M/s. Lotus Buildtech Ltd., New Delhi V. DCIT, New Delhi

ITA 5837/DEL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7355 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 21-03-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 31-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SULEKHA VERMA
• Keywords: Gift; Additional evidence; Question of law; Validity of assessment; Right to appeal
• Section: 40A(3); 143(3); 153A; 132; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D: NEW DELHI BEFORE SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER, AN D SHRI L.P. SAHU, ACCOUNTANT MEMBER , ITA NOS. 5836 & 5837/DEL /2013 [ASSESSMENT YEARS: 2007-08 & 2008-09] & CO. NO. 169/DEL/2014 ITA NOS. 6361 /DEL /2013 [ASSESSMENT YEARS: 2007-08] M/S LOTUS BUILDTECH LTD. VS. THE D.C. I.T. 910, ANSAL BHAWAN, K.G. MARG CENTRAL CIRCLE-1 4 NEW DELHI NEW DELHI PAN : AABCL 1549 B ITA NOS. 6361 /DEL /2013 [ASSESSMENT YEARS: 2007-08] THE D.C. I.T. VS. M/S LOTUS BUILDTECH LTD. CENTRAL CIRCLE-14 910, ANSAL BHAWAN, K.G. MARG NEW DELHI NEW DELHI PAN : AABCL 1549 B CO. NO. 169/DEL/2014 ITA NOS. 6361 /DEL /2013 [ASSESSMENT YEARS: 2007-08] M/S LOTUS BUILDTECH LTD. VS. THE D.C. I.T. 910, ANSAL BHAWAN, K.G. MARG CENTRAL CIRCLE-1 4 NEW DELHI NEW DELHI PAN : AABCL 1549 B [APPELLANT] [RESPONDENT] DATE OF FINAL HEARING : 21.03.2016 DATE OF PRONOUNCEMENT : 17.06.2016 2 ASSESSEE BY : SHRI RAKESH GUPTA , ADV SHRI SOMIL AGGARWAL, ADV REVENUE BY : MS. SULEKHA VERMA , CIT DR ORDER PER CHANDRA MOHAN GARG, JUDICIAL MEMBER THE ABOVE CAPTIONED CROSS APPEALS BY THE ASSESSEE A S WELL AS THE REVENUE AND CROSS OBJECTIONS BY THE ASS ESSEE FOR A.Y 2007-08 ARE DIRECTED AGAINST THE ORDER OF THE C IT(A)- XXXIII, NEW DELHI, DATED 26/07/2013 PASSED IN FIRST APPEAL NO. 62/12-13/1088. THE APPEAL OF THE ASSESSEE FOR A.Y 2008- 09 HAS BEEN FILED AGAINST THE ORDER OF THE LD. CIT( A)- XXXIII, NEW DELHI, DATED 26/07/2013 PASSED IN FIRST APPEAL NO. 61/12-13/1087. ASSESSEES APPEAL ITA NOS. 5836 & 5837/DEL /2013, & CO. NO. 169/DEL/2014 REVENUES APPEAL ITA NOS. 6361 /DEL /2013 [ASSESSMENT YEARS: 2007-08] 2. BRIEFLY STATED, THE FACTS GIVING RISE TO THESE A PPEALS AND CROSS OBJECTION OF THE ASSESSEE ARE THAT A SEARCH A ND SEIZURE OPERATION WAS CONDUCTED BY THE INVESTIGATION WING O F THE DEPARTMENT ON 22.3.2011 IN THE CASE OF AMTEK GROUP OF CASES 3 INCLUDING THE ASSESSEE M/S LOTUS BUILDTECH LTD WHIC H WAS ALSO COVERED U/S 132(1) OF THE INCOME TAX ACT, 1961 [FOR SHORT, 'THE ACT'], WHICH IS A GROUP COMPANY OF AMTEK GROUP. SU BSEQUENTLY, THE CASE WAS CENTRALIZED WITH CENTRAL CIRCLE -14, N EW DELHI AND NOTICE U/S 153A OF THE ACT WAS ISSUED TO THE ASSESS EE ON 4.10.2011 AND IN RESPONSE TO WHICH THE ASSESSEE FLE D RETURN DECLARING INCOME AT NIL ON 24.11.2011. FURTHER, NO TICE U/S 143(2)/142(1) ALONGWITH QUESTIONNAIRE ON 7.2.2012 W ERE ISSUED TO THE ASSESSEE FIXING THE CASE FOR HEARING ON 13.2.20 12. AFTER DETAILED INVESTIGATION AND ENQUIRY, THE AO FRAMED A SSESSMENT ORDER U/S 153A R.W.S 143(3) OF THE ACT AT TOTAL INC OME OF RS. 41,20,000/- AS AGAINST THE NIL INCOME RETURNED BY T HE ASSESSEE BY MAKING A SOLE ADDITION ON ACCOUNT OF DISALLOWANC E OF EXPENDITURE U/S 40A(3) OF THE ACT. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) WHO HELD T HAT DISALLOWANCE U/S 40A(3) OF THE ACT IS PROPER. HOWE VER, HE DIRECTED THE AO WHEREVER THE LAND IS SHOWN AS WORK IN PROGRESS, TO THE EXTENT OF DISALLOWANCE U/ 40A(3) OF THE ACT, THE VALUE OF WORK IN PROGESS WOULD BE REDUCED BY THIS AMOUNT. W HILE GIVING THE SAID DIRECTION, THE LD. CIT(A) RELIED ON THE DE CISION OF THE HON'BLE SUPREME COURT IN THE CASE OF ATTAR SINGH GU RMUKH SINGH 4 [1991] 191 ITR 667 [SC]. NOW THE AGGRIEVED ASSESSE E HAS FILED THE APPEAL CHALLENGING THE CONCLUSION OF THE LD. CI T(A) WHEREIN THE FIRST APPELLATE AUTHORITY HELD THAT THE DISALLO WANCE U/ 40A(3) OF THE ACT IS PROPER AND THE REVENUE HAS ALSO FILED CROSS APPEAL CHALLENGING THE DIRECTION OF THE LD. CIT(A) REGARDI NG DIRECTION TO THE AO THAT THE AMOUNT OF DISALLOWANCE WOULD GO ONL Y TO REDUCE THE WORK IN PROGRESS TO THE EXTENT OF AMOUNT OF DIS ALLOWANCE AND VALUE OF WORK IN PROGRESS WOULD BE REDUCED ACCORDIN GLY. 3. THE ASSESSEE HAS ALSO FILED CROSS OBJECTION ALLE GING THAT THE LD. CIT(A) RIGHTLY HELD THAT NO DISALLOWANCE U/ 40A (3) OF THE ACT CAN BE MADE WHILE COMPUTING THE INCOME OF THIS YEAR AND THUS THE REVENUES APPEAL IS NOT SUSTAINABLE. THE ASSES SEE HAS ALSO CHALLENGED THE VALIDITY OF ASSESSMENT FRAMED U/S 15 3A OF THE ACT BY ALLEGING THAT THE ASSESSEE FILED ORIGINAL RETURN OF INCOME FOR A.Y 2007-08 ON 28.3.2008 AND ASSESSMENT ORDER WAS P ASSED U/S 143(3) OF THE ACT ON 11.12.2009 AND HENCE ASSESSMEN T WAS NOT PENDING AND SAME GOT COMPLETED ON THE DATE OF SEARC H I.E. 22.3.2011. THE LD. AR HAS MAINLY CHALLENGED THE CO NCLUSION OF THE AO IN PARAS 4 TO 4.7 OF THE ASSESSMENT ORDER AN D THE CONCLUSION OF THE LD. CIT(A) IN PARA 5.5 AT PAGES 1 1 TO 14 OF THE 5 IMPUGNED ORDER BY ALLEGING THAT IN VIEW OF THE RECE NT DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT OF DELHI IN T HE CASE OF CIT VS. KABUL CHAWLA DATED 28.8.2015 PASSED IN ITA NO. 707/2014 AND OTHER APPEALS, NO ADDITION CAN BE MADE IN THE COMPL ETED ASSESSMENTS WHEREIN NO INCRIMINATING MATERIAL HAS B EEN FOUND PERTAINING TO THE IMPUGNED ADDITIONS. 4. THE LD. AR HAS ALSO PLACED RELIANCE ON THE DECIS ION OF THE HON'BLE HIGH COURT OF BOMBAY DATED 25.2.2016 PASSED IN WRIT PETITION NO. 1753/2016 IN THE CASE OF HDFC BANK LTD , MUMBAI VS. DY. CIT AND SUBMITTED THAT IT IS NOT OPEN TO THE T RIBUNAL TO DISREGARD THE BINDING DECISION OF THE HON'BLE HIGH COURT, THEREFORE, THE BENEFIT OF THE RATIO OF THE DECISION OF KABUL CHAWLA [SUPRA] MAY KINDLY BE ALLOWED IN FAVOUR OF T HE ASSESSEE. 