ACIT, CC-I, Lucknow V. M/s. Lucknow Mall Developers Pvt. Ltd., Lucknow

ITSSA 237/LKW/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 2882 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 21-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 17-08-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CIRCUMSTANCES OF CASE; MISREAD RELEVANT FACTS
• Keywords: Unexplained cash credit; Search and seizure; Document seized; Accommodation entries; Bogus loan; Penny stocks; Documents seized
• Section: 143(3); 133A; 153A; 143(2); 264; 13; 153; 153C; 68; 132; 15

Judgement Text

I.T.(SS)A. NO.237/LKW/2020 ASSESSMENT YEARS:2013-14 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW (THROUGH VIRTUAL HEARING) BEFORE SHRI A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER I.T.(SS)A. NO.237/LKW/2020 ASSESSMENT YEARS:2013-14 A.C.I.T., CENTRAL CIRCLE-1, LUCKNOW. VS. M/S LUCKNOW MALL DEVELOPERS PVT. LTD., 426, T.G. CIVIL LINES, NEW HYDERABAD, LUCKNOW. PAN:AABCL2066P (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LEARNED CIT(A), DATED 17/06/2020 PERTAINING TO ASSESSMENT Y EARS 2013-14. IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLOWING GROUNDS : 1. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) WHILE ANNULLING THE ASSTT ORDER ON GROUN DS THAT IN ABSENCE OF ANY INCRIMINATING MATERIAL BEING FOUND D URING SEARCH, THE CONDITIONS FOR ISSUE OF NOTICE U/S 153A WERE NOT SATISFIED, ERRED AND MISREAD THE RELEVANT FACTS AND CIRCUMSTANCE AS WELL AS LEGAL PROVISIONS UNDER 153A /153COF THE I T ACT,1961. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A), ERRED IN RELYING UPON THE DISMISSAL OF APPELLANT BY SMT. SHEELA CHOPRA, CIT, D.R. RESPONDENT BY SHRI RAKESH GARG, ADVOCATE DATE OF HEARING 02 /0 9 /20 21 DATE OF PRONOUNCEMENT 21/10/2021 I.T.(SS)A. NO.237/LKW/2020 ASSESSMENT YEARS:2013-14 2 REVENUE'S SLP IN CASE OF MEETA GUTGUTIA TO CONCLU DE THAT THE BINDING JURISDICTIONAL ALLAHABAD HIGH COURT IN RAJ KUMAR ARORA STANDS OVERRULED WITHOUT APPRECIATING THAT IT WAS A LREADY HELD BY A 3 JUDGE BENCH OF SC ITSELF IN ITS DECISION IN CASE OF KHODAY DISTILLERIES LTD IN CIVIL APPEAL NO. 2432 OF 20J9 AFFIRMING THE EARLIER 3 JUDGE BENCH DECISION IN CAS E OF KUNHAYAMMED & ORS VS. STATE OF KERALA & ANR. 245 IT R 360 THAT IN LIMINE DISMISSAL OF SLP AT THRESHOLD ITSEL F NEITHER CONSTITUTES DECLARATION OF LAW NOR A BINDING PRECED ENT. HENCE, THE RELIANCE BY CIT(A) ON DISMISSAL OF SLP I N MEETA GUTGUTIA TO OVERRIDE THE BINDING JURISDICTIONAL HIG H COURT DECISION IN RAJ KUMAR ARORA WAS AN APPARENT AND PAT ENT MISTAKE. 3. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, THE LD. CIT(A) ERRED IN IMPORTING & APPLYING THE RATIO OF DELHI HIGH COURT DECISION IN CASE OF KABUL CHAWLA AS WELL AS OTHER DECISIONS, IGNORING THE JUDICIAL DISCIPLINE AND LAW OF BINDING PRECEDENT AS THE JURISDICTIONAL HIGH COURT IN THE C ASE OF RAJ KUMAR ARORA 367 ITR 517 (ALLD.) HAS ALREADY HELD TH AT THERE WAS NO REQUIREMENT OF ASSTT U/S 153A BEING BASED ON LY ON THY BASIS OF 'INCRIMINATING MATERIAL' FOUND DURING SEAR CH. 4. WITHOUT PREJUDICE TO ABOVE GROUNDS, ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A ) ERRED IN ANNULLING THE ASSTT ORDER ON GROUNDS OF ABSENCE OF INCRIMINATING MATERIAL WITHOUT APPRECIATING THAT TH E TERM INCRIMINATING USED BY COURTS HAS NOT BEEN DEFINED U NDER 153A AND THEREFORE ITS MEANING IS REQUIRED TO BE INFERRE D HARMONIOUSLY WITH OTHER PROVISIONS OF THE ACT DEALI NG WITH SEARCH ASSESSMENT OR LEVY OF PENALTY IN CASES OF SE ARCH ASSESSMENTS SUCH AS 153C, CLAUSE (II) OF 271AAB(C) ETC. 5. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, THE LD. CIT(A) FAILED TO APPRECIATE THAT IN ABSENCE OF SPECIFIC USE OF TERM 'INCRIMINATING' U/S 153A, THE MEANING OF TH E 'TERM 'INCRIMINATING' NEEDS TO BE INFERRED AS AKIN TO THE EXPRESSION 'BEARING ON THE ASSESSMENT OF INCOME' AS APPEARING U/S 153C FOR ASSTT OF OTHER PERSON BASED ON MATERIAL FOUND D URING SEARCH. THIS EXPRESSION HAS VERY WIDE CONNOTATION A ND ENVISAGES THAT SUCH MATERIAL SHOULD BE IN THE NATUR E OF PRIMA FACIE MATERIAL ONLY HAVING LIVE NEXUS TO THE BELIEF OF IT HAVING BEARING ON ASSESSMENT OF INCOME AND NOT IN THE NATU RE OF I.T.(SS)A. NO.237/LKW/2020 ASSESSMENT YEARS:2013-14 3 ABSOLUTE INCRIMINATING EVIDENCE, WHICH BY ITSELF CO ULD SUGGEST/DIVULGE THE UNDISCLOSED INCOME WITHOUT ANY FURTHER ACT INVESTIGATION/EXAMINATION. THE DETAILED EXAM INATION OF SUCH MATERIAL FOR DIFFERENT ASSTT YEARS FINALLY REPRESENTING UNDISCLOSED MATERIAL OR NOT, WAS THE S TEP ENVISAGED ONLY AFTER THE ISSUE OF NOTICE U/S 153A FOR SIX ASSTT YEARS. 6. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, THE LD. CIT(A) FAILED TO APPRECIATE THAT AFTER AMENDMEN T U/S 153C W.E.F. 01.04.2005, IT IS THE TEST OF BEARING ON TH E ASSESSMENT OF INCOME' ONLY WHICH NEEDS TO BE APPLIED IN PLACE OF THE TEST OF 'PRESENCE OF INCRIMINATING MATERIAL' U/S 153A AN D THE DECISION OF APEX COURT IN SINHGAD TECHNICAL EDUCATI ON SOCIETY WHICH WAS RENDERED FOR PERIOD PRIOR TO AME NDMENT W.E.F. 1/4/2005 IS THEREFORE DISTINGUISHABLE IN LAW. 7. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, THE LD. CIT(A) WHILE EVALUATING AS TO WHAT CAN BE 'INCR IMINATING', FAILED TO TAKE A NOTE OF CLAUSE (II) OF 271AAB(C) W HICH DEFINES UNDISCLOSED INCOME.: AS 'ANY INCOME BASED ON ENTRY IN BOOKS OF ACCOUNTS WHOLLY OR PARTLY FALSE AND WOULD NOT HA VE BEEN FOUND TO BE SO, HAD THE SEARCH NOT BEEN CONDUCTED I MPLYING THEREBY THAT UNSUPPORTED ENTRIES APPEARING IN BOOKS OF ACCOUNTS CAN ALSO FALL WITHIN THE SWEEP OF BEING IN CRIMINATING UNDER THE OTHER PROVISIONS OF THE ACT AND HENCE THE MEANING OF TERM 'INCRIMINATING' WAS REQUIRED TO BE INFERRED HARMONIOUSLY W.R.T SUCH STATUTORY PROVISIONS. 8. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, THE LD. CIT(A) WHILE EVALUATING AS TO WHAT CAN BE 'INCR IMINATING', AGAIN FAILED TO TAKE A NOTE THAT EVEN THE PENALTY I S ATTRACTED U/S 270A(10) WHEN THERE IS MISREPORTING BASED ON RE CORDED ENTRIES IN BOOKS OF ACCOUNTS, ONCE AGAIN IMPLYING T HAT ENTRIES RECORDED IN BOOKS OF ACCOUNTS MAY STILL REPRESENT U NDISCLOSED INCOME HAVING BEARING ON THE ASSESSMENT OF INCOME O R BEING INCRIMINATING', IF THEY ARE PARTLY RECORDED OR CAMA FLOUGED OR SHOWN TO BE FROM A SOURCE WHICH IS NOT THE REAL SOU RCE AND HENCE THE MEANING OF TERM 'INCRIMINATING' WAS REQUI RED TO BE INFERRED HARMONIOUSLY W.R.T SUCH STATUTORY PROVISIO NS. 9. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, THE LD. CIT(A) ERRED IN APPLYING THE RATIO OF DELHI HIG H COURT I.T.(SS)A. NO.237/LKW/2020 ASSESSMENT YEARS:2013-14 4 DECISION IN CASE OF KABUL CHAWLA WHICH WAS RENDERED IN CONTEXT OF 153A AND NOT 153C WHEREIN THE REQUIREMEN T OF ISSUE OF NOTICE HAS BEEN CLEARLY LINKED TO PRESENCE OF ANY MATERIAL BELONGING/RELATING TO ASSESSEE FOUND DURIN G SEARCH WHICH HAS A BEARING ON THE ASSESSMENT OF TOTAL INCO ME OF OTHER PERSON AND AS SUCH THE DECISION OF DELHI HIGH COURT COULD NOT HAVE BEEN READ INTO TO ASSESSMENT MADE U/ S 153C. 10. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN REFFERING ONLY TO THE STATEMENT OF SANTOSH CHOUDHARY WHOSE STATEMENT WAS RECORDED ADMITTING T O HAVE PROVIDED WITH BOGUS LTCG FROM PENNY STOCKS AND SECU RITY PREMIUM THROUGH SHELL COS NOT EXITING AT GIVEN ADDR ESSES, WHILE IGNORING THE STATEMENT OF SOME OTHER PERSONS RECORDED WAS ON OATH U/S 131(1 A) SUCH AS SHRI VIRENDRA KESH RI EX DIRECTOR OF THE SHELL COS WHO ADMITTED THAT M/S ANI RUDH MOTOR AND GENERAL FINANCE PVT LTD, M/S FANTASTIC MERCHAND ISE P LTD ETC WAS A PAPER CO WHEREIN THE INDIVIDUALS OF FORTU NA GROUP BECAME DIRECTORS AND ALSO CONFIRMED THE STATEMENT O F SANTOSH CHAUDHARY AND ANOTHER PERSON SHAILENDRA GUP TA CA, AUDITOR OF TECHMECH DEVELOPER PVT LTD ALSO ADMITTED ON OATH U/S 131(1 A) THAT CO DID NOT HAVE ANY BUSINESS ACTI VITY AND THAT ITS ACCOUNTS WERE PARTIALLY CERTIFIED ON THE B ASIS OF BILLS, VOUCHERS AND BANK STATEMENTS, WHICH DID SATISFY THE CONDITION OF 'INCRIMINATING' AS WELL AS HAVING BEARING ON THE ASSTT OF INCOME AS PROVIDED U/S 153A/153C W.R.T BOGUS LOANS TAKEN BY ASSESSEE FROM SUCH SHELL CO. 11. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) ERRED IN HOLDING THAT THE STATEMENT OF S ANTOSH CHOUDHARY RECORDED BY DDIT KOLKATA COULD NOT BE TER MED AS 'INCRIMINATING' ON GROUND THAT STATEMENT RECORDED U /S 133A WAS NOT ON OATH WITHOUT APPRECIATING THAT IN THE AS STT ORDER IT WAS CLEARLY MENTIONED THAT THE STATEMENTS OF OTHER TWO PERSONS I.E. SHRI VIRENDRA KESHRI AND SHRI SHAILEND RA GUPTA CA WERE RECORDED ON OATH BY THE DDLT(LNV) U/S 131(1A) IN THE CAPACITY OF THE AUTHORISED OFFICER U/S 132(1) IN CO NNECTION WITH THE SEARCH IN THE FORTUNA GROUP WHEREIN THEY H AD ADMITTED THAT M/S ANIRUDH MOTOR FINANCE P LTD AND M /S TECHMECH DEVELOPER P LTD WERE MERELY PAPER COS WITH OUT ACTUAL ECONOMIC ACTIVITIES, EVEN THOUGH THE NO SURV EY COULD BE DONE AS THESE COS WERE FOUND NON-EXISTENT AT THE GIVEN ADDRESSES. IN C/T CHENNAI VS AJIT S KUMAR 93 TAXMAN .COM I.T.(SS)A. NO.237/LKW/2020 ASSESSMENT YEARS:2013-14 5 294(SC), THE COURT IN THE CONTEXT OF SECTION 158BB HAS ALSO UPHELD THE USE OF INFORMATION COLLECTED IN A SURVEY IN CASE OF CONNECTED PERSON CARRIED ALONG WITH SEARCH IN OTHER PERSON FOR THE PURPOSE OF MAKING ASSTT. U/S 158BB. 12. ON FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) ALSO ERRED IN NOT APPRECIATING THAT THE MERE FACT THAT THE BOGUS CREDIT ENTRIES ARE FOUND TO BE RECOR DED IN BOOKS OF ACCOUNTS CANNOT BY ITSELF TAKE SUCH ENTRIE S OUT OF THE SWEEP OF BEING INCRIMINATING OR HAVING A BEARING ON THE ASSTT OF INCOME. ACCORDINGLY, WHEN IT WAS ALREADY ADMITTE D BY EX DIRECTOR AND CAS OF SHELL COS THAT THEY PROVIDED ACCOMMODATION ENTRY, THE BURDEN U/S 68 COULD NOT BE SAID TO HAVE BEEN DISCHARGED BY ASSESSEE AND THIS FACT ITSE LF NOT ONLY HAD BEARING ON ASSTT OF CORRECT INCOME EVEN IF RECO RDED IN BOOKS OF ACCOUNTS BUT ALSO WAS INCRIMINATING IN ITS ELF AS THE LENDER ENTITIES ADMITTEDLY LACKED ECONOMIC SUBSTANC E ALSO, MORE SO WHEN THE CIT(A) HAVING HIMSELF CONFIRMED TR E ADDITION ON ACCOUNT OF BOGUS LTCG CREDIT ENTRIES IN THE CASES OF SOME INDIVIDUAL ASSESSEES OF THE SAME SEARCHED G ROUP IN THE ASSTT U/S 143(3) R/W 153A IN AY 2017-18. 13. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LEARNED CIT(A) IN LAW WHILE DELETING THE ADDITION M ADE BY THE ASSESSING OFFICER U/S 68 WITHOUT CONSIDERING THE ME RITS THAT IN VIEW OF THE AMENDED PROVISIONS W.E.F 1/4/2013, THE BURDEN U/S 68 COULD NOT HAVE BEEN SAID TO BE DISCHARGED BY ASSESSEE JUST BY FILING CONFIRMATIONS/FINANCIAL STATEMENT OF SHELL COS WHICH DID NOT HAVE ANY ECONOMIC SUBSTANCE NOR FOUND EXISTING AT GIVEN ADDRESSES, IN VIEW OF THE RATIO O F DECISION IN CASE OF N R PORTFOLIO PVT LTD 264 CTR 258(DELHI), N OVA PROMOTERS & FIN LEASE PVT LTD 252 CTR 187(DELHI), S EEMA JAIN 406 ITR 411 (DELHI), CHETAN DAS LACHMAN DAS 294 ITR 497(DELHI). 14. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) FAILED TO ALLUDE TO THE RELEVANT FACTS & CIRCUMSTANCES AND MISREAD THE LEGAL PROVISIONS TO A RRIVE AT THE CONCLUSION. 2. THE ASSESSEE HAS ALSO FILED A PETITION UNDER RUL E 27 WHEREBY IT HAS TAKEN A GROUND THAT APPROVAL GIVEN BY JT. CIT U/S 1 53D OF THE ACT TO THE I.T.(SS)A. NO.237/LKW/2020 ASSESSMENT YEARS:2013-14 6 ORDER PASSED U/S 153C IS WITHOUT APPLICATION OF MIN D AND HENCE THE ORDER PASSED U/S 153C IS NONEST AND VOID AB INITIO AND SA ME MAY BE QUASHED. HOWEVER, DURING THE COURSE OF HEARING, LEARNED COUN SEL FOR THE ASSESSEE DID NOT PRESS THE SAME AND THEREFORE, LEARNED CIT, D.R. WAS ASKED TO PROCEED WITH HER ARGUMENTS ON THE GROUNDS OF APPEAL . 3. LEARNED CIT, D.R. SUBMITTED THAT A SEARCH HAD TA KEN PLACE ON 21/04/2016 ON THE FORTUNA GROUP AND WHEREBY THE CAS E OF THE ASSESSEE ALONG WITH CASES OF OTHER ASSESSEES WERE REOPENED U /S 153C OF THE ACT AND ASSESSING OFFICER HAD MADE CERTAIN ADDITIONS WHICH THE LEARNED CIT(A) HAS DELETED BY HOLDING THAT THE ASSESSMENTS IN THIS CAS E STOOD COMPLETED AND THEREFORE, THE ADDITIONS, IF ANY, COULD HAVE BEEN M ADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL. LEARNED CIT, D.R. IN THIS RESPECT SUBMITTED THAT WHILE HOLDING SO, LEARNED CIT(A) HAS NOT TAKEN INTO ACCOUNT THE JUDGMENT OF HON'BLE JURISDICTION HIGH COURT IN THE CASE OF RAJ KUMAR ARORA WHEREIN THE HON'BLE COURT HAS HELD THAT DURING PROCEEDINGS U/S 153A, THE ASSESSING OFFICER IS ALL EMPOWERED TO MAKE ADDITION OR MAKE R EASSESSMENT, EVEN WITHOUT THE INCRIMINATING MATERIAL. IT WAS SUBMITT ED THAT SUCH JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT WAS A BINDING JUDGMENT AS IT WAS DELIVERED BY JURISDICTIONAL HIGH COURT. LEARNED CIT, D.R. FURTH ER SUBMITTED THAT LEARNED CIT(A) HAS ANNULLED THE ASSESSMENT WITHOUT APPRECIA TING THAT THE TERM INCRIMINATING HAS NOT BEEN DEFINED U/S 153A OF THE ACT AND THEREFORE, ITS MEANING IS REQUIRED TO BE INFERRED HARMONIOUSLY WIT H OTHER PROVISIONS OF THE ACT. IT WAS ARGUED THAT UNSUPPORTED ENTRIES APPEAR ING IN THE BOOKS OF ACCOUNT CAN ALSO FALL UNDER THE TERM INCRIMINATING DOCUMENTS AND HENCE, THE MEANING OF TERM INCRIMINATING WAS REQUIRED TO BE INFERRED HARMONIOUSLY WITH RESPECT TO THE SUCH STATUTORY PRO VISIONS. LEARNED CIT, D.R. ARGUED THAT THE ASSESSEE HAD EARNED BOGUS LONG TERM CAPITAL GAIN FROM PENNY STOCK THROUGH SHELL COMPANIES AND THE DI RECTOR OF SHELL I.T.(SS)A. NO.237/LKW/2020 ASSESSMENT YEARS:2013-14 7 COMPANIES HAD ADMITTED TO BE ENGAGED IN PROVIDING A CCOMMODATION ENTRIES. IT WAS SUBMITTED THAT LEARNED CIT(A) HAS NOT APPREC IATED THAT THE BOGUS ENTRIES EVEN RECORDED IN THE BOOKS OF ACCOUNT CANNO T BY ITSELF TAKE SUCH ENTRIES OUT OF THE SWEEP OF BEING INCRIMINATING AND THE BURDEN U/S 68 OF THE ACT COULD NOT SAID TO HAVE BEEN DISCHARGED BY THE A SSESSEE IN VIEW OF THE FACT THAT DIRECTORS OF THE COMPANY HAD ADMITTED THA T THEY WERE ENGAGED IN PROVIDING ACCOMMODATION ENTRIES. IT WAS ALSO SUBMIT TED THAT THE PROVISIONS OF SECTION 153C GOT AMENDED WITH EFFECT FROM 01/04/ 2005 AND THEREFORE, UNLIKE SECTION 153A, TEST OF BEARING ON THE ASSESSM ENT OF INCOME WAS REQUIRED TO BE MADE INSTEAD OF PRESENCE OF INCRIMIN ATING MATERIAL AND THEREFORE, THE RELIANCE PLACED BY LEARNED CIT(A) ON THE ORDER OF SINGHAD TECHNICAL EDUCATION SOCIETY IS MISPLACED. IT WAS S UBMITTED THAT LEARNED CIT(A) HAD HIMSELF CONFIRMED THE ADDITION ON ACCOUN T OF LONG TERM CAPITAL GAIN IN THE CASE OF SOME INDIVIDUAL ASSESSEES IN T HE SAME GROUP AND THEREFORE, IT WAS ARGUED THAT THE ORDER PASSED BY L EARNED CIT(A) BE REVERSED AND THAT OF THE ASSESSING OFFICER BE RESTO RED. 4. LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, SUBMITTED THAT LEARNED CIT(A) HAS PASSED A VERY ELABORATE ORDER WH EREIN THE ORDER OF HON'BLE SUPREME COURT IN THE CASE OF SINGHAD TECHNI CAL EDUCATION SOCIETY HAS BEEN RELIED FOR THE PROPOSITION THAT ADDITION C AN BE MADE ON THE BASIS OF INCRIMINATING MATERIAL IN THE YEAR TO WHICH THAT MATERIAL BELONGED. IT WAS SUBMITTED THAT LEARNED CIT(A) HAS RELIED ON THIS CA SE LAW ONLY TO STRENGTHEN HIS FINDINGS THAT IN CASE OF COMPLETED ASSESSMENTS, ADDITION CAN ONLY BE MADE ON THE BASIS OF INCRIMINATING MATERIAL. IT WA S SUBMITTED THAT HON'BLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA HAS CL EARLY HELD THAT IN THE CASE OF COMPLETED ASSESSMENTS, THE ADDITIONS CAN ON LY BE BASED ON INCRIMINATING DOCUMENTS. IT WAS FURTHER ARGUED THA T HON'BLE SUPREME COURT IN THE CASE OF MEETA GUTGUTIA HAS UPHELD THE DECISI ON OF HON'BLE DELHI HIGH I.T.(SS)A. NO.237/LKW/2020 ASSESSMENT YEARS:2013-14 8 COURT IN THE CASE OF MEETA GUTGUTIA. THEREFORE, IT WAS ARGUED THAT THERE IS NO PERVERSE FINDING IN THE ORDER OF LEARNED CIT(A). AS REGARDS THE GROUND TAKEN BY THE REVENUE REGARDING NON APPLICATION OF D ECISION OF APEX COURT IN THE CASE OF SINGHAD TECHNICAL EDUCATION SOCIETY AS THIS DECISION WAS BEFORE THE AMENDMENT IN SECTION 153C, IT WAS SUBMITTED THA T THE ASSESSMENT IN THE PRESENT CASE HAS THOUGH BEEN COMPLETED U/S 153C OF THE ACT BUT THE LEARNED CIT(A) HAS NOT DECIDED THE ISSUE ON THE BAS IS OF DECISION OF HON'BLE SUPREME COURT IN THE CASE OF SINGHAD TECHNICAL EDUC ATIONAL SOCIETY ONLY BUT HAS TAKEN SUPPORT FROM THIS ORDER OF HON'BLE SU PREME COURT FOR THE PROPOSITION THAT ADDITION HAS TO BE MADE ONLY ON TH E BASIS OF INCRIMINATING DOCUMENTS THEREFORE, SUCH AMENDMENT TO SECTION 153C DOES NOT HELP THE REVENUE. AS REGARDS THE ARGUMENT OF LEARNED CIT, D.R. THAT UNSUPPORTED ENTRIES APPEARING IN THE BOOKS OF ACCOUNT CAN ALSO FALL INTO BEING INCRIMINATING, LEARNED COUNSEL FOR THE ASSESSEE SUB MITTED THAT THE ENTRIES, WHICH ARE RECORDED IN THE BOOKS OF ACCOUNT, CANNOT BE SAID TO BE INCRIMINATING. IT WAS SUBMITTED THAT THOUGH THE WO RD INCRIMINATING HAS NOT BEEN DEFINED IN THE I.T. ACT BUT IN GENERAL TERMS, IT CAN BE INFERRED THAT THE WORD INCRIMINATING IS SOMETHING WHICH HAS A BEARI NG ON THE TOTAL INCOME OF THE ASSESSEE AND WHICH HAS NOT BEEN RECORDED IN THE BOOKS OF ACCOUNT. AS REGARDS THE ARGUMENTS OF LEARNED CIT, D.R. REGARDIN G ONUS U/S 68 OF THE ACT, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THA T LEARNED CIT(A) HAS ALLOWED RELIEF TO THE ASSESSEE ONLY ON A LEGAL ISSU E THAT THE ADDITION IN THE CASE OF COMPLETED ASSESSMENT CAN ONLY BE MADE ON TH E BASIS OF SOME INCRIMINATING MATERIAL FOUND DURING SEARCH AND THER EFORE, IT WAS PRAYED THAT THE ORDER OF LEARNED CIT(A) BE UPHELD. 5. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT A SEARCH TOOK PLACE ON THE FORTUNA GROUP OF CASES ON 21/04/2016 AND SIX ASSESSMENT YEARS, PRECE DING ASSESSMENT YEAR I.T.(SS)A. NO.237/LKW/2020 ASSESSMENT YEARS:2013-14 9 IN WHICH SEARCH TOOK PLACE, WERE REOPENED FOR VARIO US ASSESSEES AND THE PRESENT ASSESSEE IS ONE OF THE GROUP CASES. THE OR IGINAL RETURN OF INCOME WAS FILED ON 29/09/2013, THE EVIDENCE OF WHICH HAS BEEN FILED IN THE FORM OF ACKNOWLEDGEMENT OF RETURN. SUCH RETURN OF INCOME W AS REVISED ON 08/10/2013. THE TIME LIMIT FOR ISSUE OF NOTICE U/S 143(2) EXPIRED ON 30/09/2014, WHICH IS MUCH BEFORE THE DATE OF SEARCH WHICH HAPPENED ON 24/04/2016. IT IS ALSO AN UNDISPUTED FACT THAT ADD ITION HAS NOT BEEN MADE ON THE BASIS OF ANY INCRIMINATING MATERIAL BUT HAS BEEN MADE ON THE BASIS OF ENTRIES IN THE BOOKS OF ACCOUNT. THE LUCKNOW BENCH OF THE TRIBUNAL, IN A NUMBER OF CASES, HAS HELD THAT FOR COMPLETED ASSESS MENTS, THE ADDITIONS U/S 153A OR U/S 153C CAN ONLY BE MADE ON THE BASIS OF SOME INCRIMINATING MATERIAL. THE ARGUMENT OF LEARNED CIT, D.R. THAT U NSUPPORTED ENTRIES, RECORDED IN THE BOOKS OF ACCOUNT, ALSO COMES UNDER THE DEFINITION OF INCRIMINATING MATERIAL, IS OF NO FORCE AS THESE ENT RIES CANNOT BE CALLED INCRIMINATING AS THE ASSESSEE HAD RECORDED SUCH TRA NSACTIONS IN THE BOOKS OF ACCOUNT AND WHICH ARE PROPERLY SUPPORTED BY DOCUMEN TARY EVIDENCES, SUCH AS BANK STATEMENTS, DEMAT STATEMENTS AND REAL TIME TRANSACTIONS THROUGH SCREEN BASED TRADING ON RECOGNIZED STOCK EXCHANGES. SIMPLY BECAUSE CERTAIN PERSONS HAVE ADMITTED TO HAVE PROVIDED THES E ENTRIES AS ACCOMMODATION ENTRIES, CANNOT MAKE THESE ENTRIES IN CRIMINATING UNLESS SUCH PERSONS ARE SUBJECTED TO CROSS EXAMINATION BY THE A SSESSEE. THE ARGUMENT OF LEARNED CIT, D.R. THAT SECTION 153C GOT AMENDED WITH EFFECT FROM 01/04/2005 AND THEREFORE, THE RELIANCE PLACED BY LE ARNED CIT(A) ON THE ORDER OF SINGHAD TECHNICAL EDUCATION SOCIETY IS MIS PLACED WE FIND THAT LEARNED CIT(A) HAS RELIED ON THE ORDER OF APEX COUR T IN THE CASE OF SINGHAD TECHNICAL EDUCATION SOCIETY FOR STRENGTHENING HIS F INDINGS THAT FOR MAKING ADDITIONS IN THE CASE OF COMPLETED ASSESSMENTS, EXI STENCE OF INCRIMINATING MATERIAL IS A MUST. THE HON'BLE APEX COURT IN THAT CASE HAS EVEN HELD THAT ADDITION CAN ONLY BE MADE IN THE YEAR TO WHICH INCR IMINATING MATERIAL I.T.(SS)A. NO.237/LKW/2020 ASSESSMENT YEARS:2013-14 10 RELATES. IN THE CASE BEFORE US, IT IS UNDISPUTED F ACT THAT ADDITION IS NOT BASED UPON ANY INCRIMINATING MATERIAL THEREFORE, TH IS ARGUMENT OF LEARNED CIT, D.R. HAS NO FORCE. AS REGARDS THE ARGUMENT OF LEARNED CIT, D.R. THAT THE ASSESSEE HAD NOT DISCHARGED ITS ONUS UNDER SECT ION 68, WE FIND THAT LEARNED CIT(A) HAS ALLOWED RELIEF TO THE ASSESSEE O N THE BASIS OF A LEGAL ISSUE AND HAS NOT GONE INTO THE MERITS OF THE CASE. AS REGARDS THE ARGUMENTS OF LEARNED CIT, D.R. THAT THE DECISION IN THE CASE OF RAJ KUMAR ARORA, RENDERED BY HON'BLE ALLAHABAD HIGH COURT, WA S APPLICABLE, WE FIND THAT SUCH DECISION WAS BASED ON THE JUDGMENT IN THE CASES OF ANIL KUMAR BHATIA, RENDERED BY HON'BLE DELHI HIGH COURT AND HO N'BLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA HAS FOLLOWED THE JUDGME NT OF HON'BLE DELHI HIGH COURT IN THE CASE OF ANIL KUMAR BHATIA AND HAS DECIDED THE ISSUE IN FAVOUR OF ASSESSEE BY HOLDING THAT IN CASE OF COMPL ETED ASSESSMENTS, THE ADDITIONS CAN ONLY BE MADE ON THE BASIS OF INCRIMIN ATING MATERIAL AND WHICH HAS BEEN UPHELD BY HON'BLE SUPREME COURT AND FURTHE R HON'BLE DELHI HIGH COURTS DECISION IN THE CASE OF MEETA GUTGUTIA HAS ALSO BEEN UPHELD BY HON'BLE SUPREME COURT AND MOREOVER, THESE DECISIONS HAVE BEEN RENDERED AFTER THE DECISION OF RAJ KUMAR ARORA BY HON'BLE AL LAHABAD HIGH COURT. THEREFORE, LEARNED CIT(A) HAS RIGHTLY NOT FOLLOWED THE DECISION OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF RAJ KUMAR ARORA . THE LEARNED CIT(A) HAS CLEARLY HELD THAT THERE IS A DIFFERENCE BETWEEN A STATEMENT RECORDED UNDER SECTION 133A AND THAT RECORDED U/S 132(4) OF THE ACT. THE STATEMENTS WHICH HAVE BEEN RELIED BY ASSESSING OFFI CER HAVE BEEN RECORDED U/S 133A OF THE ACT AND NOT U/S 132(4) OF THE ACT. THE STATEMENT RECORDED U/S 133A HAS BEEN HELD TO BE NOT CONCLUSIVE PIECE O F EVIDENCE BY ITSELF BY VARIOUS HON'BLE HIGH COURTS AS HAS BEEN NOTED BY LE ARNED CIT(A). IN THE PRESENT CASE, THE ONLY MATERIAL IN THE POSSESSION O F THE DEPARTMENT IS THE STATEMENTS OF SHRI SANTOSH CHOUDHARY AND SHRI VIREN DER KUMAR WHICH HAVE BEEN RECORDED POST SEARCH ON THE ASSESSEE AND DURIN G THE SURVEY U/S 133A I.T.(SS)A. NO.237/LKW/2020 ASSESSMENT YEARS:2013-14 11 OF THE ACT. THE LEARNED CIT(A) HAS PASSED AN ELABO RATE ORDER DISCUSSING ALL THE ASPECTS RELATING TO GROUNDS OF APPEALS. THE RE LEVANT FINDINGS OF LEARNED CIT(A) ARE CONTAINED IN PARA 8.6 TO 8.11, WHICH FOR THE SAKE OF COMPLETENESS HAS BEEN MADE PART OF THIS ORDER AND I S REPRODUCED BELOW: 8.6 THE ABOVE SUBMISSION OF THE APPELLANT HAS BEEN CONSIDERED. A PERUSAL OF THE PROVISIONS OF THE SECT ION 153C OF THE ACT SHOWS THAT SECTION 153C OF THE INCOME TAX A CT ALLOWS THE JURISDICTIONAL ASSESSING OFFICER TO ENQUIRE ABO UT THE UNDISCLOSED INCOME OF THE SEIZED ASSET AND IN CASE THERE IS NO SEIZED MATERIAL RELATED TO THAT ASSESSMENT YEAR NO ADDITION CAN BE MADE. THE ABOVE PROVISION IS REPRODUCED BELO W:- ASSESSMENT OF INCOME OF ANY OTHER PERSON. 153C[(1)] [NOTWITHSTANDING ANYTHING CONTAINED IN S ECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153, WHERE THE ASSESSING OFFICER IS SATISFI ED THAT, (A) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING, SEIZED OR REQUISITIONED, BELONGS TO; OR (B) ANY BOOKS OF ACCOUNT OR DOCUMENTS, SEIZED OR REQUISITIONED, PERTAINS OR PERTAIN TO, OR ANY INFOR MATION CONTAINED THEREIN, RELATES TO, A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTI ON 153A, THEN, THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS, SEIZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON] [AND T HAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH O THER PERSON AND ISSUE NOTICE AND ASSESS OR REASSESS THE INCOME OF THE OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A, IF, THAT ASSESSING OFFICER IS SATISFIED THAT THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIO NED HAVE A BEARING ON THE DETERMINATION OF THE TOTAL INCOME OF SUCH OTHER PERSON [FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECE DING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH SEARCH IS CONDUCTED OR REQUISITION IS MADE AND]* FOR THE R ELEVANT ASSESSMENT YEAR OR YEARS REFERRED TO IN SUB-SECTION (1) OF SECTION 153A]:] (*) INSERTED BY THE FINANCE ACT, 2017 I.T.(SS)A. NO.237/LKW/2020 ASSESSMENT YEARS:2013-14 12 8.7 THUS A BARE PERUSAL OF THE PROVISIONS OF THE S ECTION MAKES IT CLEAR THAT ADDITION TO THE TOTAL INCOME CA N BE MADE, WHERE THE ASSESSING OFFICER IS SATISFIED THAT THE B OOKS OF ACCOUNT OR DOCUMENTS OR ASSETS OR REQUISITIONED HAV E A BEARING ON THE TOTAL INCOME OF THE ASSESSEE FOR A P ARTICULAR AY. THE OPERATION OF SECTION 153C HAS BEEN VERY WEL L SUMMARIZED IN THE CASE OF SSP AVIATION LTD VS DEPUT Y COMMISSIONER OF INCOME TAX [2012] 20 TAXMANN.COM 21 4 (DELHI). IT HAS BEEN HELD IN PARA 17 OF THE ORDER T HAT:- 'THE SECTION MERELY ENABLES THE REVENUE AUTHORITIES TO INVESTIGATE INTO THE CONTENTS OF THE DOCUMENT SEIZE D, WHICH BELONGS TO A PERSON THAN THE PERSON SEARCHED SO THAT IT CAN BE ASCERTAINED WHETHER THE TRANSACTION OR THE INCOME EMBEDDED IN THE DOCUMENT HAS BEEN ACCOUNTED FOR IN THE CASE OF THE APPROPRIATE PERSON . IT IS AIMED AT ENSURING THAT INCOME DOES NOT ESCAPE ASSESSMENT IN THE HANDS OF ANY OTHER PERSON MERELY BECAUSE HE HAS NOT BEEN SEARCHED UNDER SECTION 132 OF THE ACT. IT IS ONLY A FIRST STEP TO THE ENQUIRY, - WHICH IS TO FOLLOW. THE ASSESSING OFFICER WHO HAS REACHED TH E SATISFACTION THAT THE DOCUMENT RELATES TO A PERSON OTHER THAN THE SEARCHED PERSON CAN DO NOTHING EXCEPT TO FORWARD THE DOCUMENT TO THE ASSESSING OFFICER HAVIN G JURISDICTION OVER THE OTHER PERSON AND THEREAFTER I T IS FOR THE ASSESSING OFFICER HAVING JURISDICTION OVER THE OTHER PERSON TO FOLLOW THE PROCEDURE PRESCRIBED BY SECTIO N 153A IN AN ATTEMPT TO ENSURE THAT THE INCOME REFLEC TED BY THE DOCUMENT HAS BEEN ACCOUNTED FOR BY SUCH OTHE R PERSON. IF HE IS SO SATISFIED AFTER OBTAINING THE R ETURNS FROM SUCH OTHER PERSON FOR THE SIX ASSESSMENT YEARS , THE PROCEEDINGS WILL HAVE TO BE CLOSED. IF THE RETU RNS FILED BY THE OTHER PERSON FOR THE PERIOD OF SIX YEA RS DOES NOT SHOW THAT THE INCOME REFLECTED IN THE DOCUMENT HAS BEEN ACCOUNTED FOR, ADDITIONS WILL BE ACCORDINGLY MADE AFTER FOLLOWING THE PROCEDURE PRESCRIBED BY LAW AND AFTER GIVING ADEQUATE OPPORTU NITY OF BEING HEARD TO SUCH OTHER PERSON. THAT, IN SUM A ND I SUBSTANCE, IS THE POSITION. 8.8 HON'BLE DELHI HIGH COURT IN CASE OF COMMISSIONE R OF INCOME-TAX-7 V. RRJ SECURITIES LTD. [2015] 62 TAXMA NN.COM I.T.(SS)A. NO.237/LKW/2020 ASSESSMENT YEARS:2013-14 13 391 (DELHI) HAS FURTHER ELABORATED THE PROCEDURE OF SECTION 153C OF THE ACT, WHICH IS REPRODUCED BELOW:- '36. THE DECISION IN SSP AVIATION LTD. (SUPRA) CANN OT BE UNDERSTOOD TO MEAN THAT THE AO HAS THE JURISDICTION TO MAKE A REASSESSMENT IN EVERY CASE, WHERE SEIZED ASSETS OR DOCUMENTS ARE HANDED OVER TO THE ASSESSIN G OFFICER. THE QUESTION WHETHER THE DOCUMENTS/ASSETS SEIZED COULD POSSIBLY REFLECT ANY UNDISCLOSED INCOM E HAS TO BE CONSIDERED BY THE AO AFTER EXAMINING THE SEIZ ED ASSETS/DOCUMENTS HANDED OVER TO HIM. IT IS ONLY IN CASES WHERE THE SEIZED DOCUMENTS/ASSETS COULD POSSI BLY REFLECT ANY UNDISCLOSED INCOME OF THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEARS, THAT FURTHER ENQUIRY WOU LD BE WARRANTED IN RESPECT OF THOSE YEARS. WHILST, IT IS NOT NECESSARY FOR THE AO TO BE SATISFIED THAT THE ASSETS/DOCUMENTS SEIZED DURING SEARCH OF ANOTHER PERSON REFLECT UNDISCLOSED INCOME OF AN ASSESSEE BE FORE COMMENCING AN ENQUIRY UNDER SECTION 153C OF THE ACT , IT WOULD BE IMPERMISSIBLE FOR HIM TO COMMENCE SUCH ENQUIRY IF IT IS APPARENT THAT THE DOCUMENTS/ASSETS IN QUESTION HAVE NO BEARING ON THE INCOME OF THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEARS.' 8.9 THE HON'BLE APEX COURT HAS HELD IN CASE OF COMMISSIONER OF INCOME-TAX-III, PUNE V. SINHGAD TEC HNICAL EDUCATION SOCIETY, [2017] 84 TAXMANN.COM 290 (SC) H AS HELD THAT AS PER THE PROVISIONS OF SECTION 153C, INCRIMI NATING MATERIAL HAS TO PERTAIN TO THE ASSESSMENT YEARS IN QUESTION. THE RELEVANT EXTRACT OF THE JUDGMENT IS GIVEN BELOW :- 18. THE I.T.A.T. PERMITTED THIS ADDITIONAL GROUND BY GIVING A REASON THAT IT WAS A JURISDICTIONAL ISSUE TAKEN UP ON THE BASIS OF FACTS ALREADY ON THE RECORD AND, THEREFORE, COULD BE RAISED. IN THIS BEHALF, IT WAS NOTED BY THE ITAT THAT AS PER THE PROVISIONS OF SECTION 1 53C OF THE ACT, INCRIMINATING MATERIAL WHICH WAS SEIZED HAD TO PERTAIN TO THE ASSESSMENT YEARS IN QUESTION AND IT IS AN UNDISPUTED FACT THAT THE DOCUMENTS WHICH WERE SEIZED DID NOT ESTABLISH ANY CO-RELATION, DOCUMENT- WISE WITH THESE FOUR ASSESSMENT YEARS. SINCE THIS REQUIREMENT UNDER SECTION 153C OF THE ACT IS ESSENT IAL FOR ASSESSMENT UNDER THAT PROVISION, IT BECOMES A I.T.(SS)A. NO.237/LKW/2020 ASSESSMENT YEARS:2013-14 14 JURISDICTIONAL FACT. WE FIND THIS REASONING TO BE L OGICAL AND VALID, HAVING REGARD TO THE PROVISIONS OF SECTI ON 153C OF THE ACT. PARA 9 OF THE ORDER OF THE ITAT REVEALS THAT THE ITAT HAD SCANNED THROUGH THE SATISFACTION NOTE AND THE MATERIAL WHICH WAS DISCLO SED THEREIN WAS CULLED OUT AND IT SHOWED THAT THE SAME BELONGS TO ASSESSMENT YEAR 2004-05 OR THEREAFTER. AFTER TAKING NOTE OF THE MATERIAL IN PARA 9 OF THE ORDER, THE POSITION THAT EMERGES THEREFROM IS DISCUSSED IN PARA 10. IT WAS SPECIFICALLY RECORDED THAT THE COUNSEL F OR THE DEPARTMENT COULD NOT POINT OUT TO THE CONTRARY. IT IS FOR THIS REASON THE HIGH COURT HAS ALSO GIVEN ITS IMPRI MATUR TO THE AFORESAID APPROACH OF THE TRIBUNAL. THAT APA RT, LEARNED SENIOR COUNSEL APPEARING FOR THE RESPONDENT , ARGUED THAT NOTICE IN RESPECT OF ASSESSMENT YEARS 2000-01 AND 2001-02 WAS EVEN TIME BARRED. 8.10 BESIDES THE ABOVE,- IT HAS BEEN HELD THROUGH A NUMBER OF JUDGMENT THAT THE A.O. WHILE MAKING ASSESSMENT I N SEARCH CASES SHALL RESTRICT ADDITION ONLY TO INCRIMINATING MATERIAL FOUND DURING THE SEARCH. RELIANCE IS PLACED ON THE JUDGMENT OF HON'BLE DELHI HIGH COURT DATED 28-08-2015 (ITA N O. 707, 709 AND 713 OF 2014, A.Y. 2002-02, 2005-6 AND 2006- 07) IN THE CASE OF CIT VS.'KABUL CHAWLA'. FURTHERMORE IN T HE CASE OF CASE MEETA GUTGUTIA (ITA NO. 06 TO 310 OF 2017 FOR A.Y. 2000-01 TO 2004-05), THE HIGH COURT OF DELHI VIDE O RDER DATED 25.05.2017, GOES ONE STEP AHEAD OF KABUL CHAWLA CAS E BY CONCLUDING THAT WHERE THERE IS NO INCRIMINATING MAT ERIAL, INVOKING OF 153 A IS NOT JUSTIFIED. REVENUE FILED S LPS AGAINST THIS ORDER AND THE HON'BLE SUPREME COURT VIDE ORDER DATED 02.07.2018 HAS DISMISSED THE SLP FILED BY THE REVEN UE ON MERIT IN CASE OF PRINCIPAL COMMISSIONER OF INCOME-T AX, CENTRAL IT, NEW DELHI V. MEETA GUTGUTIA, [2018] 96 TAXMANN. COM 468 (SC). 8.11 IN THIS CASE THE INCRIMINATING MATERIAL DISCU SSED IN THE SATISFACTION NOTE PERTAINED TO ASSESSMENT YEAR 2016 -17 WHICH NEITHER HAD ANY RELATION TO THE ASSESSMENT YEAR UND ER CONSIDERATION, NOR HAD ANY RELATION TO THE SUBJECT MATTER ON WHICH ADDITION WAS MADE BY THE ASSESSING OFFICER. IN VIEW OF DISCUSSION MADE IN THE PRECEDING PARAGRAPHS AND RESPECTFULLY FOLLOWING THE RATIO OF BINDING JUDICIA L PRONOUNCEMENTS DISCUSSED ABOVE, I FIND THAT THE INV OKING OF I.T.(SS)A. NO.237/LKW/2020 ASSESSMENT YEARS:2013-14 15 SECTION 153C FOR THE ASSESSMENT YEAR 2013-14 IS LEG ALLY AND FACTUALLY UNSUSTAINABLE. 6. THE ANALYSIS OF PROVISIONS OF SECTION 153C READ WITH VARIOUS CASE LAWS, RELIED ON BY LEARNED CIT(A), LEADS US TO THE FOLLOWING FACTS WHICH ARE NECESSARY TO MAKE THE ADDITIONS IN THE HANDS OF OTH ER PERSON: (A) THERE MUST BE SOME INCRIMINATING DOCUMENTS WHICH SH OULD BELONG TO OTHER PERSON AND WHICH SHOULD HAVE A BEAR ING TO THE DETERMINATION OF TOTAL INCOME IN THE CASE OF OTHER PERSON. (B) THAT INCRIMINATING DOCUMENTS SHOULD BE HANDED OVER TO THE ASSESSING OFFICER OF OTHER PERSON. (C) THE ASSESSING OFFICER, AFTER RECORDING HIS SATISFAC TION, WILL REQUIRE THE OTHER PERSON TO FILE RETURNS U/S 153C O F THE ACT. (D) THE ASSESSING OFFICER OF THE OTHER PERSON THEN RECO RD A FINDING THAT SUCH DOCUMENT WAS AN INCRIMINATING DOCUMENT HA VING BEARING TO THE DETERMINATION OF TOTAL INCOME OF THE OTHER PERSON. 6.1 THEREFORE, FROM THE ABOVE, IT IS ABSOLUTELY CLE AR THAT EXISTENCE OF INCRIMINATING MATERIAL RELATING TO OR BELONGING TO OTHER PERSON IS A MUST AND WHICH SHOULD HAVE BEEN SEIZED DURING SEARCH ON A SE ARCHED PERSON AND IF SUCH CIRCUMSTANCES DO NOT EXIST, THE PROVISIONS OF SECTION 153C CAN NOT BE TRIGGERED. 6.2 IN THE PRESENT CASE BEFORE US, IT IS UNDISPUTED FACT THAT ADDITION HAS NOT BEEN MADE ON THE BASIS OF ANY INCRIMINATING DOC UMENTS RELATING TO OR BELONGING TO THE ASSESSEE WHICH WERE SEIZED DURING SEARCH ON THE SEARCHED PERSON. THE ONLY DOCUMENT RELATING TO THE ASSESSEE , FOUND DURING SEARCH, WAS A FRANCHISE AGREEMENT WHICH IS APPARENT FROM TH E FINDINGS OF ASSESSING OFFICER IN PARA-I WHICH FOR THE SAKE OF COMPLETENES S IS REPRODUCED BELOW: A SEARCH AND SEIZURE OPERATION U/S 132 OF THE INCO ME-TAX ACT, 1961 (HEREIN AFTER REFERRED TO AS THE 'ACT') W AS CARRIED OUT ON FORTUNA GROUP ON 21.04.2016. UNEXPLAINED CASH JE WELLERY AND INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED D URING I.T.(SS)A. NO.237/LKW/2020 ASSESSMENT YEARS:2013-14 16 OPERATION. THOUGH, NO WARRANT WAS ISSUED IN THE NAM E OF M/S LUCKNOW MALL DEVELOPERS, BUT INCRIMINATING DOCUMENT S IN THE FORM OF FRANCHISE AGREEMENT WERE FOUND WHICH HAD BE ARING ON DETERMINATION OF TAXABLE INCOME OF ASSESSEE M/S LUCKNOW MALL DEVELOPERS. HENCE, THE CASE WAS PROPOSED TO BE SCRUTINIZED U/S 153C AND CASE HAS BEEN CENTRALIZED U/S 127(2) OF THE ACT, VIDE ORDER DATED 01.08.2016 OF PR. CIT- 2, LUCKNOW. 6.3 FURTHER THE FACT THAT ADDITION HAS NOT BEEN MAD E ON THE BASIS OF ANY INCRIMINATING MATERIAL IS ALSO APPARENT FROM THE FI NDINGS OF ASSESSING OFFICER AS CONTAINED IN PARA 7.1 WHERE HE ADMITS THAT ADDIT ION HAS NOT BEEN MADE ON THE BASIS OF INCRIMINATING MATERIAL AND HE HELD THAT EXISTENCE OF INCRIMINATING MATERIAL WAS NOT NECESSARY AND RELIED ON THE JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF RAJ KUM AR ARORA. FOR THE SAKE OF COMPLETENESS, HIS FINDINGS AT PARA 7.1 HAS BEEN MADE PART OF THIS ORDER AND ARE REPRODUCED BELOW: 7.1 CONSIDERING ALL THE FACTS AS DISCUSSED ABOVE R EPLY OF ASSESSEE IS NOT FOUND SATISFACTORY. AS THE LENDER C OMPANY M/S ANIRUDDHA MOTOR & GENERAL FINANCE PVT. LTD IS NOT G ENUINE FOR THE REASONS ALREADY DISCUSSED, THE UNSECURED LOAN R ECEIVED FROM IT TO THE TUNE OF RS. 4,40,00,000/- (6,40,00,0 00 - 2,00,00,000) IS TREATED AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. IN PARA 4, THE OBJECTION RAISED BY ASSESSEE HAS BEE N QUOTED ACCORDING TO WHICH 'CASE OF ASSESSEE COMPANY HAS ALREADY BEEN ASSESSED UNDER REGULAR ASSESSMENT PROC EEDING AND UNDER THE CIRCUMSTANCES THE COMPLETED ASSESSMEN T CAN NOT BE DISTURBED UNLESS INCRIMINATING MATERIAL HAS A BE ARING ON THE ASSESSMENT OF THE ASSESSEE COMPANY 'AND RELIED ON D ELHI HIGH COURT JUDGEMENT IN THE CASE OF COMMISSIONER OF INCO ME TAX -7 VS RRJ SECURITIES LTD. 380 ITR 612. WITH REGARD TO THIS OBJECTION, THOUGH THERE IS NO A DDITION ON THE BASIS OF SEIZED DOCUMENTS, AS MENTIONED IN T HE SATISFACTION NOTE, BUT THIS INFORMATION REGARDING M /S ANIRUDHMOTER AND GENERAL FINANCE PVT LTD PROVIDING FUNDS TO I.T.(SS)A. NO.237/LKW/2020 ASSESSMENT YEARS:2013-14 17 M/S LUCKNOW MALL DEVELOPERS PVT LTD, IN THE FORM OF UNSECURED LOAN AND INVESTMENT WAS AVAILABLE AT THE TIME OF SE ARCH. SEC. 153C(1) (B) READS THAT: (B) ANY BOOKS OR DOCUMENTS SEIZED OR REQUISIONED, P ERTAINS OR PERTAINS TO, OR ANY INFORMATION CONTAINED THEREIN R EFERS TO..... AS THE INFORMATION WAS ALREADY AVAILABLE REGARDING FUNDS DIVERSION FROM M/S ANIRUDH TO GROUP COMPANIES OF FO RTUNA GROUP, M/S LUCKNOW MALLS BEING ONE OF THEM, THE ADD ITION MADE ABOVE IS JUSTIFIED AS PER PROVISIONS OF THE AC T. ALLAHABAD HIGH COURT IN RAJ KUMAR ARORA 367 ITR 517 HAS HELD THAT THERE IS NO REQUIREMENT OF INCRIMINATING MATER IAL FOR INVOKING PROVISIONS OF SEC. 153A. SINCE THE PROCEED INGS UNDER SECTION 153C ARE IDENTICAL TO SEC. 153A EXCEPT THE FACT THAT THE PERSON ASSESSED UNDER THIS SECTION IS NOT THE SEARC HED ONE BUT THE RELATED PERSON, THE ABOVE DECISION OF ALLAHABAD HIGH COURT IS ALSO APPLICABLE IN CASE OF INVOKING THE PROVISIO NS OF S. 153C. 6.4 FURTHER WE FIND THAT FRANCHISE AGREEMENT FOUND DURING SEARCH RELATED TO ASSESSMENT YEAR 2016-17 AND THEREFORE, THE ASSES SEE TOOK THE GROUND BEFORE LEARNED CIT(A) THAT ADDITIONS, IF ANY, COULD BE MADE ONLY IN ASSESSMENT YEAR 2016-17 AND RELIED ON THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF SINGHAD TECHNICAL EDUCATION SO CIETY AND WHICH THE LEARNED CIT(A) RIGHTLY APPRECIATED AND RELYING ON T HE JUDGMENTS OF KABUL CHAWLA AND MEETA GUTGUTIA HAS RIGHTLY ALLOWED RELIE F TO THE ASSESSEE. 7. IN VIEW OF THESE FACTS AND CIRCUMSTANCES AND IN VIEW OF JUDICIAL PRECEDENT, RELIED ON BY THE ASSESSEE, THE LEARNED C IT(A) HAS RIGHTLY ALLOWED RELIEF TO THE ASSESSEE. 8. THE LUCKNOW BENCH OF THE TRIBUNAL, HAS ALSO TAKE N SIMILAR VIEW, IN THE FOLLOWING CASES THAT IN CASE OF COMPLETED ASSES SMENTS, THE ADDITIONS CAN ONLY BE MADE ON THE BASIS OF INCRIMINATING MATERIAL . I.T.(SS)A. NO.237/LKW/2020 ASSESSMENT YEARS:2013-14 18 (I) SHRI BALAJI BETAL NUTS PVT. LTD. VS. DCIT & ORS. IN I.T.(SS)A. NOS.105 TO 108/LKW/2019 & ORS. (II) SHRI NAVIN JAIN VS. DCIT & ORS. IN I.T.(SS)A. NOSS 639 TO 641/LKW/2019 & ORS. (III) KUNDAN CASTINGS PVT. LTD. VS. DCIT & ORS. IN I.T.A. NOS. 630 & 631/LKW/2019 & ORS. (IV) SHRI SURENDRA KUMAR GUPTA VS. DCIT IN I.T.(SS)A. NO.125/LKW/2019 7. RESPECTFULLY FOLLOWING THE JUDGMENT OF HON'BLE S UPREME COURT IN THE CASE OF MEETA GUTGUTIA AND KABUL CHAWLA AND THAT OF SINGHAD TECHNICAL EDUCATION SOCIETY AND THE JUDGMENTS OF LUCKNOW BENC HES IN THE ABOVE CASES, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED CIT(A). THEREFORE, THE APPEALS FILED BY THE REVENUE ARE DIS MISSED. 8. IN THE RESULT, APPEAL OF THE REVENUE STANDS DISM ISSED AND THE PETITION FILED BY ASSESSEE UNDER RULE 27 IS DISMISSED AS NOT PRESSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 21/10/2021) SD/. SD/. ( A. D. JAIN ) ( T. S. KAPOOR ) VICE PRESIDENT ACCOUNTANT MEMBER DATED:21/10/2021 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSISTANT REGISTRAR