M/S. Paul Brothers, Dakshin Dinajpur V. DCIT, CC-XXVII, Kolkata, Kolkata

ITSSA 166/KOL/2014

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3075 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 08-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 27-09-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 24-12-2014
• Court: TRIBUNAL
• Department Lawyers: NIRAJ KUMAR
• Keywords: Search and seizure; Reason to believe
• Section: 143(3); 142(1); 133A; 153A; 132; 144

Judgement Text

1 IT(SS)A NOS. 166-169 OF 2014 PAUL BROTHERS., AYS 2007-08 TO 2010-11 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KO LKATA [BEFORE SHRI M. BALAGANESH, AM & SHRI PARTHA SARAT HI CHAUDHURY, JM] I.T(SS).A NOS.166 TO 169/KOL/2014 ASSESSMENT YEARS: 2007-08 TO 2010-11 M/S. PAUL BROTHERS (PAN: AAJFP7846C) VS. DEPUTY COM MISSIONER OF INCOME-TAX, CENTRAL CIRCLE-XXVII, KOLKATA. ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 02.03.2017 DATE OF PRONOUNCEMENT: 08.03.2017 FOR THE APPELLANT: SHRI SUBASH AGARWAL, ADVOCATE FOR THE RESPONDENT: SHRI NIRAJ KUMAR, CIT, DR ORDER PER SHRI M. BALAGANESH, AM: ALL THESE APPEALS BY ASSESSEE ARE ARISING OUT OF SE PARATE ORDERS OF CIT(A), CENTRAL-II, KOLKATA VIDE APPEAL NOS. 144, 143, 142 & 141/CC-XXV II/CIT(A)C-II/14-15 DATED 10.09.2014, 14.11.2014, 11.09.2014 & 14.11.2014 RES PECTIVELY. ASSESSMENTS WERE FRAMED BY DCIT, CENTRAL CIRCLE-XXVII, KOLKATA U/S. 153A/14 3(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR AYS 2007 -08 TO 2010-11 VIDE HIS SEPARATE ORDERS ALL DATED 27.03.2014. SINCE SOME OF THE ISSUES ARE COMMON AND FACTS ARE IDENTICAL, WE DISPOSE OF ALL THESE APPEALS BY THIS CONSOLIDATED O RDER FOR THE SAKE OF CONVENIENCE. 2. AT THE OUTSET, THERE IS A DELAY OF 30 DAYS IN F ILING THE APPEALS BY THE ASSESSEE FOR THE ASST YEARS 2007-08 AND 2009-10. IN THE DELAY CONDO NATION PETITION, THE ASSESSEE HAD STATED THAT HIS ELDER BROTHER SHRI RANJIT KUMAR PAUL WAS V ERY CRITICAL AND WAS SUFFERING FROM SEVERE ILLNESS AND ACCORDINGLY THE ASSESSEE WAS PRE OCCUPIED WITH HIM IN THE TREATMENT AND WHICH EVENTUALLY LED TO THE DELAY IN FILING THE APP EALS BEFORE THIS TRIBUNAL BY 30 DAYS. WE ARE CONVINCED WITH THE REASONS STATED IN THE CONDON ATION PETITION AND ACCORDINGLY PROCEED TO CONDONE THE DELAY AND ADMIT THE APPEALS FOR THE ASS T YEARS 2007-08 AND 2009-10 FOR ADJUDICATION. 2 IT(SS)A NOS. 166-169 OF 2014 PAUL BROTHERS., AYS 2007-08 TO 2010-11 3. THE PRELIMINARY ISSUE TO BE DECIDED IN THESE AP PEALS IS AS TO WHETHER IN RESPECT OF UNABATED ASSESSMENTS AS ON THE DATE OF SEARCH, THE LD AO COULD FRAME THE SEARCH ASSESSMENTS U/S 153A OF THE ACT BY MAKING CERTAIN A DDITIONS WITHOUT ANY INCRIMINATING MATERIALS FOUND DURING THE COURSE OF SEARCH. 