M/s. R. Kantilal & CO., Ahmedabad V. The ACIT, Central Circle-1, Surat

ITSSA 131/AHD/2014

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 2954 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 26 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-02-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 24-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VASUNDHARA UPMANU
• Keywords: Business income; Question of law
• Section: 153A; 147; 132; 15

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ IT(SS)A.NO.131/AHD/2014 / ASSTT. YEAR: 2009-2010 M/S.R.KANTILAL & CO. 105, 1 ST FLOOR, VRUJSWAMI COMPLEX DOSHIWADANI POLE ZAVERIWAD, AHMEDABAD. PAN : AAIFR 2867 E VS ACIT, CENT.CIR.1 SURAT. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : MS.URVASHI SHODHAN, AR REVENUE BY : VASUNDHARA UPMANU, CIT - DR / DATE OF HEARING : 09/02/2017 / DATE OF PRONOUNCEMENT: 20/02/2017 $%/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF THE LD.CIT(A)-II, AHMEDABAD DATED 10.1.2014 PASSED FOR THE ASSTT.YEAR 2009-10. 2. ASSESSEE HAS TAKEN SIX GROUNDS OF APPEAL VIZ. TH E LD.AO HAS ERRED IN TAKING COGNIZANCE UNDER SECTION 153C, AND THEREBY C HANGING COLOUR OF THE ASSESSMENT OF SUM OF RS.12.55 LAKHS AS BUSINESS IN COME TO INCOME FROM OTHER SOURCES AND THEREBY DENYING REMUNERATION TO ITS PARTNERS ON THIS AMOUNT UNDER SECTION 40(B) OF THE INCOME TAX ACT, 1 961. IT(SS)A NO.131 /AHD/2014 2 3. BRIEF FACTS OF THE CASE ARE THAT A CASH OF RS.12 .55 LAKHS WAS SEIZED FROM THE EMPLOYEE OF THE ASSESSEE-FIRM ON 12.8.2008. TH IS CASH WAS OFFERED BY THE ASSESSEE AS INCOME AND ASSESSMENT ORDER WAS PASSED ACCORDINGLY. THIS AMOUNT WAS ASSESSED AS INCOME OF THE ASSESSEE. SUB SEQUENTLY, A SEARCH UNDER SECTION 132A OF THE ACT WAS CARRIED OUT IN THE CASE OF SHRI JAGDISH R. PATEL ON 16.4.2010 WHO IS AN EMPLOYEE OF THE ASSESSEE-FIRM. CASH OF RS.9,64,010/- WAS SEIZED FROM HIM. ASSESSEE-FIRM AND SHRI JAGADI SH R. PATEL THE EMPLOYEE OF THE ASSESSEE-FIRM HAVE ADMITTED THAT THIS AMOUNT WAS AN UNACCOUNTED CASH BELONGED TO THE ASSESSEE-FIRM AND IT HAS BEEN OFFER ED FOR TAXATION IN THE HANDS OF THE ASSESSEE-FIRM FOR ASSTT.YEAR 2011-12. TAKIN G A CUE FROM THIS, THE LD.AO INITIATED PROCEEDINGS UNDER SECTION 153C OF T HE INCOME TAX ACT AGAINST ASSESSEE-FIRM FOR THE ASSTT.YEAR 2009-10 AL SO. THE AO DID NOT MAKE ANY ADDITION TO THE INCOME ALREADY ASSESSED IN THE HANDS OF THE ASSESSEE-FIRM. HE SIMPLY TREATED THE INCOME OF RS.12.55 LAKHS RECO VERED FROM THE EMPLOYEE BY THE POLICE ON 12.8.2008 AS INCOME FROM OTHER SO URCES AND DENIED REMUNERATION TO THE PARTNERS ON THIS AMOUNT. 4. APPEAL TO THE CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. THE LD.COUNSEL FOR THE ASSESSEE WHILE IMPUGNING BOTH T HE ORDERS HAD CONTENDED THAT ACTION UNDER SECTION 153C IN THE CASE OF THE A SSESSEE-FIRM COULD BE TAKEN IF DURING THE COURSE OF SEARCH AT THE EMPLOYEE OF T HE ASSESSEE ANY EVIDENCE BELONG TO THE ASSESSEE EXHIBITING UNACCOUNTED INCOM E WAS FOUND. AMOUNT OF RS.9,64,010/- WAS SEIZED FROM THE EMPLOYEE AND IT W AS MEANT FOR THE ASSTT.YEAR 