5. REPLYING TO THE ABOVE, THE LD. CIT-DR REITERATED THE WRITTEN SUBMISSIONS I AND II AVAILABLE AT PAGES 13 TO 25 OF THE REVENUES PAPER BOOK. THE LD. DR VEHEMENTLY CONTENDED THAT I N THE CASE OF KABUL CHAWLA [SUPRA] NO QUESTION OF LAW HAS BEEN FR AMED, HENCE IT HAS NO PRECEDENTIARY VALUE. FURTHER, PLACING RE LIANCE ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F ATTAR SINGH 6 [SUPRA], CONTENDED THAT CASH PAYMENTS EXCEEDING THE PRESCRIBED LIMIT ATTRACTS THE PAYMENTS MADE FOR ACQUIRING STOC K IN TRADE AND OTHER MATERIALS. THE LD. CIT-DR ALSO POINTED OUT F ROM THE COPIES OF THE AUDITED BALANCE SHEET AS ON 31.3.2008 OF THE ASSESSEE AND CONTENDED THAT THERE WAS CLOSING STOCK OF RS. 11.24 CRORES ON 31.3.2007 WHICH WAS INCREASED TO 27.66 CRORES FOR T HE YEAR ENDED ON 31.3.2008. THEREFORE, CASH PAYMENTS MADE BY THE ASSESSEE TOWARDS ACQUIRING STOCK IN TRADE AND OTHER MATERIAL S IN CASH PAYMENTS EXCEEDING PRESCRIBED LIMITS ATTRACTS THE P ROVISIONS OF SECTION 40A(3) OF THE ACT R.W.R 6DD OF THE I.T. RUL ES, 1962 [HEREINAFTER THE RULES FOR SHORT]. 6. THE LD. CIT-DR, IN WS-I MAINLY PLACED RELIANCE O N THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT O F DELHI IN THE CASE OF ANIL KUMAR BHATIA 24 TAXMANN.COM 98 DATED 7 .8.2012 TO PROVE THAT THE JURISDICTION OF THE AO U/S 153A OF T HE ACT AND PROCEDURE THEREON IN THE LIGHT OF THE AMENDMENT OF THE ACT DATED 1.6.2003 AND INTRODUCTION OF NEW SECTION 153A AND CIRCULAR 7/2003 OF CBDT IN PARA 17 OF THE ORDER. THE LD. CI T-DR ALSO CONTENDED THAT THE AO IS EMPOWERED TO REOPEN PROCEE DINGS U/S 143(1)(A) OF THE ACT OR 143(3)OF THE ACT TO REASSES S TOTAL INCOME 7 TAKING NOTE OF UNDISCLOSED INCOME, IF ANY. THE LD. CIT-DR ALSO PLACED RELIANCE ON THE DECISION OF THE HON'BLE HIGH COURT OF DELHI IN THE CASE OF ANIL KUMAR BHATIA [SUPRA] HAS BEEN F OLLOWED IN THE CASE OF FILATEX INDIA LTD ITA NO. 269/2014. THE HO NBLE ALLAHABAD HON'BLE HIGH COURT IN THE CASE OF RAJ KUM AR ARORA, ITA NO. 56/2011 VIDE ORDER DATED 11.7.2014 AND CONTEND ED THAT THE RATIO OF THE DECISION OF HON'BLE JURISDICTIONAL HIG H COURT OF DELHI IN THE CASE OF ANIL KUMAR BHATIA [SUPRA] HAS BEEN F OLLOWED IN SEVERAL DECISIONS INCLUDING THIS DECISION OF HON'BL E HIGH COURT OF ALLAHABAD. THE LD. CIT-DR DREW OUR ATTENTION TOWAR DS HON'BLE DELHI HIGH COURT IN THE CASE OF APOORVA EXTRUSION P VT LTD IN ITA NO. 3308/DEL/2010 FOR A.Y 2002-03 AND CONTENDED THA T AS PER SECTION 153A OF THE ACT, THE INITIATION OF ASSESSME NT OR REASSESSMENT FOR ALL SIX A.YS IN THE CASE OF SEARCH ED PERSON IS NOT DEPENDENT ON THE FINDINGS OF ANY INCRIMINATING MATE RIAL. BUT ONCE NOTICE U/S 153A OF THE ACT HAS BEEN ISSUED, TH EN THE AO IS DUTY BOUND TO ASSESS OR REASSESS INCOME OF THE PERS ON SEARCHED FOR ALL THE SIX A.YS AS PER THE PROVISIONS OF THE A CT. 7. IN WS-II, THE LD. CIT-DR MAINLY CONTENDED THAT T HE RATIO OF THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT O F DELHI IN THE 8 CASE OF KABUL CHAWLA [SUPRA] IS NOT APPLICABLE AS A PRECEDENT BECAUSE IN THIS CASE NO QUESTION OF LAW HAS BEEN FR AMED BY THE HON'BLE HIGH COURT. THE LD. CIT-DR ALSO CONTENDED T HAT THE JUDGMENT OF HON'BLE JURISDICTIONAL HIGH COURT OF DE LHI IN THE CASE OF ANIL BHATIA [SUPRA] AND FILATEX INDIA LTD [SUPRA ] HAS NOT BEEN OVER RULED AS THIS CAN ONLY BE DONE BY REFERRING TO A LARGER BENCH. THEREFORE, BENEFIT OF RATIO OF THIS DECISION IN THE CASE OF KABUL CHAWLA [SUPRA] CANNOT BE EXTENDED TO THE ASSESSEE I N THE PRESENT CASE. THE LD. CIT-DR ALSO PLACED SUBMISSIONS AND C ONTENTIONS OF THE REVENUE APPEAL AND FIRST OF ALL SUBMITTED THAT GROUND NOS. 3 AND 4 OF THE REVENUE ARE GENERAL IN NATURE AND DOES NOT WANT TO PRESS GROUND NO. 2. THEREFORE, THE SAME ARE DISMIS SED AS NOT PRESSED. 8. APROPOS GROUND NO. 1 OF THE REVENUE, THE LD. DR DREW OUR ATTENTION TOWARDS PARA NOS. 4.2 TO 4.7 OF THE ASSES SMENT ORDER AND PAGE 13 OF THE IMPUGNED ORDER AND POINTED OUT T HAT THE FINDINGS OF THE AO HAS BEEN UPHELD BY THE LD. CIT(A ) BY HOLDING THAT DISALLOWANCE U/S 40A(3) IS PROPER. THE LD. CIT -DR VEHEMENTLY CONTENDED THAT THE LD. CIT(A) MISUNDERST OOD THE RATIO OF HON'BLE SUPREME COURT IN THE CASE OF ATTAR SINGH [SUPRA] 9 AND DIRECTING THE AO THAT WHENEVER THE LAND IS SHOW N AS WORK IN PROGRESS TO THE EXTENT O DISALLOWANCE U/S 40A(3) OF THE ACT, THE VALUE OF WORK IN PROGRESS WILL BE REDUCED BY THIS A MOUNT. THE LD. CIT-DR AGAIN DREW OUR ATTENTION TOWARDS REVENUES P APER BOOK DATED 11.5.2015 PAGES 1 AND 2 AND SUBMITTED THAT IN THE PRESENT CASE, THE ASSESSEE MADE PAYMENTS TOWARDS INVESTMENT S, THEREFORE, THERE WOULD BE NO OCCASION TO REDUCE THE SAME FROM WORK IN PROGRESS. THEREFORE, THE DIRECTIONS OF THE LD. CIT(A) ARE NOT SUSTAINABLE. 9. THE LD. AR ALSO PLACED REJOINDER TO THE SUBMISSI ONS OF THE LD. DR AND CONTENDED THAT AS PER THE DECISION OF TH E HON'BLE HIGH COURT OF MADHYA PRADESH IN THE CASE OF NATIONAL TEX TILE CORPORATION VS. CIT REPORTED 286 ITR 497 [MP] TRIBU NAL CANNOT COMMENT ON THE DECISION OF HON'BLE HIGH COURT AND I GNORE SUCH DECISION RENDERED BY HON'BLE JURISDICTIONAL HIGH CO URT. THE LD. AR FURTHER PLACING RELIANCE ON THE DECISION OF THE HON'BLE HIGH COURT OF GUJARAT IN THE CASE OF ANUPAM TELE SERVICE S VS. ITO REPORTED AT 366 ITR 122 [GUJ] CONTENDED THAT EVEN O N MERITS, IN THE CASE OF PAYMENTS IN CASH EXCEEDING SPECIFIED LI MITS, SECTION 40A(3) OF THE ACT MUST BE READ WITH RULE 6DD OF THE RULES AND 10 PAYMENTS IN CASH AT THE REQUEST OF THE PAYEES IN GE NUINE TRANSACTIONS COULD NOT BE DISALLOWED WHERE A REASON ABLE EXPLANATION FOR SUCH PAYMENTS IN CASH HAS BEEN PLAC ED BY THE ASSESSEE. 10. THE LD. COUNSEL HAS ALSO PLACED RELIANCE ON THE DECISION OF THE ITAT G BENCH IN THE CASE OF SARASWAT HOUSING AND DEVELOPERS VS. ACIT REPORTED AT 142 ITE 198 [DEL] AND SUBMITTED THAT WHERE THE ASSESSEE HAD MADE PURCHASE OF LAND F OR AGRICULTURAL PURPOSES IN CASH, THEN, NO DISALLOWANC E CAN BE MADE U/S 40A(3) OF THE ACT AS PAYMENTS IN QUESTION ARE C OVERED UNDER SECOND PROVISO TO SECTION 40A(3) R.W.R 6DD(H) OF TH E RULES. THEREFORE, BY SUBMITTING THIS LEGAL PROPOSITIONS TH E LD. COUNSEL OF THE ASSESSEE VEHEMENTLY CONTENDED THAT THE AO MADE ADDITION ON THE SAME MATERIAL WHICH WAS PLACED ALONGWITH ORIGIN AL RETURN OF INCOME WITHOUT ANY INCRIMINATING MATERIAL. THEREFO RE, NOT ONLY LEGAL GROUND BUT ON THE MERITS THE IMPUGNED ADDITIO N IS NOT SUSTAINABLE. THE LD. COUNSEL PRESSING THE SOLE GRO UND OF CROSS OBJECTION OF THE ASSESSEE ALSO POINTED OUT THAT EVE N AS PER THE REVENUES PAPER BOOK PAGE 8, THE ASSESSEE HAS SHOWN CLOSING STOCK OF RS. 27 CRORES AND PARTICULARS OF INCOME AS SHOWN BY THE 11 