3.1. THE BRIEF FACTS OF THIS ISSUE IS THAT THERE WAS A SEARCH AND SEIZURE OPERATION CONDUCTED U/S 132 OF THE ACT ON 17.1.2012 IN THE FOLLOWING PR EMISES :- - THANA ROAD, GANGARAMPUR, DAKSHIN DINAJPUR, PIN-73 3124 - RESIDENCE OF SHRI RANJAN KUMAR PAUL AND SMT SHABA RI PAUL AT NIVEDITA APARTMENT, 2 ND FLOOR, 135, N.S.C.BOSE ROAD, KOLKATA 700103 - FACTORY PREMISES OF M/S SHIVA LOKENATH RICE MILLS (P) LTD AT JOTMALKHAN, KALIDIGHI, GANGARAMPUR SURVEY U/S 133A OF THE ACT WAS ALSO CONDUCTED ON 17 .1.2012 IN THE FOLLOWING PREMISES:- - M/S SHRI BRINDABAN RICE MILLS, BANGALBARI, UTTAR DI NAJPUR - M/S BABA LOKENATH RICE MILLS, BABUPARA, HILLI, DAKS HIN DINAJPUR THE GROUP IS ENGAGED IN RICE AND FLOUR MILL BUSINES S AND SUPPLY OF ESSENTIAL COMMODITIES TO GOVERNMENT OF WEST BENGAL. THE ASSESSEE FIRM M/S PA UL BROTHERS IS ONE OF THE CONCERNS OF THE SAID GROUP AND WAS COVERED BY THE SEARCH OPERAT ION U/S 132 OF THE ACT ON 17.1.2012. THE ASSESSEE HAD ORIGINALLY FILED ITS RETURN OF INC OME FOR THE ASST YEARS 2007-08, 2008-09 AND 2009-10 ON 14.11.2007, 2.2.2009 AND 28.3.2010 RESPECTIVELY AND THE MAXIMUM TIME LIMIT FOR ISSUANCE OF NOTICE U/S 143(2) OF THE ACT FOR THE RESPECTIVE ASSESSMENT YEARS EXPIRED ON 30.11.2008 , 30.9.2009 AND 30.9.2010 RESPECTIV ELY. ACCORDINGLY NO ASSESSMENTS WERE FRAMED U/S 143(3) OF THE ACT FOR THE ASST YEARS 20 07-08 , 2008-09 AND 2009-10 ON THE ORIGINAL RETURNS FILED BY THE ASSESSEE. HENCE AS ON THE DATE OF SEARCH ON 17.1.2012, THESE THREE ASSESSMENT YEARS BECOMES UNABATED. 3.1.1. IN RESPECT OF ASST YEAR 2010-11, THE RETURN OF INCOME WAS ORIGINALLY FILED U/S 139(1) OF THE ACT ON 5.5.2011 AND THE PROCEEDINGS WERE PEN DING AS ON THE DATE OF SEARCH ON 17.1.2012 AND ACCORDINGLY THE SAID ASSESSMENT GETS ABATED. 3 IT(SS)A NOS. 166-169 OF 2014 PAUL BROTHERS., AYS 2007-08 TO 2010-11 3.2. THE FOLLOWING ADDITIONS / DISALLOWANCES WERE MADE IN THE ASSESSMENTS FRAMED U/S 153A OF THE ACT :- ASST YEAR 2007-08 DISALLOWANCE OF CARRIAGE OUTWARDS U/S 40(A)(IA) RS . 13,10,042 ASST YEAR 2008-09 DISALLOWANCE OF CARRIAGE OUTWARDS U/S 40(A)(IA) RS . 7,48,620 ASST YEAR 2009-10 DISALLOWANCE OF CARRIAGE OUTWARDS U/S 40(A)(IA) RS . 7,62,320 ADDITION TOWARDS UNDISCLOSED PURCHASES RS. 8,60, 041 PROFIT OUT OF UNDISCLOSED PURCHASES RS. 16,68 5 ASST YEAR 2010-11 ADDITION TOWARDS UNDISCLOSED PURCHASES RS. 1,92, 960 PROFIT OUT OF UNDISCLOSED PURCHASES RS. 20,49 2 THE ACTION OF THE LD AO WAS UPHELD BY THE LD CITA. AGGRIEVED, THE ASSESSEE IS IN APPEALS BEFORE US QUESTIONING THE VALIDITY OF SEARCH ASSESS MENTS U/S 153A OF THE ACT IN THE ABSENCE OF INCRIMINATING MATERIALS IN RESPECT OF UNABATED A SSESSMENTS AND ALSO QUESTIONING THE ADDITIONS / DISALLOWANCES ON MERITS. 3.3. THE LD AR STATED THAT THE LEGAL ISSUE QUESTION ING THE VALIDITY OF SECTION 153A ASSESSMENTS AND ADDITIONS MADE THEREON IN RESPECT O F UNABATED ASSESSMENTS IN THE ABSENCE OF INCRIMINATING MATERIALS WERE RAISED FOR THE FIRS T TIME BEFORE THIS TRIBUNAL. THE REASON FOR NOT RAISING IT BEFORE THE LD CITA WAS DUE TO CONTRA RY DECISIONS RENDERED BY VARIOUS JUDICIAL FORUMS AND DUE TO CONFUSION IN THE INTERPRETATION O F THE ACT. HE PRAYED FOR ADMISSION OF THOSE GROUNDS RAISED BEFORE THE TRIBUNAL FOR THE FI RST TIME AS IT GOES TO THE ROOT OF THE MATTER AND DOES NOT INVOLVE FRESH INVESTIGATION OF FACTS. HE PLACED RELIANCE IN THIS REGARD ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F NTPC LTD REPORTED IN 229 ITR 383 (SC). HE ARGUED THAT IN RESPECT OF ASST YEARS 200 7-08 , 2008-09 & 2009-10 (BEING UNABATED ASSESSMENTS) THE LD AO HAD MADE DISALLOWAN CE OF CARRIAGE OUTWARDS U/S 40(A)(IA) OF THE ACT FOR WHICH ABSOLUTELY NO INCRIMINATING MA TERIALS WERE FOUND DURING THE COURSE OF 4 IT(SS)A NOS. 166-169 OF 2014 PAUL BROTHERS., AYS 2007-08 TO 2010-11 SEARCH. HENCE HE PRAYED FOR DELETION OF THE DISALL OWANCE MADE FOR THE ASST YEARS 2007-08, 2008-09 & 2009-10. HE PLACED RELIANCE ON THE DECI SION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF (A) CIT VS VEERPRABHU MARKETING LTD REPORTED IN (2016) 73 TAXMANN.COM 149 (CAL HC) AND (B) CIT VS KABUL CHAW LA REPORTED IN (2016) 380 ITR 573 ( DELHI HC) 3.3.1. IN RESPECT OF ASST YEAR 2009-10, HE STATED T HAT DURING THE COURSE OF SEARCH, A SEIZED DOCUMENT VIDE REFERENCE ACP -4 WAS FOUND AND SEIZED BY THE DEPARTMENT WHICH CONTAINED CERTAIN DETAILS OF UNACCOUNTED PURCHASES MADE BY TH E ASSESSEE . THE TOTAL OF THE SAID SEIZED DOCUMENT WORKED OUT TO RS. 8,60,041/-. HE ARGUED T HAT THERE IS NO EVIDENCE THAT WAS FOUND DURING THE COURSE OF SEARCH FOR ASSESSEE MAKING PAY MENT FOR THESE UNACCOUNTED PURCHASES OF RS. 8,60,041/- AND SIMILARLY NO EVIDENCE WAS FOU ND FOR THE SALES MADE OUT OF THESE PURCHASES. HE ARGUED THAT ONLY THE GROSS PROFIT A TTRIBUTABLE THEREON NEEDS TO BE BROUGHT TO TAX AS ADMITTEDLY BOTH THE PURCHASES AND SALES THER EON ARE UNACCOUNTED AND KEPT OUTSIDE THE REGULAR BOOKS OF ACCOUNTS OF THE ASSESSEE. HE PLA CED RELIANCE ON THE DECISIONS OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS PRESIDENTS INDUSTRIES REPORTED IN 258 ITR 654 (GUJ). 3.3.2. SIMILARLY IN RESPECT OF ASST YEAR 2010-11, HE STATED THAT DURING THE COURSE OF SEARCH, A SEIZED DOCUMENT VIDE REFERENCE ACP -5 WAS FOUND A ND SEIZED BY THE DEPARTMENT WHICH CONTAINED CERTAIN DETAILS OF UNACCOUNTED PURCHASES MADE BY THE ASSESSEE TO THE TUNE OF RS. 1,92,960/-. HE STATED THAT THE SEIZED DOCUMENT AL SO CONTAINED EVIDENCE FOR ASSESSEE HAVING MADE THE PAYMENTS FOR THIS PURCHASE IN THE SUBSEQUE NT FINANCIAL YEAR. HE FURTHER STATED THAT NO EVIDENCE WAS FOUND FOR THE SALES MADE OUT OF THI S PURCHASE. HE ARGUED THAT IN THIS SCENARIO, ONLY THE GROSS PROFIT ATTRIBUTABLE THEREO N NEEDS TO BE BROUGHT TO TAX AS ADMITTEDLY BOTH THE PURCHASES AND SALES THEREON ARE UNACCOUNTE D AND KEPT OUTSIDE THE REGULAR BOOKS OF ACCOUNTS OF THE ASSESSEE AND THE LD AO HAD RIGHTLY ADDED A SUM OF RS. 20,492/- AS GROSS PROFIT ADDITION WHICH ALONE NEEDS TO BE SUSTAINED. 3.4. IN RESPONSE TO THIS, THE LD DR VEHEMENTLY OB JECTED TO ADMISSION OF THE LEGAL GROUNDS RAISED BY THE ASSESSEE AS THE SAME WAS NOT RAISED B EFORE THE LOWER AUTHORITIES. HE ARGUED 5 IT(SS)A NOS. 166-169 OF 2014 PAUL BROTHERS., AYS 2007-08 TO 2010-11 THAT THE EXPRESSION INCRIMINATING MATERIAL IS NOT FOUND IN THE PROVISIONS OF THE ACT AND IT IS ONLY THE HONBLE COURTS WHICH HAD IMPORTED THOSE WO RDS WHILE RENDERING THE DECISIONS. HE STATED THAT THE HONBLE COURTS ARE DIVIDED ON THIS ISSUE AND PLACED RELIANCE ON THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CANARA HOUSING DEVELOPMENT CO VS DCIT REPORTED IN (2014) 49 TAXMANN.COM 98 (KAR HC) WHEREIN IT WAS HELD THAT SEARCH ASSESSMENTS COULD BE FRAMED EVEN WITHOUT THE EXISTE NCE OF INCRIMINATING MATERIALS FOUND IN THE COURSE OF SEARCH. HE ARGUED THAT THE BASIC FOUNDATION FOR CONDUCTING THE SEARCH IS GOVERNED BY THE PROVISIONS OF SECTION 132 OF THE AC T WHICH HAS TO BE READ HARMONIOUSLY WITH SECTION 153A OF THE ACT. THERE ARE THREE CON DITIONS BASED ON WHICH A SEARCH ACTION COULD BE INITIATED U/S 132 OF THE ACT ON AN ASSESSE E. THEY ARE :- SECTION 132(1) - IF THE CONCERNED AUTHORITY HAS IN CONSEQUENCE OF INFORMATION IN HIS POSSESSION, HAS REASON TO BELIEVE THAT - (A) WHERE A PERSON FAILS TO PRODUCE THE BOOKS OF ACCOUN TS AND OTHER DOCUMENTS IN RESPONSE TO NOTICE U/S 142(1) OR SUMMONS ISSUED U/S 131(1) OF THE ACT ; OR (B) WHERE A PERSON FAILS TO COMPLY WITH THE REQUIREMENT S OF SUMMONS ISSUED U/S 131(1) OF THE ACT ; OR (C) WHERE A PERSON IS IN POSSESSION OF ANY MONEY, BULLI ON, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING AND SUCH ASSETS REPRESENTS EITHER WHOLLY OR PARTLY INCOME OR PROPERTY WHICH HAS NOT BEEN , OR WOULD NOT BE, DISCLOSED FOR THE PURPOSES OF THE ACT (HEREINAFTER REFERRED TO AS THE UNDISCLOSED INCOME OR PROPERTY) ; THEN THE OFFICER , SO AUTHORIZED COULD CONDUCT A SE ARCH AND PROCEED AS PER THE REQUIREMENTS LAID DOWN IN THE SAID SECTION. HE ARGUED THAT THE AFORESAID THREE PRIMARY CONDITIONS FOR INVOKING SEARCH PROCEEDINGS CANNOT BE GIVEN A GO BY WHILE FRAMING SECTION 153A ASSESSMENTS AND THE INSTANT CASE FALLS UNDER SECTIO N 132(1)(C ) OF THE ACT. THE PROVISIONS OF SECTION 153A OF THE ACT USE THE E XPRESSION ASSESS OR REASSESS TOTAL INCOME AND HENCE THE SEARCH ASSESSMENT COULD BE FR AMED U/S 153A OF THE ACT IRRESPECTIVE OF ANY INCRIMINATING MATERIALS. 6 IT(SS)A NOS. 166-169 OF 2014 PAUL BROTHERS., AYS 2007-08 TO 2010-11 3.5. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE FIND THAT THE LEGAL GROUNDS RASIED BY THE ASSESSEE GOES INTO THE ROOT OF THE MATTER AND DOES NOT INVOLVE ANY FRESH INVESTIGATION OF FACTS. HENCE WE DEEM IT FIT AND APPROPRIATE TO ADM IT THE SAME EVEN THOUGH THEY WERE NOT RAISED BEFORE THE LOWER AUTHORITIES. RELIANCE IN THIS REGARD IS PLACED ON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF NTPC LTD REPORTED IN 229 ITR 383 (SC). WE FIND IT WOULD BE NECESSARY TO ADDRESS THE PRELIMINARY ISSUE OF WHETHER THE ADDITION COULD BE FRAMED U/S 153A OF THE ACT IN RESPECT OF A CONCLUDED PROCE EDING WITHOUT THE EXISTENCE OF ANY