Shri Snjay Agrawal, Indore V. The A.C.I.T.2(1), Indore

ITSSA 109/Ind/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5260 (ITAT-INDORE)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 17-07-2018
• Court: TRIBUNAL

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HON'BLE KUL BHARAT, JUDICIAL MEMBER AND HON'BLE MANISH BORAD, ACCOUNTANT MEMBER IT(SS) NO 108 & 109/IND/2018 ASSESSMENT YEARS 2009-10 & 2010-11 REVENUE BY SHRI S.S. MANTRI, CIT ASSESSEE BY SHRI S.N. AGRAWAL , CA DATE OF HEARING 10 . 0 2 .20 20 DATE OF PRONOUNCEMENT 20 . 0 2 .20 20 O R D E R PER MANISH BORAD, AM THE ABOVE CAPTIONED APPEALS FILED AT THE INSTANCE O F ASSESSEE PERTAINING TO ASSESSMENT YEARS 2009-10 & 2010-11ARE DIRECTED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TA X (APPEALS)-I (IN SHORT LD.CIT(A)], INDORE DATED 04.06.2018 WHICH IS ARISING OUT OF THE ORDER U/S 153(C) R.W.S.143(3) OF THE ACT DATED 28.03.2016 FRAMED BY ACIT-2(1), INDORE. SHRI SANJAY AGRAWAL, 9, PRAGATI VIHAR, BICHOLI MARDANA, INDORE (M.P) VS. ACIT - 2(1), INDORE (APPELLANT) (REVENUE ) PAN AACPA2243F SANJAY AGRAWAL IT(SS) NO.108&109/IND/2018 2 2. AS THE ISSUES RAISED IN THESE APPEALS ARE COMMON T HEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS C OMMON ORDER FOR THE SAKE OF BREVITY AND CONVENIENCE. 3. ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL:- APPEAL (SS)NO.108/IND/2018 ASSESSMENT YEAR 2009-10 1. 1] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT(A) ERRED IN MAINTAINING ADDITION OF RS 2,20,500/- TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF CLIENT CODE MODIFICATION BY THE BROKER IN THE ASSESSMENT PROCEE DING U/S 153C OF THE ACT EVEN WHEN NOTHING INCRIMINATING WAS FOUND FROM THE PREMISES OF THE PERSON SEARCH. 1.2] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD CIT[A] ERRED IN MAINTAINING ADDITION OF RS 2,20,500 /- TO THE INCOME OF THE ASSESSEE IN THE NONABATE ASSESSMENT I N ABSENCE OF ANY INCRIMINATING DOCUMENTS FOUND DURING THE COURSE OF SEARCH. 1.3] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD CIT[A] ERRED IN MAINTAINING ADDITION OF RS 2,20,500 /- TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF CHANGE IN CODE BY THE BROKER EVEN WHEN NO SUCH REASON WAS RECORDED BY THE ASSESS ING OFFICER OF THE PERSON SEARCHED AND ALSO BY THE ASSESSING OF FICER OF THE ASSESSEE PRIOR TO THE ISSUANCE OF THE NOTICE U / S 153C OF THE ACT. 2] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE LD ASSESSING OFFICER ERRED IN PASSING THE ORDER U /S 153C OF THE ACT IN THIS YEAR EVEN WHEN INFORMATION FROM THE ASSESSING OFFICER OF THE SANJAY AGRAWAL IT(SS) NO.108&109/IND/2018 3 PERSON SEARCHED IS RECEIVED DURING THE FINANCIAL YE AR 2015-16 AND THEREFORE ASSESSMENT ORDER AS PASSED BY THE ASS ESSING OFFICER FOR THIS YEAR IS BARRED BY LIMITATION OF TI ME. 3] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW THE LD CIT[A] ERRED IN ADDING AN AMOUNT OF RS 2 ,20,500/- TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF CHANGE IN CLIENT CODE BY THE BROKER WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND SUBMISSION MADE BEFORE HIM 4] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW THE LD CIT[A] ERRED IN MAINTAINING THE ADDITION OF RS 2,20,500/- TO THE TOTAL INCOME OF THE ASSESSEE ON A CCOUNT OF CHANGE IN CLIENT MODIFICATION CODE EVEN WHEN NO SUC H LOSS WAS ACTUALLY CLAIMED BY THE ASSESSEE IN HIS RETURN OF T OTAL INCOME. 5] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE LD ASSESSING OFFICER ERRED IN CHARGING INTEREST U /S 234B OF THE ACT OF RS 1,13,309/- EVEN WHEN SUCH INTEREST IS CHARGEABLE AS PER SUB- SECTION [3] OF SECTION 234B OF THE ACT. 6) THAT THE APPELLANT RESERVES ITS RIGHT TO ADD, ALTER AND MODIF'Y THE GROUNDS OF APPEAL AS TAKEN. APPEAL (SS)NO.109/IND/2018 ASSESSMENT YEAR 2010-11 1.1] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT(A) ERRED IN MAINTAINING ADD ITION OF RS 2,72,226/- TO THE INCOME OF THE ASSESSEE ON ACCOU NT OF CLIENT CODE MODIFICATION BY THE BROKER IN THE ASSESSMENT PROCEEDING U/S 153C OF THE ACT EVEN WHEN NOTHING INCRIMINATI NG WAS FOUND FROM THE PREMISES OF THE PERSON SEARCH. SANJAY AGRAWAL IT(SS) NO.108&109/IND/2018 4 1.2] THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE LD CIT[A] ERRED IN MAINTAINING ADDITION OF RS 2,72,226/- TO THE INCOME OF THE ASSESSEE IN NONABATE ASSESSMENT IN ABSENCE OF ANY INCRIMINATING DOCUMENTS FOUND DURING THE COUR SE OF SEARCH. 1.3] THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE LD CIT[A] ERRED IN MAINTAINING ADDITION OF RS 2,72,226/- TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF CHANGE IN CO DE BY THE BROKER EVEN WHEN NO SUCH REASON WAS RECORDED BY T HE ASSESSING OFFICER OF THE PERSON SEARCHED AND ALSO BY THE AS SESSING OFFICER OF THE ASSESSEE PRIOR TO THE ISSUANCE OF THE NOTIC E U / S 153C OF THE ACT. 2] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT[A] ERRED IN ADDING AN AMOUN T OF RS 2,72,226/- TO THE INCOME OF THE ASSESSEE ON ACCOU NT OF CHANGE IN CLIENT CODE BY THE BROKER WITHOUT PROPERLY APP RECIATING THE FACTS OF THE CASE AND SUBMISSION MADE BEFORE HIM 3] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT[A] ERRED IN MAINTAINING THE ADDITION OF RS 2,72,226/- TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF CHANGE IN CLIENT MODIFICATION CODE EVEN WHEN NO S UCH LOSS WAS ACTUALLY CLAIMED BY THE ASSESSEE IN HIS RETUR N OF TOTAL 4) THAT THE APPELLANT RESERVES ITS RIGHT TO ADD, AL TER AND MODIF'Y THE GROUNDS OF APPEAL AS TAKEN. SANJAY AGRAWAL IT(SS) NO.108&109/IND/2018 5 4. BRIEF FACTS OF THE CASE AS CULLED OUT FROM THE RECORDS ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND DERIVES INCOME FROM S ALARY AND OTHER SOURCES. RETURN OF INCOME FOR ASSESSMENT YEARS 200 9-10 AND 2010- 11 WERE FILED ON 30.07.2009 AND 28.07.2010 DECLARIN G INCOME OF RS.7,38,200/- AND RS.6,71,060/-. A SEARCH U/S 132 O F THE ACT WAS CARRIED OUT AT VARIOUS RESIDENTIAL AND BUSINESS PRE MISES OF DBL GROUP INCLUDING THE RESIDENCE OF SHRI SANJAY MEHTA AT SAKET NAGAR, INDORE. DURING THE SEARCH PAGE NO. 36 TO 51 OF DS W ERE FOUND AND SEIZED. DCIT(CENTRAL)-I, BHOPAL ON THE BELIEF THAT THESE DOCUMENTS BELONGS TO ASSESSEE AND NOTICE U/S 153C WERE ISSUED TO THE ASSESSEE. ASSESSMENT WAS COMPLETED U/S 153C R.W.S. 143(3) OF THE ACT AT RS.9,58,700/- FOR ASSESSMENT YEAR 2009-10 MA KING ADDITION OF RS.2,20,500/- AND FOR ASSESSMENT YEAR 2010-11 AT RS.9,43,930/- MAKING ADDITION OF RS.2,72,226/- ON 28.3.2016. AG GRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) BUT COULD NOT SU CCEED. 5. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. LD. COUNSEL FOR THE ASSESSEE MADE COMMON ARGUMENTS FOR ASSESSMENT YEARS 2009-10 AND 2010-1. THE ISSUE A ND FACTS REMAINS SAME EXCEPT THE QUANTUM OF ADDITION WHICH I N THIS CASE IS SANJAY AGRAWAL IT(SS) NO.108&109/IND/2018 6 RS.2,20,500/- FOR ASSESSMENT YEAR 2009-10 AND RS. 2 ,72,226/- FOR ASSESSMENT YEAR 2010-11. WRITTEN SUBMISSION FILED B Y THE ASSESSEE WERE ALSO SIMILAR THEREFORE WE REPRODUCE BELOW THE ONE FILED FOR ASSESSMENT YEAR 2009-10 WHEREIN THE ASSESSEE HAS TA KEN LEGAL GROUND AS WELL AS GROUND ON MERITS. GROUND NOS 1 & 2 CHALLENGING THE ADDITION IN ABSENCE OF ANY INCREM ENTING DOCUMENTS AS FOUND AND SEIZED DURING THE COURSE OF SEARCH PROCEEDINGS: 1.1] THE ASSESSEE HAD FILED HIS ORIGINAL RETURN OF TOTAL INCOME ON 30-07-2009 DECLARING TOTAL INCOME AT RS 7,38,200/-. 1.2] THAT SEARCH UNDER SECTION 132 OF THE INCOME TA X ACT WAS EXECUTED ON DBL GROUP ON 20-06- 2012. HOWEVER, IN T HE CASE OF THE ABOVE ASSESSEE, NOTICE UNDER SECTION 153C OF TH E INCOME TAX ACT WAS ISSUED ON 27-03-2015. THE TIME LIMIT FO R ISSUANCE OF THE NOTICE V/S 143[2] WAS EXPIRED ON 30-09-2010 LE PRIOR TO THE DATE OF SEARCH, BY THAT TIME NO NOTICE U/S 143L2] OF THE ACT WAS ISSUED. HENCE, THE PRESENT ASSESSMENT YEAR IS NON- ABATE ASSESSMENT. 1.3] THE ASSESSEE IN RESPONSE TO THE NOTICE AS ISSU ED U / S 153C OF THE ACT ALSO FILED HIS RETURN OF TOTAL INCOME ON 24-04-2015 DECLARING TOTAL INCOME AT RS.7,38,200/- 1.4.1] THAT CASE OF THE ABOVE ASSESSEE WAS RE-OPENE D U / S 153C OF THE INCOME TAX ACT. THAT AS PER PROVISION O F SECTION 153C OF THE ACT WHERE THE ASSESSING OFFICER IS SATI SFIED THAT,- SANJAY AGRAWAL IT(SS) NO.108&109/IND/2018 7 (A) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ART ICLE OR THING SEIZED OR REQUISITIONED, BELONGS TO ; OR (B) ANY BOOKS OF ACCOUNT OR DOCUMENTS, SEIZED OR R EQUISITIONED, PERTAINS OR PERTAIN TO, OR ANY INFORMATION CONTAIN ED THEREIN, RELATES TO, A PERSON OTHER THAN THE PERSON TO IN S ECTION 153A, THEN, THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS, SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESS ING OFFICER HAVING SUCH OTHER PERSON AND THAT ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A, IF, THAT ASSESSING OFFICER IS SATISFIED THAT THE BOOKS OF ACCOUNT OR DOCUMENTS O R ASSETS SEIZED OR REQUISITIONED HAVE A BEARING ON THE DETERMINATION OF THE TOTAL INCOME OF SUCH OTHER PERSON FOR THE REL EVANT ASSESSMENT YEAR OR YEARS REFERRED TO IN SUB-SECTIO N (1) OF SECTION 153A. 1.4.2] THAT IT IS NOW SETTLED POSITION OF LAW THAT ADDITION IN THE CASE OF THE ASSESSEE U/S 153C R.W.S 153A OF THE INC OME TAX ACT CAN BE MADE ONLY ON THE BASIS OF INCRIMINATING DOCUMENTS AS FOUND AND SEIZED DURING THE COURSE OF SEARCH, AS HELD BY HON'BLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWL A [APPEAL NO ITA 707/ 2014 DT 28-08-2015] AND FOLLOWED BY THE HON'BLE ITAT INDORE BENCH IN THE CASE OF ANANT STEELS P LIM ITED [ APPEAL NOS IT(SS)A NOS. 31, 28, 29&30/IND/2010 A.YS . 2001- 02 TO 2004-05 DT 18-11-2015]. 1.5] THAT AS STATED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER, A SEARCH AND SEIZURE OPERATION WAS EXECUTED IN THE PREMISES OF M/S DILIP BUILDCPON LIMITED GROUP ON 20-06-2012 INCLUDING IN THE RESIDENTIAL PREMISES OF SHRI SANJA Y MEHTA SANJAY AGRAWAL IT(SS) NO.108&109/IND/2018 8 LOCATED AT 338, SAKET NAGAR, INDORE. DURING THE COU RSE OF SEARCH PAGE NOS 36 TO 51 WAS FOUND AND SEIZED AND A LL THESE DOCUMENTS RELATED TO THE PURCHASE OF HOUSE FROM THE ASSESSEE BY SHRI SANJAY MEHTA. ON THE BASIS OF THESE DOCUMEN TS NOTICE WAS ISSUED U /S 153C OF THE ACT IN THE CASE OF THE ASSESSEE. 