2011-12. IT WAS OFFERED FOR TAXATION IN THAT ASSESSMENT YEAR. ACCORDING TO THE LD.COUNSEL FOR THE ASSESSEE NOTHIN G WAS FOUND WITH REGARD TO THE ASSESSMENT YEAR 2009-10. NO PROCEEDINGS WERE P ENDING IN ASSTT.YEAR 2009-10 AND THE AO COULD NOT TAKE ACTION AGAINST TH E ASSESSEE IN ASSTT.YEAR 2009-10 UNDER SECTION 153C OF THE ACT. FOR BUTTRES SING HER CONTENTIONS, SHE IT(SS)A NO.131 /AHD/2014 3 RELIED UPON THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA, 380 ITR 573 (DEL) AND ALSO DECISI ON OF HONBLE GUJARAT HIGH COURT IN THE CASE OF PR.CIT VS. SAUMYA CONSTRU CTION P.LTD., TAX APPEAL NO.24 OF 2016 ORDER DATED 14.3.2016. ON TH E OTHER HAND, THE LD.CIT-DR RELIED UPON THE ORDER OF THE CIT(A). 5. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. BEFORE EMBARKING UPON AN INQUIRY ON THE FACTS OF THE PRESENT CASE, WE THINK IT APPROPRIATE TO BEAR IN MIND SCOPE OF IN QUIRY CONTEMPLATED UNDER SECTION 153A/153C IN THE JUDGMENT OF HONBLE DELHI HIGH COURT AS WELL AS HONBLE GUJARAT HIGH COURT. THE HONBLE DELHI HIGH COURT HAS SUMMARIZED ITS CONCLUSION ON PAGE NO.589 OF THE JOURNAL. THEY READ AS UNDER: 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 EXPLA INED IN THE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT E MERGES 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 IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN W HICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DA TE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAV E TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEAR CH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORD ERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WILL BE ONLY ONE AS SESSMENT ORDER IN IT(SS)A NO.131 /AHD/2014 4 RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE D ISCLOSED 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 O F THE SEARCH, OR OTHER POST-SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT M EAN THAT THE ASSESSMENT 'CAN BE ARBITRARY OR MADE WITHOUT ANY RE LEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT H AS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATE RIAL.' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE CO MPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REAS SESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATAB LE TO ABATED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEAR CH) AND THE WORD 'REASSESS' TO COMPLETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, T HE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UND ER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEA RCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE A O. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH B Y THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON T HE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR P ROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL A SSESSMENT. CONCLUSION 38. THE PRESENT APPEALS CONCERN AYS, 2002-03, 2005- 06 AND 2006- 07.ON THE DATE OF THE SEARCH THE SAID ASSESSMENTS A LREADY STOOD COMPLETED. SINCE NO INCRIMINATING MATERIAL WAS UNEA RTHED DURING THE SEARCH, NO ADDITIONS COULD HAVE BEEN MADE TO THE IN COME ALREADY ASSESSED. 