INCRIMINATING MATERIALS FOUND IN THE COURSE OF SEAR CH. THE SCHEME OF THE ACT PROVIDES FOR ABATEMENT OF PENDING PROCEEDINGS AS ON THE DATE OF SEARCH. IT IS NOT IN DISPUTE THAT THE ASSESSMENTS FOR THE ASST YEARS 2007-08 TO 2009-10 F ALL UNDER THE AMBIT OF UNABATED ASSESSMENTS (CONCLUDED PROCEEDINGS) AS ON THE DATE OF SEARCH. THE LEGISLATURE DOES NOT DIFFERENTIATE WHETHER THE ASSESSMENTS ORIGINALLY WE RE FRAMED U/S 143(1) OR 143(3) OR 147 OF THE ACT. HENCE UNLESS THERE IS ANY INCRIMINATING M ATERIAL FOUND DURING THE COURSE OF SEARCH RELATABLE TO THOSE CONCLUDED YEARS, THE STATUTE DO ES NOT CONFER ANY POWER ON THE LD AO TO DISTURB THE FINDINGS GIVEN THEREON AND INCOME DETER MINED THEREON, AS FINALITY HAD ALREADY BEEN REACHED THEREON, AND THOSE PROCEEDINGS WERE N OT PENDING ON THE DATE OF SEARCH TO GET THEMSELVES ABATED. 3.5.1. WE FIND THAT THE ISSUE UNDER DISPUTE IS RESO LVED BY THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS VEERPRABHU MARKETING LTD REPORTED IN (2016) 73 TAXMANN.COM 149 (CAL HC) WHEREIN THE QUESTIONS RAISED AND DECISION RENDERED THEREON ARE AS BELOW:- THE FOLLOWING QUESTIONS OF LAW WERE FORMULATED ON S EPTEMBER 10, 2008 :- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE INCOME TAX APPELLATE TRIBUNAL IS JUSTIFIED IN NOT HOLDING THAT ALL ASSESSMENTS WERE MADE UNDER SECTION 143(1) OF THE I.T.ACT, THEREFORE, DISALLOWA NCE AS PER LAW WERE NOT EARLIER MADE. AS PER SECTION 153(C ) OF THE I.T.ACT ASSESS MENT IS TO BE MADE AFRESH AND INCOME TO BE ASSESSED OR REASSESSED. THE MEANING O F REASSESSMENT IS THAT THERE IS NO NEED TO RESORT TO SECTION 147 OF THE I.T.ACT AND TO CONSIDER THE DISALLOWANCE IN THE ASSESSMENT TO BE MADE UNDER SECTION 153 OF THE I.T. ACT ? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE INCOME TAX APPELLATE TRIBUNAL IS CORRECT IN MISINTERPRETING TH E CBDTS CIRCULAR NO. 7 AS THE 7 IT(SS)A NOS. 166-169 OF 2014 PAUL BROTHERS., AYS 2007-08 TO 2010-11 SAME APPLIES TO ASSESSMENTS MADE U/SS. 143(3) , 144 OR 147 OF THE I.T.ACT WHERE APPEALS OR RECTIFICATION APPLICATION WILL NOT ABATE ? 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE INCOME TAX APPELLATE TRIBUNAL IS CORRECT IN LAW FOR THE FACT T HAT THE DECISION OF JHARKHAND HIGH COURT (290 ITR 114) HAS NOT BEEN PROPERLY INTERPRET ED AS THE SAME DOES NOT DEAL WITH A SITUATION WHERE ASSESSMENT U/S 143(1) OF THE I.T. ACT AND THERE IS NO PROPOSITION LAID DOWN THAT DISALLOWANCE WHICH REQUI RED TO BE MADE IF THE RETURN WAS SELECTED FOR REGULAR ASSESSMENT U/S 143(1) OR U/S 1 47 OF THE I.T.ACT WOULD NOT BE MADE U/S 153A OF THE I.T.ACT? ----------------------------- ---------------------------- WITH RESPECT TO THE SECOND SUBMISSION ADVANCED BY M R JAIN, WE CALLED UPON MR NIZAMUDDIN IN VAIN TO SHOW US THE INCRIMINATING MAT ERIAL, IF ANY, FOUND EITHER DURING THE SEARCH OR DURING THE REQUISITION OR EVEN DURING THE SURVEY WHICH IS OR MAY BE RELATABLE TO THE ASSESSEE. MR NIZAMUDDIN WAS