1.6] THAT AS STATED ABOVE, THIS YEAR IS NON- ABATE ASSESSMENT YEAR AND IT IS ALSO SETTLED POSITION OF LAW THAT IN CASE OF NON- ABATE~ ASSESSMENT , ADDITION CAN BE MADE ONLY ON THE BASIS OF INCRIMINATING DOCUMENTS FOUND AND SEIZED DURING THE COURSE OF SEARCH. HOWEVER, IN THIS CASE, NOTHING INCRIMINATING WAS FOUND AND SEIZED FROM THE POSSESSION OF THE PERSON SEARCHED AS TO ATTRACT THE PROVISION OF SECTION 153C OF THE ACT. HENCE, ADDITION AS MADE ON ACCOUNT OF CCM [ CLIENT CODE MODIFICATION ] WAS NOT JUSTIFIED IN THE CASE OF THE ASSESSEE. 1.7] IT IS SETTLED POSITION OF LAW THAT IN CASE OF NON- ABATE ASSESSMENT, ADDITION CAN ONLY BE MADE ON THE BASIS OF INCRIMINATING DOCUMENTS FOUND AND SEIZED DURING THE COURSE OF SEARCH. FOR THIS PREPOSITION WE RELY ON THE FOLL OWING DIRECT DECISIONS:- S. NO REFERENCE CITATION 1 CIT VS KABUL CHAWLA 380 ITR 0573 [ DELHI] 2 CRT VS RRJ SECURITIES LTD 380 ITR 0612[ DELHI] 3 SANJAY AGRAWAL VS DCIT 150 ITD 0692 [ DELHI] 4 PR CIT VS MEETU GUTGUTIA ITA NO 306/2017 DT 25 - 05-2017 SANJAY AGRAWAL IT(SS) NO.108&109/IND/2018 9 1.8.1] THAT IN CASE OF NOTICE AS ISSUED U/ S 153C OF THE INCOME TAX ACT, IN ADDITION TO THE PARAMETER AS PRESCRIBED IN THE PROVISION OF SECTION 153A OF THE ACT, FOLLOWING ADD ITIONAL REQUIREMENT NEEDS TO BE FULFILLED, THE SAME IS LIST ED AS UNDER:- S.NO. LIST OF ADDITIONAL REQUIREMENT 1 DURING THE COURSE OF SEARCH PERSON CERTAIN INCRIMIN ATING DOCUMENTS RELATED TO THE OTHER PERSON MUST BE FOUND . 2 ON THE BASIS OF DOCUMENTS AS FOUND DURING THE COURS E OF SEARCH RELATED TO THE OTHER PERSON, REASON WAS RECO RDED BY THE ASSESSING OFFICER OF THE PERSON SEARCHED. 3 THE ASSESSING OFFICER OF THE PERSON SEARCHED, AFTER RECORDING OF THE REASON, HANDED OVER THE DOCUMENTS TO THE ASSESSING OFFICER OF THE OTHER PERSONS 4 THE ASSESSING OFFICER OF THE OTHER PERSON ON THE BA SIS OF DOCUMENTS AS RECEIVED FROM THE ASSESSING OFFICER OF THE PERSON SEARCHED, MAKE NECESSARY INQUIRY AT HIS END AND RECORDED HIS INDEPENDENT SATISFACTION REGARDING INCRIMINATING MATURE OF DOCUMENTS AND THEN ISSUED N OTICE U/ S 153C OF THE INCOME TAX ACT . 5 THE ASSESSEE IN RESPONSE TO THE NOTICE AS ISSUED U/S 153C OF THE ACT FILED ITS RETURN OF TOTAL INCOME AND THE N ASSESSMENT ORDER IS TO BE PASSED 1.8.2] THAT IN THE PRESENT CASE, TWO SEPARATE REASO N WAS NOT RECORDED THE ASSESSING OFFICER OF THE PERSON SEARCHED AND THE ASSESSING OFFICER OF THE OTHER PERSON ALSO FAILED T O RECORD THE REASON BASED ON DOCUMENTS FOUND AND SEIZED FROM THE REMISES OF THE PERSON SEIZED. 1.8.2.2 THAT IT IS ALSO SETTLED POSITION OF LAW THA T IN ABSENCE OF SANJAY AGRAWAL IT(SS) NO.108&109/IND/2018 10 TWO SEPARATE REASON THE JURISDICTION AS ASSUMED B T HE ASSESSING OFFICER WAS NOT PROPER. THE ASSESSMENT ORDER AS PASSED BY THE ASSESSING OFFICER WITHOUT ASSUMING PR OPER JURISDICTION OVER THE CASE WAS NEITHER LEGAL NOR PR OPER. HENCE, THE ASSESSMENT ORDER AS PASSED WAS LEGALLY NOT SUST AINABLE. THE SAME NOW REQUIRES TO BE QUASHED. 