CARGO GLOBAL LOGISTICS 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.354 OF 2014 DATED 12.6.201 4. FOR READY REFERENCE, WE EXTRACT RELEVANT PARAGRAPH OF THE ORD ER 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 COND UCTED ON 22.8.2008 AND THE ASSESSMENT UNDER THE CONSIDERATION IS TH E A.Y. 2005-06. TIME LIMIT FOR ISSUE OF NOTICE U/S 143(2) OF THE AC T IS EXPIRED ON 31.3.2007. SINCE THE PERIOD OF LIMITATION FOR ISSU E OF NOTICE U/S 143(2) OF THE ACT HAS BEEN EXPIRED, THE ASSESSMENT DEEMED TO HAVE BEEN COMPLETED AND REACHED FINALITY. AS PER THE JUDICIA L PRECEDENTS AND THE RULING OF THIS TRIBUNAL IN THE CASE LAW CITED (SUPR A), THE COORDINATE BENCH HELD THAT WHERE THE ASSESSMENT HAVE BEEN REAC HED FINALITY CANNOT BE TINKERED WITH UNLESS THERE WAS A SEIZED D OCUMENT INDICATING UNDISCLOSED INCOME OR THE ASSET. FOR READY REFEREN CE, WE EXTRACT THE RELEVANT PARA OF 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 AUTHOR ITIES BELOW. THE ONLY ISSUE THAT ARISES FOR OUR CONSIDERATION IS WHE THER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE A.O. IS RIGHT IN MAKING ADDITIONS ITA NO.569, 570 & 571/VIZAG/2014 M/S. BALACHAMUNDESWARI COTTON COMPANY, GUNTUR 8 WITHOUT ANY SEIZED MATERIALS IN RESPECT OF ASSESSME NT YEARS FOR WHICH THE ASSESSMENT PROCEEDINGS HAVE BEEN CONCLUDED AS O N THE DATE OF SEARCH. THE LD. A.R. FOR THE ASSESSEE, SUBMITTED T HAT THE ISSUE HAS BEEN ALREADY CONSIDERED BY THE COORDINATE BENCH OF VISAKHAPATNAM ITAT IN THE CASE OF SRI HARI PRASAD BHARARIA VS. DC IT IN ITA NOS.435 TO 441/VIZAG/2014, WHEREIN IT HAS BEEN OBSERVED THA T THE A.O. HAS NO JURISDICTION TO MAKE ADDITIONS IN THE ABSENCE OF AN Y SEIZED MATERIALS IN THE ASSESSMENTS MADE U/S 143(3) R.W.S. 153A OF THE ACT, FOR THE ASSESSMENT YEARS WHICH ARE CONCLUDED AND NO PROCEED INGS ARE PENDING AS ON THE DATE OF SEARCH. THE RELEVANT PORT ION OF THE ORDER IS EXTRACTED BELOW: 12. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MAT ERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE FACTUAL MATRIX OF THE CASE IS THAT THERE WAS A SEARCH ACTION U/S 132 OF THE ACT. CONSEQUENT TO THE SEARCH, THE ASSES SEE CASE WAS CENTRALIZED AND ACCORDINGLY, NOTICE U/S 153A OF THE ACT WAS ISSUED REQUIRING ASSESSEE TO FILE RETURN FOR 6 ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR IN WHICH SEARCH IS CONDUCTED. THE ASSESSEE FILED RETURNS IN RESPONSE T O NOTICE U/S 153A OF THE ACT. THE A.O. COMPLETED THE ASSESSMENT U/S 143(3) R.W.S. 153A OF THE ACT AND MADE ADDITIONS TOWARDS D EEMED DIVIDEND UNDER THE PROVISIONS OF SECTION 2(22)(E) O F THE ACT. THE A.O. WAS OF THE OPINION THAT TRANSACTIONS BETWEEN T HE ASSESSEE AND HIS COMPANY IS COMING WITHIN THE DEFINITION 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 ORDER PASSED BY THE A.O. U/S 143(3) R.W.S. 153A OF THE ACT, FOR THE ASSESSMENT 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 T HE ACT WITHOUT ANY INCRIMINATING MATERIALS. THE ASSESSEE FURTHER C ONTENDED THAT AS PER SECTION 153A OF THE ACT, DE-NOVO ASSESSMENT CAN BE MADE ONLY IN RESPECT OF ASSESSMENT YEAR FOR WHICH THE AS SESSMENT PROCEEDINGS HAS BEEN ABATED AND THAT IN RESPECT OF ASSESSMENT YEARS FOR WHICH THE ASSESSMENT HAD ALREADY BEEN COM PLETED, NO ADDITIONS CAN BE MADE U/S 153A OF THE ACT UNLESS TH ERE WAS INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH. 