Sree Gopalakrishna Fabrics, Salem V. DCIT, Salem

ITA 790/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96415 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2015
• Appeal Filed By: Assessee
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 13-04-2015
• Court: TRIBUNAL
• Department Lawyers: DR B NISCHAL
• Assessee Lawyers: S SRIDHAR ERODE
• Keywords: Income from undisclosed sources; Retraction
• Section: 143(3); 142(1); 133A; 153A; 132; 15; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI , . ! ' , # '$ % [ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ] ./ I.T.A.NOS.788 TO 794/MDS/2015 / ASSESSMENT YEARS : 2005-06 TO 2011-12 M/S SREE GOPALAKRISHNA FABRICS 64, PULIKUTHI MAIN ROAD GUHAI, SALEM - 6 VS. THE DY. COM MISSIONER OF INCOME-TAX CENTRAL CIRCLE SALEM [PAN AALFS 8236 P] ( &' / APPELLANT) ( ()&' /RESPONDENT) ./ I.T.A.NOS.994 & 995/MDS/2015 & C.O.NOS. 87 & 88/MDS/2015 / ASSESSMENT YEARS : 2007-08 AND 2005-06 THE DY. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE SALEM VS. M/S SREE GOPALAKRISHNA FABRICS 64, PULIKUTHI MAIN ROAD GUHAI, SALEM - 6 (APPELLANT) (RESPONDENT /CROSS OBJECTOR ) ASSESSEE BY : SHRI S. SRIDHAR, ADVOCATE (ERODE) DEPARTMENT BY : DR. B. NISCHAL, JCIT / DATE OF HEARING : 16 - 11 - 2015 / DATE OF PRONOUNCEMENT : 27 - 1 1 - 2015 ITA NOS.788/15 ETC :- 2 -: * / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THE ASSESSEE HAS FILED APPEALS FOR ASSESSMENT YEARS 2005- 06 TO 2011-12 AGAINST DIFFERENT ORDERS OF THE COMMI SSIONER OF INCOME- TAX (APPEALS), CHENNAI. THE REVENUE HAS ALSO FILED APPEALS AND THE ASSESSEE HAS FILED CROSS OBJECTIONS FOR ASSESSMENT YEARS 2005-06 AND 2007-08. SINCE THE ISSUES INVOLVED ARE COMMON IN N ATURE, THESE APPEALS ARE CLUBBED TOGETHER, HEARD TOGETHER AND DI SPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENG AGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF TEXTIL E FABRICS IN THE NAME AND STYLE OF M/S SREE GOPALAKRISHNA FABRICS AT SALEM. THERE WAS A SURVEY U/S 133A OF THE ACT AT THE BUSINESS P REMISES OF THE ASSESSEE ON 9.12.2010. SUBSEQUENTLY, IT WAS CONVER TED INTO SEARCH ACTION U/S 132 BOTH AT THE RESIDENCE AND BUSINESS PREMISES OF THE ASSESSEE ON 28.12.2010. DURING THE COURSE OF SEARC H ACTION, VARIOUS MATERIALS WERE FOUND AND SEIZED. ACCORDINGLY, STAT EMENT U/S 132(4) OF THE ACT WAS RECORDED. CONSEQUENT TO THIS, NOTIC ES U/S 153A/153C OF THE ACT WERE ISSUED FOR THE ASSESSMENT YEARS 200 5-06 TO 2011-12. THE DETAILS OF RETURN OF INCOME FILED U/S 139(1) A ND IN RESPONSE TO ITA NOS.788/15 ETC :- 3 -: NOTICE U/S 153C OF THE ACT FOR THESE ASSESSMENT YE ARS I.E 2005-06 TO 2011-12 ARE AS FOLLOWS: ASSESSMENT YEAR RETURNS OF INCOME FILED U/S 139 RETURNS OF