1.9] THAT AS PER THE ORDER PASSED U/S 143(3) R.W.S 153C OF THE ACT, ADDITION CAN BE MADE ONLY BASED ON THE DOCUMEN T FOUND AND SEIZED FROM THE PREMISES OF THE PERSON SEARCHED . BUT IN THE PRESENT CASE, ASSESSING OFFICER HAD NOT MADE ANY AD DITION BASED ON DOCUMENTS AS FOUND AND SEIZED. HOWEVER, ADDITION WAS MADE ON THE BASIS OF INVESTIGATION REPORT OF AHMEDABAD I N RESPECT TO CLIENT CODE MODIFICATION. THEREFORE THE ORDER AS PA SSED VIS 143[3J R.W.S. 153C OF THE ACT IS NULL AND VOID AND CORRESPONDINGLY ADDITION SO MADE SHOULD BE DELETED IN FULL. 1.10] HENCE, ADDITION AS MADE BY THE ASSESSING OFFI CER WITHOUT ANY INCREMENTING DOCUMENTS FOUND AND SEIZED DURING SEARCH IS NOT JUSTIFIED, THE SAME NOW REQUIRES TO BE DELET ED IN FULL. RELIANCE IS PLACED ON FOLLOWING DECISIONS:- (I) HONBLE ITAT DELHI BENCH IN THE CASE OF ITO, NEW DE LHI V/S M/S ABHISHEK FINCAP SERVICES ITA NO.2750/DEL/2017 DT. 13.09.2017. (II) HONBLE ITAT AHMEDABAD BENCH IN THE CASE OF ACIT V/ S KUNVARJI FINANCE PVT. LTD IT(SS)A NO.615 TO 618/AHD/2010. (III) HONBLE ITAT AHMEDABAD BENCH IN THE CASE OF M/S. SIDDHI BEVERAGES VS ACIT CIRCLE-11, AHMEDABAD ITA NO.409/AHD/2013. SANJAY AGRAWAL IT(SS) NO.108&109/IND/2018 11 (IV) HONBLE ITAT AHMEDABAD BENCH IN THE CASE OF ACIT, CENT. CIR. 1(1) V/S SHRI NAYAN K. THAKKAR ITA NO.65 5 TO 656/AHD/2010. (V) HONBLE ITAT AHMEDABAD BENCH IN THE CASE OF ACIT CENTRAL 1(1), AHMEDABAD V/S SHRI AMAR MUKESH SHAH ITA NOS. 92 & 93/AHD/2011 (VI) HONBLE ITAT KOLKATA BENCH IN THE CASE OF ITO WD 1 2(3), KOLKATA V/S AMRABATHI INVESTRA PVT. LTD ITA NO.758/KOL/2014 DT 03.05.2017 (VII) HONBLE ITAT MUMBAI C BENCH IN THE CASE OF ITO- 9(2)(4), MUMBAI V/S PAT COMMODITY SERVICES P. LTD I TA NOS 3498 AND 3499/MUM/2012. 7. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE VEHEMEN TLY ARGUED SUPPORTING ORDERS OF BOTH THE LOWER AUTHORITIES AND ALSO SUBMITTED THAT THE ARGUMENTS OF LD. COUNSEL FOR THE ASSESSEE RELYING ON WRONG QUOTE WERE NOT INDEPENDENTLY IT WAS SUBMITTED BY L D. DEPARTMENTAL REPRESENTATIVE THAT A MISTAKE MAY HAPPEN ONCE BUT I T CANNOT HAPPEN ON MULTIPLE OCCASIONS. 8. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RE CORDS PLACED BEFORE US. COMMON ISSUES HAVE BEEN RAISED FOR BOTH THE ASSESSMENT YEARS 2009-10 AND 2010-11. WE WILL FIRST TAKE UP T HE LEGAL ISSUE RAISED BY THE ASSESSEE SUBMITTING THAT NO INCRIMINA TING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH FOR THE YEARS UND ER APPEAL AND SANJAY AGRAWAL IT(SS) NO.108&109/IND/2018 12 THE ADDITIONS MADE BY THE LD. A.O ARE ONLY ON THE B ASIS OF ENQUIRIES CONDUCTED IN THE ASSESSMENT PROCEEDINGS. THE ASSES SMENT PROCEEDINGS U/S 153C OF THE ACT DESERVES TO BE QUAS HED BEING WITHOUT JURISDICTION. 9 . WE OBSERVE THAT SEARCH IN THE CASE OF M/S DILIP B UILDCON LIMITED WAS CONDUCTED ON 20.6.2012 AND ALSO AT THE RESIDENTIAL PREMISES OF SHRI SANJAY MEHTA, INDORE. FROM THE RE SIDENTIAL PREMISES OF SHRI SANJAY MEHTA SOME DOCUMENTS RELATI NG TO SALE OF PROPERTY WERE FOUND AND SEIZED MARKED AS PAGE NO.36 TO 51 OF DS. ON THE BASIS OF THESE DOCUMENTS ASSESSEE WAS ISSUED NOTICE U/S 153C FOR CARRYING OUT THE ASSESSMENT PROCEEDINGS FO R 6 YEARS PRIOR TO THE SEARCH WAS CONDUCTED I.E. ASSESSMENT YEAR 2007- 08 TO ASSESSMENT YEAR 2012-13. ON ISSUANCE OF NOTICE U/S 153C OF THE ACT AND AFTER COMMENCEMENT OF ASSESSMENT PROCEEDING S INFORMATION WAS RECEIVED FROM PDIT (INVESTIGATION) DATED 08.03 .2016 SHARING THE LIST WHICH STATED THAT THE ASSESSEE HAS SHIFTED HI S NET PROFITS OF RS. 2,20,500/- AND RS.2,72,226/- FOR ASSESSMENT YEARS 2 009-10 AND 2010-11 RESPECTIVELY THROUGH CLIENT CODE MODIFICATI ON. THIS INFORMATION WAS PART OF THE 593 PAGE SURVEY REPORT . THE ASSESSMENT SANJAY AGRAWAL IT(SS) NO.108&109/IND/2018 13 WAS COMPLETED AFTER MAKING ADDITION OF RS. 2,20,500 /- AND RS.2,72,226/- FOR ASSESSMENT YEARS 2009-10 AND 2010 -11 RESPECTIVELY. THERE IS NO MENTION ABOUT THE SEIZED DOCUMENT, ITS ANALYSIS, SOURCE OF PURCHASE OF PROPERTY BY THE ASS ESSEE WHICH WAS SUBSEQUENTLY SOLD TO MR. SANJAY MEHTA. NO ADDITION HAS BEEN MADE ON ACCOUNT OF THE DOCUMENT SEIZED DURING THE COURSE OF SEARCH. THE FACT REMAINS IS THAT NO ADDITION WAS MADE ON THE BA SIS OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH. 10. FURTHER THE RETURN OF INCOME U/S 139(1) OF THE ACT FOR ASSESSMENT YEARS 2009-10 AND 2010-11 WERE FILED ON 30.7.2009 AND 28.7.2010 RESPECTIVELY. THE STATUTORY TIME LIMIT F OR ISSUANCE OF NOTICE U/S 143(2) OF THE ACT FOR SELECTING ASSESSE ES CASE FOR SCRUTINY STANDS EXPIRED ON 30.9.2010 AND 30.9.2011 RESPECTIV ELY. NO NOTICE U/S 143(2) OF THE ACT WAS ISSUED AND SERVED TO THE ASSESSEE BEFORE THESE DATES FOR THE TWO ASSESSMENT YEARS. DATE OF SEARCH IS 20.06.2012. SO IN THIS SITUATION ASSESSMENT YEARS 2009-10 AND 2010-11 COMES UNDER THE CATEGORY OF UNABATED ASSESS MENT. FOR SUCH ASSESSMENT YEARS, ADDITION CAN BE ONLY MADE ON THE BASIS OF INCRIMINATING MATERIAL FOUND AND SEIZED DURING THE COURSE OF SEARCH. SANJAY AGRAWAL IT(SS) NO.108&109/IND/2018 14 THIS PROPOSITION IS WELL SUPPORTED BY THE FOLLOWING JUDGMENTS:- (I) CIT V/S KABUL CHAWLA 380 ITR 0573 (DELHI) (II) CIT VS RRJ SECURITIES LTD 380 ITR 0612 (DELHI ) (III) SANJAY AGRAWAL VS DCIT 150 ITD 0692 (DELHI) (IV) PR CIT V/S MEETU GUTGUTIA ITA NO.306/2017 DT. 25.05.2017 11. SIMILAR VIEW WAS ALSO TAKEN BY THE CO-ORDINATE BEN CH IN THE CASE OF KALANI BROS & ORS ITA(SS) NO.71/IND/2014 DA TED 06.11.2015 OBSERVING AS FOLLOWS:- 'WE HAVE HEARD BOTH THE SIDES. WE HAVE ALSO GONE THRO UGH THE CASE LAWS RELIED UPON BY BOTH THE SIDES. WE HAVE ALSO CONSI DERED VARIOUS RELEVANT FACTS OF THE CASE. IT IS A SETTLED LEGAL POSITION THAT ONCE A SEARCH AND SEIZURE ACTION HAS TAKEN PLACE U/ S 132 OF THE ACT OR A REQUISITION HAS BEEN MADE U/ S 132A, THE PROVISIONS OF SECTION 153A TRIGGED AND ASSESSING OFFICER IS BOUND TO ISSUE NOTICE U/ S 153A OF THE ACT. ONCE NOTICES ARE ISSUED U/ S 153A OF, THE ACT THEN ASSESSEE IS LEGALLY OBLIGED TO FILE RETURN OF INCOME FOR SIX YEARS. TH E ASSESSMENT AND REASSESSMENT FOR SIX YEARS SHALL BE FINALISED BY THE A SSESSING OFFICER. IT IS ALSO HELD BY VARIOUS COURTS THAT ONCE NOTICE U/ S 153A OF THE ACT ISSUED, THEN ASSESSMENT FOR SIX YEARS SHALL BE AT LARG E BOTH FOR ASSESSING OFFICER AND ASSESSEE HAVE NO WARRANT OF LA W. IT HAS BEEN ALSO HELD THAT IN THE ASSESSMENT YEARS WHERE ASSESSMENTS HAVE BEEN ABATED IN TERMS OF SECOND PROVISO TO SECTION 153A THEN ASSE SSING OFFICER ACTS UNDER ORIGINAL JURISDICTION AND ONE ASSESSMENT IS MADE FO R TOTAL INCOME SANJAY AGRAWAL IT(SS) NO.108&109/IND/2018 15 INCLUDING THE ADDITION MADE ON THE BASIS OF SEIZED MAT ERIAL. BUT WHERE THERE IS NO ABATEMENT OF ASSESSMENTS AND ASSESSMENTS WERE CO MPLETED ON THE DATE OF SEARCH THEN ADDITION CAN BE MADE ONLY ON THE BASIS OF INCRIMINATING DOCUMENTS OR UNDISCLOSED ASSETS, ETC. IN THESE CASES THERE WAS NO INCRIMINATING DOCUMENT FOUND AND SEIZED. NO ASS ESSMENT PROCEEDINGS WERE ABATED IN THESE ASSESSEES. THUS ASS ESSMENTS FOR THESE ASSESSMENT YEARS WERE COMPLETED ON THE DATE O F SEARCH. THE ASSESSMENTS WERE COMPLETED U/ S 143(3) OF THE ACT READ WITH SECTION 153A/ 153C OF THE ACT AFTER THE SEARCH. THERE WAS N O ABATEMENT OF ANY PROCEEDINGS IN THESE CASES FOR THESE ASSESSMENT YEAR S IN TERMS OF SECOND PROVISO TO SECTION 153A OF THE ACT. THERE IS NO SEIZED MATERIAL BELONGING TO THE ASSESSEE WHICH WAS FOUND AND SEIZED IN RELATION TO ADDITIONS MADE. IN. A RECENT DECISION, HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA (SUPRA) HAS HELD THAT COMPLE TED ASSESSMENTS CAN BE INTERFERED WITH BY THE ASSESSING OFFICER WHILE M AKING ASSESSMENT U/ S 153A 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 IN THE COURSE OF SEARC H WHICH WAS NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. IN. ALL THESE CASES NO ASSESSMENTS WERE PENDING ON THE DATE OF SEARCH FOR THESE ASSESSMENT YEARS. NO ASSESSMENT S WERE ABATED IN TERMS OF SECOND PROVISO TO SECTION 153A OF THE ACT. HON'BLE DELHI HIGH / COURT IN THE CASE OF CIT VS. KABUL CHAWLA (SUPRA) HAS CONSIDE RED VARIOUS HIGH COURT DECISIONS RELIED UPON BY THE LEARNED DR. THE HON'BLE DELHI HIGH COURT HAS CONSIDERED THE CASES OF CANARA HOUSI NG DEVELOPMENT CO. VS. DCFT; MADUGULA VS. DCIT; CIT VS. CHETANDAS LAXM ANDAS AND CIT VS. ANIL KUMAR BHATIA (SUPRA). THE ONLY DECISION OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. RAJ KUMAR ARORA; 367 I TR 517 RELIED ON BY THE LEARNED DR WAS NOT CONSIDERED BY HON'BLE DEL HI HIGH COURT WHILE DECIDING THE ISSUE IN THE CASE OF KABUL CHAWLA. THE HON'BLE ALLAHABAD HIGH COURT HAS REVERSED THE ORDER OF THE TRIBUNAL A ND REMANDED THE ISSUE TO THE TRIBUNAL TO CONSIDER THE APPEAL OF THE DEPART MENT ON MERITS. IT IS A SANJAY AGRAWAL IT(SS) NO.108&109/IND/2018 16 SETTLED LEGAL POSITION THAT WHEN TWO VIEWS ARE POSS IBLE ON A PARTICULARS ISSUE THEN THE VIEW FAVOURABLE TO THE ASSESSEE SHOU LD BE FOLLOWED AS HELD BY THE HON'BLE APEX COURT IN THE CASE OF CIT VS. VE GETABLE PRODUCTS; 88 I TR 192. RESPECTIVELY FOLLOWING THE DECISION OF THE HON'BLE APEX COURT, WE DISMISS THE GROUND OF APPEALS OF THE REVENUE. DEPART MENTAL APPEALS ARE DISPOSED ACCORDINGLY.' THE DECISION IN THE CASE OF KALANI BROS. HAS AGAIN BEEN FOLLOWED BY THE HON'BLE ITAT INDORE BENCH, INDORE IN THE CASE O F M/S ANANT STEEL PVT. LTD., INDORE IN IT(SS)A NO. 31, 28, 29&30/IND/ 2010 VIDE ORDER DATED 18.1L.2015. THE HON'BLE ITAT INDORE BENCH, INDORE WHILE ARRIVIN G AT THE ABOVE DECISION HAS TAKEN NOTE OF ALL THE RECENT DECISIONS ON THE ISSUE OF VALIDITY OF ASSESSMENT PROCEEDINGS U/S 153A OF THE INCOME TAX ACT, 1961 WHEREIN ASSESSMENTS WERE MADE WITHOUT REFERENC E TO ANY INCRIMINATING DOCUMENTS/MATERIAL/EVIDENCES FOUND DU RING THE COURSE OF SEARCH AND HELD THAT IT IS A SETTLED LEGAL POSIT ION THAT WHEN TWO VIEWS ARE POSSIBLE ON A PARTICULAR ISSUE THEN THE V IEW FAVOURABLE TO THE ASSESSEE SHOULD BE FOLLOWED AS HELD BY THE HON' BLE APEX COURT IN THE CASE OF CIT VS. VEGETABLE PRODUCTS, 88 ITR 192. ON PERUSAL OF THE ASSESSMENT ORDER IN THE CASE IT I S SEEN THAT THE ADDITIONS MADE BY THE AO HAVE BEEN MADE WITHOUT ANY REFERENCE TO ANY EVIDENCES/ DOCUMENTS/MATERIAL FOUND AS A RESULT OF SEARCH ACTION. THE APPELLANT HAS ALSO STATED THAT NO INCRI MINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH TO JUSTIFY AN Y ENQUIRY ON THE ABOVE ISSUES. IN VIEW OF THE FACT THAT NO INCRIMINA TING DOCUMENTS/MATERIAL/EVIDENCES WERE FOUND RELATED TO THE ISSUES CONSIDERED IN THE ASSESSMENT ORDER DURING THE SEARC H AND KEEPING IN VIEW THE DECISIONS OF THE JURISDICTIONAL IT AT CITE D ABOVE THE VALIDITY OF THE ASSESSMENT II] S 153A OF THE INCOME TAX ACT, 1961 CANNOT BE UPHELD. THESE GROUNDS OF THE APPELLANT ARE THEREFOR E ALLOWED. SANJAY AGRAWAL IT(SS) NO.108&109/IND/2018 17 12. WE ALSO OBSERVE THAT SIMILAR ISSUE CAME FOR ADJUDI CATION BEFORE US IN THE CASE OF OM PRAKASH GUPTA & ORS IT(SS)A NO.277 TO 281 & 283 TO 287/IND/2017 ORDER DATED 28.2.19 AND A FTER CONSIDERING THE SETTLED JUDICIAL PRECEDENCE, IT WAS DECIDED IN FAVOUR OF ASSESSEE. RELEVANT PORTION IS EXTRACTED BELOW:- 27. THESE APPEALS FOR ASSESSMENT YEARS 2009-10 TO 2012-13 ARE CONCLUDED AND NON ABATE ASSESSMENTS. THE A.O. HAS NO TIME TO ISSUE NOTICE U/S 143(2) OF THE ACT AND UNTIL AND UNLESS THERE IS AN INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH NO ADDI TION CAN BE MADE. NOWHERE IN THE ASSESSMENT ORDER SHOWS THAT ADDITI ONS ARE BASED ON THE INCRIMINATING MATERIAL EVEN IN THE ORDER OF THE L D. CIT(A). ADDITIONS ARE ONLY MADE DURING THE COURSE OF ASSESSMENT PROCEED INGS BY CALLING THE ASSESSEE FOR VARIOUS DETAILS SUCH AS BOOKS OF ACCO UNTS VARIOUS DOCUMENTS AND ASSESSMENT WAS COMPLETED. THEREFORE ONCE THE ASSESSMENTS ARE CONCLUDED/NON-ABATED, ADDITION CANNOT BE MADE UNLE SS THERE IS AN INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. THIS LEGAL ASPECT HAS ALREADY BEEN CONSIDERED BY US IN THE ABOVE APP EALS IN IT(SS)A NO.277 TO 281/IND/2017. IN VIEW OF OUR DECISION ABOVE TH E SAME IS TO APPLY IN TO IN ALL THE OTHER PRESENT APPEALS ALSO. WE T HEREFORE, IN VIEW OF OUR DECISION IN THOSE APPEALS, THE ORDERS OF THE LD. C IT(A) ARE REVERSED AND THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED. 13. WE THEREFORE RESPECTFULLY FOLLOWING THE DECISION REFERRED ABOVE AND ALSO CONSIDERING THE LATEST JUDGMENT OF HONBLE HIGH COURT OF DELHI IN THE CASE OF PRINCIPAL CIT & ORS V/S MEETA GUTGUTIA (SUPRA) COME TO THE CONCLUSION THAT SINCE THE ASSESSMENT OR DERS IN QUESTION SANJAY AGRAWAL IT(SS) NO.108&109/IND/2018 18 WERE CONCLUDED AND NON ABATED ASSESSMENTS NO ADDITI ON CAN BE MADE IN THE ASSESSMENT PROCEEDINGS U/S 153C OF THE ACT UNLESS THERE IS ANY INCRIMINATING MATERIAL FOUND DURING TH E COURSE OF SEARCH. WE THEREFORE REVERSE THE ORDERS OF LD. CIT (A) AND QUASH THE ASSESSMENT PROCEEDINGS U/S 153C R.W.S. 143(3) OF TH E ACT DATED 28.3.2016 BEING WITHOUT JURISDICTION AND BAD IN LAW . IN THE RESULT LEGAL GROUND RAISED BY THE ASSESSEE IN GROUND NO.1 STANDS ALLOWED. 14. THE OTHER GROUNDS RAISED IN GROUND NO. 2,3 & 4 WIL L BE MERELY ACADEMIC TO DEAL WITH SINCE WE HAVE ALREADY ALLOWED THE ASSESSEES LEGAL GROUND NO.1 QUASHING THE ASSESSMEN T PROCEEDINGS AND REVERSING THE ORDER OF LD. CIT(A). THUS THE REM AINING GROUNDS ARE DISMISSED AS INFRUCTUOUS. 15. GROUND NO.5 IS CONSEQUENTIAL IN NATURE WHICH NEEDS NO ADJUDICATION. 16. GROUND NO.6 IS GENERAL IN NATURE WHICH ALSO NEEDS NO ADJUDICATION. SANJAY AGRAWAL IT(SS) NO.108&109/IND/2018 19 17 . IN THE RESULT ASSESSEES APPEAL FOR ASSESSMENT YE AR 2009-10 AND ASSESSMENT YEAR 2010-11 STANDS ALLOWED ON LEGAL GROUND. THE ORDER PRONOUNCED IN THE OPEN COURT ON 20.02.2 020. SD/- SD/- ( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 20 FEBRUARY, 2020 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE