T Ramesh, Hyderabad V. The A.C.I.T., Central Circle-1, Hyderabad

ITA 58/HYD/2013

• Counselvise Citation: 5822514 RSA 2013
• Duration Of Justice: 2 year(s) 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 23-11-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 18-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M SITARAM
• Assessee Lawyers: A V RAGHURAM
• Keywords: Gift; Depreciation; Search and seizure; Question of law
• Section: 143(3); 153A; 68; 263; 15

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NOS. 58, 59 & 60/HYD/2013 ASSESSMENT YEARS: 2004-05, 2005-06 & 2006-07 T. RAMESH, WARANGAL PAN ABAPT0902D VS. THE ASST. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 1, HYDERABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI A.V. RAGHURAM REVENUE BY : SHRI M. SITARAM DATE OF HEARING : 23-11-2015 DATE OF PRONOUNCEMENT : 18-12-2015 O R D E R PER S. RIFAUR RAHMAN, A.M.: THESE THREE APPEALS PERTAINING TO ONE ASSESSEE ARE FILED AGAINST A COMMON ORDER OF CIT(A)-I, HYDERABAD, DAT ED 29/11/2015 FOR THE AYS 2004-05 AND 2005-06. AS IDENTICAL ISSUE S ARE INVOLVED IN THESE APPEALS, THEY WERE CLUBBED AND HEARD TOGETHER AND, THEREFORE, FOR THE SAKE OF CONVENIENCE WE DISPOSE OF THESE APP EALS BY WAY OF COMMON ORDER. 2. TO DISPOSE OF THESE APPEALS, WE REFER TO THE FAC TS FROM AY 2004-05 BEING ITA NO. 58/HYD/2013. 3. BRIEFLY THE FACTS OF THE CASE ARE, THE ASSESSEE IS A DOCTOR AND PRACTICING RADIOLOGIST FILED HIS RETURN OF INCOME ON 01/11/2004, ADMITTED INCOME OF RS. 3,34,561/-. A SEARCH AND SEI ZURE WAS CONDUCTED IN THE GROUP OF M/S PRATHIMA EDUCATIONAL SOCIETY (PES). THE SEARCH WAS UNDERTAKEN ON 10/09/2009 ON THE SOCI ETY AND ALL THE TRUSTEES. THE ASSESSEE BEING ONE OF THE TRUSTEE, DU RING THE SEARCH PROCEEDING CERTAIN DOCUMENTS BELONGING TO THE ASSES SEE WERE SEIZED 2 ITA NOS. 58, 59 & 60 /HYD/2013 T. RAMESH AT PAGE NOS. 3, 4, 9 & 13 OF A/PES/17 FROM THE PREM ISES OF M/S PES. SUBSEQUENTLY, NOTICE U/S 153C OF THE INCOME TAX ACT (IN SHORT ACT), 1961 WAS ISSUED ON 13/07/2010 FOR AYS 2004-05 TO 20 09-10. IN RESPONSE TO THE ABOVE, THE ASSESSEE FILED LETTER ON 06/04/2011, STATED THAT THE RETURN OF INCOME HAD ALREADY BEEN FILED. D URING THE COURSE OF ASSESSMENT PROCEEDING, AO NOTICED THAT ASSESSEE HAD RECEIVED NRI FUND OF RS. 15,02,439/-. IN SUPPORT, THE ASSESSEE H AD FURNISHED AN EMAIL FROM SHRI UGRASENA R. SAMALA, A RESIDENT OF U SA AND BROTHER OF ASSESSEE. MR. SAMALA STATED THAT HE HAD GIVEN GI FT TO THE ASSESSEE ON VARIOUS DATES, WHEN HE VISITED INDIA. AO REJECTE D THE CLAIM OF THE ASSESSEE AND OBSERVED THAT A SIMPLE LETTER CANNOT B ECOME A DEED OF GIFT. ALSO, THE ASSESSEE IN HIS RETURN HAD NOT CLAI MED IT AS GIFT. IT IS MENTIONED AS NRI FUNDS. CONSIDERING THE ABOVE OBS ERVATION, THE AO TERMED THE SAME AS AN AFTER THOUGHT AND ADDED THE A BOVE FUNDS AS INCOME OF THE ASSESSEE U/S 68 OF THE ACT. 3. AGGRIEVED WITH THE ABOVE ORDER, ASSESSEE PREFERR ED AN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A) DURING THE COU RSE OF APPEAL PROCEEDINGS, ASSESSEE RAISED ADDITIONAL GROUNDS AS BELOW: I) THE AO ERRED IN INITIATING PROCEEDINGS U/S 153C THOUGH NO MATERIAL IS FOUND DURING THE COURSE OF SEARCH OF THIRD PARTY R ELATING TO THIS YEAR AND NO ADDITION IN FACT IS MADE BASED ON ANY MATERIAL. II) THE AO ERRED IN NOT RECOMPUTING THE DEPRECIATI ON CLAIM BY ALLOWING 40% ON MRI SCANNER AND 40% ON REGIUS 170CR SYSTEM (COL OUR DOPPLER) AS ADMISSIBLE AGAINST CLAIM OF 25% BY THE ASSESSEE. THE ABOVE ADDITIONAL GROUNDS WERE ADMITTED BY THE C IT(A) AND DISMISSED THE SAME. THE CIT(A) HAD ALSO REJECTED TH E ASSESSEES APPEAL AGAINST THE REPORTED CASH CREDITS U/S 68 OF THE ACT. 4. AGGRIEVED WITH THE ABOVE ORDER, THE ASSESSEE FIL ED APPEAL BEFORE US AND RAISED SIX GROUNDS OF APPEAL. IN GRO UND NOS. 2 TO 4, OBJECTED TO THE INITIATION OF PROCEEDINGS U/S 153C. GROUND NOS. 5 TO 6 ARE ON THE REJECTION OF ADDITIONAL GROUND ON THE CL AIM OF DEPRECIATION AND RATE OF DEPRECIATION APPLICABLE AS PER SCHEDULE TO IT RULES. 3 ITA NOS. 58, 59 & 60 /HYD/2013 T. RAMESH 5. ASSESSEE PRAYED TO FILE ADDITIONAL GROUNDS AS BE LOW: THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION MAD E U/S 68 ON THE GIFTS RECEIVED WITHOUT ADMITTING ADDITIONAL EV IDENCE THOUGH IT IS EVIDENT THAT THERE WAS NO OPPORTUNITY TO FIL E SUCH EVIDENCE DURING THE COURSE OF ASSESSMENT, BY RELYING ON A D ECISION, WHOSE FACTS ARE ENTIRELY DIFFERENT. LD. AR SUBMITTED THAT THE ASSESSEE INADVERTENTLY HA D NOT RAISED THE ABOVE GROUND AGAINST THE CIT(A)S ORDER, WHICH THE CIT(A) CONFIRMED THE ADDITION MADE U/S 68 OF THE ACT. HE SUBMITTED T HAT THE OMISSION WAS PURELY UNINTENTIONAL, PRAYED FOR ADMISSION. THE LD. DR OBJECTED FOR SUCH ADDITIONAL GROUND. HOWEVER, IT IS ADMITTE D ON THE GROUND OF LAW FOLLOWING THE DECISION OF THE HONBLE SUPREME C OURT IN THE CASE OF NATIONAL THERMAL POWER CO., LIMITED VS. CIT 229 ITR 383 (SC). 