INCOME U/S 153A/153C ADDITIONAL INCOME OFFERED U/S 153A/153C ` DATE OF FILING INCOME RETURNED ` DATED OF FILING INCOME RETURNED ( ` ) 2005 - 06 10.10.2005 79,807 28.06.2012 1,53,507 73,700 2006 - 07 20.10.2006 2,98,074 28.06.2012 5,08,072 2,09,998 2007 - 08 31.10.2007 8,51,570 28.06.2012 12,71,630 4,20,060 2008 - 09 29.9.2008 10,42,820 28.06.2012 10,98,532 55,712 2009 - 10 20.09.2009 7,32,510 28.06.2012 10,80,650 3,48,140 2010 - 11 25.09.2010 8,50,940 28.06.2012 11,47,590 2,96,650 2011 - 12 28.06.2012 17,81,030 17,81,030 3. HOWEVER, DURING THE COURSE OF ASSESSMENT, ONE SHRI N. RAJENDRAN FILED AN AFFIDAVIT DATED 13.3.2012 RETRAC TING THE DISCLOSURE MADE U/S 132(4) OF THE ACT. THE ASSESSING OFFICER OVERLOOKING THE RETRACTED STATEMENT, MADE ADDITIONS IN THESE ASSESS MENT YEARS TOWARDS INFLATION OF EXPENSES IN RESPECT OF STAFF S ALARY, CALENDARING, CLEANING AND WASHING CHARGES AND PURCHASES FOR THES E ASSESSMENT YEARS AND HAS ALSO NOT CONSIDERED THE SET OFF OF ` 1.75 CRORES IN ASSESSMENT YEAR 2005-06 AND ` 1.25 CRORES IN ASSESSMENT YEAR 2007-08: ITA NOS.788/15 ETC :- 4 -: 4. THE ASSESSING OFFICER OBSERVED IN HIS ORDER THAT DU RING THE COURSE OF SEARCH, SHRI N. RAJENDRAN, PARTNER OF THE FIRM, M/S SREE GOPALAKRISHNA FABRICS, IN HIS SWORN STATEMENT DATED 20.1.2011 WHILE REPLYING TO QUESTION NOS.8,9 & 10, STATED THAT HUGE LOSS WAS INCURRED IN M/S FABRIC STYLE INTERNATIONAL AND THE QUANTUM O F LOSS IS OF ` 1.75 CRORES DURING THE FINANCIAL YEAR 2004-05 AND THIS H AS BEEN MET OUT OF UNACCOUNTED INCOME GENERATED FROM THE BUSINESS OF ASSESSEE, M/S SREE GOPALAKRISHNA FABRICS. THIS LOSS ADJUSTED WAS DISALLOWED BY THE ASSESSING OFFICER IN ASSESSMENT YEAR 2005-06. SIMI LARLY, WHILE MAKING ADDITION OF ` 1.25 CRORES IN ASSESSMENT YEAR 2007-08 THE ASSESS ING OFFICER HAS OBSERVED THAT DURING THE COURSE OF SEAR CH SHRI N. RAJENDRAN, PARTNER OF THE FIRM IN HIS SWORN STATEME NT RECORDED ON 20.1.2011 WHILE REPLYING TO QUESTION NOS. 8, 9 & 10 STATED THAT HUGE LOSS WAS INCURRED IN M/S LENNEX INDIA, CHENNAI, AND THE QUANTUM LOSS WAS ` 1.25 CRORES DURING THE FINANCIAL YEAR 2006-07. TH IS HAS BEEN MET OUT OF THE UNACCOUNTED INCOME GENERATED FROM TH E BUSINESS OF M/S GOPALAKRISHNA FABRICS. THE SAME WAS DISALLOWED BY THE ASSESSING OFFICER AND FRAMED ASSESSMENTS AS FOLLOWS: ASSESSMENT YEAR AMOUNT 2005 - 06 1,79,41,047 2006 - 07 3,95,388 ITA NOS.788/15 ETC :- 5 -: 200 7 - 08 1,32,40,915 2008 - 09 8,93,702 2009 - 10 9,88,715 2010 - 11 7,86,849 2011 - 12 10,07,771 5. HOWEVER, ON APPEAL, THE CIT(A) OBSERVED THAT NO E VIDENCE WAS FOUND DURING THE COURSE OF SEARCH INDICATING TH AT THE UNDISCLOSED INCOME GENERATED BY THE ASSESSEE HAS BEEN CLAIMED FOR SETTLING THE LOSSES SUPPOSED TO HAVE BEEN INCURRED BY THE ABOVE CONCERNS. FURTHER EXAMINATION OF FINANCIALS OF M/S FABRIC STY LE INTERNATIONAL, IT IS SEEN THAT THE SAID CONCERN HAS SHOWN A LOSS OF ` 15,510/- ONLY FOR ASSESSMENT YEAR 2005-06, THEREFORE, IT IS DIFFICULT TO IMAGINE HOW THE SAID CONCERN SUFFERED A LOSS OF ` 1. 