ASSESSEE FOR F.Y. 2006-07 WERE NIL AND INCOME SHOWN FOR F.Y. 2007-08 AS ACCRUED TO THE ASSESSEE ONLY ON TWO SOUR CES VIZ. PROFIT ON SALE OF INVESTMENTS AND INTEREST INCOME AMOUNTIN G TO RS. 70,72,427/- AND THERE WAS NO SALE OF AGRICULTURAL L AND PURCHASED BY THE ASSESSEE AND KEPT AS STOCK IN TRADE. THE LD . COUNSEL ALSO POINTED OUT THAT SINCE THERE WAS NO SALE DURING THE YEAR, THE ASSESSEE HAS NOT CLAIMED ANY EXPENDITURE REGARDING PURCHASE OF AGRICULTURAL LAND INCLUDING THE IMPUGNED CASH PAYME NTS. THEREFORE, EVEN ON MERITS, ADDITION CANNOT BE HELD AS SUSTAINABLE. THE LD. COUNSEL FURTHER DREW OUR ATTE NTION TOWARDS ASSESSEES PAPER BOOK PAGES 44-55 AND SUBMITTED THA T IN THE WS DATED 24.6.2013 FILED BEFORE THE LD. CIT(A), THE AS SESSEE HAS EXPLAINED EVERY FACT REGARDING IMPUGNED DISALLOWANC E. THEREFORE, NOT ONLY ON LEGAL GROUND EVEN ON MERITS THE ADDITIONS MADE BY THE AO U/S 40A(3) OF THE ACT CANNOT BE HELD AS SUSTAINABLE AND THE LD. CIT(A) WAS RIGHT IN DIRECTI NG THE AO NOT TO TAX THE SAME. 11. ON CAREFUL CONSIDERATION OF THE ABOVE SUBMISSIO NS, AT THE VERY OUTSET, WE OBSERVE THAT THE LD. CIT-DR HAS PRE SSED INTO SERVICE THE WS-I [PAGES 13 TO 21 DATED 21.3.2016] T O ALLEGE THAT 12 PAYMENTS OF HON'BLE HIGH COURT OF DELHI IN THE CASE OF ANIL BHATIA[SUPRA] AND FILATEX INDIA LTD [SUPRA] HAVE NO T BEEN OVER RULED BY THE HON'BLE HIGH COURT DECISION IN THE CAS E OF CIT VS. KABUL CHAWLA [SUPRA] AND RATIO OF THIS DECISION ONL Y APPLIES TO THE CASES WHERE THE ASSESSMENTS ARE COMPLETED U/S 143(3 ) OF THE ACT. THE LD. CIT-DR HAS STRESSED ON THIS LEGAL CON TENTION THAT THE JURISDICTION OF THE AO TO MAKE ASSESSMENT U/S 153A OF THE ACT IS VALID AFTER SEARCH EVEN IF NO MATERIAL RELATING TO THAT IS FOUND AND SEIZED. 12. THE LD. CIT-DR HAS VEHEMENTLY CONTENDED THAT SI NCE NO QUESTION OF LAW HAS BEEN FRAMED BY THE HON'BLE HIGH COURT IN THE DECISION OF KABUL CHAWLA [SUPRA], THEREFORE, THE SA ME HAS NO PRECEDENTIARY VALUE. THE ABOVE CONTENTIONS, WE NOT E THAT AT PARA 20 OF THE SAID DECISION, THE HON'BLE HIGH COUR T OF DELHI HAS GONE INTO DETAIL BEFORE TAKING ANY CONCLUSION AND H AS CONSIDERED THE RATIO OF ITS OWN DECISION IN ANIL BHATIA [SUPR A] WHEREIN THEIR LORDSHIPS AT PARA 24 OF THE ORDER REFRAINED TO EXPR ESS ANY OPINION ON THIS QUESTION AS TO WHETHER SECTION 153A CAN BE INVOKED WHERE NO INCRIMINATING MATERIAL WAS FOUND DURING SEARCH C ONDUCTED U/S 132 OF THE ACT. FOR THE SAKE OF COMPLETENESS, RELE VANT PARAS 20 13 AND 21 OF THE ORDER IN THE CASE OF KABUL CHAWLA [SU PRA IS BEING RESPECTFULLY REPRODUCED: 20. AS REGARDS THE MATERIAL UNEARTHED DURING THE S EARCH THE COURT IN CIT V. ANIL KUMAR BHATIA (SUPRA) OBSERVED THAT 'IF IT IS NOT IN DISPUTE THAT THE DOCUMENT WAS FOUND IN THE C OURSE OF THE SEARCH OF THE ASSESSEE, THEN SECTION 153A IS TRIGGERED. ONCE THE SECTION IS TRIGGERED, IT APPEARS MANDATORY FOR THE ASSESSING OFFICER TO ISSUE NOTICES UNDER SECTION 153A CALLING UPON THE ASSESSEE TO FILE RETURNS FOR THE SIX ASSESSMENT YEA RS PRIOR TO THE YEAR IN WHICH THE SEARCH TOOK PLACE.' THE COURT CLA RIFIED IN PARA 24 AS UNDER: '24. WE ARE NOT CONCERNED WITH A CASE WHERE NO INCR IMINATING MATERIAL WAS FOUND DURING THE SEARCH CONDUCTED UNDE R SECTION 132 OF THE ACT. WE, THEREFORE, EXPRESS NO OPINION A S TO WHETHER SECTION 153A CAN BE INVOKED EVEN IN SUCH A SITUATIO N. THAT QUESTION IS THEREFORE LEFT OPEN.' 21. THEREFORE IT IS CLEAR THAT THE DECISION IN CIT V. ANIL KUMAR BHATIA (SUPRA) DOES NOT DEAL WITH A SITUATION WHERE, AS I N THE PRESENT CASE, NO INCRIMINATING MATERIAL WAS FOUND D URING THE SEARCH CONDUCTED UNDER SECTION 132 OF THE ACT. FURTHER, ON VIGILANT READING OF SUMMARY OF LEGAL PO SITION MENTIONED BY THEIR LORDSHIPS, SPEAKING FOR HON'BLE JURISDICTIONAL HIGH COURT IN PARA 37 OF THE DECISION, WE RESPECTFU LLY NOTE THAT 14 IN SUB-PARA (IV) TO (VII), HAS HELD AS UNDER: 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW E XPLAINED IN THE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT E MERGES IS AS UNDER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153 A (1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR S IX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DA TE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS W ILL HAVE TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REA SSESS THE 'TOTAL INCOME' OF THE AFOREMENTIONED SIX YEARS IN S EPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS. IN OTH ER WORDS THERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EAC H OF THE SIX AYS 'IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSE D INCOME WOULD BE BROUGHT TO TAX'. IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITI ONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH, OR OTHER POST-SEARCH MATERIAL OR INFORMATIO N AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE EVIDENCE FO UND, IT DOES NOT MEAN THAT THE ASSESSMENT 'CAN BE ARBITRARY OR M ADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OB VIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY O N THE BASIS OF SEIZED MATERIAL.' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE CO MPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSM ENT OR REASSESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECT ION 153 A IS RELATABLE TO ABATED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE 15 OF SEARCH) AND THE WORD 'REASSESS' TO COMPLETED ASS ESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, T HE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND TH E ASSESSMENT UNDER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUG HT ON THE RECORD OF THE AO. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH B Y THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONL Y ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURI NG THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UND ISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEAR CH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. 13. FIRST OF ALL, WE MAY POINT OUT THAT THE CONTENT ION OF THE LD. DR THAT THE EARLIER JUDGMENTS OF HON'BLE SUPREME COURT AND HONBLE HIGH COURT HAVE NOT BEEN PROPERLY CONSIDERED IN THE CASE OF CIT VS. KABUL CHAWLA [SUPRA] IS NOT SUSTAINABLE AND IN FACT, IT I S INCORRECT BECAUSE FROM THE VIGILANT READING OF THE JUDGMENT OF HONBL E HIGH COURT OF DELHI IN THE CASE OF KABUL CHAWLA [SUPRA] IT IS AMP LY CLEAR THAT THE HONBLE HIGH COURT HAS CONSIDERED RATIO OF THE DECI SIONS OF HON'BLE SUPREME COURT AND HONBLE HIGH COURT IN THE CASE OF CIT VS. ANKITECH PVT. LTD [2011] 11 TAXMANN COM. 100 [DEL], ANIL KUM AR BHATIA [SUPRA], MADUGULA VENU VS. DIT [2013] 29 TAXMANN 200 [DEL], CHETAN DAS LACHMAN DAS ITA NO. 2021/2010, FILATEX INDIA LTD [S UPRA], RANBAXY LABORATORIES LTD. VS. CIT [2011] 12 TAXMANN.COM 74 [DEL], JAI STEEL 16 (INDIA) VS. ACIT [2013] 36 TAXMANN.COM 523 [RAJ AND JUDGMENT OF HONBLE BOMBAY HIGH COURT DATED 29.10.2010 IN ITA N O. 36/2009 CIT VS. MURLI AGRO PRODUCTS LTD. [BOM] AND JUDGMENT OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF M/S CANARA HOUSING DEVELO PMENT COMPANY VS. DCIT DATED 25.7.2014 IN ITA NO.38/2014 HAVE BEE N CONSIDERED BY THEIR LORDSHIPS AND THEREAFTER, SUMMARY OF LEGAL PO SITION HAS BEEN DRAWN IN PARA 37, AS REPRODUCED HEREINABOVE. THERE FORE, WE DECLINE TO ACCEPT CONTENTION OF THE LD. CIT-DR THAT IN THE DECISION OF KABUL CHAWLA [SUPRA] RELEVANT JUDGEMENT ON THE ISSUE HAVE NOT BEEN CONSIDERED AND THEREFORE, RATIO OF THIS DECISION IS NOT APPLICABLE TO THE PRESENT CASE. 14. REGARDING LEGAL CONTENTIONS OF LD. DR PLACED IN WRITTEN SUBMISSIONSII DATED 21.3.2016, AVAILABLE AT PAGES 21 TO 25 OF REVENUES PAPER BOOK, WE ARE OF THE VIEW THAT SIMIL AR LEGAL CONTENTIONS AND OBJECTIONS AGAINST THE APPLICABILIT Y OF THE JUDGMENT AND PROPOSITIONS LAID DOWN BY HON'BLE SUPREME COURT AND VARIOUS HONBLE HIGH COURT WAS ALSO POSED TO THE TRIBUNAL I N THE CASE OF LAIRY DISTRIBUTORS PVT. LTD ITA NO. 6947/DEL/2014 AND OTH ER APPEALS BY THE THEN LD. CIT-DR AND IN THE ORDER DATED 27.1.2016 TH E LEGAL CONTENTIONS OF THE REVENUE WERE CONSIDERED IN DETAIL AND DISMIS SED BEING DEVOID OF MERITS. THE RELEVANT OPERATIVE PART OF THE ORDE R OF THE TRIBUNAL IN 17 THE CASE OF LAIRY DISTRIBUTORS [SUPRA], CONTENTION OF THE LD. CIT-DR WHICH WERE QUITE SIMILAR TO THE WRITTEN SUBMISSIONS -II OF THE REVENUE FILED IN THE PRESENT CASE AND THE SIMILAR LEGAL CON TENTIONS RAISED BY THE THEN LD. CIT-DR WERE REPRODUCED IN THE ORDER OF THE TRIBUNAL DATED 27.1.2016 [SUPRA] WHICH READ AS FOLLOWS: 32. THE LD. CIT-DR ALSO SUBMITTED WRITTEN OBJECTION S REGARDING DECISIONS RELIED BY THE LD. AR QUA APPLICABILITY OF DICTA ON PROPOSITIONS OR RATIO OF THESE JUDGMENTS AND ORDERS OF HON'BLE SUPREME COURT, HON'BLE HIGH COURT AND HON'BLE JURIS DICTIONAL HIGH COURT OF DELHI, WHICH ARE BEING REPRODUCED BEL OW FOR THE SAKE OF COMPLETENESS: I. BEFORE ADVERTING TO THE JUDGMENTS/DECISIONS RELIED BY THE AR, HONBLE IS PRAYED TO KINDLY NOTE THAT -- A DECISION IS AVAILABLE AS A PRECEDENT ONLY IF IT DECIDES QUESTION OF LAW: AS HELD IN (I) MEHBOOB DAWOOD SHEIKH V. STATE OF MAHARASHTRA{ (2004) 2 SCC 362 PARA 12} (II) SURINDER KUMAR V. STATE OF PUNJAB V. {194 ITR 434 SC)}. --(I) ONLY RATIO DECIDENDI IS BINDING; --(II) OBSERVATIONS (OBITER DICTA ) HAVE NO BINDING FORCE: AS HELD IN (I) REKHA MUKERJEE V. ASHISH K. DAS (2005) 3 SCC 427; 18 440-47 (PARA 29); (II) ORIENT PAPER AND INDS. LTD. V. STATE IF IRUSSA AIR 1991 SC 672}. (III) UOI VS. BHANWANTI DEVI (1996) 6 SCC 44 PARA 9; (IV) DIVISIONAL CONTROLLER, KSRTC V. MAHADEVA SHETTY (2003) 7 SCC 197, 206 (PARA 23); -- DECISION APPLICABLE TO FACTS OF THE CASE IS NOT TO BE TREATED AS A PRECEDENT: AS HELD IN (I) NATIONAL INS. CO. LTD. V. SWARNA SINGH (2004) 3 SCC 297. -- OBSERVATION OR SIMPLY WHAT WAS DONE IN A GIVEN CASE , WITHOUT LAYING DOWN THE LAW CANNOT BE READ AS A PRECEDENT, AS HELD IN COMMON CAUSE V. UOL (2004) 5 SCC 222, 223 (PARA 6)}. - -JUDGMENT TO BE APPLIED SHOULD NOT BE PER INCURIAM: AS HELD IN MUKESH K. TRIPATHI V. SR. DM LIC (2004) 8 SCC 387 396 (PARA 23). - -JUDGMENT TO BE APPLIED SHOULD NOT BE SUB SILENTIO . AS HELD IN (I) STATE OF UP SYNTHETICS & CHEMICALS (1991) 4 SCC 13 9 SC; (II) AMRIT DAS V. STATE OF BIHAR (2000) 5 SCC 488 PARA 20. II THE DECISIONS BEING RELIED UPON BY THE AR AS BEING DISCUSSED BELOW ARE THE ONES WHICH WERE OBTAINED BY SUPPRESSING THE VITAL FACT THAT BEFORE THE AO THERE WAS NO CHALLENGE TO HIS JURISDICTION ON THE GROUNDS IN THESE 19 CASE (I) THAT THERE WAS NO INCRIMINATING MATERIAL O R (II) THAT YEARS IN WHICH ASSESSMENT WERE FRAMED WERE OUTSIDE THE PURVIEW OF 6 YEARS CONTEMPLATED U/S 153 C OR (III) THAT THERE WAS NO DOCUMENT FOUND WHICH BELONGED TO THEM SO AS TO INVOKE 153C. SINCE THE JURISDICTION OF THE AO HOVERING AROUND TH E ABOVE ASPECTS WAS NOT CHALLENGED WITHIN THE TIME PRESCRIBED U/S 124 IT WAS NOT PERMISSIBLE TO RAISE THESE ISSUES LATER BEFORE THE CIIT(A)/ITAT/HC. (II) TRIBUNAL DECISIONS CANNOT BE USED AS PRECEDENT BECAUSE THEY RUN CONTRARY TO TRIBUNALS OWN DECISIO N IN APOORVA EXTRUSIONS P. LTD. (ON WHETHER ASSESSTT WAS HEY AND 6 YEARS MENTIONED U/S 153C ETC.) AND ALSO CONTRARY TO WHAT WAS HELD BY THE JURISDICTIONAL HIG H COURT IN (I)SSP AVIATIONS LTD; (II) CHETAN DAS LACH HMAN DAS; (III) MADUGULA VENU; (IV) FILATEX INDIA LTD; ( V) ANILA BHATIA. (II) SSP AVIATION LTD. (346 ITR 177 DELHI HIGH COU RT). PARA 17 OF THE ORDER RELIED BY THE AR ..ASSESSING OFFICER HAVING JURISDICTION OVER THE OT HER PERSON TO FOLLOW THE PROCEDURE PRESCRIBED HY SECTIO N 153A IN AN ATTEMPT TO ENSURE THAT THE INCOME REFLECTED H Y THE DOCUMENT HAS BEEN ACCOUNTED FOR HY SUCH OTHER PERSO N. IF HE IS SO SATISFIED AFTER OBTAINING THE RETURNS FROM SUCH OTHER PERSON FOR THE 6 ASSESSMENT YEARS, THE PROCEE DINGS WILL HAVE TO BE CLOSED . A RE CLEARLY OBITER AND THIS WOULD 20 BECOME CLEAR FROM (I) PARA 15 WHERE HIGH COURT CLEARLY HELD THAT ...THERE IS NO REQUIREMENT IN SECTION 153 C(I) THAT THE ASSESSING OFFICER SHOULD ALSO BE SATISFIED THAT SUC H VALUABLE ARTICLES OR BOOKS OF ACCOUNTS OR DOCUMENTS BELONGING TO THE OTHER PERSON MUST BE SHOWN TO CONCLUSIVELY REFLECT OR DISCLOSE ANY UNDISCLOSED IN COME, AND (II) PARA 7 ..THE MAIN CONTENTION OF THE PETITIONER IS THAT THE ASSESSING OFFICER HAS ILLEGALLY ASSUMED JU RISDICTION U/S 153C READ WITH SECTION 153A OF THE ACT, THAT THERE WAS NO UNDISCLOSED INCOME TO