39. THE QUESTION FRAMED BY THE COURT IS ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. IT(SS)A NO.131 /AHD/2014 5 40. THE APPEALS ARE ACCORDINGLY DISMISSED BUT IN TH E CIRCUMSTANCES NO ORDERS AS TO COSTS. 6. SIMILARLY, HONBLE GUJARAT HIGH COURT HAS MADE L UCID ENUNCIATION OF LAW AND THE RELEVANT DISCUSSION IN THE CASE OF SAUM YA CONSTRUCTION PVT. LTD. (SUPRA). IT READS AS UNDER: 15. ON A PLAIN READING OF SECTION 153A OF THE ACT, IT IS EVIDENT THAT THE TRIGGER POINT FOR EXERCISE OF POWERS THERE UNDER IS A SEARCH UNDER SECTION 132 OR A REQUISITION UNDER SECTION 13 2A OF THE ACT. ONCE A SEARCH OR REQUISITION IS MADE, A MANDATE IS CAST UPON THE ASSESSING OFFICER TO ISSUE NOTICE UNDER SECTION 153 A OF THE ACT TO THE PERSON, REQUIRING HIM TO FURNISH THE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSME NT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE AND ASSESS OR REASSESS THE SAME. SINCE THE ASS ESSMENT UNDER SECTION 153A OF THE ACT IS LINKED WITH SEARCH AND R EQUISITION UNDER SECTIONS 132 AND 132A OF THE ACT, IT IS EVIDENT THA T THE OBJECT OF THE SECTION IS TO BRING TO TAX THE UNDISCLOSED INCOME W HICH IS FOUND DURING THE COURSE OF OR PURSUANT TO THE SEARCH OR R EQUISITION. HOWEVER, INSTEAD OF THE EARLIER REGIME OF BLOCK ASS ESSMENT WHEREBY, IT WAS ONLY THE UNDISCLOSED INCOME OF THE BLOCK PERIOD THAT WAS ASSESSED, SECTION 153A OF THE ACT SEEKS TO ASSESS THE TOTAL INCOME FOR THE ASSESSMENT YEAR, WHICH IS CLEAR FROM THE FIRST PROVISO THERETO WHICH PROVIDES THAT THE ASSESSING O FFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF E ACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS. THE SECOND PROVISO MAKES THE INTENTION OF THE LEGISLATURE CLEAR AS THE SAME PROVIDES THAT ASSESSMENT OR REASSESSMENT, IF ANY, RELATING T O THE SIX ASSESSMENT YEARS REFERRED TO IN THE SUB-SECTION PEN DING ON THE DATE OF INITIATION OF SEARCH UNDER SECTION 132 OR REQUIS ITION UNDER SECTION 132A, AS THE CASE MAY BE, SHALL ABATE. SUB- SECTION (2) OF SECTION 153A OF THE ACT PROVIDES THAT IF ANY PROCEE DING OR ANY ORDER OF ASSESSMENT OR REASSESSMENT MADE UNDER SUB- SECTION (1) IS ANNULLED IN APPEAL OR ANY OTHER LEGAL PROVISION, TH EN THE ASSESSMENT OR REASSESSMENT RELATING TO ANY ASSESSME NT YEAR WHICH IT(SS)A NO.131 /AHD/2014 6 HAD ABATED UNDER THE SECOND PROVISO WOULD STAND REV IVED. THE PROVISO THERETO SAYS THAT SUCH REVIVAL SHALL CEASE TO HAVE EFFECT IF SUCH ORDER OF ANNULMENT IS SET ASIDE. THUS, ANY PRO CEEDING OF ASSESSMENT OR REASSESSMENT FALLING WITHIN THE SIX A SSESSMENT YEARS PRIOR TO THE SEARCH OR REQUISITION STANDS ABATED AN D THE TOTAL INCOME OF THE ASSESSEE IS REQUIRED TO BE DETERMINED UNDER SECTION 153A OF THE ACT. SIMILARLY, SUBSECTION (2) PROVIDES FOR REVIVAL OF ANY ASSESSMENT OR REASSESSMENT WHICH STOOD ABATED, IF ANY PROCEEDING OR ANY ORDER OF ASSESSMENT OR REASSESSME NT MADE UNDER SECTION 153A OF THE ACT IS ANNULLED IN APPEAL OR ANY OTHER PROCEEDING. 16. SECTION 153A BEARS THE HEADING ASSESSMENT IN C ASE OF SEARCH OR REQUISITION. IT IS WELL SETTLED AS HELD BY THE SUPREME COURT IN A CATENA OF DECISIONS THAT THE HEADING OF THE SECTION CAN BE REGARDED AS A KEY TO THE INTERPRETATION OF THE OPERATIVE POR TION OF THE SECTION AND IF THERE IS NO AMBIGUITY IN THE LANGUAGE OR IF IT IS PLAIN AND CLEAR, THEN THE HEADING USED IN THE SECTION STRENGT HENS THAT MEANING. FROM THE HEADING OF SECTION 153, THE INTEN TION OF THE LEGISLATURE IS CLEAR VIZ., TO PROVIDE FOR ASSESSMEN T IN CASE OF SEARCH AND REQUISITION. WHEN THE VERY PURPOSE OF THE PROVI SION IS TO MAKE ASSESSMENT IN CASE OF SEARCH OR REQUISITION, IT GOE S WITHOUT SAYING THAT THE ASSESSMENT HAS TO HAVE RELATION TO THE SEA RCH OR REQUISITION. IN OTHER WORDS, THE ASSESSMENT SHOULD BE CONNECTED WITH SOMETHING FOUND DURING THE SEARCH OR REQUISITI ON, VIZ., INCRIMINATING MATERIAL WHICH REVEALS UNDISCLOSED IN COME. THUS, WHILE IN VIEW OF THE MANDATE OF SUB-SECTION (1) OF SECTION 153A OF THE ACT, IN EVERY CASE WHERE THERE IS A SEARCH OR R EQUISITION, THE ASSESSING OFFICER IS OBLIGED TO ISSUE NOTICE TO SUC H PERSON TO FURNISH RETURNS OF INCOME FOR THE SIX YEARS PRECEDI NG THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH THE SEARCH IS CONDUCTED OR REQUISITION IS MADE, ANY ADDITION O R DISALLOWANCE CAN BE MADE ONLY ON THE BASIS OF MATERIAL COLLECTED DURING THE SEARCH OR REQUISITION. IN CASE NO INCRIMINATING MAT ERIAL IS FOUND, AS HELD BY THE RAJASTHAN HIGH COURT IN THE CASE OF JAI STEEL (INDIA), JODHPUR V. ASSISTANT COMMISSIONER OF INCOM E TAX (SUPRA), THE EARLIER ASSESSMENT WOULD HAVE TO BE REITERATED. IN CASE WHERE PENDING ASSESSMENTS HAVE ABATED, THE ASSESSING OFFI CER CAN PASS IT(SS)A NO.131 /AHD/2014 7 ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS DETERMI NING THE TOTAL INCOME OF THE ASSESSEE WHICH WOULD INCLUDE INCOME D ECLARED IN THE RETURNS, IF ANY, FURNISHED BY THE ASSESSEE AS W ELL AS UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SEARCH OR REQU ISITION. IN CASE WHERE A PENDING REASSESSMENT UNDER SECTION 147 OF T HE ACT HAS ABATED, NEEDLESS TO STATE THAT THE SCOPE AND AMBIT OF THE ASSESSMENT WOULD INCLUDE ANY ORDER WHICH THE ASSESS ING OFFICER COULD HAVE PASSED UNDER SECTION 147 OF THE ACT AS W ELL AS UNDER SECTION 153A OF THE ACT. 17. IN THE FACTS OF THE PRESENT CASE, A SEARCH CAME TO BE CONDUCTED ON 07.10.2009 AND THE NOTICE WAS ISSUED TO THE ASSE SSEE UNDER SECTION 153A OF THE ACT FOR ASSESSMENT YEAR 2006-07 ON 04.08.2010. IN RESPONSE TO THE NOTICE, THE ASSESSEE FILED RETURN OF INCOME ON 18.11.2010. IN TERMS OF SECTION 153B, THE ASSESSMENT WAS REQUIRED TO BE COMPLETED WITHIN A PERIOD OF TWO YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE SEARCH C AME TO BE CARRIED OUT, NAMELY, ON OR BEFORE 31ST MARCH, 2012. HERE, INSOFAR AS THE IMPUGNED ADDITION IS CONCERNED, THE NOTICE I N RESPECT THEREOF CAME TO BE ISSUED ON 19.12.2011 SEEKING AN EXPLANATION FROM THE ASSESSEE. THE ASSESSEE GAVE ITS RESPONSE B Y REPLY DATED 21.12.2011 CALLING UPON THE ASSESSING OFFICER TO PR OVIDE COPIES OF STATEMENTS RECORDED ON OATH OF SHRI ROHIT P. MODI A ND SMT. PARESHABEN K. MODI DURING THE SEARCH AS WELL AS THE COPIES OF THE DOCUMENTS UPON WHICH THE DEPARTMENT PLACED RELIANCE FOR THE PURPOSE OF MAKING THE PROPOSED ADDITION AS WELL AS THE COPY OF THE EXPLANATION GIVEN BY SHRI ROHIT P. MODI AND SMT. PA RESHABEN K. MODI REGARDING THE ON-MONEY RECEIVED, COPIES OF THE ASSESSMENT ORDERS IN CASE OF SAID PERSONS AND ALSO REQUESTED T HE ASSESSING OFFICER TO PERMIT HIM TO CROSS-EXAMINE THE SAID PER SONS. THE ASSESSING OFFICER ISSUED SUMMONS TO THE SAID PERSON S, HOWEVER, THEY WERE OUT OF STATION AND IT WAS NOT KNOWN AS TO WHEN THEY WOULD RETURN. IN THIS BACKDROP, WITHOUT AFFORDING A NY OPPORTUNITY TO THE ASSESSEE TO CROSS-EXAMINE THE SAID PERSONS, THE ASSESSING OFFICER MADE THE ADDITION IN QUESTION. 18. IN THIS CASE, IT IS NOT THE CASE OF THE APPELLA NT THAT ANY INCRIMINATING MATERIAL IN RESPECT OF THE ASSESSMENT YEAR UNDER IT(SS)A NO.131 /AHD/2014 8 CONSIDERATION WAS FOUND DURING THE COURSE OF SEARCH . AT THE RELEVANT TIME WHEN THE NOTICE CAME TO BE ISSUED UND ER SECTION 153A OF THE ACT, THE ASSESSEE FILED ITS RETURN OF I NCOME. MUCH LATER, AT THE FAG END OF THE PERIOD WITHIN WHICH THE ORDER UNDER SECTION 153A OF THE ACT WAS TO BE MADE, IN OTHER WORDS, WHE N THE LIMIT FOR FRAMING THE ASSESSMENT AS PROVIDED UNDER SECTION 15 3 WAS ABOUT TO EXPIRE, THE NOTICE HAS BEEN ISSUED IN THE PRESEN T CASE SEEKING TO MAKE THE PROPOSED ADDITION OF RS.11,05,51,000/- ON THE BASIS OF THE MATERIAL WHICH WAS NOT FOUND DURING THE COURSE OF SEARCH, BUT ON THE BASIS OF A STATEMENT OF ANOTHER PERSON. IN T HE OPINION OF THIS COURT, IN A CASE LIKE THE PRESENT ONE, WHERE AN ASS ESSMENT HAS BEEN FRAMED EARLIER AND NO ASSESSMENT OR REASSESSMENT WA S PENDING ON THE DATE OF INITIATION OF SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A, WHILE COMPUTING THE TOTAL INCOME OF THE ASSESSEE UNDER SECTION 153A OF THE ACT, ADDI TIONS OR DISALLOWANCES CAN BE MADE ONLY ON THE BASIS OF THE INCRIMINATING MATERIAL FOUND DURING THE SEARCH OR REQUISITION. IN THE PRESENT CASE, IT IS AN ADMITTED POSITION THAT NO INCRIMINAT ING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH, HOWEVER, IT IS O N THE BASIS OF SOME MATERIAL COLLECTED BY THE ASSESSING OFFICER MU CH SUBSEQUENT TO THE SEARCH, THAT THE IMPUGNED ADDITIONS CAME TO BE MADE. 19. ON BEHALF OF THE APPELLANT, IT HAS BEEN CONTEND ED THAT IF ANY INCRIMINATING MATERIAL IS FOUND, NOTWITHSTANDING TH AT IN RELATION TO THE YEAR UNDER CONSIDERATION, NO INCRIMINATING MATE RIAL IS FOUND, IT WOULD BE PERMISSIBLE TO MAKE ADDITIONS AND DISAL LOWANCE IN RESPECT OF ALL THE SIX ASSESSMENT YEARS. IN THE OPI NION OF THIS COURT, THE SAID CONTENTION DOES NOT MERIT ACCEPTANCE, INAS MUCH AS, THE ASSESSMENT IN RESPECT OF EACH OF THE SIX ASSESSMENT YEARS IS A SEPARATE AND DISTINCT ASSESSMENT. UNDER SECTION 153 A OF THE ACT, AN ASSESSMENT HAS TO BE MADE IN RELATION TO THE SEA RCH OR REQUISITION, NAMELY, IN RELATION TO MATERIAL DISCLO SED DURING THE SEARCH OR REQUISITION. IF IN RELATION TO ANY ASSESS MENT YEAR, NO INCRIMINATING MATERIAL IS FOUND, NO ADDITION OR DIS ALLOWANCE CAN BE MADE IN RELATION TO THAT ASSESSMENT YEAR IN EXER CISE OF POWERS UNDER SECTION 153A OF THE ACT AND THE EARLIER ASSES SMENT SHALL HAVE TO BE REITERATED. IN THIS REGARD, THIS COURT I S IN COMPLETE AGREEMENT WITH THE VIEW ADOPTED BY THE RAJASTHAN HI GH COURT IN IT(SS)A NO.131 /AHD/2014 9 THE CASE OF JAI STEEL (INDIA), JODHPUR V. ASSISTANT COMMISSIONER OF INCOME TAX (SUPRA). BESIDES, AS RIGHTLY POINTED OUT BY THE LEARNED COUNSEL FOR THE RESPONDENT, THE CONTROVERSY INVOLVE D IN THE PRESENT CASE STANDS CONCLUDED BY THE DECISION OF THIS COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX-1 V. JAYABEN RATILAL SOR ATHIA (SUPRA) WHEREIN IT HAS BEEN HELD THAT WHILE IT CANNOT BE DI SPUTED THAT CONSIDERING SECTION 153A OF THE ACT, THE ASSESSING OFFICER CAN REOPEN AND/OR ASSESS THE RETURN WITH RESPECT TO SIX PRECEDING YEARS; HOWEVER, THERE MUST BE SOME INCRIMINATING MA TERIAL AVAILABLE WITH THE ASSESSING OFFICER WITH RESPECT T O THE SALE TRANSACTIONS IN THE PARTICULAR ASSESSMENT YEAR. 20. FOR THE FOREGOING REASONS, IT IS NOT POSSIBLE T O STATE THAT THE IMPUGNED ORDER PASSED BY THE TRIBUNAL SUFFERS FROM ANY LEGAL INFIRMITY SO AS TO GIVE RISE TO A QUESTION OF LAW, MUCH LESS, A SUBSTANTIAL QUESTION OF LAW, WARRANTING INTERFERENC E. THE APPEAL, THEREFORE, FAILS AND IS, ACCORDINGLY, DISMISSED. 7. A PERUSAL OF THESE DECISIONS WOULD INDICATE THAT BOTH THE HONBLE COURTS ARE UNANIMOUS ON THEIR CONCLUSION THAT ADDIT ION UNDER SECTION 153A OR 153C COULD BE MADE IF DURING THE COURSE OF SEARCH S EIZED MATERIAL WAS FOUND EXHIBITING UNDISCLOSED INCOME. REVERTING TO THE F ACTS OF THE PRESENT CASE, IT WOULD REVEAL THAT FOR ASSTT.YEAR 2009-10 NOTHING WA S FOUND DURING THE SEARCH CARRIED ON SHRI JAGDISH R. PATEL ON 16.4.2010. A S UM OF RS.9,64,010/- WAS FOUND FROM THIS EMPLOYEE, BUT IT WAS TAXABLE IN THE ASSTT.YEAR 2011-12. IT WAS OFFERED FOR TAXATION IN THAT ASSESSMENT YEAR. NOTHING PERTAINED TO THE ASSTT.YEAR 2009-10 WAS FOUND WHICH CAN AUTHORIZE TH E AO TO TAKE ACTION UNDER SECTION 153C OF THE ACT AGAINST THE ASSESSEE IN THE ASSTT.YEAR 2009-10. WHATEVER WAS FOUND ON 12.8.2008 FALL WITHIN THE A.Y .2009-10 THAT HAS BEEN OFFERED FOR TAXATION AND ASSESSMENT WAS COMPLETE. IT WAS NOT PENDING IN 2010 WHEN SUBSEQUENT SEARCH WAS CARRIED OUT. THESE JUDG MENTS ARE SQUARELY APPLICABLE ON THE FACTS OF THE PRESENT CASE AND THE AO CANNOT CHANGE THE IT(SS)A NO.131 /AHD/2014 10 COLOUR OF THE ASSESSEES INCOME SIMPLY BY TAKING UP PROCEEDINGS UNDER SECTION 153C. IN VIEW OF THE ABOVE DISCUSSION, WE ALLOW THE APPEAL OF THE ASSESSEE AND DIRECT THE AO NOT TO DENY REMUNERATION TO THE PARTNERS AND NOT TO CHANGE THE STATUS OF ADDITION OF RS.12.55 LAKHS BY TAKING ITS STATUS AS INCOME FROM OTHER SOURCES, INSTEAD OF BUSINESS INCOME ACCEPTED BY HIM IN ORIGINAL ASSESSMENT ORDER. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 20 TH FEBRUARY, 2017 AT AHMEDABAD. SD/- SD/- (MANISH BORAD) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 20/02/2017