75 CRORES IN THE SAID ASSESSMENT YEAR AND THE SAME WAS ADJUSTED BY THE UNDISCLOSED I NCOME OF THE ASSESSEE. FURTHER THE CIT(A) OBSERVED THAT ON PERUS AL OF LEDGER COPY OF M/S LENNEX INDIA, CHENNAI, THE ASSESSEE HAS ONL Y ONE TRANSACTION WITH M/S LINNEX INDIA, CHENNAI ON 10.10.2009 FOR A SUM OF ` 1,06,299/- WITH REGARD TO CASH SALES FOR FABRICS. THERE WAS NO OTHER TRANSACTION WITH M/S LENNEX INDIA, CHENNAI. FURTHE R WHILE MAKING SUCH ADDITION, THE ASSESSING OFFICER ALSO RELIED UP ON THE STATEMENT GIVEN ON OATH BY SHRI N. RAJENDRAN AND THERE IS NO MATERIAL TO SHOW ITA NOS.788/15 ETC :- 6 -: THAT THE ASSESSEE HAS STATED TO HAVE UTILIZED ITS UNDISCLOSED INCOME FOR SETTING OFF OF LOSSES OF THE SAID CONCERNS, M/S FABRIC STYLE INTERNATIONAL AND M/S LENNEX INDIA, CHENNAI. THERE FORE, THE ADDITIONS MADE BY THE ASSESSING OFFICER ARE NOT BAS ED ON ANY CONCRETE EVIDENCE, BUT BASED ONLY ON THE STATEMENT GIVEN BY SHRI N. RAJENDRAN DURING THE COURSE OF SEARCH ACTION U/S 132 OF THE ACT. ACCORDINGLY, BY PLACING RELIANCE ON THE ORDER OF THE ITAT, CHENNAI IN THE CASE OF G. MUNUSAMY IN I.T.A.NO. 751/MDS/2013, THE CIT(A) DIRE CTED THE ASSESSING OFFICER TO DELETE THE ADDITIONS OF ` 1.75 CRORES AND ` 1.25 CRORES FOR ASSESSMENT YEARS 2005-06 AND 2007-08 RES PECTIVELY, AS THEY WERE NOT MADE ON THE BASIS OF ANY SEIZED MATERIAL. AGAINST THE ABOVE DELETIONS, THE REVENUE IS IN APPEAL BEFORE US AND CORRESPONDINGLY THE CROSS OBJECTIONS WERE FILED BY THE ASSESSEE. 6. HOWEVER, FOR ASSESSMENT YEARS 2005-06 TO 2011-12, THE CIT(A) SUSTAINED THE ADDITIONS RELATING TO THE INFL ATION OF EXPENDITURE IN RESPECT OF CALENDARING, WASHING CHARGES, STAFF S ALARY ETC MADE BY THE ASSESSING OFFICER. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US STATING THAT THERE IS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH SUGGESTING THESE ADDITIONS AND IT WAS MADE ONLY ON THE BASIS OF SWORN STATEMENT RECORDED DURING THE CO URSE OF SEARCH ACTION WHICH WAS RETRACTED LATER. ITA NOS.788/15 ETC :- 7 -: 7. FURTHER, THE ASSESSEE RAISED A GROUND THAT U/S 15 3A OF THE ACT, ONLY THE ASSESSMENT OR THE RE-ASSESSMENT PROCE EDINGS THAT ARE PENDING ON THE DATE OF CONDUCTING SEARCH U/S 132 O F THE ACT OR MAKING REQUISITION U/S 132A OF THE ACT STAND ABATE D AND NOT THE ASSESSMENTS/RE-ASSESSMENTS ALREADY CONCLUDED FOR T HOSE ASSESSMENT YEARS COVERED U/S 153A OF THE ACT. HE RELIED O N THE CIRCULAR NO.8 OF 2003 DATED 18.9.2003, 