THE DCIT, 2(1), Indore V. SHRI SATISH NEMA, Indore

ITSSA 150/IND/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6774 (ITAT-INDORE)
• Duration Of Justice: 3 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 07-02-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 27-01-2020
• Assessment Year: 2006-2007
• Appeal Filed On: 15-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S B PRASAD
• Keywords: Unexplained investment; Search and seizure; Opportunity of being heard; Validity of assessment
• Section: 271(1)(c); 143(3); 142(1); 153A; 69B; 143(2); 139(1); 13; 153; 22; 153C; 68; 132

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 149, 150 & 152/IND/2016 ASSESSMENT YEARS 2005-06, 2006-07,& 2009-10 PAN : ABOPM2352F DCIT-2(1), V/S SHRI SATI SH NEMA, INDORE 61/1, PUJA VILLA, LAL BAG, KESHAR BAG ROAD, INDORE (REVENUE) (RESPONDENT) C.O. NO.34,35 & 37/IND/2016 ASSESSMENT YEARS 2005-06, 2006-07 & 2009-10 SHRI SATISH NEMA, V/S DCIT-2(1) 61/1, PUJA VILLA, INDORE LAL BAG, KESHAR BAG ROAD, INDORE (RESPONDENT) (REVENUE) REVENUE BY SHRI S. B. PRASAD, DR ASSESSEE BY SHRI ANIL KUMAR GARG, CA DATE OF HEARING 2 7 . 0 1.20 20 DATE OF PRONOUNCEMENT 07 . 0 2 .20 20 SATISH NEMA IT(SS) NO.149, 150, 152/IND/2016 & C.O.NO.34, 35 & 37/IND/2016 2 O R D E R PER BENCH. THE ABOVE CAPTIONED APPEALS FILED AT THE INSTANCE O F REVENUE & CROSS OBJECTION BY ASSESSEE PERTAINING TO ASSESSMEN T YEARS 2005- 06, 2006-07 & 2009-10 ARE DIRECTED AGAINST THE ORDE RS OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-I (IN SHORT LD.CIT(A)], INDORE DATED 10.3.2016 WHICH IS ARISING OUT OF THE ORDER U/S 153A R.W.S.143(3) OF THE ACT DATED 28.03.2013 FRAMED BY DCIT-2(1), INDORE. 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. AS REVENUE HAS RAISED COMMON GROUNDS OF APPEAL FOR ALL THREE ASSESSMENT YEARS 2005-06, 2006-07 AND 2009-10. GRO UNDS RAISED FOR ASSESSMENT YEAR 2005-06 ARE ONLY MENTIONED BEL OW:- (1) WHETHER IN THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT CA) ERRED IN LAW BY DELETING THE ADDITIONS HOLDING THAT THESE ADDITIONS HAVE NOT BEEN MADE ON THE BASIS OF INCRIMINATING MATERIA LS OR DOCUMENTS FOUND DURING SEARCH & SEIZURE ACTION U/S 132 OF THE IT ACT. SATISH NEMA IT(SS) NO.149, 150, 152/IND/2016 & C.O.NO.34, 35 & 37/IND/2016 3 (2) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE LD. CIT CA) ERRED IN LAW IN INTERPRETING SECTION 153A OF TH E IT ACT. (3) WHETHER IN THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE LD. CIT CA) ERRED IN LAW BY ALLOWING THE APPEAL OF THE ASSESSEE IN NOT APPRECIATING THE CIRCULAR NO. 7 OF2003 DATED: 05/09/2003 ISSUED BY THE CBDT, NEW DELHI. (4) WHETHER IN THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE LD. ERR CA) ERRED IN LAW BY NOT APPRECIATING THE FACT THAT THER E IS NO PRECONDITION FOR INITIATION AS WELL AS ASSESSMENT/REASSESSMENT U/S 1 53A OF THE I'I' ACT THAT DOCUMENTS PERTAINING TO EACH OF THE ASSESSMENT YEAR FALLING UNDER PROVISIONS OF SECTION 153A/L53C SHOULD BE FOUND. 4. AGAINST THE APPEALS FILED BY THE REVENUE ASSESSEE HAS ALSO FILED CROSS OBJECTIONS FOR ALL THE THREE ASSESSMENT YEARS RAISING FOLLOWING GROUNDS OF APPEAL; C.O. NO.34/IND/2016 (ASSESSMENT YEAR 2005-06) 1. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) GROSSLY ERRED IN LAW IN NOT ADMITTING THE ADDITIONA L GROUND OF APPEAL RAISED BY THE RESPONDENT BEFORE THE ID. CIT(A) INASMUCH TH AT THE IMPUGNED ASSESSMENT ORDER PASSED BY THE LEARNED AO WAS BARRE D BY THE TIME LIMIT PRESCRIBED UNDER S.153B(1)(A) OF THE INCOME-TAX ACT , 1961 INASMUCH IN THE INSTANT CASE, LAST OF THE AUTHORISATIONS FOR SEARCH UNDER S.132 OF THE ACT WAS EXECUTED DURING THE FINANCIAL YEAR ENDED ON 31- 03-2011 AND CONSEQUENTLY, THE ASSESSMENT ORDER WAS STATUTORILY REQUIRED TO BE PASSED UPTILL 31-03-:2013 WHEREAS SUCH ASSESSMENT ORDER WA S ACTUALLY PASSED AFTER 31-03-2013 AND SERVED UPON THE RESPONDENT ON 02-04-20'13, THEREFORE, THE IMPUGNED ASSESSMENT ORDER DESERVES TO BE QUASHE D ON THIS LEGAL SATISH NEMA IT(SS) NO.149, 150, 152/IND/2016 & C.O.NO.34, 35 & 37/IND/2016 4 GROUND ALONE. 