DEEPAK MAHAVIR GUPTA, MUMBAI V. ACIT CEN CIR 45, MUMBAI

ITA 680/MUM/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4094 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 27-10-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 24-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A K SRIVASTAVA
• Keywords: Search and seizure; Reassessment proceedings
• Section: 143(3); 80HHC; 133A; 153A; 68; 263; 132; 139

Judgement Text

DEEPAK MAHAVIR GUPTA ITA NO. 9214 /M UM /201 0 AND SIX APPEALS 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D , MUMBAI , , BEFORE SHRI AMIT SHUKLA , JUDICIAL MEMBER AND SHRI RAMIT KOCHAR , ACCOUNTA NT MEMBER ITA NO. : 9214 /MUM/20 1 0 (ASSESSMENT YEAR: 200 1 - 0 2 ) ITA NO. : 921 7/MUM/201 0 (ASSESSMENT YEAR: 200 4 - 0 5 ) ACIT - CC - 45 , R.NO. 6 50 , 6 TH FLOOR, AAYAKAR BHAVAN, M K ROAD, MUMBAI - 400 02 0 VS DEEPAK MAHAVIR GUPTA , 203 GIRIRAJ, IRON MARKET, S.T. ROAD, M UMBAI - 400 009 .: PAN: AA GPG 0744 H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI A K SRIVASTAVA RESPONDENT BY : SHRI ANUJ KISNADWALA CO NO. 187/MUM/2012 ARISING OUT OF I TA NO. : 9214/MUM/2010, AY 2001 - 02 CO NO. 188/MUM/2012 ARISING OUT OF ITA NO. : 921 7 /MUM/2010 , AY 2004 - 05 DEEPAK MAHAVIR GUPTA , 203 GIRIRAJ, IRON MARKET, S.T. ROAD, MUMBAI - 400 009 .: PAN: AAGPG 0744 H VS DCIT - CC - 45, R.NO. 650, 6 TH FLOOR, AA YAKAR BHAVAN, M K ROAD, MUMBAI - 400 020 (APPELLANT) (RESPONDENT) CROSS OBJECTOR ASSESSEE BY : SHRI ANUJ KISNADWALA RESPONDENT BY : SHRI A K SRIVASTAVA ITA NO. : 680/MUM/2011 (ASSESSME NT YEAR: 2001 - 02 ) ITA NO. : 681/MUM/2011 (ASSESSMENT YEAR: 2002 - 03 ) ITA NO. : 685/MUM/2011 (ASSESSMENT YEAR: 2005 - 06 ) DEEPAK MAHAVIR GUPTA , 203 GIRIRAJ, IRON MARKET, S.T. ROAD, MUMBAI - 400 009 .: PAN: AAGPG 0744 H VS ACIT - CC - 45, R.NO. 650, 6 TH FLOOR, AAYAKAR BHAVAN, M K ROAD, MUMBAI - 400 020 (APPELLANT) (RESPONDENT) CROSS OBJECTOR ASSESSEE BY : SHRI ANUJ KISNADWALA RESPONDENT BY : SHRI A K SRIVASTAVA /D ATE OF HEARING : 21 - 0 1 - 201 6 / DATE OF PRONOUNCEMENT : 18 - 0 4 - 201 6 DEEPAK MAHAVIR GUPTA ITA NO. 9214 /M UM /201 0 AND SIX APPEALS 2 ORDER : . . : PER AMIT SHUKLA , JM : THE AFORESAID CROSS APPEAL S HAVE BEEN FI LED BY THE ASSESSEE AS WELL AS BY THE REVENUE AND THE CROSS OBJECTIONS BY THE ASSESSEE , AGAINST SEPARATE IMPUGNED ORDERS OF EVEN DATE , 15.10.2010 PASSED BY CIT(A) - 36 MUMBAI, FOR THE QUANTUM OF ASSESSMENT PASSED UNDER SECTION 143 ( 3) R.W.S. 1 5 3A FOR THE ASSESSMENT YEARS 2001 - 02, 2002 - 03, 2004 - 05 AND 2005 - 06 . SINCE T HE ISSUES INVOLVED IN ALL THE APPEALS HAVE A RE COMMON ARISING OUT OF IDENTICAL SET OF FACTS, THEREFORE, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY WAY OF THIS CONSOLIDATED ORDER. 2. SUCCINCTLY, THE ISSUES AND THE ADDITIONS CHALLENGED IN THE DE PARTMENT S APPEALS AS WELL AS IN THE ASSESSEES APPEAL/CROSS OBJECTIONS ARE AS UNDER: ISSUES IN DEPARTMENTS APPEAL 9214/M/2011 9217/M/2010 9218/M/2010 9219/M/2010 HOUSEHOLD WITHDRAW A LS 4 , 80,000 - 4 , 55,090 6 , 00,000 6 , 00,000 UNSECURED LOANS U/S 68 9,049,526 - - - - UNEXPLAINED SUNDRY CREDITORS U/S 68 268,373,880 - - - - ADVANCES FROM CUSTOMERS U/S 68 - - 6 ,00,000 - - ISSUES IN ASSESSEES APPEAL 680/M/2011 681/M/11 685/M/2011 UNSECURED LOANS U/S 68 8,549,526 1,000000 - - - UNSECURED LOANS U/S 68 40,096,588 - - - - ADDITIONAL GROUND - VALIDITY OF ADDITIONS MADE IN ASSESSMENT UNDER SECTION 133A YES ISSUES IN ASSESSEES CROSS OBJECTION 187/M/2012 - 188/M/2012 189/M/2012 VALIDITY OF ADDITIONS MADE IN ASSESSMENT U/S 153A YES YES YES - BY WAY OF PRELIMINARY OBJECTIONS, LEGAL ISSUE CHALLENGING THE VALIDITY OF ADDITIONS MADE IN THE IMPUGNED ASSESSMENT ORDERS PASSED U/S 153A HAS BEEN RAISED BY THE ASSESSEE IN ALL THE YEARS, DEEPAK MAHAVIR GUPTA ITA NO. 9214 /M UM /201 0 AND SIX APPEALS 3 EITHER IN THE FORM OF ADDIT IONAL GROUND OR BY WAY OF CROSS OBJECTION THAT, THE ADDITIONS WHICH HAVE BEEN MADE /CONFIRMED IN THE IMPUGNED ORDERS ARE OUTSIDE THE SCOPE OF ASSESSMENT UNDER SECTION 153A FOR THE REASON THAT, SUCH ADDITIONS ARE NOT BASED ON ANY INFORMATION OR MATERIAL FOUN D DURING THE COURSE OF THE SEARCH, WHEREAS, THE ASSESSMENT IN SUCH CASES, HAD ATTAINED FINALITY I.E. THEY WERE UNABATED AT THE TIME OF SEARCH . FOR THE SAKE OF READY REFERENCE, CROSS OBJECTIONS RAISED BY THE ASSESSEE IN AY 2001 - 02 ARE REPRODUCED HEREUNDER: - 1) ON THE FACTS AND CIRCUMSTANCES OF THE ASSESSMENT ORDER PASSED UNDER SECTION 153A OF THE I.T. ACT, 1961 IS BAD IN LAW AS THE ASSESSMENT WAS NOT PENDING, AT THE TIME OF SEARCH AND THERE IS NO NEXUS BETWEEN FOLLOWING ADDITIONS MADE AND ANY INFORMATION & MATERIAL FOUND DURING THE SEARCH SR. NO. PARTICULARS AMOUNT 1 AD - HOC ADDITION OF HOUSEHOLD EXPENSES 4,80,000 2 ADDITIONS UNDER SECTION 68 OF THE IT ACT 1961 IN RESPECT OF UNEXPLAINED UNSECURED LOANS 90,49,526 3 ADDITIONS UNDER SECTION 68 OF THE IT ACT, 1961 IN RESPECT OF UNEXPLAINED SUNDRY CREDITORS 26,83,73,880 AND ADDITIONAL GROUND IN AY 2002 - 03 READS AS UNDER: - 1) ON THE FACTS AND CIRCUMSTANCES OF THE ASSESSMENT ORDER PASSED UNDER SECTION 153A OF THE I.T. ACT, 1961 IS BAD IN LAW AS THE ASSESS MENT WAS NOT PENDING, AT THE TIME OF SEARCH AND THERE IS NO NEXUS BETWEEN FOLLOWING ADDITIONS MADE AND ANY INFORMATION & MATERIAL FOUND DURING THE SEARCH SR. NO. PARTICULARS AMOUNT 1 ADDITIONS UNDER SECTION 68 OF THE IT ACT 1961 IN RESPECT OF UNEXPLAINE D UNSECURED LOANS 10,00,000 SIMILAR GROUNDS HAVE BEEN RAISED IN OTHER APPEALS AS WELL AS CROSS OBJECTIONS. DEEPAK MAHAVIR GUPTA ITA NO. 9214 /M UM /201 0 AND SIX APPEALS 4 3. BRIEF FACTS QUA THE LEGAL ISSUE ARE THAT, I N THE CASE OF THE ASSESSEE, A SEARCH AND SEIZURE ACTION UNDER SECTION 132(1) WAS CARRIED OUT ON 10 .11.2006 IN THE CASE OF M/S S K S IS PAT LTD, A ND GROUP INCLUDING ITS DIRECTOR S AND OTHER DIFFERENT ASSOCIATE SISTER COMPANIES. THE ASSESSEE IS ONE OF THE DIRECTORS IN THE COMPANY M/S SKS I SPAT LTD. AND WAS ALSO COVERED UNDER THE SAID SEARCH. IN PURSUANCE THE REOF, NOTICE S UNDER SECTION 153A W ERE ISSUED ON 05.10.2007 REQUIRING THE ASSESSEE TO FILE THE RETURN OF INCOME FOR THE VARIOUS ASSESSMENT YEARS, AS SPECIFIED IN NOTICES . O N THE DATE OF THE SEARCH, THE STATUSES OF THE ASSESSMENT FOR THE AFORESAID ASSESSMENT YEARS WERE AS UNDER: SR. NO. PARTICULARS AY 2001 - 02 AY 2002 - 03 AY 2004 - 05 AY 2005 - 06 1 ORIGINAL RETURN FILED U/S 139 OF THE ACT 31.10.2001 31.10.2002 01.11.2004 31.10.2005 2 TIME LIMIT FOR ISSUING NOTICE U/S 143(2) OF THE ACT 30.09.2002 30 .09.2003 30.11.2005 31.10.2006 3 SEARCH & SEIZURE ACTION U/S 132 OF THE ACT 10.11.2006 10.11.2006 10.11.2006 10.11.2006 IN ALL THESE YEARS, NO NOTICES UNDER SECTION 143(2) W ERE ISSUED FOR SELECTION OF SCRUTINY AND ACCORDINGLY, T HE RETURN OF INCOME FILED BY THE ASSESSEE FINALLY STOOD AS ASSESSED INCOME AND HENCE THESE ASSESSMENTS UNDER THE LAW STOOD COMPLETED AS ON THE DATE OF SEARCH , I.E. ON 10.11.2006 , I N TERMS OF SECOND P ROVISO TO SECTION 153A(1). 5. BEFORE US, THE LD. COUNSEL SUBMITTED THAT, NO INCRIMINATING MATERIAL OR EVIDENCE OR ANY SEIZED DOCUMENT WHATSOEVER WAS FOUND DURING THE COURSE OF THE SEARCH. SO FAR AS ADDITIONS MADE IN THE IMPUGNED ASSESSMENT ORDERS, THERE IS NO WHISPER OR REFERENCE OF ANY SEIZED MATERIAL FOR MAKI NG THE ADDITION S EXCEPT FOR MATERIAL ALREADY ON RECORD, THAT IS, THE INFORMATION GIVEN IN THE BALANCE SHEETS ALREADY ON RECORD (I.E., IN THE RETURN OF INCOME) IN THE ASSESSMENT ORDER . ONCE THAT IS SO, THEN IN VIEW OF THE HONBLE DEEPAK MAHAVIR GUPTA ITA NO. 9214 /M UM /201 0 AND SIX APPEALS 5 BOMBAY HIGH COURT DECISION IN THE CASE OF AL L C ARGO GLOBAL LOGISTIC LTD VS. CIT , REPORTED IN 374 ITR 645, SUCH AN ADDITION CANNOT BE MADE IN THE PROCEEDINGS UNDER SECTION 153A , ESPECIALLY IN THE CASES WHERE ASSESSMENT ARE UNABATED, THAT IS, THEY HAVE ATTAINED FINALITY BEFORE THE DAT E OF SEARCH. 6 . ON THE OTHER HAND, LD. CIT DR, SHRI A K SRIVASTAVA, SUBMITTED THAT, HE HAD WRITTEN LETTERS TO THE DEPARTMENT SEEKING REPORT FROM THE AO ON THE ADDITIONAL GROUND/ AND OBJECTIONS RAISED BY THE ASSESSEE, TO CONFIRM WHE THE R THE ADDITIONS WHICH HAVE BEEN MADE ARE BASED ON ANY INFORMATION OR MATERIALS FOUND DURING THE COURSE OF SEARCH OR NOT . HOWEVER, NO SUCH INFORMATION HAS BEEN RECEIVED FROM THE OFFICER. HE ADMITTED THAT, FROM THE B ARE PERUSAL OF THE ORDER, IT CANNOT BE BORNE OUT THAT THESE ADDI TIONS ARE BASED ON SEIZED MATERIAL. HOWEVER, HE STRONGLY RELIED UPON THE ORDER OF THE AO AND SUBMITTED AGAINST THE DECISION OF HONBLE BOMBAY HIGH COURT IN AL L CARGO LOGISTIC LTD. , A SLP HAS BEEN FILED BEFORE THE HONBLE SUPREME COURT AND THE SAME HAS BEEN ADMITTED ALSO. 7 . WE HAVE HEARD THE RIVAL SUBMISSIONS QUA THE LEGAL ISSUE AND ALSO PERUSED THE RELEVANT MATERIAL PLACED BEFORE US. IT IS AN ADMITTED FACT THAT, ON THE DATE OF THE SEARCH, THAT IS, ON 10.11.2006, THE ASSESSMENT FOR THE ALL THE IMPUGNED ASS ESSMENT YEARS HAD ATTAINED FINALITY, THAT IS, THEY WERE UNABATED IN TERMS OF SECOND PROVISO TO SECTION 153A. IT IS NOW A SETTLED LAW IN WAKE OF SEVERAL HIGH COURT DECISIONS INCLUDING THE JURISDICTION AL HIGH COURT THAT, IF THE ASSESSMENT FOR THE ASSESSMENT YEAR S FALLING WITHIN THE YEARS AS MENTIONED IN SECTION 153A, HAS ATTAINED FINALITY, THAT IS, IT DOES NOT ABATE AT THE TIME OF SEARCH, THEN NO ADDITION CAN BE MADE IN THE ASSESSMENT FRAMED UNDER SECTION 153A, UNLESS SOME INCRIMINATING MATERIAL OR EVIDENCE I S FOUND DURING THE COURSE OF A SEARCH QUA THE AD DITION SOUGHT TO BE MADE, THAT IS, OVER AND ABOVE THE INCOME WHICH HAS ALREADY STOOD ASSESSED. DEEPAK MAHAVIR GUPTA ITA NO. 9214 /M UM /201 0 AND SIX APPEALS 6 8. IF WE READ THE RELEVANT PROVISIONS OF SECTION 153A ALONG WITH THE PROVISO THERETO IT CAN BE SEEN THAT THE SECO ND PROVISO CARVES OUT AN EXCEPTION OR PUTS A CONDITION THAT THE PENDING ASSESSMENT OR REASSESSMENT RELATING TO ANY ASSESSMENT YEAR FOLLOWING WITHIN THE PERIOD OF SIX YEARS ON THE DATE OF SEARCH, THE SAME WILL GET ABATED. IN OTHER WORDS, THE ASSESSMENTS WHI CH HAVE NOT ATTAINED FINALITY AND ARE PENDING ON THE DATE OF SEARCH, THEN THE SAME DOES NOT GETS ABATED. THE ASSESSMENTS WHICH HAVE ABATED, FRESH DETERMINATION OF TOTAL INCOME WOULD BE REQUIRED WHICH CAN BE MADE ON THE BASIS OF MATERIAL ALREADY ON RECORD A S WELL AS MATERIAL GATHERED DURING THE COURSE OF SEARCH. HOWEVER, THE ASSESSMENTS WHICH HAVE ALREADY ATTAINED FINALITY AND DO NOT GET ABATED, THEN THEY HAVE TO BE ASSESSED ON THE SAME INCOME AND CANNOT INCLUDE ANY TYPE OF INCOME OR ADDITION FOR WHICH NO IN CRIMINATING MATERIAL HAS BEEN FOUND. THE REASON BEING THAT THE ASSESSMENTS WHICH ARE PENDING AND GET ABATED, THE ENTIRE INCOME HAS TO BE DETERMINED WHICH INCLUDES MATERIAL ALREADY ON RECORD AND ALSO THE MATERIAL FOUND AS A RESULT OF SEARCH. HOWEVER, STATUT E HAS CAR V ED OUT THE EXCEPTION TO THOSE ASSESSMENTS WHICH HAVE ATTAINED FINALITY BECAUSE THOSE ASSESSMENTS DO NOT GET ABATED. IN SUCH A SITUATION, THE INCOME WHICH HAS ALREADY BEEN ASSESSED, THE SAME CANNOT BE DISTURBED UNLESS SOME INCRIMINATING INFORMATIO N OR MATERIAL IS FOUND SUGGESTING THAT THE INCOME WHICH ALREADY STOOD ASSESSED REQUIRES TO BE REASSESSED ON THE BASIS OF NEW MATERIAL FOUND. THIS PROPOSITION HAS BEEN UPHELD AND CLARIFIED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF MURLI CARGO PRODUCTS LTD. IN ITA NO. 36 OF 2000 JUDGMENT DATED 29.10.2010 IN THE FOLLOWING MANNER: - 10. THUS ON A PLAIN READING OF SECTION 153A OF THE INCOME TAX ACT, IT BECOMES CLEAR THAT ON INITIATION OF PROCEEDINGS UNDER SECTION 153A, IT IS ONLY THE ASSESSMENT/RE ASSESSMENT PROCEEDINGS THAT ARE PENDING ON THE DATE OF CONDUCTING SEARCH UNDER SECTION 132 OR MAKING REQUISITION UNDER SECTION 132A OF THE ACT STAND ABATED AND NOT THE DEEPAK MAHAVIR GUPTA ITA NO. 9214 /M UM /201 0 AND SIX APPEALS 7 ASSESSMENTS/REASSESSMENTS ALREADY FINALIZED FOR THOSE ASSESSMENT YEARS COVERED UNDER WE RE CONTRARY TO THE FACTS UNEARTHED DURING THE COURSE OF 153A PROCEEDINGS 13) IN THE PRESENT CASE, THERE IS NOTHING ON RECORD TO SUGGEST THAT ANY MATERIAL WAS UNEARTHED DURING THE SEARCH OR DURING THE 153A PROCEEDINGS WHICH WOULD SHOW THAT THE RELIEF UNDER SECTION, 80HHC WAS ERRONEOUS. IN SUCH A CASE, THE AO WHILE PASSING THE ASSESSMENT ORDER UNDER SECTION 153A READ WITH SECTION 143(3) COULD NOT HAVE DISTURBED THE ASSESSMENT ORDER FINALIZED ON 29.12.2000 RELATING TO SECTION 80HHC DEDUCTION AND CONSEQUENTLY THE CIT COULD NOT HAVE INVOKED JURISDICTION UNDER SECTION 263 OF THE ACT. THE PRINCIPLE AND THE RATIO REITERATED IN PARA 12 OF THE AFORESAID ORDER MAKES IT ABUNDANTLY CLEAR THAT, THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER U /S 153A CANNOT DI STURB THE ASSESSMENTS/REASSESSMENT ORDER WHICH HAD ATTAINED FINALITY, UNLESS MATERIAL GATHERED IN THE COURSE OF SEARCH ESTABLISHES THAT THE EARLIER ASSESSMENT FINALIZED IS CONTRARY TO THE FACT. 9. THIS PRINCIPLE HAS BEEN REITERATED BY THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF JAI STEEL (INDIA) VS.. ACIT, REPORTED IN [2013] 36 TAXMANN.COM 523, WHEREIN LORDSHIPS AFTER ANALYZING THE ENTIRE PROVISION OF SECTION 153A, HELD AND CONCLUDED AS UNDER: - 22. THE UNDERLYING PURPOSE OF MAKING ASSESSMENT OF TOTAL INCOME UNDER S. 153A OF THE ACT IS, THEREFORE, TO ASSESS INCOME WHICH WAS NOT DISCLOSED OR WOULD NOT HAVE BEEN DISCLOSED. THE PURPOSE OF SECOND PROVISO IS ALSO VERY CLEAR, IN AS MUCH AS ONCE AN ASSESSMENT OR REASSESSMENT IS PENDING ON THE DATE O F INITIATION OF SEARCH OR REQUISITION AND IN TERMS OF S. 153A A RETURN IS FILED AND THE AO IS REQUIRED TO ASSESS THE SAME, THERE CANNOT BE TWO ASSESSMENT ORDERS DETERMINING THE TOTAL INCOME OF THE ASSESSEE FOR THE SAID ASSESSMENT YEAR AND THEREFORE, THE PR OVISO PROVIDES FOR ABATEMENT OF SUCH PENDING ASSESSMENT AND REASSESSMENT PROCEEDINGS AND IT IS ONLY THE DEEPAK MAHAVIR GUPTA ITA NO. 9214 /M UM /201 0 AND SIX APPEALS 8 ASSESSMENT MADE UNDER S. 153A OF THE ACT THAT WOULD BE THE ASSESSMENT FOR THE SAID YEAR. 23. THE NECESSARY COROLLARY OF THE ABOVE SECOND PROVISO IS THAT THE ASSESSMENT OR REASSESSMENT PROCEEDINGS, WHICH HAVE ALREADY BEEN COMPLETED AND ASSESSMENT ORDERS HAVE BEEN PASSED DETERMINING THE ASSESSEES TOTAL INCOME AND SUCH ORDERS ARE SUBSISTING AT THE TIME WHEN THE SEARCH OR THE REQUISITION IS MADE, THERE IS NO QUESTION OF ANY ABATEMENT SINCE NO PROCEEDINGS ARE PENDING. IN SUCH CASES, WHERE THE ASSESSMENT ALREADY STANDS COMPLETED, THE AO CAN REOPEN THE ASSESSMENTS ALREADY MADE WITHOUT FOLLOWING THE PROVISIONS OF SS. 147, 148 AND 151 OF THE ACT AND DETERMINE TH E TOTAL INCOME OF THE ASSESSEE. 24. THE ARGUMENT RAISED BY THE COUNSEL FOR THE APPELLANT TO THE EFFECT THAT ONCE A NOTICE UNDER S. 153A OF THE ACT IS ISSUED, THE ASSESSMENTS FOR SIX YEARS ARE AT LARGE BOTH FOR THE AO AND ASSESSEE HAS NOT WARRANT IN LAW. 25 . IN THE FIRM OPINION OF THIS COURT FROM A PLAIN READING OF THE PROVISION ALONG WITH THE PURPOSE AND PURPORT OF THE SAID PROVISION, WHICH IS INTRICATELY LINKED WITH SEARCH AND REQUISITION UNDER SS. 132 AND 132A OF THE ACT, IT IS APPARENT THAT : - (A) THE A SSESSMENTS OR REASSESSMENTS, WHICH STAND ABATED IN TERMS OF SECOND PROVISO TO S. 153A OF THE ACT, THE AO ACTS UNDER HIS ORIGINAL JURISDICTION, FOR WHICH, ASSESSMENTS HAVE TO BE MADE; (B) REGARDING OTHER CASES, THE ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL; AND (C) IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE. DEEPAK MAHAVIR GUPTA ITA NO. 9214 /M UM /201 0 AND SIX APPEALS 9 10. EARLIER, THE ITAT SPECIAL BENCH IN THE CASE OF ALL - CARGO GLOBAL LOGISTIC LTD., REPORTED IN [2012] 18 ITR (TRIB) 106 HAS REITERATED THIS PROPOSITION. NOW, THIS DECISION OF THE SPECIAL BENCH HAS NOW BEEN UPHELD BY THE HONBLE BOMBAY HIGH COURT SINCE REPORTED IN [201 5] 374 ITR 645, WHEREIN, THE HONBLE BOMBAY HIGH COURT HELD THAT IF THERE WAS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH, THEN WITHIN THE SCOPE OF SECTION 153A NO ADDITION CAN BE MADE WHERE THE ASSESSMENT ARE NOT ABATED AND ONLY PENDING AS SESSMENT ARE OPEN FOR ALL KIND OF ADDITIONS INCLUDING THE MATERIAL FOUND DURING THE COURSE OF SEARCH AND ALSO OTHERWISE. THUS, RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT, WE HOLD THAT THE ADDITION MADE BY THE ASSE SSING OFFICER AND CONFIRMED BY THE CIT(A) CANNOT BE SUSTAINED BECAUSE, ADMITTEDLY, AS DISCUSSED ABOVE NO INCRIMINATING MATERIAL HAS BEEN FOUND QUA THE ADDITION MADE BY THE ASSESSING OFFICER IN THE IMPUGNED ASSESSMENT YEAR, THE ASSESSMENT OF WHICH HAD NOT A BATED. IN VIEW OF OUR FINDING THE ADJUSTMENT ON MERITS HAVE BECOME PURELY ACADEMIC, HENCE WE REFRAIN FROM ADJUDICATING THE SAME. 11. NOW, IN LATEST DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS K ABUL CHAWLA, IN ITA NO. 707 AND 709 OF 2014 OR DER DATED 28.08.2015, THE HONBLE HIGH COURT AFTER TAKING THE NOTE OF DECISION OF CIT VS A NIL KUMAR BHATIA, REPORTED IN [2013] 352 ITR (DEL); MADUGULA VENN VS DIT, REPORTED IN [2013] 29 TAXMANN.COM 200 (DEL) ; RAJASTHAN HIGH COURT IN JAI STEEL INDIA ( SUPRA ) ; DECISION OF HONBLE BOMBAY HIGH COURT IN AL L CARGO GLOBAL LOGISTICS LTD. AND CATENA OF OTHER DECISIONS, SUMMARI ZED THE LEGAL PROPOSITION IN THE FOLLOWING MANNER: - 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN THE AFOREMENTIONED DECISIONS THE LEGAL POSITION THAT EMERGES IS AS UNDER: - DEEPAK MAHAVIR GUPTA ITA NO. 9214 /M UM /201 0 AND SIX APPEALS 10 I . ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153A(1) WILL HAVE TO MANDATORILY ISSUED TO THE PERSON SEARCHED REQUIRI NG HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. II . ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO BE COMPUT ED BY THE AOS AS A FRESH EXERCISE. III . THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE TOTAL INCOME OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX. IV . ALTHOUGH SECTION 153A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH, OR OTHER POST - SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE AS SESSMENT CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL. V . IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE DEEPAK MAHAVIR GUPTA ITA NO. 9214 /M UM /201 0 AND SIX APPEALS 11 MADE. THE WORD ASSESS IN SECTION 153A IN RELATABLE TO ABATED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD REASSESS TO COMPLETED ASSESSMENT PROCEEDINGS. VI . INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE AO. VII . COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISIT ION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. 38. THE PRESENT APPEALS CONCERN AYS. 2002 - 03, 2005 - 06 AND 2006 - 07.ON THE DATE OF THE SEARCH THE SAID ASSESSMENTS ALREADY STOOD COMPLETED. SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEARCH, NO ADDITIONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. 12. THUS, RESPECTFULLY FOLLOWING THE RATIO LA ID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT AS WELL AS AFORESAID HIGH COURTS, WE HOLD THAT THE ADDITION MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A) CANNOT BE S USTAINED BECAUSE, ADMITTEDLY, AS DISCUSSED ABOVE NO INCRIMINATING MATERIAL HAS BEEN FOUND QUA THE ADDITION MADE BY THE ASSESSING OFFICER IN THE IMPUGNED DEEPAK MAHAVIR GUPTA ITA NO. 9214 /M UM /201 0 AND SIX APPEALS 12 ASSESSMENT YEAR, THE ASSESSMENT OF WHICH HAD NOT ABATED. THUS, ALL THE ADDITIONS MADE BY THE AO AND SUS TAINED BY THE CIT(A) ARE DELETED. ACCORDINGLY, IN VIEW OF OUR FINDING, THE APPEAL OF THE ASSESSEE AND CROSS OBJECTIONS ARE TREATED AS ALLOWED WHEREAS REVENUES APPEALS ARE TREATED AS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH A PRIL , 2016 . SD/ - SD/ - ( ) ( ) ( RAMIT KOCHAR ) ( AMIT SHUKLA ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 18 TH APRIL , 2016 / COPY TO: - 1 ) / THE APPELLANT. 2 ) / THE RESPONDENT. 3) THE CIT (A) - 3 6 , MUMBAI . 4 ) THE C OMMISSIONER OF INCOME TAX ( CENTRAL ) - 1 , MUMBAI . 5 ) , , / THE D.R. D BENCH, MUMBAI. 6 ) \ COPY TO GUARD FILE. / BY ORDER / / TRUE COPY / / / , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI * . . *CHAVAN, SR.PS