263 ITR (ST) 61 AT PAGE 107 I SSUED BY THE CBDT WHEREIN IT WAS CLARIFIED THAT ON INITIATION OF PROCEEDINGS U/S 153A, THE PROCEEDINGS PENDING IN APPEAL, REVISION O R RECTIFICATION PROCEEDINGS AGAINST FINALIZED ASSESSMENT/RE-ASSESSM ENT SHALL NOT ABATE. THE LD. COUNSEL BROUGHT TO OUR NOTICE THE D ETAILS OF THE RETURNS OF INCOME FILED FOR ASSESSMENT YEARS 2005-06 TO 200 9-10 WHICH ARE AS FOLLOWS: ASSESSMENT YEAR RETURN OF INCOME FILED ON TIME LIMIT TO SERVE NOTICE DATE OF SEARCH 2005 - 06 10/10/2005 31/10/2006 28/12/2010 2006 - 07 20/10/2006 31/10/2007 28/12/2010 2007 - 08 31/10/2007 30/09/2008 28/12/2010 2008 - 09 29/9/2008 30/09/2009 28/12/2010 2009 - 10 20/09/2009 30/09/2010 28/12/2010 ITA NOS.788/15 ETC :- 8 -: 8. ACCORDING TO THE LD. COUNSEL, ONCE THE TIME LIMIT T O SERVE NOTICE U/S 143(2) HAS EXPIRED AND THE SEARCH WAS C ONDUCTED ON 28.12.2010, THE ASSESSMENT PROCEEDINGS ON THE BASIS OF THE RETURNS FILED U/S 139(1) WERE TERMINATED BY OPERATION OF L AW. IN SUCH A CASE, THE ASSESSING OFFICER, WHILE PASSING THE INDEPENDEN T ASSESSMENT ORDER U/S 153A R.W.S 143(3) OF THE ACT COULD NOT HAVE DIS TURBED THE CONCLUDED ASSESSMENT WHICH HAD ATTAINED FINALITY U NLESS THE MATERIALS GATHERED IN THE COURSE OF SEARCH ACTION TO ESTABLIS H THAT THERE IS UNDER-ASSESSMENT IN THESE CASES. ACCORDING TO THE LD. COUNSEL, THERE IS NO MATERIAL FOUND INDICTING THE ASSESSEE EITHER SUPPRESSED ITS SALES OR INFLATED THE EXPENDITURE DURING THE COURSE OF SE ARCH ACTION. THE ADDITIONS WERE MADE ONLY ON THE BASIS OF STATEMENT RECORDED BY THE PARTNER OF THE ASSESSEE-FIRM, THEREFORE, THERE CA NNOT BE ANY ADDITION ON THE STATEMENT ALONE UNLESS IT IS SUPPORTED BY CO RROBORATED MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION. HE RE LIED ON THE FOLLOWING CASE LAW: A) CIT VS MURLI AGRO PRODUCTS LTD [2014] 49 TAXMANN.CO M 172(BOM) B) CIT VS CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD , 374 ITR 645 (BOM.) C) PR. CIT VS KURELE PAPER MILLS P. LTD I.T.A.NO. 369/2015 DATED 6.7.2015 BY DELHI HIGH COURT ITA NOS.788/15 ETC :- 9 -: D) CIT VS KABUL CHAWLA I.T.A.NO. 707/2014 DATED 28.8.2015 BY DELHI HIGH COURT E) B.R. MACHINE TOOLS P. LTD VS ACIT - I.T.A.NOS.417 4 TO 4177/MUM/2013 DATED 6.12.2013 F) SHRI GOPAL AGARWAL VS ACIT - I.T.A.NO.4823/MUM/2012 DATED 28.5.2014 G) SHRI GOPAL AGARWAL VS ACIT - I.T.A.NOS.7075 & 7076/MUM/2012 DATED 7.8.2015 H) SHRI G. MUNUSAMY VS ACIT - I.T.A.NO.751/MDS/2013 DATED 14.3.2014 I) FASHION FABRICS VS THE DY. CIT - I.T.A.NOS.776 AND 782/MDS/2015 DATED 6.8.2015 J) ALL CARGO GLOBAL LOGISTICS LTD VS DCIT, 137 ITD 287(MUM)(SB). 9. ACCORDING TO THE LD. COUNSEL, THE ASSESSMENTS ARE B AD IN LAW AND THEREFORE, LIABLE TO BE QUASHED. 10. REGARDING THE REVENUES APPEAL FOR ASSESSMENT YEARS 2005- 06 AND 2007-08, IT WAS SUBMITTED BY AR THAT THE ADD ITIONS WERE MADE ONLY ON THE BASIS OF SWORN STATEMENT AND THERE IS N O MATERIAL TO SUGGEST THAT THERE IS ANY UNDISCLOSED INCOME IN RES PECT OF THE ADDITIONS MADE BY THE ASSESSING OFFICER. 11. ON THE CONTRARY, THE LD. DR SUBMITTED THAT DURING T HE COURSE OF SEARCH OPERATION, VARIOUS MATERIALS WERE GATHERE D INDICATING SUPPRESSION OF SALES AS WELL AS INFLATION OF EXPEND ITURE AND ON THE ITA NOS.788/15 ETC :- 10 -: BASIS OF THAT MATERIALS, THE PARTNER ALSO ADMITTED THAT THEY ARE IN THE HABIT OF INFLATING VARIOUS EXPENSES AT 20% IN RESPE CT OF WEAVING AND STAFF SALARY AND 10% IN RESPECT OF CALENDARING AND WASHING CHARGES AND THE STATEMENT WAS RECORDED U/S 132(4) ON 20.1. 2011. THE RETRACTION WAS MADE ONLY ON 13.3.2012 WHICH WAS ONL Y AFTER FILING THE RETURNS OF INCOME AND IT HAS TO BE CONSIDERED AS AN AFTERTHOUGHT. 12. AT THE TIME OF HEARING, THE LD. COUNSEL DID NOT PRE SS THE CROSS OBJECTIONS FILED BY THE ASSESSEE FOR THESE T WO ASSESSMENT YEARS. 13. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MA TERIAL AVAILABLE ON RECORD. IN THIS CASE, ORIGINALLY, THE RE WAS A SURVEY U/S 133A OF THE ACT ON 9.12.2010 AT THE BUSINESS PREMIS ES OF THE ASSESSEE. THERE WERE CERTAIN DOCUMENTS INDICATING SUPPRESSION OF THE ACTUALS FOUND DURING THE COURSE OF SURVEY. LATER, THE SURVEY WAS CONVERTED INTO SEARCH U/S 132 OF THE ACT AND THE S EARCH WAS CONDUCTED ON 28.12.2010. CONSEQUENT TO THIS, NOTIC E U/S 153A WAS ISSUED FOR ALL THESE ASSESSMENT YEARS AND ALSO IN R ESPONSE TO NOTICES, THE ASSESSEE FILED RETURNS OF INCOME FOR THE ASSES SMENT YEARS 2005-06 TO 2011-12 ON 28.6.2012. THE ASSESSING OFFICER IS SUED NOTICES U/S 142(1) AND ALSO U/S 143(2) ON 12.11.2012. THE TIME LIMIT FOR ISSUING NOTICE U/S 143(2) FOR ASSESSMENT YEARS 2005-06 TO 2009-10 HAS BEEN LAPSED BY THE DATE OF SEARCH WHICH WAS ON 28.12.201 0. THEREFORE, THE ITA NOS.788/15 ETC :- 11 -: ASSESSMENT PROCEEDING ON THE BASIS OF THE RETURNS FILED U/S 139(1) WAS TERMINATED BY OPERATION OF LAW FOR THESE ASSESS MENT YEARS 2005- 06 TO 2009-10. THEREFORE, THE ASSESSING OFFICER HA S TO MAKE ASSESSMENT U/S 153C IN THE CASE OF THE PERSON OTHE R THAN THE SEARCHED PERSON ON THE BASIS OF THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPERATION. IN OTHER WORDS, THE ASSESSMEN T PROCEEDINGS ON THE BASIS OF RETURN FILED U/S 139(1) IS NOT PENDIN G ON THE DATE OF SEARCH, THEREFORE, THE ASSESSING OFFICER HAS TO CON FINE HIMSELF ONLY TO THE MATERIAL FOUND DURING THE COURSE OF SEARCH OPER ATION. 13.1 IN THIS CASE, IT IS TO BE NOTED THAT SEARCH WAS TOOK PLACE ON 28.12.2010 AND THE ASSESSEE HAD ALREADY FILED THE RETURNS OF INCOME FOR THE ASSESSMENT YEARS 2005-06 TO 2009-10 AND THE TIME LIMIT FOR ISSUE OF NOTICE U/S 143(2) WAS ALREADY EXPIRED BY THIS TIME AND THEREBY THE ASSESSMENTS SAID TO BE REACHED FINALITY BY OPERATION OF LAW. BEING SO, NO ASSESSMENT OR RE-ASSESSMENT WAS PENDING AT THE TIME OF SEARCH CARRIED OUT ON 28.12.2010 IN RESPECT OF THESE ASSESSMENT YEARS OR IN THE COURSE OF ASSESSMENT PRO CEEDINGS INITIATED U/S 153C OF THE ACT. WHEN THIS CRUCIAL FACT IS TAK EN INTO CONSIDERATION, WE HAVE TO LOOK INTO THE DECISION OF SPECIAL BENCH IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTDE VS DCIT, 137 ITD 287 (S B). IN THE SAID CASE, THE SPECIAL BENCH HAS MADE IT CLEAR THAT AN A SSESSMENT U/S 153A ITA NOS.788/15 ETC :- 12 -: EMPOWERS THE ASSESSING OFFICER TO COMPLETE THE ASSE SSMENT FOR SIX CONSECUTIVE ASSESSMENT YEARS. IT IS ALSO CLARIFIED THAT ASSESSMENTS AS WELL AS RE-ASSESSMENTS ARE POSSIBLE IN THE CASE OF PENDING ASSESSMENTS. IT FURTHER CLARIFIED THAT WHERE THE A SSESSMENTS ARE COMPLETED AND NO ASSESSMENT IS PENDING AT THE TIME OF ASSESSMENT U/S 153A, RE-ASSESSMENT CAN BE MADE ONLY IF ANY INC RIMINATING MATERIAL ARE COLLECTED IN THE COURSE OF SEARCH AND THE ITEMS CONCLUDED IN THE EARLIER ASSESSMENTS CANNOT BE RECONSIDERED T HROUGH A RE- ASSESSMENT. IN THE CASE OF JAI STEEL (INDIA) VS AC IT, 258 CTR 281(RAJ), IT WAS HELD THAT IN CASE NOTHING INCRIMIN ATING IS FOUND ON ACCOUNT OF SEARCH OR REQUISITION THEN THE QUESTION OF RE-ASSESSMENT OF THE CONCLUDED ASSESSMENTS DOES NOT ARISE. THE COUR T HAS DECLARED THAT THE UNDERLINE PURPOSE OF MAKING ASSESSMENT OF TOTAL INCOME UNDER SEC. 153A OF THE ACT IS TO ASSESS THE INCOME WHICH HAS NOT BEEN DISCLOSED OR WOULD NOT HAVE BEEN DISCLOSED. SECOND PROVISO TO SEC. 153A PROVIDIES FOR ABATEMENT OF ASSESSMENT OR RE-AS SESSMENT ONLY FOR THE REASON THAT THERE CANNOT BE TWO RE-ASSESSME NT FOR A SINGLE ASSESSMENT YEAR. IN ALL THE DECISIONS CITED BY THE LD. COUNSEL FOR THE ASSESSEE, THE ABOVE DECISION OF SPECIAL BENCH AND T HE DECISIONS OF THE HIGH COURTS HAVE BEEN FOLLOWED AND THE TRIBUNAL HA S BEEN CONSISTENTLY HELD THAT A RE-ASSESSMENT/CONCLUDED AS SESSMENT IS ITA NOS.788/15 ETC :- 13 -: PERMITTED IN AN ASSESSMENT U/S 153A ONLY WHEN INCR IMINATING MATERIALS ARE FOUND IN THE COURSE OF SEARCH. WHAT IS APPLICABLE AS ABOVE U/S 153A IS SQUARELY APPLICABLE TO SECTION 15 3C ALSO. 13.2 IN THE CASE BEFORE US, NO MATERIAL WAS FOUND I NDICATING THAT THERE WAS ANY SUPPRESSION OF SALES OR INFLATION OF EXPENDITURE DURING THE COURSE OF SEARCH OPERATION. ONLY ON THE BASIS OF STATEMENT RECORDED FROM ONE SHRI N. RAJENDRAN AND THIS STATEM ENT OF SHRI N. RAJENDRAN WAS RETRACTED VIDE HIS LETTER DATED 13.3. 2012. THE ADDITIONS WERE MADE IN THESE ASSESSMENT YEARS ONLY ON THE BASIS OF STATEMENT MADE U/S 132(4) WHICH WAS RETRACTED SUBS EQUENTLY. IN OUR OPINION, THE STATEMENT MADE BY SHRI N. RAJENDRA N DURING THE COURSE OF SEARCH OPERATION U/S 132(4) IS NOWHERE S URVIVING AND IT IS NOT POSSIBLE TO HOLD THAT THE ASSESSMENT U/S 153C COULD BE MADE ONLY ON THE BASIS OF STATEMENT RECORDED U/S 132(4) WITH OUT ANY SUPPORT OF CORROBORATING MATERIAL. ADMISSION OF THE ASSESSEE IN A STATEMENT RECORDED U/S 132(4) DURING THE SEARCH PROCEEDINGS IS NOT CONCLUSIVE PROOF AS HELD BY THE RAJASTHAN HIGH COURT IN THE CASE OF ASHOK KUMAR SONI, 291 ITR 172. FURTHER, THE SUPREME COUR T IN THE CASE OF PULLANGODE RUBBER PRODUCE CO. VS STATE OF KERALA, 9 1 ITR 18, OBSERVED THAT AN ADMISSION IS AN EXTREMELY PIECE OF EVIDENCE BUT IT CANNOT BE SAID THAT IT IS CONCLUSIVE. IT IS OPEN T O THE PERSON WHO MADE ITA NOS.788/15 ETC :- 14 -: THE ADDITION TO SHOW THAT IT IS INCORRECT. IN THE CASE OF SAVEETHA INSTITUTE OF MEDICAL AND TECHNICAL SCIENCES VS ACIT [2011] 12 (TRIB) 376(CHEN) WHEREIN ADDITION TOWARDS CAPITATION FEE ALLEGEDLY COLLECTED BY THE INSTITUTE WAS MADE SOLELY ON THE BASIS OF ST ATEMENT OF STUDENTS AND STAFF RECORDED UNDER SEC. 132(4) WAS MADE. EXC EPT FOR A NOTE GIVING THE BREAKUP OF NUMBER OF STUDENTS WHO WERE A DMITTED UNDER DIFFERENT QUOTAS IN VARIOUS COURSES, THERE WAS NO I NCRIMINATING MATERIAL AS TO THE RECEIPT OF CAPITATION FEE. REFERRING TO THE INSTRUCTION F.NO.286/2/2003-IT(INV.II) DATED 10.3.2003 ADDITION DELETED AFTER OBSERVING THAT ADMISSION MADE U/S 132(4) WAS NOT A VALID EVIDENCE. THEREFORE, IT IS WELL SETTLED JUDICIAL PROPOSITION THAT MERELY ON THE BASIS OF STATEMENT WHICH IS NOT SUPPORTED BY THE DEPARTME NT WITH COGENT CORROBORATIVE MATERIAL CANNOT BE A VALID ADDITION B ASIS FOR SUSTAINING SUCH ADHOC ADDITIONS. IT IS THE BURDEN OF THE DEPA RTMENT TO PROVE THAT THERE EXISTED RELEVANT AND COGENT MATERIAL TO ENABLE THE ASSESSING OFFICER TO MAKE SUCH ADDITIONS. THE DEPARTMENT HAS GROSSLY FAILED TO PROVE OR DEMONSTRATE EXISTENCE OF ANY SUCH RELEVAN T OR COGENT MATERIAL SUPPORTING THE ADDITION. THE ASSESSEE HA S DEMONSTRATED THAT THE ADDITIONS WERE NOT BASED ON ANY INCRIMINAT ING MATERIAL FOUND DURING THE COURSE OF SEARCH. EVEN IN THE ABSENCE O F PROOF SUPPORTED WITH COGENT MATERIAL, THE STATEMENT RECORDED U/S 1 32(4) BY ITSELF ITA NOS.788/15 ETC :- 15 -: CANNOT BE TAKEN AS CONCLUSIVE. A PERUSAL OF THE CB DT INSTRUCTION DATED 10.3.2003 REVEALS THAT EVEN THE BOARD IS AWAR E OF SUCH LACONIC DISCLOSURES AND EXCEPTS ITS OFFICERS TO RELY ON INC RIMINATING EVIDENCE. THE CBDT ALSO IS NOT IN FAVOUR OF SEARCH ASSESSMENT S BEING BASED ON SUCH DISCLOSURES, IT WANTS THEM TO BE BASED ON INCR IMINATING MATERIAL. IN VIEW OF THE FACTS AND CIRCUMSTANCES, CBDT INSTRU CTION AND VARIOUS CASE LAWS RELIED ON BY THE ASSESSEE, WE ARE UNABLE TO UPHOLD THE ADDITIONS MADE SOLELY ON THE BASIS OF STATEMENT REC ORDED U/S 132(4) OF THE ACT. ACCORDINGLY, WE ARE OF THE OPINION THA T FOR THE ASSESSMENT YEARS 2005-06 TO 2009-10 WHEREIN ASSESSMENTS WERE F RAMED NOT AS A RESULT OF ANY MATERIAL FOUND DURING THE COURSE OF S EARCH OPERATION, IN VIEW THEREOF, THE SAID ADDITIONS CANNOT BE SUSTAINE D AS THEY DO NOT CONFORM THE MANDATE OF SECTION 153A OF THE ACT. 14. NOW, COMING TO ASSESSMENT YEAR 2010-11, THERE IS TI ME LIMIT TO ISSUE NOTICE U/S 143(2) UPTO 30.9.2011 AS IN THIS CASE, ORIGINAL RETURN WAS FILED ON 25.9.2010. THEREFORE, IN OUR O PINION, EVEN THOUGH THERE WAS NO SEARCH MATERIAL, THE PROCEEDINGS ARE P ENDING ON THE BASIS OF THE RETURN FILED, THEREFORE, THE ASSESSING OFFICER HAS TO PASS A COMPOSITE ORDER FOR THE UNDISCLOSED INCOME AND THE NORMAL INCOME. IN OTHER WORDS, ONE ORDER HAS TO BE PASSED FOR THE BLOCK PERIOD COMPUTING THE TAXABLE INCOME INCLUDING THE UNDISCLO SED INCOME, ITA NOS.788/15 ETC :- 16 -: THEREFORE, THE ASSESSING OFFICER HAS TO COMPUTE TOT AL TAXABLE INCOME ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD. SINCE THE ASSESSEE HAS ADMITTED THAT CALENDARING, CLEARING AND WASHING CHARGES, STAFF SALARY WERE INFLATED, THE SAME ARE TO BE CONSIDERED . 15. FOR THE ASSESSMENT YEAR 2011-12, THE RETURN OF INCO ME WAS FILED CONSEQUENT TO NOTICE U/S 153C AND NO RETURN WAS FILED U/S 139. AS DISCUSSED FOR ASSESSMENT YEAR 2010-11, THE ASSES SING OFFICER HAS TO PASS A COMPOSITE ORDER FOR THE UNDISCLOSED INCOM E AND THE NORMAL INCOME ON THE BASIS OF MATERIAL AVAILABLE ON RECORD . BEING SO, AS DISCUSSED IN ASSESSMENT YEAR 2010-11, THE ASSESSING OFFICER IS JUSTIFIED IN PASSING ASSESSMENT ORDER FOR THIS ASSESSMENT YE AR ALSO TO BRING THE UNDISCLOSED INCOME INTO TAX. ACCORDINGLY, THE AS SESSEES APPEALS FOR ASSESSMENT YEARS 2005-06 TO 2009-10 ARE ALLOWED AND APPEALS FOR ASSESSMENT YEARS 2010-11 AND 2011-12 ARE DISMISSED. 16. SINCE WE HAVE ALLOWED THE APPEALS OF THE ASSESSEE FOR ASSESSMENT YEARS 2005-06 AND 2007-08, THE REVENUES APPEALS FOR THESE ASSESSMENT YEARS HAVE BECOME INFRUCTUOUS. TH E CORRESPONDING CROSS OBJECTIONS FILED BY THE ASSESSEE FOR ASSESSM ENT YEARS 2005-06 AND 2007-08 ARE DISMISSED AS NOT PRESSED. ITA NOS.788/15 ETC :- 17 -: ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH NOVEMBER, 2015, AT CHENNAI. SD/- SD/- ( . ! ' ) (G. PAVAN KUMAR) # / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER / CHENNAI / DATED: 27 TH NOVEMBER, 2015 RD ' #$ %$ / COPY TO: 1 . &' / APPELLANT 4. ( / CIT 2. ')&' / RESPONDENT 5. $*+ ' , / DR 3. ( () / CIT(A) 6. +/ 0 / GF