UNABL E TO SHOW THAT ANY SUCH INCRIMINATING MATERIAL WAS UNEARTHED AT ANY OF THE THREE STAGES PERTAINING TO THE ASSESSEE. WE ARE IN AGREEMENT WITH THE VIEWS EXPRESSED BY THE KARNATAKA HIGH COURT THAT INCRIMINATING MATERIAL IS A PRE-REQUISITE BEFORE PO WER COULD HAVE BEEN EXERCISED UNDER SECTION 153C READ WITH SECTION 153A. IN THE CASE BEFORE US, THE ASSESSING OFFICER HAS MA DE DISALLOWANCES OF THE EXPENDITURE, WHICH WERE ALREADY DISCLOSED, FOR ONE REASON OR THE OTHER. BUT SUCH DISALLOWANCES WERE NOT CONTEMPLATED BY THE PROVISIO NS CONTAINED UNDER SECTION 153C READ WITH SECTION 153A. THE DISALLOWANCES MAD E BY THE ASSESSING OFFICER WERE UPHELD BY THE CIT(A) BUT THE LEARNED TRIBUNAL DELET ED THOSE DISALLOWANCES. WE FIND NO INFIRMITY IN THE AFORESAID ACT OF THE LE ARNED TRIBUNAL. THE APPEAL IS, THEREFORE, DISMISSED. THE QUESTIONS ARE ANSWERED ACCORDINGLY. 3.5.2. WE ALSO FIND THAT THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS KABU L CHAWLA REPORTED IN (2016) 380 ITR 573 (DEL) HAD HELD AS UNDER:- 38. THE PRESENT APPEALS CONCERN AYS 2002-03, 2005-0 6 AND 2006-07 , ON THE DATE OF THE SEARCH THE SAID ASSESSMENTS ALREADY STOOD COMPL ETED. SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEARCH, NO ADDITI ONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. 8 IT(SS)A NOS. 166-169 OF 2014 PAUL BROTHERS., AYS 2007-08 TO 2010-11 3.5.3. WE FIND THAT THE DECISION RELIED UPON BY THE LD DR IN THE CASE OF CIT VS ANIL KUMAR BHATIA REPORTED IN (2013) 352 ITR 493 (DEL) DOES NOT IN ANY MANNER ADVANCE THE CASE OF THE REVENUE AS ADMITTEDLY THE HONBLE DELHI HIGH COURT IN PARA 24 OF ITS ORDER HAD HELD AS UNDER:- 24. WE ARE NOT CONCERNED WITH A CASE WHERE NO INCR IMINATING MATERIAL WAS FOUND DURING THE SEARCH CONDUCTED UNDER SECTION 132 OF TH E ACT. WE, THEREFORE, EXPRESS NO OPINION AS TO WHETHER SECTION 153A CAN BE INVOKED E VEN IN SUCH A SITUATION. THAT QUESTION IS THEREFORE LEFT OPEN. 3.5.4. WE FIND THAT THE DECISION OF HONBLE DELHI H IGH COURT IN THE CASE OF CIT VS KABUL CHAWLA REPORTED IN (2016) 380 ITR 573 (DEL) HAD DUL Y CONSIDERED THE DECISIONS OF CIT VS ANIL KUMAR BHATIA REPORTED IN (2013) 352 ITR 493 (D EL) ; CIT VS CHETAN DAS LACHMAN DAS REPORTED IN (2012) 211 TAXMAN 61 (DEL HC) ; MA DUGULA VENU VS DIT REPORTED IN (2013) 215 TAXMAN 298 (DEL HC) ; CANARA HOUSING DE VELOPMENT CO. VS DCIT REPORTED IN (2014) 49 TAXMANN.COM 98 (KAR HC) ; FILATEX INDIA LTD VS CIT REPORTED IN (2014) 229 TAXMAN 555 (DEL HC) ; JAI STEEL (INDIA) VS ACIT REP ORTED IN (2013) 219 TAXMAN 223 (DEL HC) ; CIT VS MURLI AGRO PRODUCTS LTD REPORTED IN (2 014) 49 TAXMANN.COM 172 (BOM HC) ; CIT VS CONTINENTAL WAREHOUSING CORPORATION (NHAVA S HEVA) LTD REPORTED IN (2015) 374 ITR 645 (BOM HC) AND ALL CARGO GLOBAL LOGISTICS LTD VS DCIT REPORTED IN (2012) 137 ITD 287 (MUM ITAT) (SB). HENCE IT COULD BE SAFEL Y CONCLUDED THAT THE DECISION OF HONBLE DELHI HC IN THE CASE OF KABUL CHAWLA SUPRA HAD CONSIDERED THE DECISIONS THAT WERE QUOTED BY THE LD DR AND DISTINGUISHED THE SAME. 3.5.5. WE ALSO FIND THAT THE HONBLE JURISDICTIONAL HIGH COURT RECENTLY IN THE C ASE OF PRINCIPAL CIT VS M/S SALASAR STOCK BROKING LTD IN G .A.NO. 1929 OF 2016 ITAT NO. 264 OF 2016 DATED 24.8.2016 HAD ENDORSED THE AFORESAID VIEW OF HONBLE DELHI H IGH COURT IN KABUL CHAWLAS CASE AND ALSO PLACED RELIANCE ON ITS OWN DECISION IN THE CASE OF CIT VS VEERPRABHU MARKETING LTD REPORTED IN (2016) 73 TAXM ANN.COM 149 (CAL HC). 3.5.6. WE FIND THAT THE PROVISIONS OF SECTION 132 O F THE ACT RELIED UPON BY THE LD DR WOULD BE RELEVANT ONLY FOR THE PURPOSE OF CONDUCTING THE SEARCH ACTION AND INITIATING PROCEEDINGS 9 IT(SS)A NOS. 166-169 OF 2014 PAUL BROTHERS., AYS 2007-08 TO 2010-11 U/S 153A OF THE ACT. ONCE THE PROCEEDINGS U/S 153A OF THE ACT ARE INITIATED, WHICH ARE SPECIAL PROCEEDINGS, THE LEGISLATURE IN ITS WISDOM BIFURCATES DIFFERENTIAL TREATMENTS FOR ABATED ASSESSMENTS AND UNABATED ASSESSMENTS. AT TH E COST OF REPETITION, WE STATE THAT IN RESPECT OF ABATED ASSESSMENTS (I.E PENDING PROCEEDI NGS ON THE DATE OF SEARCH) , FRESH ASSESSMENTS ARE TO BE FRAMED BY THE LD AO U/S 153A OF THE ACT WHICH WOULD HAVE A BEARING ON THE DETERMINATION OF TOTAL INCOME BY CONSIDERING ALL THE ASPECTS, WHEREIN THE EXISTENCE OF INCRIMINATING MATERIALS DOES NOT HAVE ANY RELEVANCE . HOWEVER, IN RESPECT OF UNABATED ASSESSMENTS, THE LEGISLATURE HAD CONFERRED POWERS O N THE LD AO TO JUST FOLLOW THE ASSESSMENTS ALREADY CONCLUDED UNLESS THERE IS AN IN CRIMINATING MATERIAL FOUND IN THE SEARCH TO DISTURB THE SAID CONCLUDED ASSESSMENT. IN OUR CONSIDERED OPINION, THIS WOULD BE THE CORRECT UNDERSTANDING OF THE PROVISIONS OF SECTION 153A OF THE ACT , AS OTHERWISE, THE NECESSITY OF BIFURCATION OF ABATED AND UNABATED ASS ESSMENTS IN SECTION 153A OF THE ACT WOULD BECOME REDUNDANT AND WOULD LOSE ITS RELEVANCE . HENCE THE ARGUMENTS ADVANCED BY THE LD DR IN THIS REGARD DESERVES TO BE DISMISSED. 3.5.7. IN VIEW OF THE AFORESAID FINDINGS AND RESPE CTFULLY FOLLOWING THE JUDICIAL PRECEDENTS RELIED UPON HEREINABOVE, WE HOLD THAT THE DISALLOWA NCE OF CARRIAGE OUTWARDS MADE U/S 40(A)(IA) OF THE ACT, FOR THE ASST YEARS 2007-08 , 2008-09 AND 2009-10 WHICH WERE UNABATED / CONCLUDED ASSESSMENTS, ON THE DATE OF SE ARCH, CANNOT BE MADE IN THE SEARCH ASSESSMENTS IN THE ABSENCE OF ANY INCRIMINATING MAT ERIAL FOUND IN THE COURSE OF SEARCH AND ACCORDINGLY DIRECTED TO BE DELETED. SINCE THE ISS UES ARE ADDRESSED ON PRELIMINARY GROUND OF ABSENCE OF INCRIMINATING MATERIALS, WE REFRAIN TO G IVE OUR FINDINGS ON THE MERITS OF THE DISALLOWANCES MADE TOWARDS CARRIAGE OUTWARDS U/S 40 (A)(IA) OF THE ACT. ACCORDINGLY THE LEGAL GROUNDS RAISED BY THE ASSESSEE IN THIS REGARD FOR THE ASST YEARS 2007-08 , 2008-09 AND 2009-10 ARE ALLOWED. 3.6. HOWEVER, WE FIND THAT THE LD AO HAD INCRIMINA TING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH VIDE SEIZED DOCUMENT REFERENCE ACP -4 AND ACP -5 FOR MAKING ADDITIONS TOWARDS UNDISCLOSED PURCHASES FOR ASST YEARS 2009-1 0 AND 2010-11 RESPECTIVELY. HENCE IT WOULD BE RELEVANT FOR US TO ADJUDICATE THE ADDITION ON ACCOUNT OF UNDISCLOSED PURCHASES AND ADDITION MADE TOWARDS PROFIT ON SUCH PURCHASES FOR THE ASST YEARS 2009-10 AND 2010-11 10 IT(SS)A NOS. 166-169 OF 2014 PAUL BROTHERS., AYS 2007-08 TO 2010-11 SEPARATELY ON MERITS. WE FIND THAT THE SEIZED DO CUMENT ACP 4 AND ACP-5 REPRESENTS PURCHASE OF PADDY BY THE ASSESSEE OUTSIDE THE BOOKS FOR RS. 8,60,041/- AND RS. 1,92,960/- FOR ASST YEARS 2009-10 AND 2010-11 RESPECTIVELY. A DMITTEDLY, THE SALES MADE OUT OF THESE PURCHASES WERE ALSO MADE OUT OF THE BOOKS. HENCE W E FIND LOT OF FORCE IN THE ARGUMENT ADVANCED BY THE LD AR THAT ONLY THE GROSS PROFIT TH EREON SHOULD BE BROUGHT TO TAX AND NOT THE ENTIRE AMOUNT OF PURCHASES. THE LD AO HAS ADDE D BOTH UNDISCLOSED PURCHASES AND PROFIT ATTRIBUTED THEREON IN THE SEARCH ASSESSMENT EFFECTI VELY ADDING THE ENTIRE SALE VALUE AS INCOME OF THE ASSESSEE. ADMITTEDLY THESE ARE NOT N EW ITEMS OF PURCHASES MADE BY THE ASSESSEE WARRANTING TAXATION OF THE INVESTMENT MADE TOWARDS PURCHASES. WE HOLD THAT THE ADDITION TOWARDS GROSS PROFIT ON UNDISCLOSED PURCHA SES FOR BOTH THE ASST YEARS WOULD MEET THE ENDS OF JUSTICE. WE FIND THAT THE LD AO HAD C ORRECTLY ADDED A SUM OF RS. 20,492/- TOWARDS GROSS PROFIT ON UNDISCLOSED PURCHASES IN AS ST YEAR 2010-11 AND ACCORDINGLY NO ACTION NEED TO BE TAKEN ON THE SAME BY THE LD AO FO R ASST YEAR 2010-11. IN VIEW OF OUR AFORESAID FINDINGS, WE DIRECT THE LD AO TO DELETE T HE ADDITION MADE TOWARDS UNDISCLOSED PURCHASES AMOUNTING TO RS. 8,60,041/- AND RS. 1,92, 960/- FOR THE ASST YEARS 2009-10 AND 2010-11. THE LD AO IS ALSO DIRECTED TO MAKE AN ADD ITION TOWARDS GROSS PROFIT AT THE RATE DISCLOSED BY THE ASSESSEE FOR THE ASST YEAR 2009-10 AND APPLY THE SAME ON THE AMOUNT OF UNDISCLOSED PURCHASES OF RS. 8,60,041/- AND BRING T HE SAME TO TAX FOR THE ASST YEAR 2009- 10. HENCE, THE GROUNDS RAISED BY THE ASSESSEE FOR BOTH THE ASST YEARS 2009-10 AND 2010-11 IN THIS REGARD ARE PARTLY ALLOWED. 4. IN THE RESULT, TO SUM UP, THE APPEALS OF THE AS SESSEE IN IT(SS) A NO. 166/KOL/2014 FOR ASST YEAR 2007-08 IS ALLOWED IT(SS) A NO. 167/KOL/2014 FOR ASST YEAR 2008-09 IS ALLOWED IT(SS) A NO. 168/KOL/2014 FOR ASST YEAR 2009-10 IS PARTLY ALLOWED IT(SS) A NO. 169/KOL/2014 FOR ASST YEAR 2010-11 IS PARTLY ALLOWED ORDER IS PRONOUNCED IN THE OPEN COURT ON 08.03.2017 SD/- SD/- (PARTHA SARATHI CHAUDHURY) (M. BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 8 TH MARCH, 2017 JD.(SR.P.S.) 11 IT(SS)A NOS. 166-169 OF 2014 PAUL BROTHERS., AYS 2007-08 TO 2010-11 COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT M/S. PAUL BROTHERS, THANA ROAD, GANGARA MPUR, DAKSHIN DINAJPUR-733 124. 2 RESPONDENT DCIT, CENTRAL CIRCLE-XXVII, KOLKATA. 3. THE CIT(A), KOLKATA 4. 5. CIT, KOLKATA. DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .