Deputy Commissioner of Income Tax, Circle - 3, Guwahati V. M/s. SMS Smelters Limited, Naharlagun

ITA 69/GTY/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2029 (ITAT-GUWAHATI)
• Duration Of Justice: 2 year(s) 4 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 25-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RABINDRO SINGH J
• Assessee Lawyers: AMIT GOENK A
• Keywords: Unexplained cash credit; Bogus Share capital; Unexplained expenditure; Search and seizure; Additional evidence; TDS
• Section: 143(3); 153A; 133(6); 80IC; 192; 32; 131; 68; 6; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL GUWAHATI BENCH, GUWAHATI BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 91, 69, 76 & 77 / GAU / 2017 ASSESSMENT YEARS :2006-07, 207-08, 2012-13 & 2013-14 DCIT, CIRCLE-3, 7 TH FLOOR, AAYAKAR BHAWAN, G.S. ROAD, CHRISTIAN BASTI, GUWAHATI-781005 V/S . M/S SMS SMELTERS LTD. NH 52A, LEKHI VILLAGE, NAHARLAGUN, DIST. PAPUMPARE, ARUNACHAL PRADESH [ PAN NO.AABCN 7147 D ] /APPELLANT .. / RESPONDENT ITA NO. 93 - 96 / GAU / 2017 ASSESSMENT YEARS :2009-10, 2010- 11, 2012-13 & 2013-14 M/S SMS SMELTERS LTD. NH 52A, LEKHI VILLAGE, NAHARLAGUN, DIST. PAPUMPARE, ARUNACHAL PRADESH [ PAN NO.AABCN 7147 D ] V/S . DCIT, CIRCLE-3, 7 TH FLOOR, AAYAKAR BHAWAN, G.S. ROAD, CHRISTIAN BASTI, GUWAHATI-781005 /APPELLANT .. / RESPONDENT /BY ASSESSEE SHRI R.P. AGARWALLA, SR. ADVOCATE SHRI RAMESH GOENKA, SR. ADVOCATE & SHRI AMIT GOENKA, ADVOCATE /BY RESPONDENT SHRI RABINDRO SINGH, JCIT-DR /DATE OF HEARING 04-07-2019 ITA NOS. 93-96/GAU/2017 & 91,69,76-77/GAU/17 39-40/ GAU/2017 M/S SMS SMELTERS LTD. VS. DCIT, CIR-3, GAU &JU D CEMENT LTD. V. ACIT CIR-SHILL. PAGE 2 ITA NO. 39 - 40 / GAU / 2017 ASSESSMENT YEARS 2006-07 & 2008- 09: JUD CEMENT LIMITED N..H. 44, LUMPSHONG, WAHIAJIER, DIST. JAINTIA HILLS, MEGHALAYA [ PAN NO.AABCJ 7312 C ] V/S . ACIT, CIRCLE-SHILLONG /APPELLANT .. / RESPONDENT /BY ASSESSEE SHRI J.P.GUPTA, FCA /BY RESPONDENT SHRI RABINDRO SINGH, JCIT-DR /DATE OF HEARING 04-07-2019 /DATE OF PRONOUNCEMENT 06-09-2019 / O R D E R PER BENCH:- THE INSTANT BATCH OF TEN CASE(S) PERTAINS TO TWO ASSESSEES M/S SMS SMELTERS LTD. & JUD CEMENT LTD. THE REVENUES FOUR APPEAL(S) ITA NOS 91, 69, 76-77/GAU/2017 FOR ASSESSMENT YEAR(S) 2006-07 T O 2007-08 AND 2012-13 TO 2013-14 ALONGWITH FORMER ASSESSEES CROSS APPEAL (S) ITA NO. 95- 96/GAU/2017 IN LATTER TWO ASSESSMENT YEAR(S) ARISE AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-2, GUWAHATIS SEPARATE ORDERS; ALL DATED 23.02.2017 PASSED IN CASE NO.GUWA-181/182/201 5-16 (ASSESSMENT YEAR-WISE). THIS FORMER TAXPAYERS TWO MORE APPEAL( S) ITA NOS. 93- 94/GAU/2017 FOR ASSESSMENT YEAR(S) 2009-10 TO 2010- 11 ARE DIRECTED AGAINST THE VERY CIT(A)S ORDER OF THE SAME DATE IN CASE NO S.GUWA-178/179/2015-16 (ASSESSMENT YEAR-WISE); RESPECTIVELY. LATTER ASSESS EES TWO APPEAL(S) ITA NOS.39-40/GAUA/2017 FOR ASSESSMENT YEAR(S) 2006-07 & 2008-09 ARISE FROM THE CIT(A)-SHILLONGS SEPARATE ORDERS ALL DATED 20. 10.2016 PASSED IN CASE NO.SHILL-25/24/2014-15. RELEVANT PROCEEDINGS IN ALL THESE ASSESSMENT YEAR(S) ARE U/S 143(3) R.W.S. 153A R,.W,S 147 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. ITA NOS. 93-96/GAU/2017 & 91,69,76-77/GAU/17 39-40/ GAU/2017 M/S SMS SMELTERS LTD. VS. DCIT, CIR-3, GAU &JU D CEMENT LTD. V. ACIT CIR-SHILL. PAGE 3 WE HAVE HEARD THESE APPEAL(S) TOGETHER SINCE INVOLV ING IDENTICAL ISSUES. CASE FILE(S) PERUSED. 2. LEARNED SENIOR COUNSEL STATES AT BAR THAT THE FI RST ASSESSEE M/S SMS SMELTERS LTD. NO MORE WISHES TO PRESS FOR ITS FOUR APPEALS ITA NO..93- 96/GAU/2017 . THE REVENUE HAS NOT RAISED ANY OBJECTION. THESE F OUR ASSESSEES APPEAL(S) ARE DISMISSED AS WITHDRAWN THE REFORE. 3. WE NOW ADVERT TO REVENUES APPEAL(S) ITA NO.91, 69, 76 AND 77/GAU/2017 FOR ASSESSMENT YEAR(S) 2006-07, 2007-08 , 2012-13 & 2013-14; RESPECTIVELY IN FIRST ASSESSEES CASE. 4. COMING TO ASSESSMENT YEAR 2006-07, WE FIND THAT CIT(A) HAS DELETED SEC. 68 ADDITION OF SHARE CAPITAL AMOUNTING TO 1,02,50,000/- MADE BY ASSESSING OFFICER VIDE FOLLOWING DETAILED DISCUSSIO N:- 5.1 THE APPELLANT, APART FROM RELYING UPON THE FAC TS, HAS RAISED A LEGAL CONTENTION STATING THAT THE ADDITION OF RS.1,02,50,000/- MADE ON ACCOUNT OF SHARE CAPITAL WAS BEYOND THE SCOPE AND AMBIT OF SECTION 147 OF INCOME TAX ACT, 1961. ACCORDING TO THE APPELLANT IN THE REASONS RECORDED FOR RE-OPENIN G OF ITS CASE, THE ONLY REASON GIVEN IS THAT THE APPELLANT COMPANY RECEIVED TRANSP ORT SUBSIDY AMOUNTING TO RS.6,97,84,511/- FOR THE PERIOD FROM 01.04.2005 TO 31.03.2016 WHICH ACCORDING TO THE ASSESSING OFFICER ESCAPED THE ASSESSMENT. NO OTHER REASON WAS RECORDED FOR REOPENING OF THE APPELLANT'S CASE. ACCORDING TO THE APPELLANT, WHILE MAKING THE RE- ASSESSMENT U/S.143(3)/147 OF THE INCOME TAX ACT, 19 61, THE ASSESSING OFFICER HAS ALSO ADDED THE SHARE APPLICATION MONEY OF RS.1,02,5 0,000/- RECEIVED FROM MR. C.N. LYNGDOH, WHICH WAS NOT A PART OF THE REASONS RECORD ED FOR RE-OPENING OF THE CASE. THE APPELLANT HAS SUBMITTED THAT THE ISSUE REGARDIN G TRANSPORT SUBSIDY HAS SINCE BEEN SETTLED BY HON'BLE APEX COURT IN THE CASE OF C IT VS. MEGHALAYA STEELS LTD. (383 ITR. 217) WHEREIN THE HON'BLE APEX COURT HAS H ELD THAT THE TRANSPORT SUBSIDY HAD A DIRECT NEXUS WITH THE PROFITS AND GAINS OF TH E BUSINESS OF AN INDUSTRIAL UNDERTAKING AND, THEREFORE, IT WAS ELIGIBLE FOR DED UCTION U/S.80LB / 80IC OF THE INCOME TAX ACT, 1961. IT IS ARGUED BY THE APPELLANT THAT I N VIEW OF THE AFORESAID JUDGMENT OF THE HON'BLE APEX COURT THE REASONS RECORDED BY THE ASSESSING OFFICER FOR RE-OPENING OF THE APPELLANT'S CASE CEASED TO SURVIVE. CONSEQUE NTLY, NO ADDITION MADE ON ACCOUNT OF SHARE APPLICATION MONEY OF RS.1,02,50,00 0/- COULD SURVIVE. IN SUPPORT OF ITS CONTENTION THE APPELLANT HAS RELIED UPON THE FO LLOWING CASE LAWS : I) CIT VS. JET AIRWAYS (I) LTD 331 ITR. 236 (BOMBAY ) II) RANBAXY LTD. VS. CIT 336 ITR. 136 (DELHI) 5.2 APART FROM THE ABOVE LEGAL SUBMISSIONS, THE APP ELLANT HAS FILED ACCOUNT CONFIRMATION FROM MR. C.N. LYNGDOH AND HAS STATED T HAT MR. C.N. LYNGDOH WAS A COAL TRADER AND THE APPELLANT HAD REGULAR BUSINESS DEALI NG WITH HIM. ACCORDING TO THE APPELLANT, THE ABOVE DETAILS WAS BROUGHT TO THE NOT ICE OF THE ASSESSING OFFICER. THE APPELLANT HAS FURTHER SUBMITTED THAT IT HAD REGULAR TRANSACTIONS WITH MR. C.N. LYNGDOH AND ALL THE TRANSACTIONS WERE THROUGH CHEQUES AND, THEREFORE, THERE CANNOT BE ANY DOUBT ABOUT THE SHARE APPLICATION MONEY RECEIVED FR OM MR. C.N. LYNGDOH. HOWEVER, THE CONFIRMATION FROM MR. C.N. LYNGDOH COULD NOT BE SUBMITTED AT THE TIME OF ITA NOS. 93-96/GAU/2017 & 91,69,76-77/GAU/17 39-40/ GAU/2017 M/S SMS SMELTERS LTD. VS. DCIT, CIR-3, GAU &JU D CEMENT LTD. V. ACIT CIR-SHILL. PAGE 4 ASSESSMENT. THE APPELLANT HAS, THEREFORE, MADE A PR AYER UNDER RULE 46A OF THE INCOME TAX RULES, 1962. THE ASSESSING OFFICER IN HI S REMAND REPORT HAS ALSO NOT OBJECTED TO THE ADMISSION OF ANY FRESH OR ADDITIONA L EVIDENCE IF IT IS CONSIDERED TO BE RELEVANT FOR DISPOSAL OF THE ISSUE. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, I ADMIT THE ADDITIONAL EVIDENCE AS PRAYED FOR BY THE APPELLANT. 5.3 AS FAR AS THE LEGAL CONTENTION RAISED BY THE AP PELLANT IS CONCERNED, I FIND THAT AT THE TIME WHEN THE APPELLANT'S CASE WAS RE-OPENED U/S.147 OF THE INCOME TAX ACT, 1961 AS WELL AS WHEN THE ASSESSMENT WAS MADE U/S.14 3(3)/147 OF THE INCOME TAX ACT, 1961 ON 31.03.2013, THE JUDGMENT OF THE HON'BL E APEX COURT IN THE CASE OF M/S. MEGHALAYA STEELS LTD (SUPRA) WAS NOT AVAILABLE TO T HE ASSESSING OFFICER. THEREFORE, IN MY VIEW THERE WAS NO BAR FOR THE ASSESSING OFFIC ER IN MAKING ADDITION ON ANY OTHER ISSUE APART FROM THE ISSUE OF TRANSPORT SUBSIDY ON THE BASIS OF WHICH THE APPELLANT'S CASE WAS RE-OPENED U/S.147 OF THE INCOME TAX ACT, 1 961. THEREFORE, THE RATIO OF THE JUDGMENT OF JET AIRWAYS (I) LTD. (SUPRA) AND RANBAX Y LTD. (SUPRA) ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. 5.4 COMING TO THE FACTS OF THE CASE I FIND THAT MR. C.N. LYNGDOH, FROM WHOM THE APPELLANT HAD RECEIVED RS.1,02,50,000/- AS SHARE AP PLICATION MONEY, HAD REGULAR TRANSACTIONS WITH THE APPELLANT. ALL THESE TRANSACT IONS WERE MADE THROUGH BANK AND ARE DULY RECORDED IN THE BOOKS OF ACCOUNTS OF THE A PPELLANT COMPANY. I ALSO FIND THAT THE ASSESSING OFFICER HAS ACCEPTED ALL OTHER TRANSA CTIONS APPEARING IN THE ACCOUNT CONFIRMATION OF MR. C.N. LYNGDOH EXCEPT CLOSING BAL ANCE OF RS.1,02,50,000/- WHICH WAS CONVERTED INTO SHARE APPLICATION MONEY. THERE D OES NOT SEEM TO BE ANY JUSTIFICATION BEFORE THE ASSESSING OFFICER FOR NOT ACCEPTING THE CLOSING BALANCE OF RS.1,02,50,000/- APPEARING IN THE ACCOUNT OF MR. C. N. LYNGDOH AS GENUINE AND TREATING IT AS UNEXPLAINED U/S.68 OF THE INCOME TAX ACT, 1961 WHILE ACCEPTING ALL OTHER TRANSACTIONS APPEARING THE ACCOUNT OF MR. C.N . LYNGDOH. THE APPELLANT HAS FURNISHED THE FULL ADDRESS OF MR. C.N. LYNGDOH WHO WAS A COAL DEALER AND HAD REGULAR TRANSACTIONS WITH THE APPELLANT. FURTHER, M R. C.N. LYNGDOH BEING A MEMBER OF SCHEDULE TRIBE, WAS EXEMPTED FROM INCOME TAX U/S.10 (26) OF THE INCOME TAX ACT, 196. IN VIEW OF THE ABOVE, I DELETE THE ADDITION OF RS.1,02,50,000/- MADE BY THE ASSESSING OFFICER. THIS GROUND OF APPEAL IS, THEREF ORE, ALLOWED. 5. LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY C ONTENDS DURING THE COURSE OF HEARING THAT THE ASSESSING OFFICER HAD RI GHTLY TREATED THE ASSESSEES SHARE CAPITAL CREDITED IN THE IMPUGNED ASSESSMENT Y EAR AMOUNTING TO RS.1,02,50,000/- AS UNEXPLAINED CASH CREDITS U/S 68 OF THE ACT. HE HAS TAKEN PAINS TO INVITE OUR ATTENTION TO THE FACT THAT THE ASSESSEES INVESTORS / SUBSCRIBERS, MR. C.N.LYNGDOH IS AN EXEMPT ASSESSEE U/S 10(26) OF THE ACT NOT FILING ANY RETURN OF INCOME AND ALL THIS SUFFICIENT LY INDICATES THAT THE SHARE APPLICATION / PREMIUM AMOUNT IN QUESTION LACKS GENU INENESS / CREDITWORTHINESS. HE FURTHER STATES THAT THE ASSESS EE HAS NOT FILED ANY DOCUMENTARY EVIDENCE AS PER THE ASSESSING OFFICER A S WELL. WE FIND NO MERIT IN REVENUES INSTANT ARGUMENTS. IT HAS COME ON RECO RD THAT THIS ASSESSEE BEFORE US HAD FILED ALL THE DETAILS OF THE EXEMPT S HARE APPLICANT DURING THE ITA NOS. 93-96/GAU/2017 & 91,69,76-77/GAU/17 39-40/ GAU/2017 M/S SMS SMELTERS LTD. VS. DCIT, CIR-3, GAU &JU D CEMENT LTD. V. ACIT CIR-SHILL. PAGE 5 COURSE OF ASSESSMENT. THE ASSESSING OFFICER HAD NOT ISSUED ANY PROCESS EITHER SEC. 131 OR SEC. 133(6) OF THE ACT TO ASSESS EES INVESTOR(S). WE THEREFORE QUOTE HONBLE APEX COURTS LANDMARK DECIS ION IN CIT VS. ORISSA CORPORATION PVT. LTD . (2001) 159 ITR 78 (SC) THAT AN ASSESSEE CAN ONLY FILE ALL OF ITS SUPPORTIVE DOCUMENTS IN FAVOUR OF ITS CLAIM PROVING GENUINENESS AND CREDITWORTHINESS OF THE INVESTOR PARTIES. WE FURTHE R REITERATE THAT THERE IS ALSO NO DENIAL TO THE CIT(A)S CLINCHING FINDING THAT TH E DEPARTMENT HAS ITSELF ACCEPTED ALL OTHER TRANSACTIONS IN MR. LYNGDOHS CA SE. 6. MR. SINGH AT THIS STAGE QUOTES HONBE APEX COURT S VERY RECENT DECISION IN PR.CIT VS. NRA IRON & STEEL CO. (2019) 412 ITR 161 (SC) RESTORING SIMILAR ADDITION MADE BY THE ASSESSING OFFICER TREATING THE CONCERNED TAXPAYERS SHARE APPLICATION MONEY AS UNEXPLAINED CASH CREDITS . WE FIND THAT THE SAID DECISION DOES NOT APPLY IN THE FACTS OF THE INSTANT CASE SINCE THE ASSESSEE BEFORE US HAS ALREADY DISCHARGED ITS ONUS BEFORE TH E ASSESSING OFFICER. THE MERE FACT THAT ITS INVESTOR IS AN EXEMPT ASSESSEE U /S 110(36) DOES NOT GIVE THE IMPUGNED SHARE APPLICATION MONEY THE COLOUR OF UNEXPLAINED CASH CREDITS. WE ACCORDINGLY CONFIRM THE CIT(A)S ACTION DELETING THE IMPUGNED UNEXPLAINED SHARE APPLICATION MONEY OF RS.1,02,50,0 00/-. THE REVENUES INSTANT FIRST APPEAL ITA NO.91/GAU/2017 IS DISMISSE D. 7. NEXT COMES REVENUES APPEAL ITA NO.69/GAU/2017 F OR ASSESSMENT YEAR 2007-08. THE CIT(A)S ORDER UNDER CHALLENGE HA S DELETED SHARE CAPITALS SHARE PREMIUM AND SHARE APPLICATION MONEY ADDITION OF RS.6,69,71,870/-, 11,95,78,050/- AND RS.7,24,50,080/-; RESPECTIVELY V IDE FOLLOWING DETAILED DISCUSSION:- 5.2 I HAVE CONSIDERED THE SUBMISSIONS MADE BY THE APPELLANT BEFORE ME. I HAVE ALSO PERUSED THE ASSESSMENT ORDER AS WELL AS THE RE MAND REPORT SENT BY THE ASSESSING OFFICER ON THIS ISSUE. IN HIS REMAND REPO RT THE ASSESSING OFFICER HAS SIMPLY STATED THAT THE ADDITION WAS MADE ON THE BAS IS OF FINDINGS RECORDED IN THE ASSESSMENT ORDER. HE HAS FURTHER STATED THAT HE HAS NO OBJECTION TO THE ADMISSION OF ANY FRESH OR ADDITIONAL EVIDENCE IF IT IS CONSIDERE D TO BE RELEVANT FOR DISPOSAL OF THE ISSUE. APART FROM THIS, THE ASSESSING OFFICER HAS N OT GIVEN ANY COMMENT ON CERTAIN LEGAL ISSUES RAISED BY THE APPELLANT IN ITS WRITTEN SUBMISSIONS. 5.3 IN ITS WRITTEN SUBMISSIONS THE APPELLANT HAS RA ISED A LEGAL ISSUE REGARDING THE NATURE OF ADDITIONS THAT COULD BE MADE IN AN ASSESS MENT THAT IS TO BE MADE ITA NOS. 93-96/GAU/2017 & 91,69,76-77/GAU/17 39-40/ GAU/2017 M/S SMS SMELTERS LTD. VS. DCIT, CIR-3, GAU &JU D CEMENT LTD. V. ACIT CIR-SHILL. PAGE 6 U/S.153A/153C READ WITH SECTION 143(3) OF THE INCOM E TAX ACT, 1961 IN THE CASE OF A ' NON ABATED ASSESSMENT '. ACCORDING TO THE APPELLANT IT IS NOW A WELL SETTLED PROPOSITION THAT IN RESPECT OF NON- ABATED ASSESSMENT, I.E. WHERE THE PROCEEDINGS HAVE REACHED FINALITY, THE ASSESSMENTS U/S.153A READ WITH SECTION 143(3) OF TH E ACT, HAS TO BE MADE AS WAS ORIGINALLY MADE/ASSESSED AND IN CASE WHERE CERTAIN INCRIMINATING DOCUMENTS HAVE BEEN FOUND INDICATING UNDISCLOSED INCOME, THEN THE ADDITION SHALL ONLY BE RESTRICTED TO THOSE DOCUMENTS/INCRIMINATING MATERIAL AND CLUBB ED ONLY TO THE ASSESSMENT FRAMED ORIGINALLY. IT IS SUBMITTED THAT THE APPELLA NT'S ASSESSMENT FOR THE YEAR UNDER APPEAL HAD ALREADY ATTAINED FINALITY AND HENCE IT W AS A ' NON ABATED ASSESSMENT '. HENCE, THE ADDITION SHOULD HAVE BEEN CONFINED TO AN Y INCRIMINATING MATERIAL FOUND DURING THE SEARCH. IN SUPPORT OF ITS CONTENTION, TH E APPELLANT HAS RELIED UPON THE FOLLOWING CASE LAWS:- I) ALL CARGO GLOBAL LOGISTICS LTD. V/S. DCIT (2012) 137 I.T.D. 287 (MUMBAI)(S.B.) (II) C.I.T. VS. CONTINENTAL WAREHOUSING CORPN. (NGA VA SHEVA) LTD. (2015) 374 ITR 645 (BOM.) (III) MARIGOLD MERCHANDISE PVT. LTD. V/S. D.C.I.T. (2014)164 TTJ 448 (DELHI 'F' BENCH) (IV) JAI STEEL (INDIA) V/S. A.C.I.T. (2013) 259 CTR 281 (RAJASTHAN) (V) A.C.I.T. VS. PRATIBHA INDUSTRIES LTD. (2013) 14 1 I.T.D. 151 (MUMBAI) (VI) A.C.I.T. VS. KAMAL KUMAR S. AGARWAL (2010) 133 TTJ 818 (NAGPUR) (VII) C.I.T. VS. KABUL CHAWLA (2016) 380 I.T.R. 573 (DEL.) (VIII) JAIPURIA INFRASTRUCTURE DEVELOPERS (P) LTD. V/S. A.C.I.T. I.T.A. NOS. 5522 & 5523/DEL/2015 DECIDED BY HON'BLE ITAT, DELHI BENC H 'B', DELHI ON 27-06- 2016 (IX) PRINCIPAL C.I.T. VS. KURELE PAPER MILLS (P) LT D. (2016) 380 I.T.R. 571 (DELHI) (SLP FILED BY THE DEPARTMENT AGAINST THIS J UDGMENT DISMISSED (2016) 380 I.T.R. ST.64) IT IS FURTHER SUBMITTED BY THE APPELLANT THAT NO IN CRIMINATING DOCUMENT/MATERIAL RELATING TO THE SHARE CAPITAL/SHARE PREMIUM WAS FOU ND AND/OR SEIZED IN THE CASE OF THE APPELLANT. THE ASSESSING OFFICER HAS NEITHER RE FERRED TO NOR RELIED UPON ANY SUCH DOCUMENT WHILE MAKING THE ASSESSMENT. 5.4 AS FAR AS MERITS OF THE CASE IS CONCERNED, THE APPELLANT HAS SUBMITTED THE FOLLOWING DOCUMENTS WITH A PRAYER UNDER RULE 46A OF THE INCOME TAX RULES 1962 FOR ADMISSION OF THESE DOCUMENTS AS ADDITIONAL EVIDENCE S: (I) CHART SHOWING NAME AND ADDRESS OF THE SHAREHOLD ERS/APPLICANTS, NO. OF SHARES APPLIED FOR/ALLOTTED FACE VALUE OF SHARES, P REMIUM PAID, MODE OF PAYMENT, PAN NO., CIN NOS. OF THE APPLICANT COMPANI ES. (II) COPIES OF THE APPELLANTS STATEMENTS WITH THE F OLLOWING BANKS SHOWING THE RECEIPT OF SHARE CAPITAL/APPLICATION MONEY: (A) HDFC BANK, H.B. ROAD, GUWAHATI (B) HDFC BANK, GUWAHATI (C) STANDARD CHARTERED BANK, GUWAHATI (III) COPIES OF MEMORANDUM & ARTICLES OF ASSOCIATIO N AND AUDITED BALANCE SHEET IN RESPECT OF CORPORATE SHAREHOLDERS/APPLICANTS. (IV) COPIES OF RETURNS OF ALLOTMENT FILED BY THE AP PELLANT IN RESPECT OF SHARES ALLOTTED DURING THE PREVIOUS YEAR RELEVANT TO THE A SSESSMENT YEAR UNDER APPEAL. THE APPELLANT HAS ALSO POINTED OUT THAT OUT OF THE TOTAL SHARE CAPITAL RS.6,69,71,870/-, WHICH WAS ADDED IN THE TOTAL INCOME OF THE APPELLAN T, AN AMOUNT OF RS.5,40,00,000/- ITA NOS. 93-96/GAU/2017 & 91,69,76-77/GAU/17 39-40/ GAU/2017 M/S SMS SMELTERS LTD. VS. DCIT, CIR-3, GAU &JU D CEMENT LTD. V. ACIT CIR-SHILL. PAGE 7 WAS RECEIVED BY THE APPELLANT IN THE EARLIER YEAR, AS WILL BE EVIDENT FROM THE DETAILS SUBMITTED. HENCE, THE ASSESSING OFFICER ERRED IN LA W AS WELL AS ON FACTS IN MAKING THE ADDITION OF THIS AMOUNT OF RS.5,40,00,000/- IN THE ASSESSMENT YEAR UNDER APPEAL. 5.5 A PERUSAL OF THE CASE LAWS RELIED UPON BY THE A PPELLANT SHOW THAT IN THE CASE OF A NON-ABATED ASSESSMENT I.E. WHERE THE ASSESSMEN T PROCEEDINGS HAVE REACHED FINALITY, THE ASSESSMENTS U/S.153A/153C READ WITH S ECTION 143(3) OF THE INCOME TAX ACT, 1961 HAS TO BE MADE AS WAS ORIGINALLY MADE/ASS ESSED AND IN CASE WHERE CERTAIN INCRIMINATING DOCUMENTS HAVE BEEN FOUND IND ICATING UNDISCLOSED INCOME, THEN THE ADDITION SHALL ONLY BE RESTRICTED TO THOSE DOCUMENT/INCRIMINATING MATERIAL AND CLUBBED TO THE ASSESSMENT MADE ORIGINALLY. THUS , THE SCOPE OF ADDITIONS TO BE MADE IN THE CASE OF A NON-ABATED ASSESSMENT IS WELL DEFINED. 5.6 IN THE CASE OF C.I.T. V/S. KABUL CHAWLA (SUPRA) , HON'BLE DELHI HIGH COURT HELD AS FOLLOWS: AT PAGE 589, 590 'SUMMARY OF THE LEGAL POSITION 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 T HE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UNDER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF T HE ACT, NOTICE UNDER SECTION 153 A (1) WILL HAVE TO BE MANDATORILY ISSUE D TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATE LY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES P LACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DA TE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO B E COMPUTED BY THE AOS AS A FRESH EXERCISE. III THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS I N RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAK ES 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 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 INFORMATION AVAILABLE WITH THE A O WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSES SMENT '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 O N THE BASIS OF SEIZED MATERIAL.' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE CO MPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMEN T CAN BE MADE. THE WORD ASSESS' IN SECTION 153 A IS RELATABLE TO ABATE D PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD 'REASSE SS' TO COMPLETED ASSESSMENT PROCEEDINGS. VI. LNSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, T HE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SE CTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY F OR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIA L EXISTING OR BROUGHT 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 ONLY ON THE BASI S OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR R EQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE CO URSE OF SEARCH WHICH ITA NOS. 93-96/GAU/2017 & 91,69,76-77/GAU/17 39-40/ GAU/2017 M/S SMS SMELTERS LTD. VS. DCIT, CIR-3, GAU &JU D CEMENT LTD. V. ACIT CIR-SHILL. PAGE 8 WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT.' WHILE SO HOLDING, HON'BLE DELHI HIGH COURT HAS TAKE N NOTE OF THE JUDICIAL PRONOUNCEMENTS MADE IN ALL CARGO GLOBAL LOGISTICS L TD. V/S. DCIT (SUPRA), C.I.T. V/S. CONTINENTAL WAREHOUSING CORPN. (NGAVA SHEVA) L TD. (SUPRA), JAI STEEL (INDIA) V/S. ACIT (SUPRA) AND PRINCIPAL C.I.T. V/S. KURELE PAPER MILLS (P) LTD. (SUPRA) AND A NUMBER OF OTHER CASE LAWS. 5.7. IN THE CASE OF PRINCIPAL C.I.T. V/S. KURELE PA PER MILLS (P) LTD. (SUPRA), HON'BLE DELHI HIGH COURT HELD AS FOLLOWS:- AT PAGE 572 1. THE REVENUE HAS FILED THE APPEAL AGAINST AN ORDE R DATED 14.11.2014 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL (ITAT) IN 3761/DEL/2011 PERTAINING TO THE ASSESSMENT YEAR 2002-03. THE QUES TION WAS WHETHER THE LEARNED CIT (APPEALS) HAD ERRED IN LAW AND ON THE F ACTS IN DELETING THE ADDITION OF RS.89 LACS MADE BY THE ASSESSING OFFICE R UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 ('ACT') ON BOGUS SHARE CAPITAL . BUT, THE ISSUE WAS WHETHER THERE WAS ANY INCRIMINATING MATERIAL WHATSO EVER FOUND DURING THE SEARCH TO JUSTIFY INITIATION OF PROCEEDINGS UNDER S ECTION 153A OF THE ACT. 2.THE COURT FINDS THAT THE ORDER OF THE CIT (APPEAL S) REVEALS THAT THERE IS A FACTUAL FINDING THAT ' NO INCRIMINATING EVIDENCE RELATED TO SHARE CAPITAL ISSUED WAS FOUND DURING THE COURSE OF SEARCH AS IS MANIFEST FROM THE ORDER OF THE AO. ' CONSEQUENTLY, IT WAS HELD THAT THE AO WAS NOT JUS TIFIED IN INVOKING SECTION 68 OF THE ACT FOR THE PURPOSES OF MAKING ADDITIONS ON ACCOUNT OF SHARE CAPITAL. 3. AS FAR AS THE ABOVE FACTS ARE CONCERNED, THERE I S NOTHING SHOWN TO THE COURT TO PERSUADE AND HOLD THAT THE ABOVE FACTUAL D ETERMINATION IS PERVERSE. CONSEQUENTLY, AFTER CONSIDERING ALL THE FACTS AND C IRCUMSTANCES OF THE CASE, THE COURT IS OF THE OPINION THAT NO SUBSTANTIAL QUE STION OF LAW ARISES IN THE IMPUGNED ORDER OF THE ITAT WHICH REQUIRES EXAMINATI ON. 4.THE APPEAL IS, ACCORDINGLY, DISMISSED.' HON'BLE SUPREME COURT HAS DISMISSED THE SPECIAL LEA VE PETITION FILED BY THE DEPARTMENT AGAINST THIS JUDGMENT AS REPORTED AT (20 16) 380 I.T.R. (ST.) 64. 5.8 IN THE CASE OF JAIPURIA INFRASTRUCTURE DEVELOPE RS (P) LTD. V/S. ACIT (I.T.A. NOS. 5522 & 5523/DEL/2015) WHICH WAS DECIDED BY HON 'BLE ITAT, BENCH 'B' DELHI ON 27-06-2016, HON'BLE TRIBUNAL HAS HELD AS FOLLOWS:- '21. HOWEVER, IN THE BACKDROP OF AFORESAID UNDISPUT ED FACTS DISCUSSED IN THE PRECEDING PARAS AND LAW LAID DOWN BY HON'BLE JURISD ICTIONAL HIGH COURT IN THE CASE CITED AS KABUL CHAWLA (SUPRA), WE ARE OF THE C ONSIDERED VIEW THAT COMPLETED ASSESSMENT INTERFERED WITH BY THE AO U/S. 153A AND CONFIRMED BY THE ID. CIT (A) ARE NOT SUSTAINABLE IN THE EYES OF LAW FOR THE FOLLOWING REASONS:- (I) THAT IN THE INSTANT CASE, UNDISPUTEDLY THE AO H AS NOT MADE ASSESSMENT ON THE BASIS OF INCRIMINATING MATERIAL U NEARTHED DURING SEARCH AND SEIZURE OPERATION CONDUCTED U/S.1 32 RATHER PROCEEDED U/S 153A OF THE ACT ON THE BASIS OF SOME PRE- SEARCH ENQUIRIES TO MAKE AN ADDITION AS HAS SPECIFI CALLY BEEN RECORDED IN PARA 6 OF THE ASSESSMENT ORDER THAT, 'P RE SEARCH ENQUIRIES REVEALED THAT MIS JAIPURIA INFRASTRUCTURE DEVELOPERS PVT. LTD., THE FLAGSHIP COMPANY INVOLVED IN THE REA L ESTATE BUSINESS OF THE S.K. JAIPURIA GROUP IS INDULGED IN INFLATING THE COST OF THE PROJECT BY DEBITING BOGUS EXPENSES BY R AISING BILLS FROM THE NON-EXISTING PARTIES OR THE ENTRY PROVIDER S.' ITA NOS. 93-96/GAU/2017 & 91,69,76-77/GAU/17 39-40/ GAU/2017 M/S SMS SMELTERS LTD. VS. DCIT, CIR-3, GAU &JU D CEMENT LTD. V. ACIT CIR-SHILL. PAGE 9 (II) THAT THE RATIO OF THE JUDGMENT IN CASE OF KABU L CHAWLA (SUPRA) IS REQUIRED TO BE EXTRACTED BY PERUSING THE JUDGMEN T IN ENTIRETY AND NOT BY PICKING UP THE FAVOURABLE SENTENCES AND BY I GNORING THE UNFAVORABLE ONE. HIGHLIGHTED PORTION OF PARA 37 (IV ), (V), (VI) & (VII) OF KABUL CHAWLA (SUPRA) IS CRUX OF THE ISSUE INVOLVED WHICH IS APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CASE; (II) THAT THE RATIO OF THE JUDGMENT KABUL CHAWLA (S UPRA) IS THAT IN ALL CIRCUMSTANCES, COMPLETED ASSESSMENT CAN BE INTE RFERED WITH BY THE AO U/S 153A ONLY ON THE BASIS OF INCRIM INATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH; (IV) THAT NOT ON THIS, THE ADDITION IN THIS CASE HA S BEEN MADE BY THE AO U/S 153A ON THE SOLE GROUND THAT ASSESSEE HAS FAILE D TO PRODUCE THE PARTIES WITH WHOM THE ASSESSEE COMPANY HAS TRANSACT ED DURING THE YEAR UNDER ASSESSMENT WHO HAVE FAILED TO TURN UP DE SPITE THE ISSUE OF NOTICE U/S 133 (6) OF THE ACT; (V) THAT THE CONTENTION OF THE ID DR THAT THE ASSES SMENT QUA THE AY 2006-07 WAS PENDING AS ON DATE OF SEARCH AS MERE IS SUANCES OF ACKNOWLEDGEMENT BY THE MINISTERIAL STAFF DOES NOT I MPLY THAT ASSESSMENT HAS BEEN COMPLETED, IS NOT TENABLE IN TH E FACE OF UNDISPUTED FACT THAT WHEN WITHIN THE PRESCRIBED PER IOD, NO NOTICE U/S 143 (2) HAS BEEN ISSUED PRIOR TO THE DATE OF SEARCH , ASSESSMENT IS DEEMED TO BE COMPLETED; (VI) THAT THERE IS NOT AN IOTA OF MATERIAL WITH THE AO TO INITIATE PROCEEDINGS U/S 153A WHAT TO TALK OF INCRIMINATING SEIZED MATERIAL; (VII) THAT THE ID. CIT (A) AFFIRMED THE ASSESSMENT ORDER BY RELYING UPON THE DECISIONS RELIED UPON BY HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE CITED AS FILATEX INDIA LTD. VS. CIT-IV - (2014 ) 49 TAXMAN.COM 465 (DELHI) WHICH HAS BEEN DISTINGUISHED IN THE KAB UL CHAWLA (SUPRA) ON THE GROUND THAT IN THE SAID CASE, THERE WAS SOME MATERIAL UNEARTHED DURING THE SEARCH WHEREAS IN THE INSTANT CASE THERE IS ADMITTEDLY NO INCRIMINATING MATERIAL UNEARTHED DURI NG THE SEARCH TO PROCEED U/S 153A. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, WE ARE OF THE CONSIDERED VIEW THAT WITHOUT ENTERING INTO THE MERITS OF THIS CASE, ADDITION MADE IN BOTH THE CASES U/S 153A READ WITH SECTION 143(3) IS NOT SUSTAINABLE IN THE EYES OF LAW, HENCE DELETED. CONSEQUENTLY, BOTH THE APPEALS FILED BY THE ASSESSEE ARE HEREBY, ALLOWED .' 5.9 AN ANALYSIS OF THE ABOVE CASE LAWS RELIED UPON BY THE APPELLANT CLEARLY SHOW THAT THE COMPLETED ASSESSMENTS I.E. THE NON-AB ATED ASSESSMENTS CAN BE TINKERED WITH ONLY ON THE BASIS OF ANY INCRIMINA TING MATERIAL FOUND DURING THE COURSE OF SEARCH AND NOT OTHERWISE. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, I AM OF THE CONSIDERED VIEW THAT THE ADDITIO NS OF RS.6,69,71,870/-, RS.11,95,78,050/- AND RS.7,24,50,080/- MADE ON ACCO UNT OF SHARE CAPITAL, SHARE PREMIUM AND SHARE APPLICATION RESPECTIVELY AR E NOT SUSTAINABLE IN THE EYES OF LAW. HENCE, THESE ARE DELETED. 5.10 EVEN ON THE MERITS ALSO, I FIND THAT THE ADDIT ION MADE BY THE ASSESSING OFFICER IS NOT SUSTAINABLE. 5.11 I FIND THAT THE APPELLANT HAD SUBMITTED THE DE TAILS OF SHARE CAPITAL AND SHARE PREMIUM IN COURSE OF THE ASSESSMENT PROCEEDIN GS VIDE ITS LETTER DATED 18.02.2015. THIS FACT HAS BEEN NOTED BY THE ASSESSI NG OFFICER IN PARA 11(A) OF HIS ORDER. THE APPELLANT COULD NOT SUBMIT THE DO CUMENTS IN SUPPORT OF ITA NOS. 93-96/GAU/2017 & 91,69,76-77/GAU/17 39-40/ GAU/2017 M/S SMS SMELTERS LTD. VS. DCIT, CIR-3, GAU &JU D CEMENT LTD. V. ACIT CIR-SHILL. PAGE 10 SHARE CAPITAL/PREMIUM AS THESE WERE NOT READILY TRA CEABLE AT THE TIME OF ASSESSMENT PROCEEDINGS. THE APPELLANT HAS FURTHER C ONTENDED THAT IT WAS NOT GIVEN PROPER AND MEANINGFUL OPPORTUNITY OF BEING HE ARD TO PRODUCE THE DOCUMENTS IN SUPPORT OF SHARE CAPITAL/PREMIUM. THE APPELLANT HAS SUBMITTED BEFORE ME THE FOLLOWING DETAILS/DOCUMENTS IN SUPPOR T OF THE SHARE CAPITAL /PREMIUM: - (I) CHART SHOWING NAME & ADDRESS OF THE SHAREHOLDER S/APPLICANTS, NO. OF SHARES APPLIED FOR/ALLOTTED FACE VALUE OF SHARES, P REMIUM PAID, MODE OF PAYMENT, PAN NO., CIN NOS. OF THE APPLICANT COMP ANIES. (II) COPIES OF THE APPELLANT'S STATEMENTS WITH THE FOLLOWING BANKS SHOWING THE RECEIPT OF SHARE CAPITA [/APPLICATION MONEY: - (A) HDFC BANK, GUWAHATI (B) HDFC BANK, GUWAHATI (C) STANDARD CHARTERED BANK, GUWAHATI (III) COPIES OF MEMORANDUM & ARTICLES OF ASSOCIATIO N AND AUDITED BALANCE SHEETS IN RESPECT OF CORPORATE SHAREHOLDERS/APPLICA NTS, BANK STATEMENTS ETC. (IV) COPIES OF RETURNS OF ALLOTMENT FILED BY THE AP PELLANT IN RESPECT OF SHARES ALLOTTED DURING THE PREVIOUS YEAR RELEVANT TO THE A SSESSMENT YEAR UNDER APPEAL. A PRAYER UNDER RULE 46A OF THE INCOME TAX RULES, 19 61 WAS MADE BY THE APPELLANT FOR ADMISSION OF THESE DOCUMENTS AS ADDITIONAL EVID ENCE. THESE DOCUMENTS WERE SENT TO THE ASSESSING OFFICER WHILE CALLING FOR HIS REMAND REPORT. AS STATED ABOVE, THE ASSESSING OFFICER HAS NOT OBJECTED TO THE ADMISSION OF THESE ADDITIONAL EVIDENCES. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE , I ADMIT THE ADDITIONAL EVIDENCES NOW PRODUCED BY THE APPELLANT AS THESE ARE REQUIRED TO BE ADMITTED FOR DOING SUBSTANTIAL JUSTICE IN THE MATTER. 5.12 THE APPELLANT HAS FILED COMPLETE DETAILS OF SH AREHOLDER COMPANIES VIZ. - THEIR NAMES & ADDRESSES, NO. OF SHARES APPLIED FOR/ALLOTT ED, FACE VALUE OF SHARES, PREMIUM PAID, MODE OF PAYMENT, THEIR PAN NO., CIN NO., COPI ES OF MEMORANDUM & ARTICLES OF ASSOCIATION, AUDITED BALANCE SHEETS AND COPY OF RET URN OF ALLOTMENT. A PERUSAL OF THE BANK STATEMENTS FILED BY THE APPELLANT SHOW THAT AL L THE TRANSACTION HAVE TAKEN PLACE THROUGH BANKING CHANNELS. ON EXAMINATION OF THESE D ETAILS/DOCUMENTS, I DO NOT FIND ANY REASON TO DOUBT THE IDENTITY OF THE SHARE HOLDE RS, THEIR CREDIT WORTHINESS AND THE GENUINENESS OF THE TRANSACTIONS. IT IS SETTLED LAW THAT ONCE AN ASSESSEE PROVIDES DE TAILS REGARDING IDENTITY OF THE SHARE APPLICANTS/HOLDERS, THEIR PERMANENT ACCOUNT NUMBERS , BANK DETAILS, BALANCE SHEETS, A/D RECEIPT IN SUPPORT OF FILING OF INCOME TAX RETU RNS, COPIES OF MEMORANDUM & ARTICLES OF ASSOCIATION ETC., THE SHARE APPLICATION MONEY/CAPITAL CANNOT BE TREATED AS UNEXPLAINED IN THE HANDS OF THE ASSESSEE. THIS VIEW HAS BEEN TAKEN IN THE FOLLOWING CASES: (I) PRINCIPAL CIT. V/S. SOFT-LINE CREATIONS PVT. L TD. (2016) 387 ITR 636 (DELHI) (II) C.I.T. V/S. KAMDHENU STEL & ALLOYS LTD. (2014) 361 ITR 220 (DELHI) (III) C.I.T. V/S. LOVELY EXPORTS PVT. LTD. (2009) 3 19 ITR (ST.) 5 (S.C.) (IV) C.I.T. V/S. SAMEER BIO-TECH PVT. LTD. (2010) 3 25 ITR 294 (DELHI) (V) C.I.T. V/S. FIVE VISION PROMOTERS PVT. LTD. (20 16) 380 ITR 289 (DELHI) (VI) C.I.T. V/S. DWARKADHISH INVESTMENT PVT. LTD. ( 2011) 330 ITR 298 (DELHI) (VII) C.I.T. V/S. DIVINE LEASING & FINANCE LTD. (20 08) 299 ITR 268 (DELHI) ITA NOS. 93-96/GAU/2017 & 91,69,76-77/GAU/17 39-40/ GAU/2017 M/S SMS SMELTERS LTD. VS. DCIT, CIR-3, GAU &JU D CEMENT LTD. V. ACIT CIR-SHILL. PAGE 11 IN VIEW OF THE ABOVE ALSO, THE ADDITION MADE IN RES PECT OF SHARE CAPITAL AND SHARE PREMIUM CANNOT BE SUSTAINED. THIS GROUND OF APPEAL IS, THEREFORE, ALLOWED. 8. IT IS THEREFORE CLEAR THAT THE CIT(A) HAS QUASHE D THE IMPUGNED ASSESSMENT(S) ON THE GROUND THAT THE DEPARTMENT HAD NOT FOUND OR SEIZED ANY INCRIMINATING MATERIAL AGAINST THE ASSESSEE DURING THE COURSE OF SEARCH IN ISSUE. VARIOUS HIGH COURT(S) IN CIT VS KABUL CHAWLA (2016) 380 ITR 573 (DEL), PCIT VS. M/S SALASAR STOCK BROKING LTD IN GA NO. 1929/2016 ITAT NO.264 OF 2016 DATED 24.08.2016 (CAL), PCIT VS DIPAK J PANCHAL (2017) 397 ITR 153 (GUJ) SUPPORT THE ASSESSEES CASE QUA THE INSTANT LEGAL ASPECT. MR. SINGH HAS QUOTED E.N. GOPAKUMAR VS. CIT (2017) 390 ITR 131 (KER) AND CIT VS. KESARWANI ZARDA BHANDER INCOME-TAX APPEALS NO.270/2014 DATED 06.09.2016 (ALLAHABAD) THAT THE PURPOSE OF THE IMPU GNED SEC. 153A PROCEEDINGS IS TO ASSESS TOTAL INCOME OF THE SEARCH ED TAXPAYER RATHER THAN THAT BASED ON INCRIMINATING MATERIAL ONLY. HONBLE JURISDICTIONAL HIGH COURT HAS ADMITTEDLY NOT ADJUDICATED UPON THE INSTANT LEGAL I SSUE AS INFORMED BY THE LEARNED SENIOR COUNSEL AS WELL AS THE DEPARTMENT. W E THEREFORE QUOTE HONBLE APEX COURTS DECISION IN CIT VS. M/S VEGETABLE PRODUCTS LTD . (1973) 88 ITR 192 (SC) THAT THE VIEW FAVOURING THE ASSESSEE / TAX PAYER HAS TO BE ADOPTED IN SUCH A BACKDROP INVOLVING CONFLICTING JUDICIAL OPIN IONS OF VARIOUS HON'BLE HIGH COURTS AND ACCORDINGLY HOLD THAT THE CIT(A) HAS RIG HTLY QUASHED THE IMPUGNED ASSESSMENT SINCE NOT BASED ON ANY INCRIMINATING MAT ERIAL FOUND OR SEIZED DURING THE CURSE OF SEARCH. THAT BEING THE CASE, TH E REVENUES PLEADING ON MERITS ARE RENDERED INFRUCTUOUS. ITS APPEAL ITA NO. 69/GAU/2017 IS REJECTED. 9. NEXT COME THE LAST TWO ASSESSMENT YEARS 2012-13 AND 2013-14 IN REVENUES APPEAL(S) ITA NO.76 & 77/GAU/2017. WE NOT ICE THAT CIT(A) HAS GRANTED TELESCOPING BENEFIT TO THE ASSESSEE REGARDI NG THE INCOME DISCLOSED DURING THE COURSE OF SEARCH WHILST DELETING THE ADD ITION AMOUNT OF RS.1,34,40,00/- TO THE EXTENT OF RS.76 LAC IN FORME R AND RS.89,60,000/- IN THE LATTER ASSESSMENT YEAR. THE REVENUE IS FAIR ENOUGH IN NOT DISPUTING THE FACT THAT THERE IS NO EVIDENCE ON RECORD INDICATING THIS AMOUNT FORMING PART OF ITA NOS. 93-96/GAU/2017 & 91,69,76-77/GAU/17 39-40/ GAU/2017 M/S SMS SMELTERS LTD. VS. DCIT, CIR-3, GAU &JU D CEMENT LTD. V. ACIT CIR-SHILL. PAGE 12 ASSESSEES UNDISCLOSED INCOME. THE CIT(A)S DETAILE D DISCUSSION QUA THE INSTANT IDENTICAL ISSUE READS AS UNDER:- 7.1 BEFORE ME THE APPELLANT VIDE ITS WRITTEN SUBMIS SION DATED 02.02.2016 HAS CONTENDED AS FOLLOWS: '5. GROUND NO.5 (ADDITION ON ACCOUNT OF ALLEGED UND ISCLOSED EXPENDITURE RS.1,34,40,000/-): (I) WHILE MAKING THE ASSESSMENT THE ASSESSING OFFIC ER HAS ADDED AN AMOUNT OF RS.1,34,40,000/- IN THE TOTAL INCOME OF THE APPE LLANT ON ACCOUNT OF ALLEGED UNEXPLAINED EXPENDITURE. (II) THE RELEVANT FACTS ARE THAT IN THE COURSE OF S EARCH & SEIZURE OPERATIONS CONDUCTED AT THE OFFICE CUM FACTORY PREMISES OF APP ELLANT AT LEKHI VILLAGE, NAHADAGUN, ARUNACHAL PRADESH, BOOKS OF ACCOUNTS MAR KED., AS 'HD-4' (HARD DRIVE) WAS SEIZED VIDE ANNEXURE 'A' TO THE PANCHNAR NA DATED 07.12.2012. THE AFORESAID SEIZED MATERIAL MARKED AS 'HD-4' CONT AINED A TALLY ACCOUNT NAMED 'SSI' CONTAINING BALANCE SHEET AND PROFIT AND LOSS ACCOUNT FOR THE F.Y. 2011-11 IN THE AFORESAID SEIZED MATERIAL A DEBIT EN TRY OF RS.1,34,40,000/- WAS CLAIMED A EXPENDITURE WHICH ACCORDING TO THE ASSESS ING OFFICER DID NOT APPEAR IN ANY OF THE DISCLOSED ACCOUNT OF THE GROUP . HE THEREFORE TREATED THE SAID AMOUNT AS UNDISCLOSED EXPENDITURE OF THE APPEL LANT. (III) IT IS RESPECTFULLY SUBMITTED THAT THE AFORESA ID SEIZED MATERIAL APPEARS TO BE COMBINED ACCOUNTS OF THE VARIOUS GROUP/CONCERN. IN THE ABSENCE OF SUPPORTING DOCUMENT/DETAILS WHICH HAD BEEN MISPLACE D, WE ARE UNABLE TO RECONCILE THE ABOVE TRANSACTIONS. HOWEVER, FOR THIS ASSESSMENT YEAR, WE HAVE MADE A D ISCLOSURE OF RS.36,00,000/-, WE THEREFORE, REQUEST THAT, WE SHOU LD BE ALLOWED THE BENEFIT OF SET OFF TO THE EXTENT RS,76,00,000/- .AGAINST TH E AFORESAID ADDITION. 7.2 I HAVE CONSIDERED THE SUBMISSIONS MADE BEFORE M E. I HAVE ALSO PERUSED THE ASSESSMENT ORDER AS WELL AS THE REMAND REPORT SENT BY THE ASSESSING OFFICER ON THIS ISSUE. IN ITS WRITTEN SUBMISSION THE APPELLANT HAS MADE A GENERAL SUBMISSION TO THE EFFECT THAT THE SEIZED MATERIAL ' HD-4' APPEARED TO BE A COMBINED ACCOUNT OF VARIOUS GROUP CONCERNS. THE APPELLANT HAS FURTHER SUBMITTED THAT IN THE ABSENCE OF SUPPORTING DOCUMENT/DETAILS, WHICH WAS MISPLACED, THE APPELLAN T WAS UNABLE TO RECONCILE THE ABOVE TRANSACTIONS. THE APPELLANT HAS HOWEVER PRAYE D FOR ALLOWING THE BENEFIT OF SET OFF OF THE DISCLOSURE OF RS.76,00,000/- MADE BY THE APPELLANT IN THE RETURN SUBMITTED U/S.153A OF THE INCOME TAX ACT, 1961. I FIND THAT IN PARA 11 OF THE ASSESSMENT ORDER THE ASSESSING OFFICER HAS CATEGORICALLY MENTIONED THAT THE APPELLANT HAS SHOWN ADDITIONAL I NCOME OF RS,76,00,000/- IN ITS RETURN OF INCOME, WHICH WAS DISCLOSED BY SRI RATAN SHARMA DURING THE COURSE OF SEARCH. FROM THE ASSESSMENT ORDER I FIND THAT THOUG H THE ASSESSING OFFICER HAS INCLUDED THE DISCLOSURE OF ADDITIONAL INCOME OF RS. 76,00,000/- IN THE TOTAL INCOME OF THE APPELLANT, HE HAS NOT ALLOWED THE BENEFIT OF SE T OFF OF THIS AMOUNT AGAINST THE ADDITIONS MADE BY HIM IN THE TOTAL INCOME OF THE AP PELLANT. IT IS A SETTLED PROPOSITION THAT THE INCOME DISCLOSED BY AN ASSESSEE IS AVAILAB LE TO HIM FOR THE PURPOSE OF EXPLAINING OTHER ADDITIONS/INVESTMENT. THIS VIEW HA S BEEN TAKEN BY THE HON'BLE ITAT ' INDORE BENCH ' IN THE CASE OF EAGLE SEEDS & BIOTECH LTD. V/S. AC IT - 100 ITD 300, BY THE HON'BLE ITAT (PUNE BENCH) IN THE CASE OF KAN TILAL & BROTHERS V/S. AC1T 52 ITD 412 AND HON'BLE MADRAS HIGH COURT IN THE CASE O F CIT V/S. K.S. GURUSWAMY NADAR & SONS - 149 ITR 127 (MADRAS). I, THEREFORE D IRECT THE ASSESSING OFFICER TO ALLOW THE BENEFIT OF THE SET OFF OF RS.76,00,000/- TO THE APPELLANT AGAINST THE ADDITION OF RS,1,34,40,000/-. THE APPELLANT THUS GETS RELIEF OF RS.76,00,000/- AND THE BALANCE ITA NOS. 93-96/GAU/2017 & 91,69,76-77/GAU/17 39-40/ GAU/2017 M/S SMS SMELTERS LTD. VS. DCIT, CIR-3, GAU &JU D CEMENT LTD. V. ACIT CIR-SHILL. PAGE 13 ADDITION OF RS.54,40,000/- IS SUSTAINED. THIS GROUN D OF APPEAL IS, THEREFORE, PARTLY ALLOWED . 10. WE FIND NO SUBSTANCE IN REVENUES INSTANT GRIEV ANCE AS THE PURPOSE OF TELESCOPING IS TO AVOID DOUBLE ADDITION QUA THE VER Y INCOME IN THE HANDS OF TAXPAYER AS HELD BY THE HONBLE APEX COURTS LANDMA RK DECISION IN ANANTHARAM VEERASINGHAIAH AND CO. VS. CIT (1980) 123 ITR 457 (SC). COUPLED WITH THIS, THE ASSESSEES DISCLOSURE OF ITS TWIN UNDISCLOSED I NCOME(S) STANDS ACCEPTED BY THE DEPARTMENT ITSELF. WE CONCLUDE IN THESE FACT S DENIED OF THE IMPUGNED TELESCOPING BENEFIT TO THE ASSESSEE WOULD AMOUNT TO A DOUBLE ADDITION. MORE SO WHEN ITS BOOK TREATMENT THEREOF UNDER BUSINESS I NCOME HEAD HAS ATTAINED FINALITY. THESE TWO REVENUES APPEALS ITA NO.76 & 7 7/GAU/2017 FAIL ACCORDINGLY. 11. SAME ORDER TO FOLLOW IN LATTER ASSESSEE JUD CEM ENT LTDS TWO APPEALS ITA NO.39-40/GAU/2017 CHALLENGING CORRECTNESS OF BO TH THE LOWER AUTHORITIES ACTION ADDING SIMILAR SHARE APPLICATION MONEY(IES) OF RS.20 LAC AND RS.36 LAC; ASSESSMENT-WISE, RESPECTIVELY NOT BASED ON ANY INCR IMINATING MATERIAL FOUND OR SEIZED DURING THE COURSE OF SEARCH IN ISSUE DATE D 21.03.2013. THESE TWO ASSESSEES APPEALS ARE ALLOWED IN VIEW OF OUR FOREG OING DETAILED DISCUSSIONS. 12. TO SOME UP, FIRST ASSESSEES FOUR APPEAL(S) 93- 96/GAU/2017 ARE DISMISSED AS WITHDRAWN. THE REVENUES AS MANY APPEAL(S) ITA NO.91,69, 76 & 77/GAU/2017 ARE DISMISSED. LATTER ASSESSEES APPE ALS ITA NO.39- 40/GAU/2017 ARE ALLOWED. ORDERED ACCORDINGLY. A COPY OF THIS ORDER BE PLACED IN THE RESPECTIVE CASE FILES . ORDER PRONOUNCED IN ACCORDANCE WITH RULE 34(3) OF THE ITAT RULES BY PUTTING ON NOTICE BOARD ON 06/09/2019 SD/- SD/- ( ) (&' ) ( A.L.SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) GUWAHATI, *DKP (- 06 / 09 /201 9 ITA NOS. 93-96/GAU/2017 & 91,69,76-77/GAU/17 39-40/ GAU/2017 M/S SMS SMELTERS LTD. VS. DCIT, CIR-3, GAU &JU D CEMENT LTD. V. ACIT CIR-SHILL. PAGE 14 / COPY OF ORDER FORWARDED TO:- 1 . /ASSESSEE-M/S SMS SMELTERS LTD. NH 52A, LEKHI VILLA GE, NAHARLAGUN DIST. PAPUMPARE, ARUNACH AL PRADESH/JUD CEMENT LTD. N.H.44, LUMPSHONG, WAHIAJIER, DIST. J AINTIA HILLS, MEGHALAYA 2. /REVENUE-DCIT, CIR-3, 7 TH FL, AAYAKAR BHAWAN, G.S. ROAD, CHRISTIAN BASTI, GUWAHATI-781005, AS SAM/ACIT, CIRCLE-SHILLONG 3. 3 4 9 / CONCERNED CIT GUWAHATI 4. 4- / CIT (A) GUWAHATI/SHILLONG 5. < ''3, 3, 9 / DR, ITAT, GUWAHATI 6. B / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR. PRIVATE SECRETARY (ON TOUR) 3,