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 POWERS OF THE A.O. FOR MAKING ASSESSMENT/RE-ASS ESSMENT AND THE A.O. IS NOT REQUIRED TO CONFINE HIS ASSESSMENTS ON THE MATERIALS FOUND DURING THE COURSE OF SEARCH AS WAS THE CASE IN THE OLD PROCEDURE OF BLOCK ASSESSMENTS. IT IS THE CONT ENTION OF THE ASSESSEE THAT THE A.O. CANNOT DISTURB THE COMPLETED ASSESSMENT UNLESS THERE WAS A SEIZED MATERIAL. THE ASSESSEE FU RTHER ITA NO.569, 570 & 571/VIZAG/2014 M/S. BALACHAMUNDESWARI COTTON COMPANY, GUNTUR 9 CONTENDED THAT WHERE ASSESSMENTS ARE NOT PENDING AS ON THE DATE OF SEARCH AND TIME LIMIT FOR ISSUE OF NOTICE U/S 14 3(2) OF THE ACT HAS BEEN EXPIRED, IRRESPECTIVE OF THE FACT THAT THO SE 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 ARGUMENTS O F THE ASSESSEE, FOR THE REASON THAT THE COORDINATE BENCH OF THIS TR IBUNAL IN ITA NOS.300 TO 305/VIZAG/2012, IN CASE OF L. SURYAKANTH AM 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 ASSESSMENTS WHICH ARE NOT PENDING AS ON THE DATE OF SEARCH AND ALSO THE TIME LIMIT FOR ISSUE OF NOTICE U/S 143(2) OF THE ACT HAS BEEN EXPIRED. THE RELEVANT PORTION OF THE ORDER IS EXTRACTED BELOW: 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 THERE WAS A SEARCH ACTION U/S 132 OF THE ACT. DURING THE COURSE OF SEARCH, INCRIMINATING DOCUMENTS FOUND REVEALS THAT THE ASSESSEE HAS INFLATED LABOUR CHARGES FOR THE ASSESS MENT YEARS 2008-09 & 2009-10. BASED ON THE DOCUMENTS FOUND DU RING SEARCH, THE ASSESSEE HAS ACCEPTED THAT HE HAS INFLA TED 10% LABOUR CHARGES AND WHICH IS COMMON IN THIS LINE OF BUSINESS. CONSEQUENT TO SEARCH ACTION U/S 132 OF THE ACT, THE ASSESSEE CASE HAS BEEN CENTRALIZED AND ACCORDINGLY FRESH ASS ESSMENT PROCEEDINGS HAVE BEEN INITIATED BY ISSUING 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 SEL ECTED FOR SCRUTINY. DURING THE COURSE OF ASSESSMENT PROCEEDI NGS, THE ASSESSEE WAS ASKED TO PRODUCE BOOKS OF ACCOUNTS AND RELEVANT BILLS & VOUCHERS IN SUPPORT OF EXPENDITURE CLAIMED. IN RESPONSE, THE ASSESSEE FILED WRITTEN SUBMISSION AND STATED THAT THE BOOKS OF ACCOUNTS ARE NOT AVAILABLE AND HENCE C ANNOT BE FURNISHED. THEREFORE, THE A.O. ISSUED A SHOW CAUSE NOTICE AND ASKED TO EXPLAIN WHY THE NET PROFIT FROM THE BUSINE SS SHALL NOT BE ESTIMATED. IN RESPONSE TO SHOW CAUSE NOTICE, THE ASSESSEE HAS FILED A WRITTEN REPLY AND CONTENDED TH AT THE INCOME FOR THE ASSESSMENT YEAR 2004-05, 2005-06 AND 2007-08 CANNOT BE TINKERED WITH, AS THERE WAS NO INCRIMINAT ING MATERIAL FOUND DURING THE COURSE OF SEARCH FOR THE ABOVE ASS ESSMENT YEARS AND AS SUCH NO ADDITIONS CAN BE MADE TO THE R ETURNED