2. THAT, WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED C IT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN NOT DECIDING THE ISSUE ON M ERITS WITH RESPECT TO THE ADDITION OF RS.L,07,00,000/- MADE BY THE AO IN THE RESPONDENT'S INCOME ON ACCOUNT OF UNSECURED LOAN CLAIMED TO HAVE BEEN RECE IVED BY THE RESPONDENT FROM M/S. ARYWORTH IMPEX, BY INVOKING PROVISIONS OF SECTION 68 OF THE INCOME-TAX ACT, 1961. 3. THAT, THE LEARNED CIT(A) GROSSLY ERRED, BOTH ON FAC TS AND IN LAW, IN NOT DECIDING THE ISSUE ON MERITS WITH RESPECT TO THE AD DITION OF RS.74,00,000/- MADE BY THE AO IN THE RESPONDENT'S INCOME ON ACCOUN T OF AMOUNT RECEIVED FROM M/S. SHREENATH TRADERS, BY INVOKING PROVISIONS OF SECTION 68 OF THE INCOME-TAX ACT, 1961. 4. THAT, THE LEARNED CIT(A) GROSSLY ERRED, BOTH ON FAC TS AND IN LAW, IN NOT DECIDING THE ISSUE ON MERITS WITH RESPECT TO THE AD DITION OF RS.8,30,000/- MADE BY THE AO IN THE RESPONDENT'S INCOME BY INVOK ING PROVISIONS OF SECTION 68 OF THE INCOME-TAX ACT, 1961, MERELY ON G UESS WORK, CONJECTURES AND SURMISES. 5(A)THAT THE LEARNED CIT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN NOT DECIDING THE ISSUE ON MERITS WITH RESPECT TO THE AD DITION OF RS.6,00,000/- MADE BY THE AO IN THE RESPONDENTS INCOME BY DISALLOWING THE ENTIRE EXPENDITURE ON ACCOUNT OF BROKERAGE' CLAIMED BY TH E RESPONDENT FOR DERIVING INCOME FROM MCX SECTIONS MERELY ON GUESS W ORK, SURMISES AND CONJECTURES. (B) THAT THE LEARNED CIT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN NOT DECIDING :.....E- ISSUE ON MERITS WITH RESPECT TO THE ADDITION OF RS. 53,425/- AND RS.L,03,500/- MADE BY THE AO IN THE RESPONDENT'S IN COME BY DISALLOWING 50 OF THE EXPENDITURE ACTUALLY INCURRED AND CLAIMED BY THE RESPONDENT ON ACCOUNT OF 'LEGAL EXPENSES AND SALARY EXPENSES' RES PECTIVELY FOR DERIVING SATISH NEMA IT(SS) NO.149, 150, 152/IND/2016 & C.O.NO.34, 35 & 37/IND/2016 5 INCOME FROM MCX TRANSACTIONS MERELY ON GUESS WORK, SURMISES AND CONJECTURES. THAT, THE CROSS OBJECTOR FURTHER CRAVES LEAVE TO AD D, ALTER AND/OR AMEND GROUND OF CROSS-OBJECTIONS, AS AND WHEN CONSIDERED NECESSARY. C.O. NO.36/IND/2016 (ASSESSMENT YEAR 2006-07) 1.THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEARNED CIT(A) GROSSLY ERRED IN LAW IN NOT ADMITTING THE ADDITIONA L GROUND OF APPEAL RAISED BY THE RESPONDENT BEFORE THE LD. CIT(A) INASMUCH THAT THE IMPUGNED ASSESSMENT ORDER PASSED BY THE LEARNED AO WAS BARRE D BY THE TIME LIMIT PRESCRIBED UNDER . 153 B(1 )( A) OF THE INCOME TAX ACT, 1961 INASMUCH IN THE INSTANT CASE, LAST OF THE AUTHORISATIONS FOR SE ARCH UNDER S.132 OF THE ACT WAS EXECUTED DURING THE FINANCIAL YEAR ENDED ON 31- 03-2011 AND CONSEQUENTLY, THE ASSESSMENT ORDER WAS STATUTORILY REQUIRED TO BE PASSED UPTILL 31-03-2013 WHEREAS SUCH ASSESSMENT ORDER WAS ACTUALLY PASSED AFTER 31-03-2013 AND SERVED UPON THE RESPONDENT ON 02-04-2013, THEREFORE, THE IMPUGNED ASSESSMENT ORDER DESERVES TO BE QUASHE D ON THIS LEGAL GROUND ALONE. 2.THAT, WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN NOT DECIDING THE ISSUE ON MERITS WITH RESPECT TO THE ADDITION OF RS.30,00,000/_ MADE BY THE AO IN TH E RESPONDENT'S INCOME ON ACCOUNT, OF UNSECURED LOAN CLAIMED TO HAVE BEEN RECEIVED BY THE RESPONDENT FROM SHRI ABHINANDAN AGRAWAL, HYDERABAD, BY INVOKING PROVISIONS OF SECTION 68 OF THE INCOME- TAX ACT, 19 61. 3. THAT, THE LEARNED CIT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN NOT DECIDING THE ISSUE ON MERITS WITH RESPECT TO THE AD DITION OF RS.40,00,000/_ MADE BY THE AO IN THE RESPONDENT'S INCOME ON ACCOUN T OF UNSECURED LOAN CLAIMED TO HAVE BEEN RECEIVED BY THE RESPONDENT FRO M M/S. CSM DEVELOPERS, IN DARE, BY INVOKING PROVISIONS OF SECT ION 68 OF THE INCOME-TAX SATISH NEMA IT(SS) NO.149, 150, 152/IND/2016 & C.O.NO.34, 35 & 37/IND/2016 6 ACT, 1961. 4. THAT, THE LEARNED CIT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN NOT DECIDING THE ISSUE ON MERITS WITH RESPECT TO THE AD DITION OF RS.20,00,000/_ MADE BY THE AO IN THE RESPONDENT'S INCOME ON ACCOUN T OF UNSECURED LOAN CLAIMED TO HAVE BEEN RECEIVED BY THE RESPONDENT FRO M M/S. PATEL TIMBERS LTD., BY INVOKING PROVISIONS OF SECTION 68 OF THE I NCOME-TAX ACT, 1961. 5. THAT THE LEARNED CIT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN NOT DECIDING THE ISSUE ON MERITS WITH RESPECT TO THE AD DITION OFRS.73,25,601L- MADE BY THE AO IN THE RESPONDENT'S INCOME BY MAKING AD-HOC DISALLOWANCE OUT OF THE EXPENDITURE CLAIMED BY THE RESPONDENT FO R DERIVING INCOME FROM MCX TRANSACTIONS MERELY ON GUESS WORK, SURMISES AND CONJECTURES. 6. THAT THE LEARNED CIT(A) GROSSLY ERRED, BOTH ON F ACTS AND IN LAW, IN NOT DECIDING E ISSUE ON MERITS WITH RESPECT TO THE ADDI TION OF RS.3,80,200/- MADE BY THE AO IN E RESPONDENT'S INCOME ON ACCOUNT OF ALLEGED UNEXPLAINED INVESTMENT IN PLOT NO. I10 & 1-11, SHREEJI VELLY, G RAM BICHOLI MARDANA, INDORE, BY INVOKING PROVISIONS 0- SECTION 69B OF THE INCOME-TAX ACT, 1961, ON EXTRANEOUS CONSIDERATIONS, WITHOUT GIVING PROPER OPPORTUNITY OF BEING HEARD AND WITHOUT CONSIDERING THE MATERIAL FACT THA T THE ENTIRE INVESTMENT WAS MADE BY THE RESPONDENT OUT OF HIS EXPLAINED SOU RCES ONLY. 7. THAT, THE LEARNED CIT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN NOT DECIDING THE ISSUE ON MERITS WITH RESPECT TO THE AD DITION OFRS.3,55,995/- MADE BY THE AO IN E RESPONDENT'S INCOME ON ACCOUNT OF ALLEGED UNEXPLAINED INVESTMENT IN PLOT NO. R-8, SHREEJI VELLY, GRAM BIC HOLI MARDANA, INDORE, BY INVOKING PROVISIONS, OF SECTION 69B OF THE INCOME-T AX ACT, 1961, ON EXTRANEOUS CONSIDERATIONS, WITHOUT GIVING PROPER OP PORTUNITY OF BEING HEARD AND WITHOUT CONSIDERING THE MATERIAL FACT THAT THE ENTIRE INVESTMENT WAS MADE BY THE RESPONDENT OUT OF HIS EXPLAINED SOURCES ONLY. SATISH NEMA IT(SS) NO.149, 150, 152/IND/2016 & C.O.NO.34, 35 & 37/IND/2016 7 8. THAT, THE CROSS OBJECTOR FURTHER CRAVES LEAVE TO ADD, ALTER AND/OR AMEND GROUND OF CROSS-OBJECTIONS, AS AND WHEN CONSIDERED NECESSARY. C.O. NO.37/IND/2016 (ASSESSMENT YEAR 2009-10) 1. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) GROSSLY ERRED IN LAW IN NOT ADMITTING THE ADDITIONA L GROUND OF APPEAL- RAISED BY THE RESPONDENT BEFORE THE ID. CIT(A) INASMUCH TH AT THE IMPUGNED ASSESSMENT ORDER PASSED BY THE LEARNED AO WAS BARRE D BY THE TIME LIMIT PRESCRIBED UNDER S.L53B(L)(A) OF THE INCOME-TAX ACT , 1961 INASMUCH IN THE INSTANT CASE, LAST OF THE AUTHORISATIONS FOR SEARCH UNDER S.132 OF THE ACT WAS EXECUTED DURING THE FINANCIAL YEAR ENDED ON 31-03-2 011 AND CONSEQUENTLY, THE ASSESSMENT ORDER WAS STATUTORILY REQUIRED TO BE PASSED UPTILL 31-03- 2013 WHEREAS SUCH ASSESSMENT ORDER WAS ACTUALLY PAS SED AFTER 31-03- 2013 AND SERVED UPON THE RESPONDENT ON 02-04-2013, THEREFORE, THE IMPUGNED ASSESSMENT ORDER DESERVES TO BE QUASHED ON THIS LEGAL GROUND ALONE. 2. THAT, WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED C IT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN NOT DECIDING THE ISSUE ON M ERITS WITH RESPECT TO THE ADDITION OF RS.95,00,000/- MADE BY THE AO IN THE RE SPONDENT'S INCOME ON ACCOUNT OF AMOUNT RECEIVED FROM M/S. M.P. REAL ESTA TE & DEVELOPERS, A PARTNERSHIP FIRM IN WHICH THE RESPONDENT WAS ONE OF THE PARTNERS, BY INVOKING PROVISIONS OF SECTION 68 OF THE INCOME-TAX ACT, 1961. 3(A) THAT, THE LEARNED CIT(A) GROSSLY ERRED, BOTH ON FACTS AND IN LAW, IN NOT DECIDING THE ISSUE ON MERITS WITH RESPECT TO THE AD DITION OF RS.45,00,000/- MADE BY THE AO IN THE RESPONDENT'S INCOME ON ACCOUN T OF UNSECURED LOAN CLAIMED TO HAVE BEEN RECEIVED BY THE RESPONDENT FRO M M/S. SCS BUILDERS & DEVELOPERS PVT. LTD., BY INVOKING PROVISIONS OF SEC TION 68 OF THE INCOME-TAX ACT, 1961. (B) THAT, WITHOUT PREJUDICE TO THE ABOVE, THE LEAR NED CIT(A) GROSSLY ERRED, SATISH NEMA IT(SS) NO.149, 150, 152/IND/2016 & C.O.NO.34, 35 & 37/IND/2016 8 BOTH-ON FACTS AND IN LAW, IN NOT DECIDING THE ISSUE ON MERITS WITH RESPECT TO THE IMPUGNED ADDITION, WITHOUT CONSIDERING THE MATE RIAL FACT THAT THE DATE I.E. 12-12-2007 ON WHICH THE RESPONDENT RECEIVED TH E LOAN FROM M/S . SCS BUILDERS & DEVELOPERS PVT. LTD. FALL IN THE PREVIOUS YEAR RELE VANT TO A.Y. 2008-09 ONLY AND THEREFORE, EVEN ON THIS COUNT NO A DDITION COULD HAVE BEEN MADE DURING THE ASSESSMENT YEAR UNDER CONSIDERATION . 4. THAT, THE LEARNED CIT(A) GROSSLY ERRED, BOTH ON FAC TS AND IN LAW, IN NOT DECIDING THE ISSUE ON MERITS WITH RESPECT TO THE AD DITION OF RS.5,OO,OOO/- MADE BY THE AO IN THE RESPONDENT'S INCOME ON ACCOUN T OF UNSECURED LOAN CLAIMED TO HAVE BEEN RECEIVED BY THE RESPONDENT FRO M M/S. SHREENATH TRADERS, INDORE, BY INVOKING PROVISIONS OF SECTION 68 OF THE INCOME-TAX ACT, 1961. 5. THAT, THE LEARNED CIT(A) GROSSLY ERRED, BOTH ON FAC TS AND IN LAW, IN NOT DECIDING THE ISSUE ON MERITS WITH RESPECT TO THE AD DITION OF RS.25,OO,OOO/- MADE BY THE AO IN THE RESPONDENT'S INCOME ON ACCOUN T OF UNDISCLOSED CAPITAL GAIN, MERELY ON GUESS WORK, CONJECTURES AND SURMISES WITHOUT PROPERLY CONSIDERING AND APPRECIATING THE EXPLANATI ON OF THE RESPONDENT MADE BEFORE THE AO. 6. THAT, THE CROSS OBJECTOR FURTHER CRAVES LEAVE TO AD D, ALTER AND/OR AMEND GROUND OF CROSS-OBJECTIONS, AS AND WHEN CONSIDERED NECESSARY. 5. BRIEF FACTS OF THE CASE AS CULLED OUT FROM THE RE CORDS ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINE SS OF MCX TRADING. A SEARCH U/S 132 OF THE I.T. ACT WAS CONDU CTED ON 25.11.2010 AT THE RESIDENCE OF THE ASSESSEE. CONSE QUENTLY NOTICE U/S 153A WAS ISSUED ON 29.11.2011 AND IN RESPONSE T O THE NOTICE ASSESSED HAS FILED RETURN OF INCOME ON 20.01.2012. THEREAFTER SATISH NEMA IT(SS) NO.149, 150, 152/IND/2016 & C.O.NO.34, 35 & 37/IND/2016 9 NOTICES U/S 143(2) AND 142(1) ALONG WITH QUESTIONNA IRE WERE DULY SERVED UPON THE ASSESSEE. INCOME OF THE ASSESSEE WAS ASSESSED U/S 153A R.W.S. 143(3) OF THE I.T. ACT AFTER MAKING VAR IOUS ADDITIONS. 6 . AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) ONOBSERVING THAT SINCE THERE IS NO INCRIMINATING MA TERIAL FOUND DURING THE COURSE OF SEARCH FOR ALL THE ASSESSMENT YEARS 2005-06, 2006-07 & 2009-10, LD. CIT(A) FOLLOWING THE DECISIO N OF THE CO- ORDINATE BENCH IN THE CASE OF KALANI BROS. & OTHERS IT(SS) NO.71/IND/2015 DATED 6.11.15 DID NOT UPHOLD THE VA LIDITY OF THE ASSESSMENT U/S 153A OF THE ACT AND DELETED THE ADDI TION. AS REGARDS THE GROUND RAISED ON MERITS THEY WERE RENDERED ACAD EMIC IN VIEW OF THE FACTS THAT GROUND NO.1 TO 3 OF THE APPELLANT CH ALLENGING THE VALIDITY OF THE ORDER U/S 153A OF THE ACT WAS ALLOW ED. 7. AGGRIEVED REVENUE IS NOW IN APPEAL BEFORE THE TRIB UNAL AGAINST THE FINDING OF LD. CIT(A) QUASHING THE ASSESSMENT P ROCEEDINGS U/S 153A OF THE ACT WHEREAS THE ASSESSEE HAS FILED CROS S OBJECTIONS CHALLENGING THE FINDING OF LD. CIT(A) OF NOT ADJUDI CATING THE ISSUES RAISED ON MERITS. SATISH NEMA IT(SS) NO.149, 150, 152/IND/2016 & C.O.NO.34, 35 & 37/IND/2016 10 8. WE WILL FIRST TAKE UP THE REVENUES APPEAL FOR AL L THE THREE ASSESSMENT YEARS WHEREIN FINDING OF LD. CIT(A) IS I N CHALLENGE HOLDING THE PROCEEDINGS U/S 153A AS INVALID ON THE GROUND THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH IN THE INSTANT CASE. 9. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUED SUPPORTING ORDER OF LD. A.O AND ALSO REFERRED TO VARIOUS SUBMI SSIONS REFERRING TO THE ALLEGED INCRIMINATING MATERIAL, EXTRACT OF Q UESTIONS ASKED DURING THE COURSE OF SEARCH, DETAILS OF INVENTORY O F ACCOUNTS BOOK FOUND AND SEIZED. LD. DEPARTMENTAL REPRESENTATIVE WAS FAIR ENOUGH TO ACCEPT THAT AS REGARDS TO ASSESSMENT YEAR 2005-0 6 AND ASSESSMENT YEAR 2009-10 THERE WAS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH AND THE ADDITION MADE B Y THE LD. A.O WERE NOT BASED ON ANY SUCH SEIZED MATERIAL AND IT O NLY ON THE BASIS OF INFORMATION GATHERED DURING THE COURSE OF ASSESS MENT PROCEEDINGS. 10 . PER CONTRA LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT SINCE THE REVENUE AUTHORITIES HAVE ACCEPTED THAT NO INCRI MINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH FOR ASSESSMEN T YEAR 2005-06 SATISH NEMA IT(SS) NO.149, 150, 152/IND/2016 & C.O.NO.34, 35 & 37/IND/2016 11 AND ASSESSMENT YEAR 2009-10 THE FINDING OF LD. CIT( A) MAY BE CONFIRMED AND CROSS OBJECTIONS RAISED BY THE ASSESS EE MAY BE DISMISSED AS INFRUCTUOUS. HOWEVER WITH REGARD TO A SSESSMENT YEAR 2006-07 FOR WHICH THE LD. DEPARTMENTAL REPRESENTATI VE REFERRED TO THE INCRIMINATING MATERIAL, IT WAS SUBMITTED THAT N O SUCH MATERIAL WAS FOUND. CERTAIN QUESTIONS WERE ASKED DURING THE SEARCH PROCEEDINGS ON THE BASIS OF WHICH LD. A.O SEEKED IN FORMATION DURING THE COURSE OF ASSESSMENT ABOUT THE ALLEGED UNEXPLAI NED INVESTMENT. THE ASSESSEE HAS SUBMITTED THAT THE ALLEGED PURCHAS E OF PROPERTIES WERE DULY ACCOUNTED FOR IN THE REGULAR BOOKS AND HA VE BEEN DISCLOSED BY THE ASSESSEE. SINCE THE ALLEGED INVES TMENTS ARE DULY EXPLAINED THEY DO NOT FALL IN THE CATEGORY OF INCRI MINATING MATERIAL AND THUS NO ADDITION COULD HAVE BEEN MADE. LD. COUN SEL FOR THE ASSESSEE APART FROM RELYING VARIOUS JUDGMENTS AND D ECISIONS RELIED BY THE LD. CIT(A) ALSO RELIED ON THE DECISION OF HO NBLE HIGH COURT OF DELHI IN THE CASE OF PRINCIPAL CIT & ORS V/S MEETA GUTGUTIA (2017) 395 ITR 0526 . AGAINST THIS JUDGMENT OF HONBLE HIGH COURT OF D ELHI THE APPEAL FILED BY THE REVENUE IN SPECIAL LEAVE P ETITION BEFORE THE HONBLE SUPREME COURT WAS DISMISSED VIDE ORDER DAT ED 2.7.2018. SATISH NEMA IT(SS) NO.149, 150, 152/IND/2016 & C.O.NO.34, 35 & 37/IND/2016 12 11 . WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE R ECORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH THE VARIOUS JU DGMENTS AND DECISIONS RELIED BY THE LD. COUNSEL FOR THE ASSESSE E. COMMON GRIEVANCE OF THE REVENUE FOR ASSESSMENT YEAR 2005- 06, ASSESSMENT YEAR 2006-07 AND ASSESSMENT YEAR 2009-10 IS THAT TH E LD. CIT(A) ERRED IN LAW BY DELETING THE ADDITION HOLDING THAT THESE ADDITION HAVE NOT BEEN MADE ON THE BASIS OF INCRIMINATING MATERIA L FOUND DURING THE COURSE OF SEARCH AND SEIZURE ACTION U/S 132 OF THE ACT. 12 . DURING THE COURSE OF HEARING WHEN AFTER GIVING SU FFICIENT OPPORTUNITY TO THE REVENUE AUTHORITIES TO PRODUCE T HE INCRIMINATING MATERIAL IF ANY WHICH ARE THE SOLE BASIS OF ADDITIO N MADE BY THE LD. A.O, REVENUE AUTHORITIES WERE FAIR ENOUGH TO ACCEPT THAT FOR ASSESSMENT YEAR 2005-06 AND ASSESSMENT YEAR 2009-10 NO SUCH INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH AND THE ADDITIONS MADE IN THE ASSESSMENT ORDER ARE BASE D ON THE INFORMATION GATHERED DURING ASSESSMENT PROCEEDINGS . HOWEVER WITH REGARD TO ASSESSMENT YEAR 2006-07 REVENUE AUTHORITI ES HAVE CLAIMED THAT THERE WAS SOME INCRIMINATING MATERIAL. SATISH NEMA IT(SS) NO.149, 150, 152/IND/2016 & C.O.NO.34, 35 & 37/IND/2016 13 13 . HOWEVER FROM THE PERUSAL OF THE PAPER BOOK FILED BY THE DEPARTMENTAL REPRESENTATIVE AND THE ASSESSMENT ORDE R IT IS REVEALED THAT THE BASIS OF ADDITION WERE QUESTION NO.14 AND 15 ASKED TO THE ASSESSEE ON 25.11.10. QUESTION NO.14 WAS WITH REGAR D TO PURCHASE OF LAND AT GRAM BICHOLI MARDANA TEHSIL & DIST. INDO RE PLOT NO.I-10 AND I-11 OF 2400 SQUARE FEET EACH VALUING AT RS.1,4 8,800/- FOR EACH PLOT. QUESTION NO.15 ASSESSEE WAS ASKED TO SHOW THE SOURCE OF INVESTMENT IN PURCHASE OF 4500 SQUARE FEET OF LAND AT GRAM BICHOLI MARDANA TEHSIL & DIST. INDORE AT RS.2,79,000/-. AP ART FROM ASKING THESE TWO QUESTIONS THERE IS NO REFERENCE OF ANY IN CRIMINATING MATERIAL EVIDENCING THAT THE ASSESSEE HAD NOT DISCL OSED ANY PARTICULAR TRANSACTION OR HAS MADE ANY UNACCOUNTED INVESTMENT OVER AND ABOVE THE STATED PRICE IN THE REGISTERED DOCUME NTS. 14. THEREAFTER DURING THE COURSE OF ASSESSMENT PROCEED INGS REFERRING TO QUESTION NO. 14 & 15 LD. A.O ASKED TO PRODUCE THE DETAILS. THE ASSESSEE SUBMITTED THE NECESSARY DOCU MENTS AND CONTENDED THAT THE ALLEGED TRANSACTIONS OF PURCHASE ARE FROM THE REGULAR SOURCE OF INCOME AND FUNDS AVAILABLE WITH T HE ASSESSEE. FUND FLOW STATEMENT FOR THE PERIOD 1.4.2004 TO 31.3 .2011 WAS FILED SATISH NEMA IT(SS) NO.149, 150, 152/IND/2016 & C.O.NO.34, 35 & 37/IND/2016 14 BEFORE THE LD. A.O VIDE LETTER DATED 26.10.2012. F OR BETTER UNDERSTANDING WE REPRODUCE BELOW THE FINDING OF LD. A.O IN THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2006-07 RELATI NG TO ADDITION OF RS.3,80,200/- AND RS. 3,55,995/- FOR UNEXPLAINED INVESTMENT; 3.UNEXPLAIINED INVESTMENT :- VIDE QUESTION NO.14 OF THE STATEMENT OF THE ASSESSE E DATED 25/11/2010 RECORDED DURING THE COURSE OF SEARCH ON 25/11/2010 THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SOURCE OF PURCHASE OF THE P LOT AT NO. 1-10 AND 1-1 LEACH 2400 SQ. FT. AT SHREEJI VELLY, GRAM BICHOLI M ARDANA, INDORE PURCHASED FOR RS. 148800/- EACH DATED 02112/2005. D URING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS REQUIRED TO FURNISH EVIDENCE FOR SUCH SOURCE OF INVESTMENT. V IDE SUBMISSION DATED 26/1 0/2012 THE ASSESSEE SUBMITTED THAT HE HAS INCURRED TOTAL INVESTMENT OF RS.3,80,200/-(RS.1 ,90 ,100/- *2) INCLUDING REGISTRY EXPENSES AND THE SOURCE OF INVESTMENT CAN BE VERIFIED FROM THE FUND FLOW STATEMENT. ON EXAMINATION OF BANK STATEMENT AND THE EXPLANATIO N FOR CREDIT ENTRIES FOR BANK ENTRIES TILED BY THE ASSESSEE IT WAS NOTED THA T NO AMOUNT HAS BEEN WITHDRAWN FROM THE BANK DURING F.Y. 2005-06 FOR THE PAYMENT TOWARDS INVESTMENT IN SUBJECT PROPERTY. THE ASSESSEE ALSO F AILED TO FURNISH THE COPY OF REGISTRY FOR THE SAID PROPERTY EVEN ASKING REPEA TEDLY. IN ABSENCE OF VERIFIABLE DETAILS THE AMOUNT OF RS. 3,80,200- INVE STED REMAIN UNEXPLAINED THEREFORE ADDED TO THE INCOME OF THE ASSESSEE U/S 6 9B OF THE LT. ACT. PENALTY PROCEEDINGS U/S 271(L)(C) IS INITIATED SEPA RATELY. ADDITION: RS. 380,200/- SATISH NEMA IT(SS) NO.149, 150, 152/IND/2016 & C.O.NO.34, 35 & 37/IND/2016 15 3. UNEXPLAINED INVESTMENT :- VIDE QUESTION NO.15 OF THE-STATEMENT OF THE ASSESSEE DAT ED 25/11/2010 RECORDED DURING THE COURSE OF SEARCH ON 25/11/2010 THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SOURCE OF INVESTMENT IN THE PLOT AT H-8 4500 SQ. FT. AT SHREEJI VELLY, GRAM BICHOLI MARDANA, INDORE PU RCHASED FOR RS.2,79,000/- EACH DATED 02/12/2005. DURING THE COU RSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS REQUIRED TO FURNISH EV IDENCE FOR SUCH SOURCE OF INVESTMENT. VIDE SUBMISSION DATED 26/10/2012 THE ASSESSEE SUBMITTED THAT HE HAS INCURRED TOTAL INVESTMENT OF RS. 3,55,995/- INCLUDI NG REGISTRY EXPENSES AND THE SOURCE OF INVESTMENT CAN BE VERIFIED FROM THE F UND FLOW STATEMENT. ON EXAMINATION OF BANK STATEMENT AND THE EXPLANATIO N FOR CREDIT ENTRIES FOR BANK ENTRIES BY THE ASSESSEE IT WAS NOTED THAT NO A MOUNT HAS BEEN WITHDRAWN FROM THE BANK DURING F.Y. 2005-06 FOR THE PAYMENT TOWARDS INVESTMENT IN SUBJECT PROPERTY. THE ASSESSEE ALSO F AILED TO FURNISH THE COPY OF REGISTRY FOR THE SAID PROPERTY EVEN ASKING REPEA TEDLY. IN ABSENCE OF VERIFIABLE DETAILS THE AMOUNT OF RS. 355995/- INVESTED REMAIN UNEXPLAINED THEREFORE ADDED TO THE INCOME OF THE ASSESSEE U/S 69B OF THE LT. ACT. PENALTY PROCEEDING U/S 271(1)(C) IS INITIATED SEPARATELY. ADDITION: RS, 3,55,995/- 15. FROM GOING THROUGH THE FINDING OF LD. A.O FIRST AN D FOREMOST IT IS APPEARING THAT NEXUS OF THE ADDITIONS ARE ONLY T HE QUESTIONS ASKED DURING THE COURSE OF SEARCH PROCEEDINGS AND NOT ANY INCRIMINATING MATERIAL. SECONDLY THE ASSESSEE HAD SUBMITTED THAT THE INVESTMENTS WERE MADE OUT OF THE FUND AVAILABLE WITH IT AND DUL Y ACCOUNTED FOR SATISH NEMA IT(SS) NO.149, 150, 152/IND/2016 & C.O.NO.34, 35 & 37/IND/2016 16 AND SHOWN IN THE REGULAR RETURN OF INCOME FOR ASSES SMENT YEAR 2006-07 WHICH WAS ORIGINALLY FILED ON 19.10.2006 SH OWING THE INCOME OF RS. 4,26,605/-. THE DATE BY WHICH THE RE TURN COULD HAVE BEEN SELECTED FOR SCRUTINY BY THE ISSUANCE OF NOTIC E U/S 143(2) OF THE ACT EXPIRES ON 31.10.2007. 16 . THUS IN THE PROCEEDINGS U/S 153A OF THE ACT THE ADDITIONS SEEMS TO HAVE BEEN MADE ONLY ON THE BASIS OF ASSESS MENT ENQUIRY. ASSESSEE HAD DULY REPLIED DURING THE PROCEEDINGS AB OUT THE INFORMATION ASKED IN QUESTION NO. 14 & 15 THAT THE TRANSACTIONS HAVE BEEN SHOWN IN THE REGULAR RETURN OF INCOME. T HIS FACTS REMAINS UN REBUTTED BY THE REVENUE AUTHORITIES THAT APART F ROM THE QUESTIONS ASKED THERE WAS NO OTHER INCRIMINATING MATERIAL FOU ND DURING SEARCH RELATING TO ASSESSMENT YEAR 2006-07. THUS THE UNDI SPUTED FACT REMAINS IS THAT IN ASSESSMENT COMPLETED FOR ASSESSM ENT YEAR 2005- 06, ASSESSMENT YEAR 2006-07 AND ASSESSMENT YEAR 200 9-10, ADDITIONS WERE MADE BY THE LD. A.O MERELY ON THE BA SIS OF ENQUIRY DURING ASSESSMENT PROCEEDINGS HAVING NO DIRECT OR I NDIRECT NEXUS WITH ANY INCRIMINATING MATERIAL FOUND/SEIZED DURING THE COURSE OF SEARCH. IN THE GIVEN CASE WHERE THE RETURN OF INCOM E WERE ORIGINALLY SATISH NEMA IT(SS) NO.149, 150, 152/IND/2016 & C.O.NO.34, 35 & 37/IND/2016 17 FILED U/S 139(1) OF THE ACT AND ASSESSEES CASE WAS NOT SELECTED FOR SCRUTINY U/S 143(2) OF THE ACT, VALIDITY OF SUCH AS SESSMENT U/S 153A OF THE ACT NEEDS TO BE EXAMINED IN THE LIGHT OF JUD ICIAL PRONOUNCEMENTS. 17 . WE OBSERVE THAT LD. CIT(A) ALLOWED THE ASSESSEES LEGAL GROUND QUASHING THE ASSESSMENT PROCEEDINGS U/S 153A OF THE ACT BY COMMONLY OBSERVING AS FOLLOWS:- 5. GROUND NO.1 & 3: BY THESE GROUNDS THE APPELLANT HAS CHALLENGED THE VALIDITY OF THE ASSESSMENT MADE U/ S 153A OF TH E ACT BY CONTENDING THAT NO INCRIMINATING MATERIAL J DETAILS OF UNDISCLOSED INCOME WERE FOUND AND HENCE THE ASSESSMENT WAS BAD IN LAW. DETAILED SUBMISSIONS OF THE APPELLANT ON THE ISSUE ARE REPRODUCED AT P8RFL NO.3 ABOVE. 5.1 THE THRUST OF THE APPELLANT'S CONTENTION IS THAT FO R THE ASSESSMENT YEAR 2005-06 THE RETURN OF INCOME WAS OR IGINALLY FILED ON 19.10.2005. INCOME WAS ASSESSED AT RS. 345510/- BY ORDER U/S 143(3) OF THE ACT DATED 23-10-2007. IN VIEW OF THE ABOVE THE ASSESSMENT STOOD CONCLUDED AS ON 23-10-2007. THE AD DITIONS MADE IN THE ORDER U/ S 153A R.W.S.143(3) DATED 28-03-20 13 ARE NOT BASED ON ANY INCRIMINATING MATERIAL / DOCUMENTS/ EVIDENCES FOUND AS A RESULT OF ACTION U/S 132. THE ADDITIONS WHICH HAVE BEEN MADE ARE ON THE BASIS OF ACCOUNTS AND DETAILS ALREADY REFLECTED IN THE ORIGINAL RETURN OF INCOME FILED AND NO INCRIMINATING MATERIAL WAS F OUND RELATED TO THE ABOVE TRANSACTIONS WARRANTING ADDITION TO THE TOTAL INCOME U / S 153A OF THE INCOME TAX ACT, 1961. SATISH NEMA IT(SS) NO.149, 150, 152/IND/2016 & C.O.NO.34, 35 & 37/IND/2016 18 5.2 THE TRANSACTIONS WERE PROPERLY RECORDED IN THE ACCOU NTS/RETURN MAINTAINED/FILED PRIOR TO THE DATE OF SEARCH. APPELL ANT PLACED RELIANCE ON VARIOUS JUDICIAL PRONOUNCEMENTS IN SUPPORT OF TH E ABOVE LEGAL CONTENTION INCLUDING THE DECISION OF THE JURISDICTI ONAL ITAT IN THE CASE OF ANANT STEELS LTD. VS. ACIT (ITA NO.133/IND./2013 DA TED 30/11/2015) AND IN THE CASE OF KALANI BROS. & ORS. ITA (SS) NO. 71/IND./2014 DATED 06/11/2015 AND THE DECISION OF THE SPECIAL BENCH OF THE ITAT, MUMBAI IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT (20 ITJ 45) (TRIB. MUMBAI)(SB). 5.3 THE MATERIAL PLACED ON RECORD HAS BEEN CONSIDERED. IN THE CASE OF KALANI BROS. THE JURISDICTIONAL ITAT HAS OBSERVED A S UNDER:- 'WE HAVE HEARD BOTH THE SIDES. WE HAVE ALSO GONE TH ROUGH THE CASE LAWS RELIED UPON BY BOTH THE SIDES. WE HAVE ALSO CONSIDERED 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. THE ASSESSMENT AND REASSESSMENT FOR SIX YEAR S SHALL BE FINALISED BY THE ASSESSING OFFICER. IT IS ALSO HELD BY V ARIOUS COURTS THAT ONCE NOTICE U/ S 153A OF THE ACT ISSUED, THEN ASSESSMENT FOR SIX YEARS SHALL BE AT LARGE BOTH FOR ASSESSING OFFICER AND ASSESSEE HAVE NO WARRANT OF LAW. IT HAS BEEN ALSO HELD THAT IN THE ASSESSMENT YEARS WHERE ASSESSMENTS HAVE BEEN ABATED IN TERMS OF SECOND PROVISO TO SECTION 153A THEN ASSESSING OFFICE R ACTS UNDER ORIGINAL JURISDICTION AND ONE ASSESSMENT IS MADE F OR TOTAL INCOME INCLUDING THE ADDITION MADE ON THE BASIS OF SEIZ ED MATERIAL. BUT WHERE THERE IS NO ABATEMENT OF ASSESSMENTS AND ASSESSMENTS WERE COMPLETED ON THE DATE OF SEARCH TH EN ADDITION CAN BE MADE ONLY ON THE BASIS OF INCRIMINATING DOCU MENTS OR SATISH NEMA IT(SS) NO.149, 150, 152/IND/2016 & C.O.NO.34, 35 & 37/IND/2016 19 UNDISCLOSED ASSETS, ETC. IN THESE CASES THERE WAS N O INCRIMINATING DOCUMENT FOUND AND SEIZED. NO ASSESSMENT PROCEEDING S WERE ABATED IN THESE ASSESSEES. THUS ASSESSMENTS FOR THE SE ASSESSMENT YEARS WERE COMPLETED ON THE DATE OF SEARC H. THE ASSESSMENTS WERE COMPLETED U/ S 143(3} OF THE ACT READ WITH SECTION 153A/ 153C OF THE ACT AFTER THE SEARCH. THER E WAS NO ABATEMENT OF ANY PROCEEDINGS IN THESE CASES FOR THE SE ASSESSMENT YEARS IN TERMS OF SECOND PROVISO TO SECTION 153A OF T HE ACT. THERE IS NO SEIZED MATERIAL BELONGING TO THE ASSESSEE WHICH WA S FOUND AND SEIZED IN RELATION TO ADDITIONS MADE. IN. A RECENT DECISION, HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. KAB UL CHAWLA (SUPRA) HAS HELD THAT COMPLETED ASSESSMENTS CAN BE I NTERFERED WITH BY THE ASSESSING OFFICER WHILE MAKING 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 COUR SE OF SEARCH WHICH WAS NOT PRODUCED OR NOT ALREADY DISCLOSED OR M ADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. IN. ALL THESE CASES NO ASSESSMENTS WERE PENDING ON THE DATE OF SEARCH FOR THESE ASSESS MENT YEARS. NO ASSESSMENTS 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 CONSIDERED VARIOUS HIGH COU RT DECISIONS RELIED UPON BY THE LEARNED DR. THE HON'BLE DELHI HIG H COURT HAS CONSIDERED THE CASES OF CANARA HOUSING DEVELOPMENT CO. VS. DCFT; MADUGULA VS. DCIT; CIT VS. CHETANDAS LAXMANDAS AND CIT VS. ANIL KUMAR BHATIA (SUPRA). THE ONLY DECISION OF THE HON'B LE 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 H ON'BLE DELHI HIGH COURT WHILE DECIDING THE ISSUE IN THE CASE OF KABUL CHAWLA. THE HON'BLE ALLAHABAD HIGH COURT HAS REVERSED THE O RDER OF THE TRIBUNAL AND REMANDED THE ISSUE TO THE TRIBUNAL TO CONSIDER THE APPEAL OF THE DEPARTMENT ON MERITS. IT IS A SETTLED LEGAL POSITION THAT SATISH NEMA IT(SS) NO.149, 150, 152/IND/2016 & C.O.NO.34, 35 & 37/IND/2016 20 WHEN TWO VIEWS ARE POSSIBLE ON A PARTICULARS ISSUE TH EN THE VIEW FAVOURABLE TO THE ASSESSEE SHOULD BE FOLLOWED AS HE LD BY THE HON'BLE APEX COURT IN THE CASE OF CIT VS. VEGETABLE PRODUCTS; 88 I TR 192. RESPECTIVELY FOLLOWING THE DECISION OF THE HON'BLE APEX COURT, WE DISMISS THE GROUND OF APPEALS OF THE REVENUE. DEP ARTMENTAL 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. SATISH NEMA IT(SS) NO.149, 150, 152/IND/2016 & C.O.NO.34, 35 & 37/IND/2016 21 18. WE ALSO OBSERVE THAT SIMILAR VIEW CAME FOR ADJUDIC ATION 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. HA S 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. 19. 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 SATISH NEMA IT(SS) NO.149, 150, 152/IND/2016 & C.O.NO.34, 35 & 37/IND/2016 22 WERE CONCLUDED AND NON ABATED ASSESSMENTS NO ADDITI ON CAN BE MADE IN THE ASSESSMENT PROCEEDINGS U/S 153A OF THE ACT UNLESS THERE IS ANY INCRIMINATING MATERIAL FOUND DURING TH E COURSE OF SEARCH. WE FIND NO INCONSISTENCY IN THE FINDING OF LD. CIT(A) QUASHING THE ASSESSMENT PROCEEDINGS U/S 153A OF THE ACT SINCE THE ADDITIONS WERE NOT MADE ON THE BASIS OF ANY INCRIMI NATING MATERIAL FOUND DURING THE COURSE OF SEARCH. THUS REVENUES APPEAL FOR ASSESSMENT YEARS 2005-06, 2006-07 AND 2009-10 STAND S DISMISSED. 20. NOW WE TAKE UP THE CROSS OBJECTIONS RAISED BY THE ASSESSEE FOR ASSESSMENT YEARS 2005-06, 2006-07 AND 2009-10. SINC E WE HAVE ALREADY DISMISSED REVENUES APPEAL THEREBY CONFIRMI NG THE FINDINGS OF LD. CIT(A) HOLDING THE ASSESSMENT PROCEEDINGS U/ S 153A AS INVALID RESULTING INTO DELETION OF THE ADDITIONS MADE BY TH E LD. A.O DEALING WITH THE MERITS OF THE CASE RAISED IN THE CROSS OBJ ECTIONS BY THE ASSESSEE WILL BE MERELY ACADEMIC IN NATURE AND ARE THUS RENDERED TO BE INFRUCTUOUS. THUS THE CROSS OBJECTIONS FILED BY THE ASSESSEE FOR ASSESSMENT YEARS 2005-06, 2006-07 AND 2009-10 ARE D ISMISSED AS INFRUCTUOUS. SATISH NEMA IT(SS) NO.149, 150, 152/IND/2016 & C.O.NO.34, 35 & 37/IND/2016 23 21 . IN THE RESULT REVENUES APPEAL FOR ASSESSMENT YEA R 2005-06, ASSESSMENT YEAR 2006-07 AND ASSESSMENT YEAR 2009-10 STANDS DISMISSED AND ASSESSEES CROSS OBJECTIONS ARE DISMI SSED AS INFRUCTUOUS. THE ORDER PRONOUNCED IN THE OPEN COURT ON 07. 02. 2020. SD/- SD/- ( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 07 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