6. LD. AR SUBMITTED THAT THERE WAS NO INCRIMINATING MATERIAL FOUND DURING THE SEARCH & SEIZURE IN THE PREMISES OF PES AGAINST THE ASSESSEE. THE PROCEEDING U/S 153C WAS INITIATED PUR ELY ON SUSPICION AND IT IS INVALID AS WELL AS BAD IN LAW. HE RELIED ON THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN CASE OF SMT. A. VIJAYA IN ITA NO. 660 TO 663 AND 563-565/HYD/2013. THE RELEVANT OBSER VATIONS OF THE COORDINATE BENCH ARE REPRODUCED BELOW: 6. SINCE NO INCRIMINATING MATERIAL PERTAINING TO A SSESSEE WAS FOUND IN THE COURSE OF SEARCH AND THE TRANSACTION WHICH WAS ENTERED B Y ASSESSEE FOR DEVELOPMENT WAS ALREADY ON RECORD, WE ARE OF THE OPINION THAT THER E IS NO MERIT IN THE REVENUE CONTENTIONS. IN FACT AS SEEN FROM THE ORDER IN AY. 2004-05, ASSESSING OFFICER DID NOT EVEN HAVE ANY DOCUMENTS PERTAINING TO THAT YEAR AN D THE ONLY ADDITION MADE WAS ABOUT ASSESSEE'S INVESTMENT IN PURCHASE OF A FLAT, WHICH HAS NO CONNECTION TO THE SEARCH AT ALL. IN VIEW OF THIS, WE DO NOT FIND ANY REASON INTERFERE WITH THE ORDERS OF CIT(A) ON THE ISSUE OF JURISDICTION U/S.153C. ACCO RDINGLY, REVENUE'S APPEALS IN AYS.2004-05, 2008-09, 2009-10 ARE DISMISSED. LD. AR ALSO RELIED ON THE DECISION OF THE COORDINAT E BENCH OF THIS TRIBUNAL IN THE CASE OF MR. VED PRAKASH AGARWAL IN ITA NOS. 659 TO 665/H/2012 AND OTHERS, DATED 05/11/2014, WHEREIN TH E HONBLE J.M. WAS ONE OF THE SIGNATORY. THE RELEVANT FINDINGS OF THE COORDINATE BENCH ARE AS FOLLOWS: 4 ITA NOS. 58, 59 & 60 /HYD/2013 T. RAMESH 6. WE HAVE CONSIDERED THE ISSUE AND FIND MERIT IN A SSESSEES SUBMISSIONS. SINCE ASSESSEE WAS FILING RETURNS REGULARLY AND WAS OFFE RING INCOMES ON THE BASIS OF AUDIT REPORTS AND BOOKS OF ACCOUNTS MAINTAINED WHICH WERE ALSO A CCEPTED IN THE PROCEEDINGS EARLIER, QUESTION OF DISALLOWING THE EXPENDITURE IN THE BLO CK ASSESSMENT DOES NOT ARISE UNLESS THERE WAS INCRIMINATING MATERIAL. AS SEEN FROM THE ORDERS, A SSESSEE IS ABLE TO FURNISH NECESSARY PURCHASES, SALES DETAILS AND BOOKS OF ACCOUNTS WERE NOT REJEC TED. IN VIEW OF THIS, WE ARE OF THE OPINION THAT IN THE ABSENCE OF ANY INCRIMINATING MATERIAL, GEN ERAL DISALLOWANCE OF EXPENDITURE AT 50% AS WAS DONE BY A.O. CANNOT BE SUSTAINED. LD. CIT(A) S HOULD HAVE DELETED THE WHOLE THING BUT RESTRICTED IT TO 25%. IN THE ABSENCE OF ANY JUSTIF ICATION FOR THE SAME, WE UNABLE TO SUSTAIN THE ORDERS OF LD. CIT(A). THEREFORE, WHILE ACCEPTING T HE ADDITIONAL GROUND IN ASSESSMENT YEARS 2002- 03 TO 2005-06, WE ARE OF THE OPINION THAT NO DISAL LOWANCE CAN BE MADE IN THOSE YEARS AS ASSESSEE HAS FILED REGULAR RETURNS EARLIER AND THO SE WERE ACCEPTED. IN FACT, THERE WAS A SCRUTINY ASSESSMENT FOR A.Y. 2004-05 IN WHICH ASSESSEES BO OKS OF ACCOUNTS WERE ACCEPTED WITHOUT ANY DISALLOWANCE. THEREFORE, THERE IS JUST IFICATION IN ASSESSEES ADDITIONAL GROUND AND THE GROUNDS RAISED AT DISALLOWANCE OF 25% OF CLAIM IN THESE ASSESSMENT YEARS. ACCORDINGLY, ASSESSEES GROUNDS IN A.YS. 2002-03 TO 2005-06 INC LUDING ADDITIONAL GROUND ARE ALLOWED. CONSEQUENTLY, REVENUE GROUNDS ON DELETION OF 25% O F GROSS EXPENDITURE IN THESE ASSESSMENT YEARS BECOME INFRUCTUOUS. ACCORDINGLY, THE SAME AR E REJECTED. 7. LD. DR SUBMITTED THAT THE ASSESSEE IS A TRUSTEE IN THE PES TRUST IN WHICH THE SEARCH WAS CONDUCTED. THE TRUST WAS CONTROLLED BY THE TRUSTEES, HENCE, ASSESSEE HAD TO TAKE RESPONSIB ILITY OF THE MATERIALS FOUND IN THE PREMISES OF THE PES. IT WAS INFERRED THAT THE ASSESSEE HAD RECEIVED FUNDS ON BEHALF OF THE TRUST. THE ABOVE RECEIPTS WERE NOT SHOWN IN THE BOOKS OF THE TRUST. HE ALSO SUBMITTED THAT THE ASSESSMENT WAS COMPLETED U/S 143(1) OF THE ACT, HENCE, THERE WAS NO OPINION FORMED BY THE DEPARTMENT. ON R ECEIPT OF THE GIFT BY THE ASSESSEE, HE SUBMITTED THAT THE ONUS LIES ON THE ASSESSEE TO PROVE THE GENUINENESS OF THE GIFT. HE RELIED ON THE DECISION OF CIT VS. PR GANAPATHI, [2013] 11SCC 354. EVEN THOUGH, THERE WAS NO INCRIMINATING MATERIAL FOUND BY THE DEPARTMENT, STI LL THE DEPARTMENT CAN PROCEED WITH THE PROCEEDINGS U/S 153C OF THE AC T BY RELYING ON THE CASE OF M/S CANARA HOUSING DEVELOPMENT COMPANY VIDE ITA NO. 38 OF 2014 OF HONBLE KARNATAKA HIGH COURT. THE REL EVANT FINDINGS OF THE HONBLE COURT ARE REPRODUCED BELOW: 11. THE TRIBUNAL HAS PROCEEDED ON THE ASSUMPTION BY VIRTUE OF THE JUDGMENT OF THE SPECIAL BENCH OF THE MUMBAI, THE S COPE OF ENQUIRY UNDER SECTION 153A IS TO BE CONFINED ONLY TO THE UNDISCL OSED INCOME UNEARTHED DURING SEARCH ARID IF THERE IS ANY OTHER INCOME WH ICH IS NOT THE SUBJECT MATTER OF SEARCH, THE SAME CANNOT BE TAKEN INTO CO NSIDERATION. THEREFORE, THE REVISIONAL AUTHORITY CAN EXERCISE THE POWER UN DER SECTION 263. IN THE ENTIRE SCHEME OF 153A OF THE ACT, THERE IS NO PROH IBITION FOR THE ASSESSING AUTHORITY TO TAKE NOTE OF SUCH INCOME. ON THE CONT RARY, IT IS EXPRESSLY PROVIDED UNDER SECTION 153A OF THE ACT THE ASSESSI NG OFFICER SHALL ASSESS 5 ITA NOS. 58, 59 & 60 /HYD/2013 T. RAMESH OR REASSESS THE 'TOTAL INCOME' OF SIX ASSESSMENT Y EARS WHICH MEANS THE SAID TOTAL INCOME INCLUDES INCOME WHICH WAS RETURN ED IN THE EARLIER RETURN, THE INCOME WHICH WAS UNEARTHED DURING SEARCH AND I NCOME WHICH IS NOT THE SUBJECT MATTER OF AFORESAID TWO INCOME. IF THE COMMISSIONER HAS COME ACROSS ANY INCOME THAT THE ASSESSING AUTHORITY HAS NOT TAKEN NOTE OF WHILE PASSING THE EARLIER ORDER, THE SAID MATERIAL CAN B E FURNISHED TO THE ASSESSING AUTHORITY AND THE ASSESSING AUTHORITY SH ALL TAKE NOTE OF THE SAID INCOME ALSO IN DETERMINING THE TOTAL INCOME OF THE ASSESSEE WHEN THE EARLIER PROCEEDINGS ARE REOPENED AND THAT INCOME A LSO SHALL BECOME THE SUBJECT MATTER OF SAID PROCEEDINGS. IN THAT VIEW O F THE MATTER THE REASONING GIVEN BY THE TRIBUNAL IS NOT JUSTIFIED. THE COMMISSIONER DID NOT HAVE JURISDICTION TO INITIATE ANY PROCEEDINGS UNDE R SECTION 263 OF THE ACT. THE LD. DR ALSO RELIED ON THE DECISION OF THE HONB LE JURISDICTIONAL HIGH COURT IN THE CASE OF GAPAL LAL BADRUKA, THE RE LEVANT PORTION OF THE DECISION IS REPRODUCED BELOW FOR THE SAKE OF CL ARITY: '17. BY VIRTUE OF SECTION 158B1 OF THE ACT, THE V ARIOUS PROVISIONS OF CHAPTER XIV-B OF THE ACT ARE MADE INAPPLICABLE TO PROCEEDINGS UNDER SECTIONS 153A/153C OF THE ACT. THE EFFECT OF THIS IS THAT WHILE THE PROVISIONS OF CHAPTER XIV-B OF THE ACT LIMIT THE I NQUIRY BY THE ASSESSING OFFICER TO THOSE MATERIALS FOUND DURING THE SEARCH AND SEIZURE OPERATION, NO SUCH LIMITATION IS FOUND INSOFAR AS SECTIONS 15 3A/153C OF THE ACT ARE CONCERNED. THEREFORE, IT FOLLOWS THAT FOR THE PURP OSES OF SECTIONS 153A/153C OF THE ACT THE ASSESSING OFFICER CAN TAK E INTO CONSIDERATION MATERIAL OTHER THAN WHAT WAS AVAILABLE DURING THE SEARCH AND SEIZURE OPERATION FOR MAKING AN ASSESSMENT OF UNDISCLOSED INCOME OF THE ASSESSEE. 18. AT THIS STAGE, WE MAY MENTION THAT LEARNED COU NSEL FOR THE ASSESSEES RELIED UPON MANISH MAHESHWARI V. ASST. COMMISSIONE R OF INCOME TAX FOR THE PURPOSES OF INTERPRETING SECTION 158BB OF THE ACT. WE HAVE GONE THROUGH THE DECISION CITED BY LEARNED COUNSEL AND FIND THAT IT DOES NOT SUPPORT HIS CASE FOR THE SIMPLE REASON THAT THE PR OVISIONS CHAPTER XIV-B OF THE ACT ARE NOT APPLICABLE TO PROCEEDINGS UNDER SE CTIONS 153A/153C OF THE ACT. CONSEQUENTLY, THE PRINCIPLES OF SECTION 158BB OF THE ACT CANNOT BE IMPORTED FOR THE PURPOSES OF INTERPRETING SECTION 153A/153C OF THE ACT. THE VIEW EXPRESSED BY THE SUPREME COURT IN MANISH MAHESHWARI HAS NO APPLICATION TO THE PRESENT CASE. 19. UNDER THESE CIRCUMSTANCES, IN OUR OPINION, SIN CE THE INTERPRETATION OF SECTIONS 153A/153C OF THE ACT IS QUITE CLEAR, NO S UBSTANTIAL QUESTION OF LAW ARISES FOR CONSIDERATION. WE MAY IN THIS CONTE XT RECALL THE WORDS OF THE SUPREME COURT IN SANTOSH HAZARI V. PURUSHOTTAM TIW ARI (DEAD) WHEREIN IT WAS SAID: 'A POINT OF LAW WHICH ADMITS OF NO TWO OPINIONS M AY BE A PROPOSITION OF LAW BUT CANNOT BE A SUBSTANTIAL QU ESTION OF LAW.' 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL FACTS ON RECORD AS WELL AS THE ORDERS OF REVENUE AUTHORITIES. WE HAVE ALSO CAREFULLY GONE THROUGH TH E DECISIONS CITED AT THE BAR. THERE WAS SEARCH OPERATION CONDUCTED IN M/S PRATHIMA EDUCATIONAL SOCIETY (PES). IN SEARCH PROCEEDINGS SO ME DOCUMENTS 6 ITA NOS. 58, 59 & 60 /HYD/2013 T. RAMESH WERE SEIZED AT PAGE NOS. 3, 4, 9 & 13 OF A/PES/17 F ROM THE PREMISES OF PES. IN THESE DOCUMENTS, IT WAS FOUND THAT THE A SSESSEES NAME WAS MENTIONED. CONSIDERING THE ABOVE, PROCEEDINGS U /S 153C WAS INITIATED AND ACCORDINGLY NOTICE WAS ISSUED. THE AS SESSMENT WAS COMPLETED U/S 153C R.W.S. 143(3) OF THE ACT AND THE ADDITION WAS MADE IN THE ABOVE ORDER ON ACCOUNT OF FUNDS RECEIVE D FROM NRI AND TREATED AS CASH CREDIT U/S 68 OF THE ACT. IT IS ALS O FACT THAT THE SAME WAS NOT CONNECTED TO THE SEARCH CONDUCTED AND MATER IALS FOUND IN THE SEARCH PROCEEDINGS CARRIED OUT IN THE PREMISES OF P ES. IT WAS ALSO ACKNOWLEDGED BY THE AO IN HIS ORDER THAT THE SAME W AS DISCLOSED BY THE ASSESSEE IN HIS RETURN OF INCOME AS NRI FUNDS. THAT MEANS, THE SAME WAS ALREADY DISCLOSED IN THE RETURN OF INCOME AND THE SAME WAS NOT DISPUTED BY THE AO. IT IS CLEAR THAT THE AO HAD MADE THE ASSESSMENT ONLY BASED ON THE FINDINGS MADE DURING T HE ASSESSMENT PROCEEDINGS U/S 153C OF THE ACT NOT ANY WAY RELATIN G TO THE MATERIALS FOUND DURING THE SEARCH PROCEEDINGS CARRIED OUT IN THE PREMISES OF PES, WHICH TO THE SATISFACTION OF AO WAS THAT THE M ATERIAL FOUND WAS IN FACT BELONGS TO THE ASSESSEE, BUT, AO COULD NOT SUBSTANTIATE THE SAME DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/ S 153C. 9. ON THE SUBMISSIONS OF LD. DR THAT THE AO CAN PRO CEED WITH ASSESSMENT WITHOUT ANY INCRIMINATING MATERIAL FOUND DURING THE SEARCH PROCEEDINGS BASED ON THE JUDICIAL PRONOUNCEM ENT RELIED UPON BY HIM. IN THE CASE OF M/S CANARA HOUSING DEVELOPME NT COMPANY (SUPRA), THE OBSERVATION MADE BY THE HONBLE HIGH C OURT THAT IF THE COMMISSIONER HAS COME ACROSS ANY INCOME THAT THE AS SESSING AUTHORITY HAS NOT TAKEN NOTE OF WHILE PASSING THE E ARLIER ORDER, THE SAID MATERIAL CAN BE FURNISHED TO THE ASSESSING AUT HORITY AND THE ASSESSING AUTHORITY SHALL TAKE NOTE OF THE SAID INC OME ALSO IN DETERMINING THE TOTAL INCOME OF THE ASSESSEE WHEN T HE EARLIER PROCEEDINGS ARE REOPENED AND THAT INCOME ALSO SHALL BECOME THE SUBJECT MATTER OF SAID PROCEEDINGS. THE IMPORTANT WORD IN THIS OBSERVATION IS ALSO . IT CONNOTES THE MEANING THAT THE AO CAN MAKE 7 ITA NOS. 58, 59 & 60 /HYD/2013 T. RAMESH ASSESSMENT BASED ON THE ADDITIONAL UNDISCLOSED INCO ME, WHICH WAS NOT THE SUBJECT MATTER OF SEARCH PROCEEDINGS, CAN B E CONSIDERED WITH THE MATERIAL FOUND DURING THE SEARCH PROCEEDINGS. O NLY WHEN THE ASSESSMENT COMPLETED WITH THE MATERIAL FOUND DURING THE SEARCH AND IN ADDITION ANY OTHER UNDISCLOSED INCOME CAN ALSO B E CONSIDERED WHILE COMPLETING THE ASSESSMENT. SIMILARLY, IN THE OTHER CASE LAW RELIED ON BY THE LD. DR IN THE CASE OF GOPAL LAL BA DRUKA (SUPRA), THE HONBLE HIGH COURT OBSERVED THAT THEREFORE IT FOLLOWS THAT FOR THE PURPOSES OF SECTIONS 153A/153C OF THE ACT, THE AO C AN TAKE INTO CONSIDERATION MATERIAL OTHER THAN WHAT WAS AVAILABL E DURING THE SEARCH AND SEIZURE OPERATION FOR MAKING AN ASSESSME NT OF UNDISCLOSED INCOME OF THE ASSESSEE. FROM THE ABOVE OBSERVATION, IT IS CLEAR THAT THERE MUST BE MATERIAL OTHER THAN WHA T WAS AVAILABLE DURING SEARCH PROCEEDINGS. THAT MEANS THERE SHOULD BE MATERIAL FOUND DURING SEARCH AND IN ADDITION, AO CAN PROCEED WITH THE OTHER MATERIAL FOUND DURING THE ASSESSMENT. IT CANNOT BE OTHERWISE AROUND. AO DOES NOT FIND ANY INCRIMINATING MATERIALS AND CO MPLETES ONLY BASED ON WHAT WAS FOUND DURING ASSESSMENT PROCEEDIN G U/S 153C. THE WHOLE EXERCISE OF ASSESSMENT U/S 153C IS DEFEAT ED. 10. SINCE THERE WAS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH PROCEEDING PERTAINING TO THE ASSES SEE AND THE AO HAD FOUND THE NRI FUNDS, WHICH WAS RECEIVED BY THE ASSESSEE AS GIFT FROM MR. UGRASENA R. SAMALA. THE SAME WAS ALREADY O N RECORD AS PART OF THE RETURN OF INCOME FILED BY THE ASSESSEE. WE ARE OF THE OPINION THAT THERE IS NO MERIT IN THE REVENUES CON TENTIONS. IN FACT THE AO HAD NOT BROUGHT ANYTHING ON RECORD TO ESTABLISH THE MATERIALS FOUND DURING THE SEARCH THAT THESE WERE ANY WAY BEL ONGS TO THE ASSESSEE. THE WHOLE PROCEEDINGS CARRIED OUT U/S 153 C ON THE BASIS OF MERE SUSPICION. SINCE, THERE IS NO INCRIMINATING MATERIAL RELATING TO ASSESSEE CONSEQUENT TO THE SEARCH CONDUCTED IN OTHE R PERSONS CASE, THE PROCEEDINGS U/S 153C CANNOT BE UPHELD CONSIDERI NG THE FACTS OF THE CASE. SIMILAR VIEW WAS TAKEN BY THE COORDINATE BENCH OF THIS 8 ITA NOS. 58, 59 & 60 /HYD/2013 T. RAMESH TRIBUNAL IN THE CASE OF ACIT VS. SMT. A. VIJAYA (SU PRA) AND IN THE CASE OF VED PRAKASH AGARWAL VS. DCIT (SUPRA). 11. IN THE RESULT, THE GROUND OF APPEAL NOS. 2 TO 4 OF THE ASSESSEE ARE ALLOWED AND THE ASSESSMENT U/S 153C IS QUASHED. AS A RESULT, THE GROUND NOS. 5 & 6 AGAINST THE ADDITION MADE BY THE AO NEED NO ADJUDICATION. 12. AS THE FACTS AND GROUNDS OF APPEAL ARE MATERIAL LY IDENTICAL IN ITA NOS. 59 & 60/HYD/2013 TO THAT OF ITA NO. 58/HYD /2013, FOLLOWING THE CONCLUSIONS DRAWN THEREIN, WE ALLOW THESE APPEA LS OF ASSESSEE. 13. IN THE RESULT, ALL THREE APPEALS UNDER CONSIDER ATION ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON 18 TH DECEMBER, 2015. SD/- SD/- (P. MADHAVI DEVI) (S. RIFAUR RAHMAN) JUDICIAL MEMBER A CCOUNTANT MEMBER HYDERABAD, DATED: 18 TH DECEMBER, 2015 KV COPY TO:- 1. T. RAMESH, C/O K. VASANTKUMAR & A.V. RAGHURAM, ADVOCATES, 610, 6 TH FLOOR, BABHUKHAN ESTATE, BASHEERBAGH, HYDERABAD. 2. ACIT, CENTRAL CIRCLE 1, HYD. 3 CIT(A)-1, HYDERABAD 4) CIT(CENTRAL), HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., H YDERABAD.