INCOME. IT IS FURTHER SUBMITTED THAT AS PER SEC. 15 3A OF THE ACT, DE-NOVO ASSESSMENT CAN BE MADE ONLY IN RESPECT 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, SUCH ITA NO.569, 570 & 571/VIZAG/2014 M/S. BALACHAMUNDESWARI COTTON COMPANY, GUNTUR 10 ASSESSMENT COULD NOT BE MADE U/S 153A OF THE ACT UN LESS 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 IMMEDIA TELY PRECEDING THE YEAR IN WHICH 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 T HE NEW PROCEDURE OF SEARCH ASSESSMENTS ON THE POWERS OF A. O. FOR MAKING ASSESSMENT/REASSESSMENT AND THE A.O. IS NOT REQUIRED TO CONFINE HIS ASSESSMENTS ON THE MATERIAL FOUND DU RING THE COURSE OF SEARCH AS WAS THE CASE IN THE OLD PROCEDU RE OF BLOCK ASSESSMENTS. THE NEW PROCEDURE OF BLOCK ASSESSMENT WAS EXPLAINED BY WAY OF PROVISIONS OF SECTION 153A OF T HE ACT. AS PER SECTION 153A OF THE ACT, THE A.O. SHALL ASSESS OR REASSESS THE TOTAL INCOME OF THE SPECIFIED SIX ASSESSMENT YE ARS IRRESPECTIVE OF THE FACT THAT THE ASSESSMENT OF THE SAID YEARS WERE COMPLETED OR PENDING AS ON THE DATE OF SEARCH. THEREFORE, THE A.O. HAS REASSESSED THE INCOME OF SI X ASSESSMENT YEARS AND RECOMPUTED THE PROFITS AFRESH AFTER CONSIDERING THE RELEVANT FACTS AVAILABLE ON RECORD. IT WAS THE CONTENTION OF THE ASSESSEE THAT THE A.O. CANNOT DIS TURB THE COMPLETED ASSESSMENTS UNLESS THERE WAS A SEIZED MAT ERIAL. THE ASSESSEE FURTHER CONTENDED THAT WHERE ASSESSMENTS A RE NOT PENDING AS ON THE DATE OF SEARCH AND TIME LIMIT 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 P OWER TO REASSESS THE INCOME OF THOSE COMPLETED ASSESSMENT Y EARS. 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 DAT E OF SEARCH, THE A.O. LOSSES JURISDICTION U/S 153A OF TH E ACT TO REASSESS THE INCOME OF THOSE COMPLETED ASSESSMENTS. THOUGH THE PROVISIONS OF SECTION 153A OF THE ACT DOES NOT SPECIFY ABATED AND COMPLETED ASSESSMENTS, THE NATURAL MEANI NG ASSIGNED TO IT SHOULD BE GIVEN TO INTERPRET THE PRO VISIONS IN SUCH A WAY THAT WHICH SHALL NOT CAUSE UNDUE HARDSHIP TO THE TAX PAYERS. THE PROVISIONS OF SECTION 153A OF THE ACT E XPLAINED THE PROCEDURE OF ASSESSMENTS, ABATED ASSESSMENTS AND TH E MANNER IN WHICH THE ASSESSMENT SHOULD BE FRAMED, WHICH WAS FURTHER SUPPORTED BY CIRCULAR NO.7 OF 2003 ISSUED BY THE CB DT. WHEN THE LAW HAS EXPLAINED THE POSITION OF ABATED ASSESS MENTS, THEN THE SAME WAY THE COMPLETED ASSESSMENT SHOULD BE TRE ATED SO AS TO UNDERSTAND THAT THOSE ASSESSMENTS ARE REACHED FINALITY AND WHICH CANNOT BE TINKERED WITH UNLESS THERE WAS A SEIZED ITA NO.569, 570 & 571/VIZAG/2014 M/S. BALACHAMUNDESWARI COTTON COMPANY, GUNTUR 11 DOCUMENT. THEREFORE, WE ARE OF THE CONSIDERED OPINI ON THAT WHERE SEARCH IS INITIATED, ALL PENDING ASSESSMENTS ARE MERGE INTO ONE AND ONLY ONE ASSESSMENT FOR EACH ASSESSMEN T YEAR SHALL BE MADE SEPARATELY ON THE BASIS OF FINDINGS O F SEARCH AND OTHER MATERIAL EXISTING OR BROUGHT ON RECORD BY THE A.O. IN RESPECT OF NON ABATED OR COMPLETED ASSESSMENTS, THE ASSESSMENT WILL BE MADE ON THE BASIS OF BOOKS OF AC COUNTS OR OTHER RELEVANT DOCUMENTS FOUND DURING THE COURSE OF SEARCH, BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSME NT. 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 H AS BEEN COMPLETED U/S 143(1) & 143(3) OF THE ACT ARE NOT MA TERIAL. THE TIME LIMIT FOR ISSUE OF NOTICE U/S 143(2) OF THE AC T HAS BEEN EXPIRED. ON FURTHER VERIFICATION OF THE DOCUMENTS A VAILABLE ON RECORD, WE FIND THAT THERE WAS NO INCRIMINATING DOC UMENTS FOUND DURING THE COURSE OF SEARCH IN RESPECT OF ASS ESSMENT YEAR 2004-05 TO 2007-08. THEREFORE, WE ARE OF THE OPINI ON THAT THE A.O. WAS NOT CORRECT IN REASSESSING THE TOTAL INCOM E OF THE ASSESSMENT YEAR 2004-05 TO 2007-08 IN THE ABSENCE O F ANY SEIZED MATERIALS. ACCORDINGLY, WE DIRECT THE A.O. TO DELETE THE ADDITIONS MADE FOR THE ASSESSMENT YEAR 2004-05, 200 5-06 & 2007-08. 23. IT IS PERTINENT TO DISCUSS HEREIN THE CASE LAWS RELIED UPON BY THE ASSESSEE. THE ASSESSEE HAS RELIED UPON THE ITAT, SPECIAL BENCH DECISION IN THE CASE OF ALL CARGO GLO BAL LOGISTICS LTD. VS. DCIT (2012) 137 ITD 287. THE COORDINATE B ENCH OF THIS TRIBUNAL, WHILE DECIDING THE ISSUE IN FAVOUR O F THE ASSESSEE HELD AS 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 ADD ITION TO THE INCOME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSME NT U/S 153A WILL BE MADE ON THE BASIS OF INCRIMINATING MAT ERIAL, WHICH IN THE CONTEXT OF RELEVANT PROVISIONS MEANS (I) B OOKS OF ACCOUNT, OTHER DOCUMENTS, FOUND IN THE COURSE OF SE ARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT, AND (II) UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE CO URSE 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 O F 2014 DATED 12.6.2014. THE HONBLE HIGH COURT HELD THAT T HE A.O. HAS ITA NO.569, 570 & 571/VIZAG/2014 M/S. BALACHAMUNDESWARI COTTON COMPANY, GUNTUR 12 NO JURISDICTION TO RE-AGITATE THE ASSESSMENTS WHICH WERE ALREADY COMPLETED AND SUBSIDING. THE RELEVANT PORT ION IS EXTRACTED BELOW: WE HAVE HEARD SRI J.V. PRASAD, LEARNED COUNSEL FOR THE APPELLANT, AND GONE THROUGH THE IMPUGNED JUDGEMENT AND ORDER OF 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 RE AGITATE THE ASSESSMENTS. ACCORDING TO US, THE LEARNED TRIBUNAL HAS RIGHTLY HELD THAT THE ASSESSING OFFICER HAS NO JURISDICTION TO REAGITATE THE ASSESSMENTS WHICH WERE ALREADY COMPLETED AND SU BSISTING. WE THEREFORE DO NOT FIND ANY ELEMENT OF LAW TO BE D ECIDED IN THIS APPEAL. 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 IN ITA NO.373 TO 379/VIZAG/2014. THE COORDINATE BENCH, UNDER SIMILAR CIRCUMSTANCES HELD THE ISSUE IN FAVOUR OF T HE ASSESSEE. THE RELEVANT 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 PARA GRAPH OF THE JUDGMENT THAT THE COURT HAS TO BEAR IN MIND THAT TH E POLICY OF LAW IS THAT THERE MUST BE A POINT OF FINALITY IN ALL LEGAL PROCEEDINGS, THAT STALE ISSUES SHOULD NOT BE REACTIVATED BEYOND A PARTICULA R STAGE AND THAT LAPSE OF TIME MUST INDUCE REPOSE IN AND SET AT REST JUDICIAL AND QUASI JUDICIAL 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 ASSESSMENTS ON THE BASIS OF INCRIMINATING MATERIALS IS ALSO BASED UPON THE DECISION RENDERED BY HONBLE SUPREME COURT IN THE CASE OF PARASHURAM P OTTERY WORKS CO. LTD (SUPRA). 23. WE HAVE EARLIER NOTICED THAT THE HON'BLE JURIS DICTIONAL ANDHRA PRADESH ITA NO.569, 570 & 571/VIZAG/2014 M/S. BALACHAMUNDESWARI COTTON COMPANY, GUNTUR 13 HIGH COURT HAS ALSO UPHELD BY THE ORDERS PASSED BY THE TRIBUNAL BY FOLLOWING THE DECISION RENDERED BY THE SPECIAL BENC H IN THE CASE 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 PR EVAILING IN THOSE CASES, SINCE THE ISSUE RELATING TO CONCLUDED ASSESS MENTS AND PENDING ASSESSMENTS WAS NOT BEFORE THE I1ON'BLE ANDHRA PRAD ESH HIGH COURT ON THE CONTRARY, THE ABOVE SAID THREE DECISIONS OF THE JURISDICTIONAL HIGH COURT COMES TO THE SUPPORT OF THE ASSESSEE'S CONTEN TIONS WITH REGARD TO THE LEGAL PROPOSITION AGITATED BEFORE US, BESIDES T HE DECISIONS RENDERED BY VARIOUS OTHER HIGH COURTS. ACCORDINGLY, WE ARE O F THE VIEW THAT THE SCOPE OF ENQUIRY IN THE CASE OF UNABATED ASSESSMENT S, I.E., THE ASSESSMENT YEARS IN WHICH PROCEEDINGS ARE NOT PENDI NG, IS THAT THE UNDISCLOSED INCOME SHOULD BE ASCERTAINED ONLY ON TH E BASIS OF MATERIALS FOUND DURING THE COURSE OF SEARCH. IF NO INCRIMINAT ING MATERIAL SHOWING ANY UNDISCLOSED INCOME WAS FOUND IN THE CASE OF CON CLUDED PROCEEDINGS, THEN THE QUESTION OF MAKING ANY ADDITI ON DOES NOT ARISE. IN THAT CASE, THE ASSESSING OFFICER SHOULD COMPLETE THE ASSESSMENT OF THOSE YEARS BY DETERMINING THE VERY SAME TOTAL INCO ME THAT WAS ASSESSED IN THE EARLIER PROCEEDING. 24. IN VIEW OF THE ABOVE, WE ARE UNABLE TO AGREE W ITH THE CONTENTIONS OF LD STANDING COUNSEL THAT THE ASSESSI NG OFFICER WOULD GET UNFETTERED POWERS IN THE CASE OF UNABATED ASSES SMENTS, ONCE THEY WERE REOPENED US 153A OF THE ACT. IN OUR VIEW, IN THE CASE OF UNABATED ASSESSMENTS, THE TOTAL INCOME SHOULD BE DE TERMINED BY THE ASSESSING OFFICER BY COMBINING THE INCOME ALREADY A SSESSED/DISCLOSED IN THE RETURN OF INCOME AND THE UNDISCLOSED INCOME, IF ANY, FOUND DURING THE COURSE OF SEARCH PROCEEDING. EVEN OTHERW ISE, IT IS SETTLED PROPOSITION OF LAW THAT THE ASSESSEE IS ENTITLED TO TAKE SUPPORT OF THE DECISION IN HIS FAVOUR, WHEN TWO CONTRADICTORY VIEW S HAVE BEEN EXPRESSED BY THE HIGH COURTS. IN THE INSTANT CASE T HE HONBLE JURISDICTIONAL HIGH COURT COMES TO THE SUPPORT OF T HE ASSESSEE IN RESPECT OF THE LEGAL PROPOSITION IN ADDITION TO THE DECISION RENDERED BY THE HON'BLE BOMBAY HIGH COURT. ACCORDINGLY, WE FIND MERIT IN THE CONTENTIONS OF THE ASSESSEE ON THE LEGAL ISSUE. 26. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO RESPECTFULLY FOLLOWING THE COORDINATE BENCH DE CISION IN THE CASE OF ALL CARGO LOGISTICS PVT. LTD. (SUPRA), WE A RE OF THE OPINION THAT THE A.O. HAS MADE REASSESSMENT U/S 153 A/153C OF THE ACT ON THE BASIS OF INFORMATION/MATERIAL AVAILA BLE IN THE ITA NO.569, 570 & 571/VIZAG/2014 M/S. BALACHAMUNDESWARI COTTON COMPANY, GUNTUR 14 RETURN OF INCOME, WITHOUT REFERRING TO ANY SEIZED M ATERIAL. THEREFORE, FOLLOWING THE SPECIAL BENCH DECISION (SU PRA) WE HOLD THAT THE A.O. HAD NO JURISDICTION TO MAKE ADDITIONS U/S 153A OF THE ACT FOR THE ASSESSMENTS WHICH ARE NOT PENDING A S ON THE DATE OF SEARCH. IN THIS CASE, THE SEARCH WAS CONDUC TED ON 14.7.2009. THE ASSESSMENT FOR THE ASSESSMENT YEARS 2004-05 TO 2007-08, WERE NOT PENDING AS ON THE DATE OF SEAR CH. THE TIME LIMIT FOR ISSUE OF NOTICE UNDER SEC. 143(2) HA S 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 THE ADDITIONS MADE BY THE A.O. FOR THE ASSESSMENT YEAR 2004-05, 2005-06 & 2007-08. ACCORDINGLY, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED. 14. IN THIS VIEW OF THE MATTER AND CONSIDERING FACTS AND CIRCUMSTANCES OF THIS CASE AND ALSO RESPECTFULLY FO LLOWING THE DECISION OF CO-ORDINATE BENCH OF VISAKHAPATNAM, IN THE CASE OF L. SURYAKANTHAM VS. ACIT, IN ITA NOS.300 TO 305/VIZAG/ 2012, WE ARE OF THE VIEW THAT THE A.O. HAS MADE REASSESSMENT U/S 153A/153C OF THE ACT, ON THE BASIS OF INFORMATION/MATERIAL AVAIL ABLE IN THE RETURN OF INCOME, WITHOUT REFERRING TO ANY SEIZED MATERIAL . THEREFORE, FOLLOWING THE SPECIAL BENCH DECISION (SUPRA) WE HOL D THAT THE A.O. HAD NO JURISDICTION TO MAKE ADDITIONS U/S 153A OF T HE ACT, FOR THE ASSESSMENTS WHICH ARE NOT PENDING AS ON THE DATE OF SEARCH. THE ASSESSMENT FOR THE ASSESSMENT YEARS 2005-06 TO 2009 -10 WERE NOT PENDING AS ON THE DATE OF SEARCH. THE TIME LIMIT F OR ISSUE OF NOTICE UNDER SEC. 143(2) HAS BEEN EXPIRED. THEREFORE, THE A.O. HAS NO JURISDICTION TO REASSESS THE INCOME FOR THE ASSESSM ENT YEAR 2005- 06 TO 2009-10 IN THE ABSENCE OF ANY INCRIMINATING M ATERIALS. THE CIT(A) HAS RIGHTLY DELETED THE ADDITIONS. WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF CIT(A). HENCE, WE IN CLINED TO UPHOLD CIT(A) ORDER AND DIRECT THE A.O. TO DELETE THE ADDI TIONS MADE TOWARDS DEEMED DIVIDEND FOR THE ASSESSMENT YEAR 200 5-06 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 PENDI NG PROCEEDING FOR THOSE ASSESSMENT YEARS. THE TIME LIMIT FOR ISSUE O F NOTICE 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 DI VIDEND U/S 2(22)(E) OF THE ACT WITHOUT ANY INCRIMINATING MATER IALS AND ALSO BASED ON THE BOOKS OF ACCOUNTS AND FINANCIAL STATEMENTS, WHICH WERE ALREADY PART OF REGULAR RETURN OF INCOME FILED BY THE ASSES SEE U/S 139(1) OF THE ACT, FOR THOSE ASSESSMENT YEARS. THEREFORE, CONSID ERING THE FACTS AND ITA NO.569, 570 & 571/VIZAG/2014 M/S. BALACHAMUNDESWARI COTTON COMPANY, GUNTUR 15 CIRCUMSTANCES OF THE CASE AND ALSO RESPECTFULLY FOL LOWING THE DECISION OF COORDINATE BENCH OF ITAT, VISAKHAPATNAM IN THE C ASE OF SRI HARI PRASAD BHARARIA VS. DCIT (SUPRA), WE ARE OF THE VIE W THAT THE A.O. HAS NO JURISDICTION TO MAKE ADDITIONS IN RESPECT OF CON CLUDED ASSESSMENTS IN THE ABSENCE OF ANY INCRIMINATING MATERIALS FOUND DURING THE COURSE OF SEARCH. IN THIS CASE, UNDOUBTEDLY THE A.O. HAS MADE ADDITIONS TOWARDS DEEMED DIVIDEND ON THE BASIS OF FINANCIAL S TATEMENTS FILED BY THE ASSESSEE ALONG WITH REGULAR RETURN OF INCOME WI THOUT ANY MATERIAL FOUND DURING THE COURSE OF SEARCH. THEREFORE, WE D IRECT THE A.O. TO DELETE ADDITIONS MADE TOWARDS DEEMED DIVIDEND U/S 2 (22)(E) OF THE ACT FOR THE ASSESSMENT YEARS 2004-05 & 2005-06. 10. THE SIMILAR ISSUE HAS BEEN CONSIDERED BY THE HO NBLE ITAT KOLKATA BENCH IN THE CASE OF SMT. YAMINI AGARWAL VS . DCIT (CENTRAL CIRCLE)-3, KOLKATA REPORTED IN 83 TAXMAN.COM 209 AF TER CONSIDERING THE DECISION OF SPECIAL BENCH RULING IN THE CASE OF ALL CARGO LOTISTICS AND THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CANARA HOUSING AND THE BOMBAY HIGH COURT DECISION I N THE CASE OF ANIL KUMAR BHATIA EXPRESSED A VIEW THAT IN RESPECT OF ASSESSMENTS COMPLETED PRIOR TO THE DATE OF SEARCH THE SCOPE OF PROCEEDINGS U/S 153A OF THE ACT HAS TO BE CONFINED ONLY TO THE MATE RIAL FOUND IN THE COURSE OF SEARCH. FOR THE SAKE OF CONVENIENCE, WE EXTRACT THE RELEVANT PARA-25 & 26 OF 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 ACT ARE SHOWN TO HAVE BEEN ACCEPTED WITHOUT AN INTIMATION U/S.143(1) OF THE ACT OR WITHOUT ANY NOTICE ISSUED U/S.143(2) OF THE ACT WITHIN THE TIME LIMIT CONTEMPLATED BY THE PROVISO THERETO, CAN BE SAID TO BE ASSESSMENT PROCE EDINGS CONCLUDED THAT HAVE NOT ABATED U/S.153A OF THE ACT. SECTION 153A OF THE ACT, USES THE EXPRESSING 'PENDING ASSESSMENT OR REASSESSMENT'. WHEN A RETURN IS FILED AND WHEN NEITHER ITA NO.569, 570 & 571/VIZAG/2014 M/S. BALACHAMUNDESWARI COTTON COMPANY, GUNTUR 16 AN ACKNOWLEDGEMENT OR INTIMATION U/S.143(1)OF THE A CT IS ISSUED NOR A NOTICE U/S.143(2) OF THE ACT IS ISSUED WITHIN THE TIME LIM IT LAID DOWN IN THE PROVISO TO SECC.143(2) OF THE ACT, THE PROCEEDINGS INITIATED B Y FILING THE RETURN ARE CLOSED. IN THE PRESENT CASE, THE PERIOD FOR ISSUING THE NOTICE U/S 143(2) ELAPSED. THEREFORE THE PROCESS HAS ATTAINED THE FINALITY WHICH CAN ONL Y BE ASSAILED U/S 148 OR 263 OF THE ACT. IT CAN THUS BE CONCLUDED THAT MAKING 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 U NDER SECTION 143(1) OF THE ACT OR BY NOT ISSUING NOTICE U/S.143(2) OF THE ACT WITH IN THE TIME LIMIT LAID DOWN IN THE PROVISO TO SEC.143(2) OF THE ACT, RESULTS IN AN ASS ESSMENT PROCEEDINGS AND WHERE SUCH ASSESSMENT PROCEEDINGS ARE COMPLETED PRIOR TO THE DATE OF SEARCH THEN THEY DO NOT ABATE IN TERMS OF THE SECOND PROVISO TO SECT ION 153A(1) OF THE ACT. THE DECISION OF THE ITAT KOLKATA BENCH RENDERED IN THE CASE OF SHRI BISHWANATH GARODIA (SUPRA) ON IDENTICAL FACTS OF THE CASE AS T HAT OF THE ASSESSEE IN THE PRESENT CASE, CLEARLY SUPPORTS OUR CONCLUSIONS AS A BOVE. 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 OR DER U/S.153A OF THE ACT, COULD NOT AND OUGHT NOT TO HAVE BEEN EXAMINED BY THE AO I N THE ASSESSMENT PROCEEDINGS U/S.153A OF THE ACT AS THE SAID ISSUE S TOOD 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 WIT HIN 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. IN RESPECT OF ASSESSMENTS COMPLETED P RIOR TO THE DATE OF SEARCH THAT HAVE NOT ABATED, THE SCOPE OF PROCEEDINGS U/S.153A OF THE ACT HAS TO BE CONFINED ONLY TO MATERIAL FOUND IN THE COURSE OF SEARCH. SIN CE NO MATERIAL WHATSOEVER WAS FOUND IN THE COURSE OF SEARCH, THE ADDITIONS MADE B Y 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. CONSEQUENTLY, THE SAID VARIOUS ADDITIONS MADE IN THE ORDERS OF ASSESSMENT OUGHT NOT TO HAVE OR CO ULD NOT BE MADE BY THE AO. GR.NO.1 RAISED BY THE ASSESSEE IN BOTH THE APPEALS ARE ACCORDINGLY ALLOWED. 11. THE ITAT, VISAKHAPATNAM ALLOWED THE APPEAL ON S IMILAR FACTS IN THE CASE OF P. RAMA RAJU VS. DCIT CENTRAL CIRCLE-1, VISAHAPATNAM IN ITA NOS.424, 425 & 426/VIZAG/2013 DATED 31.7.2017. FOLLOWING THE CASE OF Y.V. ANJANEYULU VS. DCIT, CENTRAL CIRCLE, V IJAYAWADA (SUPRA). ITA NO.569, 570 & 571/VIZAG/2014 M/S. BALACHAMUNDESWARI COTTON COMPANY, GUNTUR 17 12. THE LD. D.RS ARGUMENT THAT THE ASSESSEE HAS AC CEPTED THAT THE ADDITIONS WERE MADE DURING THE COURSE OF SEARCH & SEIZURE OPERATIONS RELATING TO UNSECURED LOANS IN THE STATE MENT OF FACTS IS NOT TENABLE SINCE IT HAS NO FOUNDATION IN THE ASSESSMEN T ORDER. THE ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY EVI DENCE FOUND DURING THE COURSE OF SEARCH RELATING TO THE ADDITIO NS MADE IN THE ASSESSMENT ORDERS. ON VERIFICATION OF THE ASSESSME NT ORDERS, IT IS EVIDENT THAT THE ADDITIONS WERE MADE ON THE BASIS O F THE ENTRIES MADE IN THE REGULAR BOOKS OF ACCOUNTS BUT THERE WAS NO REFERENCE TO THE SEIZED MATERIAL. HENCE, THE RELIANCE OF THE LD . D.R. ON STATEMENT OF FACTS THAT THE ASSESSMENTS WERE MADE ON THE BASI S OF SEIZED MATERIAL IS NOT CORRECT. LD. D.R. FURTHER ARGUED T HE LEGAL POSITION SUBSEQUENT TO THE INTRODUCTION OF PROVISIONS U/S 15 3A OF THE ACT AND 153C OF THE ACT FOR SEARCH ASSESSMENTS THE INCRIMIN ATING MATERIAL NOT NECESSARY IS NOT TENABLE. THIS ISSUE HAS BEEN CONS IDERED BY THE SPECIAL BENCH IN THE CASE OF ALL CARGO LOGISTICS LI MITED CITED (SUPRA) AND ANSWERED THAT THE ASSESSMENTS U/S 153A OF THE A CT WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL. THEREFORE, THE ARGUMENT OF THE LD. D.R. LACKS MERIT ON THIS ISSUE. AS DISCUSS ED EARLIER, IN THESE APPEALS NO ADDITION WAS MADE ON THE BASIS OF SEIZED MATERIAL AND THE ORIGINAL ASSESSMENTS GOT COMPLETED AND THE ASSESSEE S CASE IS ITA NO.569, 570 & 571/VIZAG/2014 M/S. BALACHAMUNDESWARI COTTON COMPANY, GUNTUR 18 SQUARELY COVERED BY THE DECISION OF THIS TRIBUNAL C ITED (SUPRA) AND THE DECISION OF HONBLE SPECIAL BENCH IN THE CASE O F ALL CARGO GLOBAL LOGISTICS LIMITED. THEREFORE, WE SET ASIDE THE ORD ERS OF THE LOWER AUTHORITIES AND ALLOW THE APPEALS OF THE ASSESSEE. 13. IN THE RESULT, THE APPEALS FILED BY THE ASSESSE E ARE 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 M/S. SRI BALACHAMUNDESWARI COTTO N COMPANY, 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