THE ASSESSED IN THE PETITIONERS HANDS AND THEREFORE A WRIT OF CERTIORA RI SHOULD HE ISSUED TO QUASH THE PROCEEDINGS AS NULL AND VOID . (III) IF THE HIGH COURT WANTED TO HOLD SO (AS CONTE NDED BY THE AR), THE PROCEEDINGS/ASSESSMENT FOR THE YEARS F OR WHICH THERE WAS NO SEIZED MATERIAL AS REFERRED IN SATISFACTION NOTE AT ALL WOULD HAVE BEEN QUASHED. (IV) THERE WAS NO CONTROVERSY BEFORE THE HIGH COURT AS TO WHICH 6 YEARS ARE TO BE CONSIDERED WHILE MAKING ASSESSMENT U/S 153C OF THE ACT AND HENCE JUDGMENT C ANNOT BE RELIED OR REFERRED TO WHILE DECIDING THE PRESENT APPEAL. IMPORTANT FACT TO BE TAKEN NOTE OF JURISDICTION OF IS THAT THE AO TO GO AHEAD WITH THE ASSESSMENT WAS QUESTION ED BECAUSE OF THE ABSENCE OF INCRIMINATING MATERIAL. F URTHER IN THE SATISFACTION NOTE DRAWN BY THE AO 21 (I) DOCUMENTS REFERRED WERE ONLY PERTAINING TO AY 07-08 & 08- 09 (II) SATISFACTION NOTE DID NOT SHOW ANY DENIAL QUA DOCUMENTS ON THE PART OF THE PARTY SUBJECTED TO 132. (III) SATISFACTION NOTE DOES NOT SHOW ANY SATISFACT ION RECORDED IN THE CASE OF PARTY SUBJECTED TO 132. (III) KURELE PAPER MILS P. LTD. (DELHI HIGH COURTORDER DATED 06-07-2015) (IV) JASJIT SINGH (DELHI HIGH COURT IN ITA NO.337 /2015 ) (V) GRG STEEL P. LTD. (DELHI HIGH COURT ORDER DATED 04-08-2013) (VI) VRINDAVAN FARMS P. LTD. (DELHI HIGH COURT ORDER 12-08-2015) THESE ARE NOT APPLICABLE AS IN THESE CASES NEITHER QUESTION OF LAW WAS FORMULATED NOR ANSWERED AND FOR THIS RELIANCE IS PLACED ON (I) K.L. MANHAS { W.P.(C) NO. 4079/2013} IN PARA 9 HOLDING THAT MERE PRIMA FACIE OBSERVATION OF THE COURT, NOT DEALING WITH THE ISSUE ON MERITS, DOES N OT CONSTITUTE A BINDING PRECEDENT. (II) MEHBOOB DAWOOD SHEIKH V. STATE OF MAHARASHTRA (2004) 2 SCC 362 PARA 12 (III) SATWANT SINGH V. STATE OF PUNJAB V. {194 ITR 434 SC)} -WHERE IT WAS HELD THAT A DECISION IS AVAILABLE AS PRECEDENT ONLY IF IT DECIDES A QUESTION OF LAW. 22 (VII) MGF AUTOMOBILES LTD. DELHI HIGH COURT (ORDER DT. 13-08-2015) IN ITA NO.13 /2 014 & 14/2014 . THIS WAS THE CASE WHERE THE ORDER OF THE AO WAS ABSOLUTELY SILENT ON THE IMPORTANT FACT AS TO ON WH AT MATERIAL OR EVIDENCE THE ADDITION/DISALLOWANCE WAS BASED AND THIS PROMPTED THE HIGH COURT TO DISMISS REVENUES APPEAL. CLEARLY, THE JUDGMENT IS MORE ON FACTS THAN ON LAW. THIS JUDGMENT BESIDES BEING INCONSISTENT WITH ITS OWN EARLIER DECISIONS IN SSP AVIATIONS, FILTAX LTD; CHETAN DAS LACCHMAN DAS AND ANIL BHATIA ETC. IS THE ONE CASE WHERE NO CASE LAW, NO LEGAL PROVISIONS ARE FOUND REFERRED OR DISCUSSED & HENCE CANNOT BE TAKEN AS A BINDING PRECEDENT AS HEL D IN CIT V. B.R. CONSTRUCTIONS { 202 ITR AP FB}. (VIII) KABUL CHAWLA. DELHI HIGH COURT (ORDER DATED 28-08-2013 ): JUDGMENT CANNOT BE RELIED AS A BINDING PRECEDENT BECAUSE; (I) IN THIS JUDGMENT (WHICH DEALS WITH JURISDICTION AL ISSUES OF INCRIMINATING MATERIAL ETC. WHEREBY AOS AUTHORITY IS BEING CHALLENGED) IS IN IGNORANCE OF APPLICABLE PROVISIONS OF 124 WHICH ACT AS A BAR TO RAKE UP JURISDICTIONAL ISSUES LATER. SINCE THIS DECISION IS RENDERED WITHOUT REFERENCE TO THE STATUTORY BARS, I T CANNOT BE USED AS A BINDING PRECEDENT AS HELD IN ST ATE V. RATAN LAI ARORA (2004) 4 SCC 590. 23 (II) UNLIKE THE PRESENT APPEALS, THIS JUDGMENT IS N OT IN THE CONTEXT OF SECTION 153C. (III) JUDGMENT NEITHER SHOWS FORMULATION OF QUESTIO NS NOR SHOWS AS TO WHAT ALL QUESTIONS OF LAW WERE RAISED BY THE REVENUE. (IV) IT DOES NOT CONSIDERS ITS OWN JUDGMENT IN SSP AVIATION LTD WHICH WAS DIRECTLY ON SECTION 153C. (V) IT HOLDS SOMETHING NOT EVEN INDICATED IN THE LA W & HENCE GOES AGAINST THE PLAIN WORDS OF LAW. (VI) IT RELIED HEAVILY ON CERTAIN PORTIONS FROM ITS JUDGMENTS IN CHETAN DAS LACHHMAN DAS & ANIL BHATIAS CASE WHICH WERE MERE OBSERVATIONS I.E. OBITER AND NOT THE STATEMENTS OF LAW AS STATED IN ITS EARLIER JUDGMENTS IN SSP AVIATIONS LTD; MADUGULA VENU & FILATEX LTD. (VII) MATERIAL ASPECT THAT PROCEEDINGS FOR AY 6-07 WERE NOT COMPLETE BECAUSE TIME FOR ISSUING NOTICE U/S 143(2) WAS STILL AVAILABLE WITH THE AO, GOT IGNORED. (VIII) IMPORTANT ASPECT GOT IGNORED THAT KABUL CHAW LA WHILE ACCEPTING THE ADDITION MADE OF 50 LACS ON ACCOUNT OF GIFTS WHICH TOO WAS NOT REFERABLE TO INCRIMINATING MATERIAL FOUND DURING THE SEARCH ON THE OTHER ADDITION MADE U/S 2(Z2)(E) WAS BEING CHALLENGED ON PLEA THAT IT WAS NOT REFERABLE TO SEARCH FINDING. 24 (VI) UNLIKE KABUL CHAWLAS CASE WHERE THERE WAS NO SEARCH MATERIAL, IN THE PRESENT APPEALS (AS SEEN FROM AOS ORDER) THERE WAS MATERIAL IN THE SHAPE OF STATEMENTS RECORDED U/S 132(4) DURING THE SEARCH AND ALSO THE OTHER MATERIAL COLLECTED DURING THE CURRENCY OF THE SEARCH ITSELF. (IX) KUSUM GUPTA DELHI HC: CANNOT BE RELIED UPON BECAUSE (A) HERE IN THIS CASE NO SUBSTANTIAL QUESTION OF LA W WAS FORMULATED AS REQUIRED U/S 260A. (B) IT JUST FOLLOWS ITS JUDGMENT IN KABUL CHAWLA( WHICH IS SHOWN TO BE NOT APPLICABLE IN THIS NOTE). (X) PEPSICO INDIA HOLDINGS P LTD F 370 ITR 29'I DELHI HIGH COURT). AS ALREADY SUBMITTED IN PARA 2.2(PAGE 5 OF WRITTEN NOTE) THE ABOVE DECISION WAS GIVEN IN A WRIT AND WA S FUNDAMENTALLY ON FACTS WHERE THE HIGH COURT FOUND N O DOCUMENTS TO BE BELONGING TO THE PETITIONER. JUDGMENT BEING ON FACTS, CONCESSION AND ALSO FOR TH E REASON THAT THIS NEITHER SHOWS AS TO WHAT ALL QUEST IONS OF LAW WERE RAISED NOR FORMULATES SUBSTANTIAL QUESTIONS OF ITS OWN, IS NOT AVAILABLE TO BE USED A S A BINDING PRECEDENT. (I) DSL PROPERTIES DELHI TRIB; 25 (II) RL ALLIED INDUSTRIES {167 TTT 201 ; (III) CHAIN ROOP BAID 134 ITD 237 DEB NOT AVAILABLE AS PRECEDENTS BECAUSE; (A) THESE ARE THE DECISIONS (E.G. DSL) OBTAINED BY SUPPRESSING THE FACT THAT THE GROUNDS ( ON CHALLENG ING THE VALIDITY OF SATISFACTION NOTE OR THE ISSUE OF LIMITATION ( YEAR FALLING BEYOND 6 YEARS ) WERE OF THE NATURE OF ADDITIONAL GROUND AS THEY WERE NEVER RAIS ED BEFORE AO/CIT(A) AND HENCE REQUIRED SPECIFIC LEAVE OF ITAT WHICH WAS NOT OBTAINED. (B) THESE DECISIONS (DSL) RUNS CONTRARY TO DELHI HI GH COURT ORDER IN SSP AVIATIONS LTD. WHERE TOO SIMILAR SATISFACTION NOTE WAS INVOLVED. (C) THE DSL DECISION IS SEEN OBTAINED BY SUPPRESSIN G THE FACT THAT THESE JURISDICTIONAL OBJECTIONS WERE NOT RAISED WITHIN TIME MENTIONED U/S 124. (D) THIS IS CONTRARY TO LATER DECISION OF THE TRIB UNAL IN APOORVA EXTRUSION LTD. WITHOUT PREJUDICE TO THE ABOVE THIS DECISION IS FOU ND TO BE RESULTING IN ABSURDITY WHEREBY BY THE SEARCH ACTION CERTAIN YEARS/TRANSACTIONS WOULD GET COVERED WHICH BY THE TIME OF 153C HAD NOT EVEN TAKEN PLACE. ESPECIALLY IN CASE OF RL ALLIED INDUSTRIES IT WOULD BE NOTICED THAT ADJUDICATION DONE BY THE ITAT IS NOT EVEN BORNE OUT OF THE GROUNDS (THAT ORDER IS TIME BARRED) RAISED BEFORE THE ITAT. 26 (XIV) JASJIT SINGH DELHI TRIB.FLTA 1436/DEL/2012}: NOT AVAILABLE AS A PRECEDENT BECAUSE (A) IT IS OBTAINED BY SUPPRESSING THE FACT THAT AO S JURISDICTION WAS NOT CHALLENGED WITHIN 124 TIME; (B) CONTROVERSY THERE WAS DIFFERENT ABOUT WHETHER ORDER TO BE PASSED U/S 143(3) OR U /S 153C. (C) ADJUDICATIONS OF 6 YEARS TRAVELS BEYOND THE CONTROVERSY ( EVEN IN ADDL. GROUND) RAISED BEFORE ITAT (XV) BRIGHTWAYS HOUSING & LAND DEVELOPERS LTD. (ITA 5117-18/DEL/2013 (XVI) DEVI DAYAL PETRO CHEMICALS P. LTD. ITA NO. 4335-36/DEL/2013 NOT AVAILABLE AS PRECEDENT BECAUSE THESE ARE (A) OBTAINED BY SUPPRESSING THE FACT THAT AOS JURISDICTION WAS NOT CHALLENGED WITHIN 124 TIME; (B) RUN CONTRARY TO DELHI HIGH COURT ORDER IN SSP AVIATION LTD. WHERE TOO SATISFACTION NOTE DRAWN JUST REFERRED DOCUMENTS CONCERNING TWO AYS & STILL THE HIGH COURT DID NOT ALLOW THE WRIT PETITIONS. (XVII) SUNITA BAI { 68 SOT 98 URO- CANNOT BE RELIED BECAUSE IT IS (A) CONTRARY TO ITS FINDING IN PARA 13 SECTION DOES NOT 27 REQUIRE THE DOCUMENT MUST HE INCRIMINATING DOCUMENT . (B) RELIED ON CERTAIN OBSERVATIONS GIVEN IN DELHI H IGH JUDGMENTS IN CHETANDAS LACCHMAN DAS & ANIL BHATIA WHICH WERE ACCEPTED TO BE OBITER BUT STRANGELY STILLED RELIED ON THEM IN ADJUDICATION WITHOUT APPRECIATING THAT THESE OBSERVATIONS DID NOT CARRY PRECEDENTIAL VALUE. (C) ADJUDICATION THAT ADDITION IS NOT THE RESULT OF INCRIMINATING DOCUMENT. TRAVEL BEYOND THE GROUNDS RAISED. (D) OBJECTION NOT RAISED WITHIN SECTION 124 TIME. (XVIII ) LAKSHMI SINGH { 68 SOT 26}: NOT APPLICABLE FOR THE REASONS GIVEN IN CASE OF SUNITA BAI ABOVE, (XIX ) NATURAL PRODUCTS TECH {153 ITD S8{ : NOT APPLICABLE BECAUSE; (A) BEFORE ITAT ONLY TWO RELEVANT GROUNDS WERE THA T (I) ORDER IS NOT BASED ON INCRIMINATING MATERIAL AN D (II) ORDER IS WITHOUT JURISDICTION; AND RELIEF GIVEN IN VIEW OF RATIO DECIDENDI IN PEPSI HOLDINGS WITHOUT APPRECIATING THAT THERE WAS NO RATIO THERE BECAUSE THIS DECISION WAS JUST ON PECULIAR FACTS. (B) HERE IN THE PRESENT APPEALS ADDITIONS/ORDER IS BASED UPON INCRIMINATING MATERIAL BEING STATEMENTS RECORDED U/S 132(4) OF THE ENTRY OPERATOR AND ALSO OF ASHOK MINDA. 28 (C) DSL PROPERTIES DECISION OF DELHI ITAT RELIED WAS NOT AVAILABLE AS A PRECEDENT. (D) RUNS CONTRARY TO SSP AVIATIONS (DELHI HIGH COUR T) WHERE TOO SIMILAR SATISFACTION WAS INVOLVED. (E) OBJECTION TO JURISDICTION WAS NOT RAISED WITHIN 124 PRESCRIBED TIME. (XX) QUALITRON COMMODITIES LTD {167 TTT 3S3 DEL}: CANNOT BE RELIED UPON FOR THE REASONS THAT; (I) COS OF THE ASSESSEE WERE ENTERTAINED BECAUSE O F SUPPRESSION OF THE CRUCIAL FACT THAT CO WAS NOT ARI SING OUT OF THE ORDER OF THE CIT(A) WHEREBY PURE LEGAL QUESTION CHALLENGING THE VALIDITY OF ASSESSMENT WAS BEING CHALLENGED. {REFER AHMEDABAD ITAT DECISION IN SANDEEP M PATEL 22 TAXMAN.COM 288}. (II) CO FILED WAS LATE AND WITHOUT GIVING ANY REAS ON FOR DELAY IT WAS ENTERTAINED. (III) RUNS CONTRARY TO DELHI HIGH COURT ORDER IN S SP AVIATION LTD. (IV) MATERIAL FACT THAT AOS JURISDICTION WAS NOT CHALLENGED EARLIER WITHIN 124 TIME WAS SUPPRESSED. (V) DECISION RELIES ON DELHI HIGH COURT ORDER (PEPS ICO 29 HOLDINGS) WHICH WAS NOT AVAILABLE AS PRECEDENT. (XXI) TANVIR COLLECTIONS P. LTD. 168 TTT US DEB NOT APPLICABLE BECAUSE; (A) IT RUNS CONTRARY TO DELHI HIGH COURT ORDER IN SSP AVIATIONS LTD; (B) IT RELIED ON CERTAIN PORTION OF SSP AVIATION LTD. WHICH WAS JUST OBITER NOT TO BE USED AS A PRECEDENT. (C) IT RELIED ON ITS DECISION IN INLAY MARKETING & AKASH AROGYA WHICH WERE OBTAINED ON SUPPRESSION OF MATERIAL FACT THAT OBJECTION WAS NOT RAISED WITHIN 124 TIME AND THAT EVIDENCES BEING ADDUCED WERE OF THE NATURE OF ADDITIONAL EVIDENCE. (D) OBJECTION CHALLENGING THE JURISDICTION OF THE AO WAS RAISED WITHIN 124 TIME. (XII) SATYAM FOOD SPECIALITIES P. LTD {68 SOT DEL}: N OT RELEVANT AND APPLICABLE AT ALL BECAUSE THERE RELIEF IS GIVEN ON MERITS AND NOT ON THE LEGAL GROUND OF VALIDITY OF 153C ASSESSMENT. 15. FURTHERMORE, ADJUDICATING THE ABOVE LEGAL CONT ENTIONS POSED BY THE LD. CIT-DR WERE ADJUDICATED AND DISMISSED IN TH E ORDER OF THE TRIBUNAL IN THE CASE OF LAIRY DISTRIBUTORS [SUPRA] DATED 27.1.2016 30 [WHICH WAS AUTHORED BY ONE OF US - C.M. GARG, JM] B Y OBSERVING AS UNDER: 34. WE HAVE ANXIOUSLY AND THOUGHTFULLY CONSIDERED THE WRITTEN SUBMISSIONS PLACED ON RECORD BY THE LD. CIT-DR SHRI RAMESH CHANDER. IT HAS LEFT US BEWILDERED AND PERPLEXED T HAT WHETHER THE GIVEN ARGUMENTS RUNNING CONTRARY TO THE WELL SE TTLED POSITION OF LAW U/S 153C OF THE ACT CAN BE TAKEN BY A PERSON JUDICIALLY INSTRUCTED ON LAW AND FACTS. TO BE FAIR TO THE LD. CIT-DR, WE RECORD OUR DISPLEASURE THAT ON AN ISSUE WHICH IS SQ UARELY COVERED BY A CATENA AND PLETHORA OF JUDGMENTS IN ASSESSEES FAVOUR A FEEBLE AND VALIANT ATTEMPT HAS BEEN MADE TO UPSET T HE ENTIRE JURISPRUDENCE SETTLED BY THE HON'BLE SUPREME COURT, VARIOUS HON'BLE HIGH COURT INCLUDING THE HON'BLE JURISDICTI ONAL HIGH COURT OF DELHI. THERE IS A COMMONALITY IN THE ARGU MENTS OF THE LD. CIT-DR THAT ALL THESE DECISIONS HAVE BEEN RENDE RED ON ALLEGED AND SUGGESTED SUPPRESSION OF CRUCIAL AND VITAL FACT S CONTRARY TO ASSESSEE HAS WITHHELD THAT JURISDICTION IS NOT ALLE GED BEFORE THE AO. ON THIS GROUND, THE LD. CIT-DR HAS PAINFULLY A RGUED THAT ALL THE PRECEDENTS ON GIVEN ISSUE ARE DISTINGUISHABLE O N THIS GROUND. WE ARE OF THE CONSISTENT VIEW THAT AT MULTIPLE OCCA SIONS IT HAS BEEN CONSISTENTLY AND REPEATEDLY HELD THAT THE ISSU E RELATING TO JURISDICTION OF THE AO CAN BE RAISED AT ANY STAGE E VEN IN COLLATERAL PROCEEDINGS BECAUSE THE SAME STRIKES AT THE ROOT OF THE MATTER. WE ARE REMINDED OF THE CLASSICAL AND LA ND MARK DECISION OF THE HON'BLE SUPREME COURT [FOUR JUDGES BENCH] IN THE CASE OF RAJA TEXTILES LTD VS. ITO 87 ITR 539 WHEREI N IT WAS HELD THAT : 31 IT WAS CONTENDED BY MR. MANCHANDA, THE LEARNED COU NSEL FOR THE REVENUE, THAT THE APPELLANT HAD A RIGHT OF APPEAL TO THE APPELLATE ASSISTANT COMMISSIONER UNDER SECTION 30(1A) . HE ARGUED THAT IF ONLY HE HAD DEPOSITED THE AMOUNT COMPUTED BY THE INCOME-TAX OFFICER, THEN HE WOULD HAVE HAD A RIGHT OF APPEAL TO THE APPELLATE A SSISTANT COMMISSIONER. ASSUMING THAT SECTION 30(1A) APPLIED TO FACTS OF THE CASE, THEN BEFORE HAVING RECOURSE TO T HAT PROVISION A PERSON SEEKING TO FILE AN APPEAL UNDER THAT PROVISION MUST COMPLY WITH TWO REQUIREMENTS, NAMELY , THAT HE MUST HAVE FIRST DEDUCTED THE TAX DUE FROM T HE NON- RESIDENT ASSESSEE AND MUST HAVE PAID THE SAME TO TH E GOVERNMENT. THIS PROVISION CANNOT APPLY TO THE CASE OF A PERSON WHO CONTENDS THAT THE FIRM TO WHOM HE MADE T HE PAYMENT IS NOT A NON-RESIDENT FIRM. IF HE IS RIGHT IN HIS CONTENTION, THEN HE COULD NOT HAVE DEDUCTED THE TAX DUE FROM THE FIRM TO WHOM HE MADE THE PAYMENT. 5. FOR THE REASONS MENTIONED ABOVE, WE ALLOW THIS A PPEAL, SET ASIDE THE ORDER OF THE APPELLATE BENCH OF THE ALLAHABAD HIGH COURT AND REMAND THE CASE BACK TO TH AT COURT FOR DECIDING THE APPEAL AFRESH. IT IS OPEN TO THE ASSESSEE TO URGE ALL THE POINTS THAT HE HAS TAKEN I N THE CASE . 35. THESE OBSERVATIONS OF THE HON'BLE SUPREME COURT HAVE BEEN ECHOED IN VARIOUS SUBSEQUENT DECISIONS OF VARIOUS C OURTS AND FEW OF THESE ARE RESPECTFULLY MENTIONED BELOW: 32 A) HON'BLE GUJARAT HIGH COURT IN THE CASE OF P.V. D OSHI VS. CIT 113 ITR 22 [GUJ] B) HON'BLE JURISDICTIONAL HIGH COURT IN K.K.LUMBA 2 41 ITR 152 [DELHI] C) DHC S.S. AHLUWALIA [2014] 82 CCH [158] [DEL] 36. TO SUM UP, WE HAVE NO HESITATION TO JETTISON TH E ARGUMENTS OF THE LD. CIT-DR. WE ARE PAINED TO QUOTE FROM THE FAMOUS OBSERVATIONS OF MR. JUSTICE CRAMPTON IN R VS. OCON NELL [1844] ILR 261 @ 312: ANOTHER DOCTRINE BROACHED BY ' ANOTHER EMINENT COUNSEL I CANNOT PASS BY WITHOUT A COMMENT. THAT LEARNED COUNSEL DESCRIBED THE ADVOCATE AS THE MERE MOUTHPIECE OF HIS CLIENT, HE TOLD US THAT THE SPEEC H OF THE COUNSEL WAS TO BE TAKEN AS THAT OF THE CLIEN T; AND THENCE SEEMED TO CONCLUDE THAT THE CLIENT ONLY WAS ANSWERABLE FOR ITS LANGUAGE AND SENTIMENTS. SUCH, I DO CONCEIVE, IS NOT THE OFFICE OF AN ADVOCATE. HI S OFFICE IS A HIGHER ONE. TO CONSIDER HIM IN THAT LIGHT IS T O DEGRADE HIM. I WOULD SAY OF HIM AS I WOULD SAY OF A MEMBER OF THE HOUSE OF COMMONS - HE IS A REPRESENTATIVE, BUT NOT A DELEGATE. HE GIVES TO HIS CLIENT THE BENEFIT OF HIS LEARNING, HIS TALENTS AND HIS JUDGMENT; BUT ALL THR OUGH HE NEVER FORGETS WHAT HE OWES TO HIMSELF AND TO OTHERS . HE WILL NOT KNOWINGLY MISSTATE THE LAW- HE WILL NOT WI LFULLY MISSTATE THE FACTS, THOUGH IT BE TO GAIN THE CAUSE FOR HIS CLIENT. HE WILL EVER BEAR IN MIND THAT IF HE BE THE ADVOCATE OF AN INDIVIDUAL, AND RETAINED AND REMUNER ATED (OFTEN INADEQUATELY) FOR HIS VALUABLE SERVICES, YET HE HAS A PRIOR AND PERPETUAL RETAINER ON BEHALF OF TRUTH A ND 33 JUSTICE; AND THERE IS NO CROWN OR OTHER LICENCE WHI CH IN ANY CASE, OR FOR ANY PARTY OR PURPOSE, CAN DISCHARG E HIM FROM THAT PRIMARY AND PARAMOUNT RETAINER. (EMPHASIS SUPPLIED) 37. AT THIS STAGE, IT IS NECESSARY AND RELEVANT TO RESPECTFULLY REMIND THE PREPOSITION LAID DOWN BY THE HON'BLE SUP REME COURT IN THE CASE OF ACCE VS. DUNLOP INDIA LTD [1985] 154 ITR 172 [SC] THAT THE JUDGMENTS/ORDERS OF THE HON'BLE SUPREME CO URT/HON'BLE HIGH COURT HAVE BINDING EFFECT ON THE TRIBUNAL AND THE ORDERS OF THE TRIBUNAL HAVE PERSUASIVE VALUE OR EFFECT ON THE OTHER BENCHES OF THE TRIBUNAL. SPEAKING FOR THE HON'BLE SUPREME COURT OF INDIA, THEIR LORDSHIPS HELD THAT THE JUDIC IAL SYSTEM ONLY WORKS IF SOMEONE IS ALLOWED TO HAVE THE LAST WORD A ND THE LAST WORD, ONCE SPOKEN, IS LOYALLY ACCEPTED. THE HON'BL E SUPREME COURT IN THIS JUDGMENT HAS ITSELF QUOTED FROM THE D ECISION OF HOUSE OF LORDS AS FOLLOWS: WE DESIRE TO ADD AND AS WAS SAID IN CASSELL & CO. LTD . VS. BROOME (1972) AC 1027 (HL), WE HOPE IT WILL NEV ER BE NECESSARY FOR US TO SAY SO AGAIN THAT 'IN THE HIERA RCHICAL SYSTEM OF COURTS' WHICH EXISTS IN OUR COUNTRY, 'IT IS NECESSARY FOR EACH LOWER TIER' 'TO ACCEPT LOYALLY THE DECISION OF THE HIGHER TIERS'. 'IT IS INEVITABLE IN HIERARCHICAL SYSTEM OF COURTS THAT THERE ARE DECISI ONS OF THE SUPREME APPELLATE TRIBUNAL WHICH DO NOT ATTRACT THE UNANIMOUS APPROVAL OF ALL MEMBERS OF THE JUDICIARY. .. BUT THE JUDICIAL SYSTEM ONLY WORKS IF SOMEONE IS AL LOWED TO HAVE THE LAST WORD, AND THAT LAST WORD, ONCE SPO KEN, IS LOYALLY ACCEPTED. '... THE BETTER WISDOM OF THE COURT BELOW MUST YIELD TO THE HIGHER WISDOM OF THE COURT 34 ABOVE. THAT IS THE STRENGTH OF THE HIERARCHICAL JUDICIAL SYSTEM .' (EMPHASIS BY UNDERLINING SUPPLIED BY US ) 38. FURTHERMORE, IN THE CASE OF CIT VS. GODAVARI DE VI SARAF [1978] 113 ITR 589 [BOMBAY] THE HON'BLE BOMBAY HIGH COURT HELD THAT AN AUTHORITY LIKE THE TRIBUNAL HAS TO RES PECT THE LAW LAIDDOWN BY THE HON'BLE HIGH COURT, THOUGH OF A DIF FERENT STATE, SO LONG AS THERE IS NO CONTRARY DECISION ON THAT IS SUE BY THE OTHER HIGH COURT. HENCE WE DECLINE TO ACCEPT THE CONTENT IONS OF THE LD. CIT-DR ABOUT NON-APPLICABILITY OF THE RATIO OF THE DECISIONS /JUDGMENTS CITED AS RELIED BY THE LD. COUNSEL OF TH E ASSESSEE AND WE PROCEED TO CONSIDER OTHER LEGAL OBJECTIONS OF TH E ASSESSEE. 16. IN VIEW OF ABOVE FOREGOING DISCUSSIONS, WE DECL INE TO ACCEPT LEGAL CONTENTIONS AND SUBMISSIONS OF THE LD. CIT-DR ABOUT THE NON APPLICABILITY OF THE RATIO OF DECISIONS/ORDERS/JUDG MENTS OF HON'BLE SUPREME COURT AND HONBLE HIGH COURT IN FAVOUR OF T HE ASSESSEE AS CITED BY THE LD. AR. 17. NEXT QUESTION FOR OUR ADJUDICATION IS THAT WHET HER THE ASSESSMENT ORDERS PASSED U/S 143(3) R.W.S 153A OF THE ACT ARE VALID AND SUSTAINABLE IN VIEW OF RATIO LAID DOWN BY HONBLE HIGH COURT IN THE CASE OF KABUL CHAWLA [SUPRA]. IN THE PRESENT CASE ADMITTEDLY AND UNDISPUTEDLY THE AO HAS MADE SOLE ADDITION FOR BOTH THE YEARS U/S 40 A(3) OF THE ACT ON THE ALLEGATION THAT THE ASSESSEE MADE PAYMENTS TOWA RDS PURCHASE OF AGRICULTURAL LAND IN CONTRAVENTION OF SAID PROVISIO NS FOR BUSINESS 35 PURPOSES FOR BOTH THE A.YS. UNDISPUTEDLY, THESE AD DITIONS ARE NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING TH E COURSE OF SEARCH, OR POST SEARCH MATERIAL OR INFORMATION AVAILABLE WI TH THE AO WHICH CAN BE RELATED TO THE EVIDENCE FOUND DURING THE COURSE OF SEARCH. THEREFORE, WE SAFELY OBSERVE THAT THE ADDITIONS HAV E BEEN MADE ON THE BASIS OF SAME DOCUMENTS AND MATERIAL WHICH WERE PLA CED DURING THE ORIGINAL ASSESSMENT PROCEEDINGS AND THESE ADDITIONS ARE NOT BASED ON ANY INCRIMINATING MATERIAL FOUND AND SEIZED DURING THE COURSE OF SEARCH OR ANY OTHER POST SEARCH MATERIAL OR EVIDENCE FOUN D OR UNEARTHED BY THE AO DURING THE POST SEARCH INVESTIGATION AND ENQ UIRY. 18. IN VIEW OF SUMMARY OF LEGAL POSITION LAID DOWN BY THEIR LORDSHIPS IN THE CASE OF KABUL CHAWLA [SUPRA], SPEAKING FOR H ONBLE HIGH COURT OF DELHI, IT IS AMPLY CLEAR THAT ONCE SEARCH TAKES PLA CE U/S 132 OF THE ACT, NOTICE U/S 153A OF THE ACT WILL HAVE TO BE MANDATOR ILY ISSUED TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR S IX A.YS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE A.Y IN WHICH THE SEARCH TAKES PLACE; ASSESSMENT AND REASSESSMENT PENDING ON THE DATE OF SEARCH SHALL ABATE AND TOTAL INCOME FOR SUCH A.YS W ILL HAVE TO BE COMPUTED BY THE AO AS A FRESH EXERCISE; THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF SIX PREVIOUS YEARS RELEVANT TO THE A.Y IN WHICH THE SEARCH TAKES PLACE AND THE AO HAS THE POWER TO ASSESS OR 36 REASSESS THE TOTAL INCOME OF THE AFOREMENTIONED SIX YEARS IN SEPARATE A.YS FOR EACH OF THE SIX YEARS AND THERE WILL BE ON LY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX A.YS IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX . 19. THEIR LORDSHIPS ALSO HELD THAT ALTHOUGH SECTION 153A OF THE ACT DOES NOT SAY THAT ADDITION SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF SEARCH, OR OTHER PO ST SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE R ELATED TO THE EVIDENCE FOUND DURING THE COURSE OF SEARCH, IT DOES NOT MEAN THAT THE ASSESSMENT CAN BE ARBITRARILY MADE WITHOUT ANY RELE VANCE OR NEXUS WITH THE SEIZED MATERIAL. 20. THEIR LORDSHIPS, IN PARA 37(IV) & (V) IN THE LA ST SENTENCE EXPRESSLY HELD THAT OBVIOUSLY AN ASSESSMENT HAS TO BE MADE U/ S 153A OF THE ACT ONLY ON THE BASIS OF SEIZED MATERIAL AND IN THE ABS ENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CA N BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MA DE. 21. WHILE SUMMARISING THE ABOVE LEGAL POSITION, THE IR LORDSHIPS WERE CAUTIOUS ENOUGH TO HOLD THAT THE WORD ASSESS IN S ECTION 153A OF THE ACT IS RELATED TO ABATED PROCEEDINGS I.E. THOSE PEN DING ON THE DATE OF SEARCH AND THE WORD REASSESS TO COMPLETED ASSESSM ENT PROCEEDINGS. 37 22. THEIR LORDSHIPS, IN PARA 37 (VI), FURTHER HELD THAT IN SO FAR AS PENDING ASSESSMENTS ARE CONCERNED, THE JURISDICTION TO MAKE ORIGINAL ASSESSMENT AND THE ASSESSMENT U/S 153A OF THE ACT M ERGES INTO ONE AND ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FO R EACH A.Y ON THE BASIS OF FINDINGS OF SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON RECORD OF THE AO. IN PARA 37(VII), THEIR LORDSHIPS HELD THAT COMPLETED ASSESSMENT CAN BE INFERRED BY THE AO WHILE MAKING A SSESSMENT U/S 153 OF THE ACT ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUM ENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED DURING THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN TO THE REVENUE IN THE COURSE OF ORIGINAL ASSESSMENT. 23. IN VIEW OF ABOVE BINDING RATIO OF THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT OF DELHI, WHEN WE LOGICAL LY ANALYSE THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE IN LIGHT OF R IVAL CONTENTIONS OF BOTH THE SIDES, THEN UNDISPUTEDLY AND ADMITTEDLY, A SSESSMENT FOR BOTH THE A.YS. 2007-08 AND 2008-09 HAS BEEN COMPLETED ON THE DATE OF SEARCH, I.E BEFORE 22.3.2011 AND IN THIS SITUATION, AS PER RATIO AND SUMMARISED LEGAL POSITION LAID DOWN BY HONBLE HIGH COURT, IN THE CASE OF KABUL CHAWLA [SUPRA] PARA 37(VII) COMPLETED ASSE SSMENT CAN BE INTERFERED BY THE AO WHILE MAKING ASSESSMENT U/S 15 3A R.W.S 143(3) OF 38 THE ACT ONLY ON THE BASIS OF SOME INCRIMINATING MAT ERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUM ENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEAR CH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED BY THE ASSESSEE O R MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT TO THE AO. SINCE NO INCRIMINATING MATERIAL PERTAINING TO ADDITIONS MADE BY THE AO U/S 40A(3) OF THE ACT WAS UNEARTHED DURING THE COURSE OF SEARCH OR REQUI SITION OF DOCUMENTS OR ANY SUBSEQUENT POST SEARCH ENQUIRY OR INVESTIGAT ION AND ON THE DATE OF SEARCH ASSESSMENT FOR BOTH THE A.YS ALREADY STOO D COMPLETED, THEN NO ADDITIONS COULD HAVE BEEN MADE TO THE INCOME ALR EADY ASSESSED IN THE ORIGINAL ASSESSMENT PROCEEDINGS. 24. ON THE BASIS OF FOREGOING DISCUSSION, WE ARE IN CLINED TO HOLD THAT THE ASSESSMENT ORDERS FRAMED BY THE AO U/S M153A R. W.S 143(3) OF THE ACT FOR BOTH THE A.YS AND ADDITIONS MADE THEREIN U/ S 40A(3) OF THE ACT ARE BAD IN LAW AND THUS THE SAME ARE NOT SUSTAINABL E AND HENCE WE DISMISS THE SAME BEING PASSED CONTRARY TO THE PROVI SIONS OF THE ACT AS WELL AS THE RATIO LAID DOWN BY HONBLE HIGH COURT I N THE CASE OF KABUL CHAWLA [SUPRA]. CONSEQUENTLY, APPEALS OF THE ASSES SEE FOR BOTH THE A.YS ARE ALLOWED AND ASSESSMENT ORDERS ARE SET ASID E. 39 25. ACCORDINGLY, CROSS OBJECTIONS OF THE ASSESSEE F OR BOTH THE YEARS ARE ALLOWED. SINCE WE HAVE ALLOWED APPEA LS OF THE ASSESSEE AND CONSEQUENTLY ASSESSMENT ORDERS FOR BOT H THE YEARS U/S 143(3) R.W.S 153A OF THE ACT HAVE BEEN SE T ASIDE BEING BAD IN LAW AND NOT VALID BY ALLOWING LEGAL OB JECTION OF THE ASSESSEE, THEREFORE, APPEAL OF THE REVENUE FOR A.Y 2007- 08 AND CROSS OBJECTION OF THE ASSESSEE FOR A.Y 2007 -08 BECOMES INFRUCTUOUS AND ACADEMIC AND WE DISMISS BOT H AS HAVING BECOME INFRUCTUOUS. 26. TO SUM UP, IN THE RESULT, THE APPEALS OF THE AS SESSEE STAND ALLOWED AND APPEAL OF THE REVENUE AND CROSS O BJECTION OF THE ASSESSEE STAND DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 17.0 6.2016. SD/- SD/- (L.P. SAHU) (C.M. GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 17 TH JUNE, 2016 VL/ COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI