Appeal details
Counselvise Citation
[2020] 110 COUNSELVISE.COM (IT) 3564 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 6 month(s) 6 day(s)
Appellant
Respondent
Appeal Type
Income Tax (Search & Seizure) Appeal
Pronouncement Date
12-11-2020
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
A
Next Hearing Date
08-04-2020
Assessment Year
2011-2012
Appeal Filed On
06-05-2019
Judgement Text
SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 1 , - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A [CONDUCTED THROUGH VIRTUAL COURT] BEFORE SHRI RAJPAL YADAV, VICE-PRESIDENT AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER SR.NO. IT(SS)A.NO. ASSTT.YEAR APPELLANT RESPONDENT 1 - 6 118 TO 123/A H D/2019 ASSTT.YEARS : 2009-10 TO 2014-15 SHRI HITESH ASHOK VASWANI 10, TALKA NAGAR OLD VADAJ ASHRAM ROAD AHMEDABAD. PAN : AAOPV 7214 K THE DCIT, CENT.CIR.1(1) AHMEDABAD. 7 - 12 124 TO 129/AHD/2019 2009-10 TO 2014-15 SMT.VANITA DILIP VASWANI 2, SHREE SAMPRAT CO-OP HSG. SOCIETY LTD. OPP: RIVERA-11 PRAHLADNAGAR AHMEDABAD. PAN : AAKPV 7868D THE DIT CENT.CIR.1(1) AHMEDABAD. 13 - 18 130 TO 135/AHD/2019 2009-10 TO 2014-15 SMT.MAMATA ASHOK VASWANI 10, TALKA NAGAR OLD VADAJ ASHRAM ROAD AHMEDABAD. PAN : AAOPV6845 N THE DCIT, CENT.CIR.1(1) AHMEDABAD. 19 - 21 204 TO 206/AHD/2019 2009-10 TO 2013-14 SMT.HARSHA DEEPAK VASWANI 3, RAJDEEP VILLA OPP: RIVERA-11 B/H. CHIMANBHAI INSTITUTE PRAHALADNAGAR AHMEDABAD. PAN : AAOPV 6846 R THE DCIT CENT.CIR.1(1) AHMEDABAD. 22 - 23 278 AND 279/AHD/2019 ASSTT.YEAR 2012-13 AND 2013-14 M/S.SHRI SAI SIDDHI CORPORATION 901, SAPPHIRE COMPLEX THE DCIT CENT.CIR.1(1) AHMEDABAD. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 2 NR.CARGO MOTORS C.G. ROAD AHMEDABAD. PAN : ABXFS 9861 M 24 - 28 280 TO 284/AHD/2019 ASSTT.YEAR : 2010-2014- 15 M/S.VENUS TOWNSHIP INDIA P.LTD. 801-802, BROADWAY BUSINESS CENTRE OPP: MAYORS BUNGALOW LAW GARDEN ELLISBRIDGE AHMEDABAD. PAN : AACCV 6265 F THE DCIT CENT.CIR.1(1) AHMEDABAD. 29 - 31 834 TO 8 36/AHD/2019 2012-13 TO 2014-15 M/S.VENUS INFRABUILD 801, BROADWAY BUSINESS CENTRE OPP: MAYORS BUNGALOW LAW GARDEN ELLISBRIDGE PAN : AAJFV 3857 F THE DCIT, CENT.CIR.1(1) AHMEDABAD. 32 - 37 75 TO 80/ AHD /2019 ASSTT.YEAR : 2009-10 TO 2014-15 SHRI DILIP KUMAR LALWANI R-649, NEW RAJENDRA NAGAR NEW DELHI PAN : AAEPL 5472 F THE DCIT CIR.1(1) AHMEDABAD. 38 - 43 195 TO 200/AHD/2019 2009-10 TO 2014-15 THE DCIT, CIR.(1)(1) AHMEDABAD. SHRI DILIP KUMAR LALWANI R-649, NEW RAJENDRA NAGAR NEW DELHI PAN : AAEPL 5472 F 44 50 88 TO 94/AHD/2019 ASSTT.YEAR : 2009-10 TO 2015-16 SHRI ASHOK SURENDRAS VASWANI 1, RAJDEEP VILLA OPP: RIVERA-11 B/H. CHIMANBHAI INSTITUTE PRAHALAD NAGAR, SATELLITE AHMEDABAD PAN : AAOPV 6849 A THE DCIT, CENT.CIR.1(1) AHMEDABAD. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 3 51 - 57 241 TO 247/AHD/2019 ASSTT.YEARS 2009-10 TO 2015-16 THE DCIT, CENT.CIR.1(1) AHMEDABAD. SHRI ASHOK SURENDRAS VASWANI 1, RAJDEEP VILLA OPP: RIVERA-11 B/H. CHIMANBHAI INSTITUTE PRAHALAD NAGAR, SATELLITE AHMEDABAD PAN : AAOPV 6849 A 58 - 64 102 TO 108/AHD/2019 ASSTT.YEAR 2009-10 TO 2015-16 M/S.VENUS INFRASTRUCTURE & DEVELOPERS P.LTD. 801-802, BROADWAY BUSINESS CENTRE OPP: MAYORS BUNGALOW LAW GARDEN ELLISBRIDGE AHMEDABAD. PAN : AAHCS 6254 J DCIT, CENT.CIR.1(1) AHMEDABAD. 65 - 71 228 TO 234/AHD/2019 ASSTT.YEAR 2009-12 TO 2015-16 DCIT, CENT.CIR.1(1) AHMEDBAD. M/S.VENUS INFRASTRUCTURE & DEVELOPERS P.LTD. 801-802, BROADWAY BUSINESS CENTRE OPP: MAYORS BUNGALOW LAW GARDEN ELLISBRIDGE AHMEDABAD. PAN : AAHCS 6254 J 72 - 78 111 TO 117/AHD/2019 ASSTT.YEAR 2009-10 TO 2015-16 SHRI DEEPAK BUDHARMAL VASWANI 3, RAJDEEP VILLA OPP: RIVERA-11 B/H. CHIMANBHAI INSTITUTE PRAHALADNAGAR, SATELLITE AHMEDABAD. PAN : AAPPV 8625 F DCIT, CENT.CIR.1(1) AHMEDABAD. 79 - 85 248 TO 254/AHD/2019 2009-10 TO 2015-16 THE DCIT, CIR.1(1) AHMEDABAD. SHRI DEEPAK KUMAR VASWANI 3, RAJDEEP VILLA OPP: RIVERA-11 B/H. CHIMANBHAI SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 4 INSTITUTE PRAHALADNAGAR, SATELLITE AHMEDABAD. PAN : AAPPV 8625 F 86 - 92 95 TO 101/AHD/2019 ASSTT.YEAR 2009-10 TO 2015-16 SHRI RAJESH SUNDERDAS VASWANI 10, TILA NAGAR OLD VADA ASHRAM ROAD AHMEDABAD. PAN : AAOPV6848B THE DCIT, CIR.1(1) AHMEDABAD. 93 ITA NO.805/AHD/2019 ASSTT.YEAR 2008-09 DCIT, CENT.CIR.1(1) AHMEDABAD. SHRI RAJESH SUNDERDAS VASWANI ASHRAM ROAD AHMEDABAD PAN : AAOPV 6848 B 94 - 99 235 TO 240/AHD/2019 ASST.YEAR 2009-10 TO 2015-16 - DO - - DO - 100 - 101 109 AND 110/AHD/2019 ASSTT.YEAR :2012-13 AND 2013-14. M/S.SANJEET MOTORS FINANCE P.LTD. 6, SARTHI BUNGALOWS PRENATHIRTH DERASAR ROAD SATELLITE AHMEDABAD. PAN : AAMCS 8522 L THE DCIT CENT.CIR.1(1) AHMEDABAD. 102 ITA NO.456 /AHD/2019 ASSTT.YEAR : 2008-09 SHRI ASHOK SURENDRAS VASWANI 1, RAJDEEP VILLA OPP: RIVERA-11 B/H. CHIMANBHAI INSTITUTE PRAHALAD NAGAR, SATELLITE AHMEDABAD PAN : AAOPV 6849 A THE DCIT, CENT.CIR.1(1) AHMEDABAD. 103 ITA NO. 806/AHD/2019 ASSTT.YEAR : 2008-09 THE DCIT, CENT.CIR.1(1) AHMEDABAD. SHRI ASHOK SURENDRAS VASWANI 1, RAJDEEP VILLA OPP: RIVERA-11 B/H. CHIMANBHAI INSTITUTE PRAHALAD NAGAR, SATELLITE AHMEDABAD SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 5 PAN : AAOPV 6849 A 104 ITA 457/AHD/2019 ASSTT.YEAR 2008-09 SHRI RAJESH SUNDERDAS VASWANI 10, TILA NAGAR OLD VADA ASHRAM ROAD AHMEDABAD. PAN : AAOPV6848B THE DCIT, CIR.1(1) AHMEDABAD. 105 ITA 461/AHD/2019 ASSTT.YEAR 2008-09 SHRI DEEPAK BUDHARMAL VASWANI 3, RAJDEEP VILLA OPP: RIVERA-11 B/H. CHIMANBHAI INSTITUTE PRAHALADNAGAR, SATELLITE AHMEDABAD. PAN : AAPPV 8625 F THE DCIT, CIR.1(1) AHMEDABAD. 106 ITA NO.807/AHD/2019 ASSTT.YEAR 2008-09 DCIT, CENT.CIR.1(1) AHMEDABAD SHRI DEEPAK BUDHARMAL VASWANI 3, RAJDEEP VILLA OPP: RIVERA-11 B/H. CHIMANBHAI INSTITUTE PRAHALADNAGAR, SATELLITE AHMEDABAD. PAN : AAPPV 8625 F. 107 IT(SS)A.NO.837/AHD/2019 ASSTT.YEAR 2015-16 M/S.VENUS INFRABUILD 801, BROADWAY BUSINESS CENTRE OPP: MAYORS BUNGALOW LAW GARDEN ELLISBRIDGE PAN : AAJFV 3857 F THE DCIT, CENT.CIR.1(1) AHMEDABAD. ( APPLICANT ) ( RESPONENT ) REVENUE BY : SHRI VIRENDRA OJHA, CIT-DR ASSESSEE BY : SHRI TUSHAR HEMANI WITH SHRI PARIMALSINHB. PARMAR SHRI VIJAY GOVANI, ARS. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 6 / DATE OF HEARING:25/08/2020,31/08/2020&07/09/2020 / DATE OF PRONOUNCEMENT: 12/11/2020 / O R D E R PERBENCH:- THIS IS A BUNCH OF 107 APPEALS; OUT OF WHICH 71 APPE ALS ARE DIRECTED AT THE INSTANCE OF THE ASSESSEE, AND 36 AT THE INSTANCE OF THE REVENUE. THUS, IN SOME OF THE ASSESSMENT YEARS, AND IN THE CASE OF SOME OF TH E ASSESSEES, THERE ARE CROSS- APPEALS. THE FACTS FOR THE PURPOSE OF PROCEDURAL REQUIREMENTS ARE CONCERNED, THEY ARE COMMON. 2. BRIEF FACTS OF THE CASE ARE THAT THE DEPARTMENT HAS CARRIED OUT SEARCHES ON THE FOLLOWING PLACES: PERSON SEARCHED AS PER PANCHNAMA ADDRESS OF PREMISES SEARCHED DATE AND TIME OF INITIATION OF SEARCH DATE AND TIME OF CONCLUSION OF SEARCH ASHOK SUNDERDAS VASWANI 1- RAJDEEP VILLAS, B/H. CHIMANBHAI PATEL INSTITUTE, PRAHLADNAGAR, AHMEDABAD 10.03.2015 08:05 A.M. 12.03.2015 07:00 P.M. DEEPAK BUDHARMA VASWANI 2-RAJDEEP VILLA, OPP. RIVERA-11, B/H CHIMANBHAI PATEL INSTITUTE, PRAHLADNAGAR, AHMEDABAD. 3-RAJDEEP VILLA, OPP. RIVERA-11, B/H CHIMANBHAI PATEL INSTITUTE, PRAHLADNAGAR, AHMEDABAD. 501, SAPPHIRE COMPLEX, OPP: RATNAM, CG ROAD, AHMEDABAD. 10.03.2015 06:30 A.M. 12.03.2015 10:30 P.M. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 7 G-9, GOLD SOUK COMPLEX B/H. SAPPHIRE BLDG. CG ROAD AHMEDABAD. 10, RAJDEEP TILAK NAGARSOCIETY OLD WADAJ,ASHRAM ROAD AHMEDABAD. PRAKASH BUILDING KALUPUR AHMEDABAD. RAJESH SUNDERDAS VASWANI RAJDEEP VILLA, 10, TIILAK NAGAR SOCIETY, OLD VADAJ, ASRAM ROAD, AHMEDABAD PRAKASH BUILDIG, KADIA KUI KATNI RANG ROAD RELIEF ROAD KALUPUR AHMEDABAD. 10.03.2015 06:40 A.M. 11.03.2015 11:35 P.M. M/S VENUS INFRASTRUCTURE & DEVELOPERS (P) LTD (RAJESH VASWANI WAS AVAILABLE HERE) I) 801-802, BROADWAY BUSINESS CENTRE, OPP. MAYOR'S BUNGLOW, LAW GARDEN, ELLISBRIDGE, AHMEDABAD II) 901, SAPPHIRE COMPLEX, O PP. RATNAM, CG ROAD, AHMEDABAD III) G- 9, GOLD SOUK COMPLEX, B/H SAPPHIRE BUILDING, CG ROAD, AHMEDABAD IV) A- 101, PROJECT SITE OFFICE, VENUS PARKLAND, NEAR VEJALPUR POLICE CHOWKY, VEJALPUR, AHMEDABAD 10.03.2015 12:05 P.M 12.03.2015 11:20 P.M. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 8 V) TERRACE OF CRYSTAL ARCADE, BESIDES NAVRANGPURA, TELE. EXCHANGE, CG ROAD, AHMEDABAD VI) D- 5, NEW GARDEN FLATS, ELLISBRIDGE, LAW GARDEN, AHMEDABAD VII) HOUSE OF VASIBHAI VASRAMBHAI DESAI AT VILLAGE KHADEDA, RABARI VAS, DIST. PATAN ASHOK SUNDERDAS VASWANI & M/S VENUS INFRASTRUCTURE-& DEVELOPERS (P) LTD I) TERRACE OF CRYSTAL ARCADE BESIDES NAVRANGPURA TELEPHONE EXCHANGE, C.G. ROAD, AHMEDABAD. II) 901, SAPPHIRE COMPLEX, OPP. RATNAM, CG ROAD, AHMEDABAD III) 307, 3RD FLOOR, CRYSTAL ARCADE, BESIDES NAVRANGPURA TELEPHONE EXCHANGE, CG ROAD, AHMEDABAD IV) 10, RAJ DEEP TILAK NAGAR SOCIETY, OLD WADAJ, ASHRAM ROAD, AHMEDABAD. V) 2, RAJ DEEP VILLAS, OPP. RIVERA 11, B/H CHIMANBHAI INSTITUTE, PRAHLADNAGAR, AHMEDABAD. VI) PRAKASH BUILDING, KADIA KUI, KAMI RANG ROAD, RELIEF ROAD, KALUPUR, AHMEDABAD 12.03.2015 09:30 A.M. 13.03.2015 07:20 P.M. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 9 V) TERRACE OF CRYSTAL ARCADE, BESIDES NAVRANGPURA, TELE. EXCHANGE, CG ROAD, AHMEDABAD VI) HOUSE OF VASIBHAI VASRAMBHAI DESAI, AT VILLAGE KHADEDA, RABARI VAS, DIST. PATAN. SANJEET MOTORS FINANCE P.LTD. 6, SAARTHI BUNGALOWS PRERNATIRTH DERASAR ROAD SATELLITE, AHMEDABAD. 17/B/1, DEVENDRA SOCIETY NARANPURA AHMEDABAD. B/6, PALLAVI APARTMENT OPP: MUNICIPAL MARKET C.G.ROAD AHMEDABAD. 3. IN ORDER TO GIVE LOGICAL END TO THE SEARCH, THE LD.AO HAD ISSUED NOTICE UNDER SECTION 153A, 153C AND 148 OF THE INCOME TAX A CT AS REQUIRED IN THE PARTICULAR CASE OF AN ASSESSEE, AND DIRECTED THEM T O FILE THEIR RETURN. THE RETURNS WERE FILED. THE ASSESSMENTS HAVE BEEN COMPLETED, A ND THE APPEALS HAVE BEEN DECIDED BY THE LD.CIT(A) VIDE ORDERS IMPUGNED IN THE SE APPEALS. 4. AT THE TIME OF HEARING, WE HAVE APPRAISED THE PA RTIES AS TO HOW THEY WOULD ARGUE THE APPEALS, BECAUSE, IF WE LOOK TO THE TOTAL NUMBER OF APPEALS, AND PAPERS SUBMITTED THEREIN, THEN DETAILS ON DIFFERENT ISSUES IN ALL THESE APPEALS MUST BE RUNNING IN MORE THAN 20,000 PAGES. THE LD.COUNS EL FOR THE ASSESSEE HAS SUBMITTED THAT HE HAS DIVIDED HIS SUBMISSIONS IN FO UR COMPARTMENTS, AND MOST OF SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 10 THESE SUBMISSIONS ARE RELATED TO JURISDICTIONAL AND LEGAL ISSUES. THE ADJUDICATION OF THESE JURISDICTIONAL GROUNDS WOULD BE THE BASIS FOR PROCEEDING FURTHER ON MERIT. BROADLY, BOTH THE PARTIES HAVE AGREED FOR C OMMENCING THE HEARING IN THE MANNER SUGGESTED BY THE LD.COUNSEL FOR THE ASSESSEE . FOUR COMPARTMENTS ARE (I) WHETHER THE ASSESSMENT PROCEEDING UNDERTAKEN UN DER SECTION 153C IS SUSTAINABLE IN THE EYES OF LAW. FOR THIS PROPOSITI ON, THE LEAD MATTER HAS BEEN SUGGESTED AS ITA NO.75/AHD/2019 OF THE ASSESSE ES APPEAL, AND CROSS APPEAL OF THE REVENUE I.E. ITA NO.195/AHD/201 9 FOR THE ASSTT.YEAR 2009-10; (II) WHETHER THE ASSESSMENTS UNDER SECTION 153A IS TO BE FRAMED STRICTLY ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH IN THE CASE OF CONCERNED ASSESSEE. THE LEAD MATTER SUG GESTED FOR THE PROPOSITION IS IT(SS)A.NO.95AHD/2019 AND IT(SS)A.NO .235/AHD/2019 FOR THE ASSTT.YEAR 2009-10 IN THE CASE OF RAJESH SU NDERDAS VASWANI. (III) WHETHER THE ASSESSMENTS COMPLETED UNDER SECTI ON 153A ARE WITHIN THE LIMITATION OR NOT. THE LEAD MATTER SUGGESTED B Y THE PARTIES FOR THE PROPOSITION IS ASHOK SUNDERDAS VASWANI, IT(SS)A.NO.8 8/AHD/2019 AND CROSS APPEALBEARING NO.IT(SS)A.NO.241/AHD/2019 FOR THE ASSTT.YEAR 2009-10; IV) ITHAS BEEN PLEADED THAT WHETHER REOPENING OF TH E ASSESSMENT IN THE ASSTT.YEAR 2008-09 IN THE CASE OF ASHOK SUNDERDAS V ASWANI IS JUSTIFIABLE. THIS IS THE SINGLE ASSESSMENT ORDER IN THE CASE OF A SHOK SUNDERDAS VASWANI FOR THE ASSTT.YEAR 2008-09, ITANO.456/AHD/2 019, AND ITA NO. 806/AHD/2019 ARE TO BE TAKEN TOGETHER. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 11 V) THE LAST COMPARTMENT OF THE ARGUMENT IS WITH REGA RD TO THE APPEAL IN ITA NO.837/AHD/2019 IN THE CASE OF VENUS INFRABU ILD FOR THE ASSTT.YEAR 2015-16. IT IS ALSO TO BE DECIDED INDEP ENDENTLY ON MERIT. 5. THUS, AS AGREED BY THE LD.REPRESENTATIVES, WE HAV E HEARD FIRST PROPOSITION CANVASSED BY THE LD.COUNSEL FOR THE ASSESSEES ON 25 .8.2020. THE ISSUE UNDER THE FIRST PROPOSITION IS, WHETHER THE PROCEEDINGS INITI ATED UNDER SECTION 153C ARE VALID? ACCORDING TO THE LD.COUNSEL FOR THE ASSESSE E, THIS PROPOSITION WOULD BE APPLICABLE ON THE 43 APPEALS MENTIONED IN SERIAL NO .1 TO 43 OF THE CAUSE-TITLE. 6. THE LD.COUNSEL FOR THE ASSESSEE WOULD SUBMITTED T HAT SEARCH IN THE PRESENT CASE WAS COMMENCED ON 10.3.2015 AND CONCLUDED ON 13 .3.2015. TAKING US THROUGH SECTION153C, HE SUBMITTED THAT THIS SECTION HAS BEEN AMENDED SUBSEQUENT TO THE SEARCH W.E.F. 1-6-2015. AN ACTIO N UNDER SECTION 153C CAN ONLY BE INITIATED IF THE DOCUMENTS BELONGS TO PERSON OTH ER THAN THE PERSON REFERRED TO SECTION 153A OF THE ACT. THUS, ACCORDING TO HIM, PR IMARILY THE ACT EXPECTS THAT COGNIZANCE OF SEARCHED MATERIAL SHOULD BE TAKEN PRI MARILY IN THE CASE OF SEARCHED PERSONS, EXCEPT THAT, IF THE AO OF THE SEA RCHED PERSON IS SATISFIED THAT THE SEIZED MATERIAL BELONGS TO SOME OTHER PERSONS. ONCE THE AO OF THE SEARCHED PERSON ARRIVES AT THE DECISION THAT MATERIAL BELONG S TO SOME OTHER PERSONS, THEN HE WOULD RECORD HIS SATISFACTION TO THAT EFFECT, AN D TRANSMIT THOSE MATERIALS TO THE AO HAVING JURISDICTION OVER OTHER SUCH PERSONS. HE SUBMITTED THAT PRIOR TO 1.6.2015, THE SECTION CONTEMPLATES THAT MATERIAL FO UND DURING THE COURSE OF SEARCH AND CONSIDERED BY THE AO OF THE SEARCHED PER SON, BELONGS TO SOME OTHER PERSON. HOWEVER, AFTER AMENDMENT IN SECTION 153C W .E.F. 1.6.2015 THIS EXPRESSION BELONGS OR BELONG TO HAS BEEN RESTRI CTED WITH REGARD TO ANY MONEY, BULLION, JEWELLERY AND OTHER VALUABLE ARTICL E OR THINGS SEIZED OR REQUISITIONED DURING THE COURSE OF SEARCH. WITH RE GARD TO ANY BOOKS OF ACCOUNTS OR DOCUMENTS SEIZED OR REQUISITIONED, THE EXPRESSIO N BELONGS TO AND BELONG TO HAS BEEN ELIMINATED; AND IN PLACE OF THIS EXPRE SSION PERTAINS TO OR PERTAIN SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 12 TO OR ANY INFORMATION CONTAINED THEREIN RELATES TO , HAS BEEN USED. THUS, ACCORDING TO THE LD.COUNSEL FOR THE ASSESSEE THE EX PRESSION PERTAINS OR PERTAIN TO OR ANY INFORMATION CONTAINED THEREIN R ELATES TO, HAS WIDER SCOPE FOR TAKING ACTION UNDER SECTION 153C INSTEAD OF EXPRESS IONS BELONGS OR BELONG TO USED IN THE ORIGINAL SECTION PRIOR TO ITS AMENDMENT W.E.F. 1.6.2015. THE LD.COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT ACTION UNDER SECTION 153C COULD BE TAKEN AGAINST THE ASSESSEE IF DURING THE C OURSE OF SEARCH ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG; OR ANY BOOKS OF ACCOUNT OR DOCUMENTS, SEIZED OR REQUISITIONED, WERE FOUND TO B E BELONGED TO OR BELONG TO, OTHER THAN THE SEARCHED PERSON. IN THAT SITUATION , THE AO OF THE SEARCHED PERSON WOULD RECORDHIS SATISFACTION THAT THE ACTION IS REQ UIRED AGAINST OTHER SUCH PERSON WITH REGARD TO UNDISCLOSED INCOME EMBEDDED IN THAT EVIDENCE. HE TOOK US THROUGH THE SATISFACTION-NOTE RECORDED BY THE AO, F OR EXAMPLE IN THE CASE OF DILIPKUMAR LALWANI [IT(SS)A.NO.75/AHD/2019] AND OTHE RS. 7. THE LD.COUNSEL FOR THE ASSESSEE DREW OUR ATTENTIO N TOWARDS PAGE NO.456 TO 483 OF THE PAPER BOOK, WHEREIN THE SATISFACTION NOT E RECORDED BY THE AO OF THE SEARCHED PERSON IS PLACED ON RECORD. HE ALSO POINT ED OUT THAT THE AO OF THE SEARCHED PERSON AS WELL AS ALL THE PRESENT ASSESSEE S IS COMMON, BUT ACCORDING TO THE REQUIREMENT OF LAW, HE HAS TO RECORD SATISFACTI ON FIRST WHILE EXAMINING THESE DOCUMENTS IN THE CAPACITY OF AO OF THE SEARCHED PER SON, THEREAFTER, FRESH SATISFACTION WAS TO BE RECORDED WHILE ISSUING NOTIC E UNDER SECTION 153C. WHILE TAKING US THROUGH THIS SATISFACTION, HE CONTENDED T HAT A PERUSAL OF THE SATISFACTION WOULD INDICATE THAT THE AO NOWHERE RECORDED A FINDI NG THAT DOCUMENTS BELONG TO THE ASSESSEES WERE FOUND AT THE PREMISES OF THE SEA RCHED PERSON. IN ALL OF HIS NARRATIONS, HE HAS ONLY RECORDED THAT DOCUMENTS CON TAINED INFORMATION WHICH RELATES TO THE ASSESSEE. FROM THE READING OF THESE , HE POINTED OUT THAT IT APPEARS THAT THE AO WAS UNDER THE IMPRESSION THAT HE WAS RE QUIRED TO EXAMINE THE EVIDENCE ALLEGED TO HAVE FOUND DURING THE COURSE OF SEARCH UNDER THE NEW SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 13 PROVISION WHICH HAS MADE APPLICABLE W.E.F. 1.6.2015 . THIS IS CONTRARY TO THE LAW LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF ANIL KUMAR GOPIKISHNA AGRAWAL VS. ACIT, (2019) 106 TAXMANN.COM 137 (GUJ). COPY OF THIS DECISION HAS BEEN PLACED ON RECORD BY THE LD.C OUNSEL FOR THE ASSESSEE. HE FURTHER SUBMITTED THAT SUBSEQUENTLY THIS DECISION H AS BEEN FOLLOWED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE FOLLOWING CASES: I) MAHENDRABHAI KASTURCHAND SON VS. ITO, SCA NO.118 17 OF 2019 (GUJ); II) CHARMY SANKET NAIK VS. ACIT, SCA NO.13374 OF 201 9 (GUJ); III) NITA CHAITANYA SHAH, SCA NO.14059 OF 2019 (GUJ ). 8. TAKING US THROUGH THE JUDGMENT OF HONBLE JURISDI CTIONAL HIGH COURT IN THE CASE OF ANIL KUMAR GOPIKISHNA AGRAWAL VS. ACIT (SUPRA), HE SUBMITTED THAT HONBLE HIGH COURT HAS CONSIDERED A LARGE NUMB ER OF WRIT PETITIONS, AND ULTIMATELY PROPOUNDED THAT AMENDMENT IN SECTION 153 C IS PROSPECTIVE AND IT WILL BE APPLICABLE W.E.F. 1.6.2015. PRIOR TO THIS AMEND MENT, SEARCH CONDUCTED BY THE DEPARTMENT WOULD BE GOVERNED BY OLD SECTION. IN OT HER WORDS, ACCORDING TO THE LD.COUNSEL FOR THE ASSESSEE, SEARCH CONDUCTED UPTO 1.6.2015, THE DEPARTMENT HAS TO RECORD A SATISFACTION THAT DOCUMENTS FOUND DURIN G THE COURSE OF SEARCH BELONGS OR BELONG TO AN ASSESSEE, AFTER RECORDING SUCH A SA TISFACTION, ACTION UNDER SECTION 153C CAN BE TAKEN. 9. THE LD.COUNSEL FOR THE ASSESSEE THEREAFTER TOOK U S THROUGH PARAGRAPH-2.4 OF THE JUDGMENTS. HE POINTED OUT THAT ONE OF SPECI AL CIVIL APPLICATIONS BEARING NO.19647 OF 2018 WAS FILED BY M/S. OCEAN VALVES MFG . CO. THE PROPRIETOR HAD FILED HIS RETURN OF INCOME ON 14.3.2013 DECLARING T OTAL INCOME OF RS.7,27,700/-. A SEARCH WAS CONDUCTED ON VARIOUS PREMISES OF SHRI ASHOK SUNDARDAS VASWANI, M/S.VENUS INFRASTRUCTURE AND DEVELOPERS P.LTD. ON 13 .3.2015. ACCORDING TO THE REVENUE, DURING THE COURSE OF SEARCH VARIOUS DOCUME NTS WERE SEIZED IN WHICH SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 14 INFORMATION ABOUT THE TRANSACTIONS RELATING TO THE PETITIONERS WERE FOUND. THE SEIZED INCRIMINATING DOCUMENTS RELATED TO UNACCOUNT ED CASH TRANSACTIONS AS RECORDED IN THE SEIZED UNACCOUNTED CASH BOOKS WHICH WERE FOUND DURING THE COURSE OF SEARCH. A REFERENCE WAS ALSO MADE TO THE PETITIONER I.E. PROPRIETOR OF OCEAN VALVES MFG. CO. NOTICE UNDER SECTION153C WAS ISSUED AND THESE NOTICES WERE CHALLENGED BY THE ASSESEES IN SCA NO.19647 OF 2018. HONBLE GUJARAT HIGH COURT HAS QUASHED THESE NOTICES BY HOLDING THA T INFORMATION RECORDED BY THE REVENUE COULDBE TERMED AS RELATES TO OR PERTAIN S TO PETITIONER. IT COULD NOT BE CONSTRUED AS A DOCUMENT BELONGS TO THE PETITIONE R. SIMILARLY, A LARGE NUMBER OF OTHER CASES HAVE BEEN CONSIDERED BY THE HONBLE GUJARAT HIGH COURT. THUS, ACCORDING TO THE LD.COUNSEL FOR THE ASSESSEE, THIS JUDGMENT IS FULLY APPLICABLE ON THESE 43 APPEALS, WHERE ASSESSMENTS HAVE BEEN PASSE D UNDER SECTION 153C OF THE INCOME TAX ACT, 1961. 10. THE LD.CIT-DR, ON OTHER HAND, SUBMITTED THAT THE ASSESSMENT PROCEEDING OF THE SEARCHED PERSON WAS PENDING WHEN THE AMENDME NT IN SECTION 153C WAS MADE. THE POSITION OF LAW FOR THE PURPOSE OF SECTI ON 153C IS THAT DURING THE COURSE OF SEARCH, IF ANY MATERIAL BELONGS TO SOME O THER PERSON WAS FOUND AND SEIZED, AND THE AO OF THE SEARCHED PERSON WAS SATIS FIED THAT THIS MATERIAL BELONGS TO THE PERSON OTHER THAN THE SEARCHED PERSO N, THEN HE WOULD RECORD HIS SATISFACTION ABOUT THE UNDISCLOSED INCOME EMBEDDED IN THOSE DOCUMENTS AND TRANSMIT THOSE PAPERS TO THE AO HAVING JURISDICTION OVER SUCH OTHER PERSON. THE AO OF THAT PERSON WOULD RECORD HIS SATISFACTION AGA IN AFTER MAKING ANALYSIS OF THE MATERIAL, AND THEREAFTER NOTICE UNDER SECTION 1 53C WOULD BE ISSUED. ONCE NOTICE UNDER SECTION 153C WAS ISSUED, THE ASSESSMEN T PROCEEDINGS WOULD TAKE PLACE AS IF IT WAS A NOTICE UNDER SECTION 153A. THE ASSESSMENT OF THE SEARCHED PERSON WAS NOT CONCLUDED, AND ANY DOCUMENT BELONGS TO THE PERSON OTHER THAN THE SEARCHED PERSON COULD BE UNEARTHED DURING THE A SSESSMENT OF THE SEARCHED PERSON. IN BETWEEN, THE AMENDMENT CAME, AND SCOPE OF SECTION HAS BEEN SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 15 WIDENED. THEREFORE, THE AO HAS RIGHTLY RECORDED TH E SATISFACTION TAKING INTO CONSIDERATION THE LAW AS ON THE DATE, WHEN HE LAYS HIS HAND ON THE DOCUMENTS SHOWING UNDISCLOSED INCOME OF THE PERSON OTHER THAN THE SEARCHED PERSON. HE FURTHER SUBMITTED THAT IN THE PRESENT APPEALS, BOTH THE EVENTS, THAT IS, RECORDING OF SATISFACTION BY THE AO OF THE SEARCHED PERSON, AND BY THE AO OF THESE APPELLANTS, HAVE HAPPENED SUBSEQUENT TO 1.6.2015 BECAUSE LD. AO IS COMMON. THEREFORE, NEW SECTION IS APPLICABLE. HE ALSO SUBMITTED THAT SECTION 153C IS A PROCEDURAL SECTION, AND NO VESTED RIGHT HAS BEEN TAKEN AWAY BY THE AMENDMENT. THUS, IT WILL BE APPLICABLE ON THE PENDING ASSESSMENT. 11. THE LD.DR FURTHER SUBMITTED THAT THE ASSESSEE DI D NOT COOPERATE DURING THE ASSESSMENT PROCEEDINGS. HE TOOK US THROUGH PARA 9. 2 AT PAGE NO.30 OF THE ASSESSMENT ORDER. ACCORDING TO HIM, FIRST FACTS AN D CONDUCT OF THE ASSESSEE ARE TO BE SEEN; LAW WILL COME LATER ON. IT WAS ALSO SU BMITTED THAT RESPONSIBILITY TO PROVE THAT THESE DOCUMENTS DID NOT BELONG TO THESE ASSESSEES WAS UPON THEM, AND THEY DID NOT PRODUCE ANY EVIDENCE IN THIS REGARD. 12. THE LD.CIT-DR FURTHER TOOK US THROUGH PAGES 38 T O 41; 58, 68, 71 TO 79 OF THE ASSESSMENT ORDER. HE POINTED OUT THAT THERE WE RE CERTAIN MESSAGES RECOVERED BY THE REVENUE, AND THESE MESSAGES WERE ON THE DIRE CTION OF DIRECTOR I.E. SHRI DILIPKUMAR LALWANI. ACCORDING TO HIM, THESE ARE NOT DUMB DOCUMENTS. IN SUPPORT OF HIS CONTENTIONS, HE RELIED UPON THE ORDE R OF THE ITAT, AHMEDABAD BENCH IN THE CASE OF PRAVINBHAI KESHAVBHAI PATEL VS . DCIT, REPORTED IN 45 TAXMANN.COM 533. HE ALSO PUT RELIANCE ON THE JUDGM ENT OF HONBLE KERALA HIGH COURT IN THE CASE OF E.N. GOPAKUMAR, 75 TAXMANN.COM 215 (2016). HE PLACED ON RECORD COPIES OF THESE JUDGMENTS. ON THE STRENG TH OF THESE JUDGMENTS, IT WAS CONTENDED THAT THE MOMENT SEARCH IS CONDUCTED, THEN A VALID NOTICE UNDER SECTION 153A SHOULD BE ISSUED, EVEN ON NON-DISCLOSURE OF AN Y INCRIMINATING MATERIAL, WHICH COULD REVEAL UNDISCLOSED INCOME. THUS, ACCOR DING TO THE LD.CIT-DR THERE IS NO NECESSITY OF INCRIMINATING MATERIAL UNEARTHIN G THE UNDISCLOSED INCOME FOR SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 16 ASSESSMENTS UNDER SECTION 153A OR 153C OF THE ACT. ONLY SEARCHING THE ASSESSEE UNDER SECTION 132 IS SUFFICIENT. THE LD.C IT-DR FURTHER SUBMITTED THAT SUFFICIENCY OF SATISFACTION AND SATISFACTION AR E DIFFERENT THING. IT WAS THE SATISFACTION ONLY OR WORD BELONGS OR PERTAINS TO COULD NOT BE CONSTRUED TO QUASH THE ORDERS PASSED BY THE AO. IF THE AO WAS SATISFIED FOR TAKING ACTION UNDER SECTION 153C, THEN THE MEANING OF WORDS BELO NGS OR PERTAINS TO WOULD NOT CHANGE THE COLOUR. 13. IN REBUTTAL, THE LD.COUNSEL FOR THE ASSESSEE SU BMITTED THAT THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF PR.CIT VS. SAUMYA CONSTRUCTION P.LTD. 387 ITR 529 (GUJ) HAS HELD THAT ADDITION UNDER SECTI ON 153A CAN BE MADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. DECISION OF HONBLE KERALA HIGH COURT IS NOT IN LIN E OF THE DECISION OF HONBLE GUJARAT HIGH COURT, AND ITAT IS BOUND TO FOLLOW THE D ECISION OF HONBLE JURISDICTIONAL HIGH COURT ONLY. AS FAR AS OTHER SU BMISSIONS MADE BY THE LD.CIT- DR ARE CONCERNED, THESE ASPECTS HAVE BEEN CONSIDERE D BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF ANILK KUMA R GOPIKISHNA AGRAWAL VS. ACIT (SUPRA). 14. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND G ONE THROUGH THE RECORD CAREFULLY. BEFORE WE EMBARK UPON AN INQUIRY, WHETH ER THE MATERIAL FOUND AT THE PREMISES OF THE SEARCHED PERSON, WOULD INDICATE THA T THESE DOCUMENTS FALLS IN THE CATEGORY OF DOCUMENTS, WHICH COULD BE TERMED AS DOC UMENT BELONG TO OR BELONGS TO THE ASSESSEE OR ENTRY EMBEDDED IN THEM FALLS WIT HIN THE AMBIT OF EXPRESSION PERTAINS TO OR RELATES TO. WE HAVE TO DETERMIN E UNDER WHICH CLAUSE ONE HAS TO CONSTRUE THE DOCUMENTS FOUND DURING THE COURSE O F SEARCH. THEREFORE, IT IS IMPERATIVE UPON US TO TAKE NOTE OF SECTION 153C, WH ICH READS AS UNDER: 2.2.2 UPTO 01.06.2015: ASSESSMENT OF INCOME OF ANY OTHER PERSON. - SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 17 153C. -[(1)] NOTWITHSTANDING ANYTHING CONTAINED IN SECTIO N 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153, WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITION ED A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 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 THAT ASSE SSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE NOTICE AND ASSESS OR REASSESS THE INCOME OF THE OTHER PERSON IN ACCORDANCE WITH THE PROVISIO NS OF SECTION 153A, IF, THAT ASSESSING OFFICER IS SATISFIED THAT THE BOOKS OF AC COUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED HAVE A BEARING ON THE DETER MINATION OF THE TOTAL INCOME OF SUCH OTHER PERSON FOR THE RELEVANT ASSESSMENT YEAR OR YEARS REFERRED TO IN SUB- SECTION (1) OF SECTION 153A]:] 2.2.3 WITH EFFECT FROM 01.06.2015: ASSESSMENT OF INCOME OF ANY OTHER PERSON. - 153C. -[(1)] [NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139. SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 153, WHERE THE ASSESSING OFFICER IS SATISFIED THAT, (A) ANY MONEY, BULLION, JEWELLERY OR OTHER V ALUABLE ARTICLE OR THING, SEIZED OR REQUISITIONED, ~ BELONGS TO; OR (B) ANY BOOKS OF ACCOUNT OR DOCUMENTS, SEIZE D OR REQUISITIONED, OR ANY INFORMATION CONTAINED THEREIN, A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTI ON 153A, THEN, THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS, SEIZED OR REQUISITI ONED SHALL BE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTH ER PERSON ] [AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH O THER PERSON AND ISSUE NOTICE AND ASSESS OR REASSESS THE INCOME OF THE OTHER PERS ON IN ACCORDANCE -WITH THE PROVISIONS OF SECTION 153A, IF, THAT ASSESSING OFFI CER 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 PER SON FOR THE RELEVANT ASSESSMENT YEAR OR YEARS REFERRED TO IN SUB-SECTION (1) OF SEC TION 153A] :] 15. A PERUSAL OF THE ABOVE PROVISIONS WOULD REVEAL THAT IN THE CASE OF SEARCH ACTION, CARRIED OUT UNDER SECTION 132 OF THE INCOME TAX ACT, PRIOR TO 1.6.2015, IF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ART ICLE OR THING, OR BOOKS OF ACCOUNTS OR DOCUMENTS, SEIZED OR REQUISITIONED BEL ONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO SECTION 15 3A, THEN THE AO OF THE SEARCHED PERSON WHILE PASSING ASSESSMENT ORDER UNDE R SECTION 153A OR PRIOR TO THAT, RECORD HIS SATISFACTION ABOUT THOSE DOCUMENTS , AND IF THOSE DOCUMENTS SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 18 DISCLOSED UNDISCLOSED INCOME OF THE PERSON OTHER TH AN THE SEARCHED PERSON. HE WILL TRANSMIT THOSE DOCUMENTS ALONG WITH HIS SATISF ACTION NOTE TO THE AO HAVING JURISDICTION OVER THAT OTHER PERSON. JURISDICTION UNDER SECTION 153C OF THE ACT PRIOR TO 1.6.2015 COULD BE INVOKED ONLY IF THE MATE RIAL SEIZED DURING THE COURSE OF SEARCH IN THE CASE OF THIRD-PERSON BELONGS TO TO SOME PERSONS OTHER THAN THE SEARCHED PERSON. HOWEVER, AFTER 1.6.2015, THE LEGI SLATURE HAS CATEGORIZED TWO SITUATIONS. AS FAR AS RECOVERY OF ANY MONEY, BULLI ON JEWELLERY OR OTHER VALUABLE ARTICLE OR THING SEIZED OR REQUISITIONED BELONGS TO PERSON OTHER THAN THE SEARCHED PERSON, THEN SECTION 153C WOULD BE JUSTIFIED. HOWE VER, WITH REGARD TO THE RECOVERY OF ANY BOOKS OF ACCOUNTS OR DOCUMENTS, SEI ZED OR REQUISITIONED, THEN IF THEY PERTAIN TO OTHER PERSON, OR ANY INFORMATION CO NTAINED THEREIN RELATES TO PERSON OTHER THAN THE SEARCHED PERSON, THEN THE ACT ION UNDER SECTION 153C COULD BE THERE. THE SCOPE OF SECTION 153C AFTER 1.6.2015 HAS BEEN WIDENED; VIZ. IF A PERSON AT WHOSE PREMISES SEARCH WAS CARRIED OUT MAI NTAINING CERTAIN DETAILS IN HIS REGULAR DAY-TO-DAY BUSINESS, AND THAT CONTAIN C ERTAIN INFORMATION EXHIBITING THE UNDISCLOSED INCOME OF THE PERSON OTHER THAN THE SEARCHED PERSON, THEN THE ACTION UNDER SECTION 153C COULD BE JUSTIFIED. BUT PRIOR TO 1.6.2015, THE DOCUMENTS OUGHT TO BE BELONGED TO PERSON OTHER THAN THE SEARCHED PERSON. THERE IS A CLEAR DISTINCTION BETWEEN BOTH THE CONDIT IONS. SUBSEQUENT TO 1.6.2015, THE INFORMATION EMBEDDED IN THE DOCUMENT IS SUFFICI ENT FOR TAKING ACTION UNDER SECTION 153C, BUT PRIOR TO 1.6.2015 ACTION UNDER SE CTION 153C COULD BE TAKEN IF DOCUMENTS BELONG TO THE PERSON OTHER THAN THE SEARC HED PERSON WAS FOUND DURING THE COURSE OF SEARCH. 16. HONBLE GUJARAT HIGH COURT IN ITS DECISION REND ERED IN THE CASE OF ANILK KUMAR GOPIKISHNA AGRAWAL VS. ACIT (SUPRA) CONSIDERED AN ISSUE, WHETHER POST-AMENDED SECTION COULD BE APPLICABLE ON THE PEN DING ASSESSMENTS, MEANING THEREBY, IF SEARCH WAS CONDUCTED PRIOR TO 1.6.2015, BUT ASSESSMENTS WERE NOT SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 19 CONCLUDED, WHETHER POST-AMENDED SECTION IS TO BE AP PLIED IN SUCH CASES OR NOT; BECAUSE THAT WOULD CHANGE THE VERY NATURE OF THE DI SPUTES. 17. HONBLE GUJARAT HIGH COURT HAS FORMULATED THE F OLLOWING QUESTION WHETHER SECTION 153C OF THE ACT AS AMENDED W.E.F. 1.6.2015 WOULD BE APPLICABLE TO CASES WHERE SEARCH INITIATED PRIOR TO THAT DATE ? AFTER AN ELABORATE DISCUSSION, HONBLE COURT ARRIVE D AT THE CONCLUSION THAT THIS SECTION WOULD BE APPLICABLE PROSPECTIVELY ONLY ON THE SEARCH CONDUCTED AFTER 1.6.2015. WE WOULD LIKE TO TAKE NOTE OF THE RELEVA NT DISCUSSION MADE IN THE JUDGMENT, WHICH READS AS UNDER: 19.8 WHILE IT IS TRUE THAT SECTION 153C OF THE ACT IS ALSO A MACHINERY PROVISION FOR ASSESSMENT OF INCOME OF A PERSON OTHER THAN THE PER SON SEARCHED, IN THE OPINION OF THIS COURT, THIS IS NOT A CASE WHERE BY VIRTUE OF T HE AMENDMENT, THERE IS MERELY A CHANGE IN THE PROCEDURAL PROVISIONS AFFECTING THE A SSESSEES WHO WERE COVERED BY THE UNAMENDED PROVISION. BY THE AMENDMENT, A NEW CL ASS OF ASSESSEES ARE SOUGHT TO BE BROUGHT WITHIN THE SWEEP OF SECTION 153C OF T HE ACT, WHICH AFFECTS THE SUBSTANTIVE RIGHTS OF THE ASSESSEES AND CANNOT BE S AID TO BE A MERE CHANGE IN THE PROCEDURE. SINCE THE AMENDMENT EXPANDS THE SCOPE OF SECTION 153C OF THE ACT BY BRINGING IN AN ASSESSEE IF BOOKS OF ACCOUNT OR DOCU MENTS PERTAINING TO HIM OR CONTAINING INFORMATION RELATING TO HIM HAVE BEEN SE IZED DURING THE COURSE OF SEARCH, WITHIN THE FOLD OF THAT SECTION, THIS QUEST ION ASSUMES SIGNIFICANCE, INASMUCH AS IN THE FACTS OF THE PRESENT CASE, AS ON THE DATE OF SEARCH, IT WAS ONLY IF SUCH MATERIAL BELONGED TO A PERSON OTHER THAN THE SEARCH ED PERSON, THAT THE ASSESSING OFFICER OF THE SEARCHED PERSON COULD RECORD SUCH SA TISFACTION AND FORWARD THE MATERIAL TO THE ASSESSING OFFICER OF SUCH OTHER PER SON. HOWEVER, SUBSEQUENT TO THE DATE OF SEARCH, THE AMENDMENT HAS BEEN BROUGHT INTO FORCE AND BASED ON THE AMENDMENT, THE PETITIONERS WHO WERE NOT INCLUDED WI THIN THE AMBIT OF SECTION 153C OF THE ACT AS ON THE DATE OF THE SEARCH, ARE NOW SO UGHT TO BE BROUGHT WITHIN ITS FOLD ON THE GROUND THAT THE SATISFACTION NOTE AND NOTICE UNDER SECTION 153C OF THE ACT HAVE BEEN ISSUED AFTER THE AMENDMENT CAME INTO FORC E. THEREFORE, THIS CASE DOES NOT RELATE TO THE INTERPRETATION OF THE PROVISIONS OF ANY OF THE SECTIONS, BUT RELATES TO THE STAGE AT WHICH THE AMENDED SECTION 153C OF THE ACT CAN BE MADE APPLICABLE, AS TO WHETHER IT RELATES TO THE DATE OF SEARCH; OR THE DATE OF RECORDING OF SATISFACTION BY THE ASSESSING OFFICER OF THE SEARCHED PERSON; OR THE DATE OF RECORDING OF SATISFACTION BY THE ASSESSING OFFICER OF THE OTHER PERSON; OR THE DATE OF ISSUANCE OF NOTICE UNDER SECTION 153C OF THE ACT. 19.9 IN THE FACTS OF THE PRESENT CASE, THE SEARCH W AS CONDUCTED IN ALL THE CASES ON A DATE PRIOR TO 1ST JUNE, 2015. THEREFORE, ON THE DAT E OF THE SEARCH, THE ASSESSING OFFICER OF THE PERSON SEARCHED COULD ONLY HAVE RECO RDED SATISFACTION TO THE EFFECT SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 20 THAT THE SEIZED MATERIAL BELONGS OR BELONG TO THE O THER PERSON. IN THE PRESENT CASE, THE HARD-DISC CONTAINING IN THE INFORMATION RELATIN G TO THE PETITIONERS ADMITTEDLY DID NOT BELONG TO THEM, THEREFORE, AS ON THE DATE O F THE SEARCH, THE ESSENTIAL JURISDICTIONAL REQUIREMENT TO JUSTIFY ASSUMPTION OF JURISDICTION UNDER SECTION 153C OF THE ACT IN CASE OF THE PETITIONERS, DID NOT EXIS T. IT WAS ONLY ON 1ST JUNE, 2015 WHEN THE AMENDED PROVISIONS CAME INTO FORCE THAT TH E ASSESSING OFFICER OF THE SEARCHED PERSON COULD HAVE FORMED THE REQUISITE BEL IEF THAT THE BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED PERTAIN TO OR THE INFORMATION CONTAINED THEREIN RELATES TO THE PETITIONERS. 19.10 IN THIS BACKDROP, TO TEST THE STAGE OF APPLIC ABILITY OF THE AMENDED PROVISIONS, A HYPOTHETICAL EXAMPLE MAY BE TAKEN. THE SEARCH IS CARRIED OUT IN THE CASE OF HN SAFAL GROUP ON 4.9.2013. IF THE ASSESSING OFFICER O F THE SEARCHED PERSON HAD RECORDED SATISFACTION THAT SOME OF THE SEIZED/REQUI SITIONED MATERIAL BELONGS TO A PERSON OTHER THAN THE SEARCHED PERSON AND FORWARDED THE MATERIAL TO THE ASSESSING OFFICER OF THE OTHER PERSON, HAD ISSUED NOTICE UNDE R SECTION 153C OF THE ACT PRIOR TO THE COMING INTO FORCE OF THE AMENDED PROVISION. THE NOTICE UNDER SECTION 153C OF THE ACT WAS CHALLENGED BEFORE THE APPROPRIATE FO RUM ON THE GROUND THAT THE SEIZED MATERIAL DOES NOT BELONG TO SUCH OTHER PERSO N AND SUCH ISSUE WAS DECIDED IN FAVOUR OF SUCH PERSON ON A FINDING THAT THE SEIZED MATERIAL DOES NOT BELONG TO THE OTHER PERSON. THEREAFTER, IN VIEW OF THE AMENDMENT IN SECTION 153C (1) OF THE ACT, SINCE THE BOOKS OF ACCOUNT OR DOCUMENTS DID NOT BEL ONG TO THE OTHER PERSON BUT DID PERTAIN TO HIM OR THE INFORMATION CONTAINED THEREIN RELATED TO HIM, CAN THE ASSESSING OFFICER OF THE SEARCHED PERSON ONCE AGAIN RECORD SATISFACTION AS CONTEMPLATED UNDER THE AMENDED PROVISION AND FORWAR D THE MATERIAL TO THE ASSESSING OFFICER OF SUCH OTHER PERSON. THE ANSWER WOULD BE AN EMPHATIC 'NO' AS THE ASSESSING OFFICER OF THE SEARCHED PERSON AFTER RECORDING THE EARLIER SATISFACTION WOULD HAVE ALREADY FORWARDED THE MATERIAL TO THE AS SESSING OFFICER HAVING JURISDICTION OVER THE OTHER PERSON, THEREFORE, THER E WOULD BE NO QUESTION OF HIS AGAIN FORMING A SATISFACTION AS REQUIRED UNDER THE AMENDED PROVISIONS OF SECTION 153C OF THE ACT. 19.11 IN THE OPINION OF THIS COURT, IF A DATE OTHER THAN THE DATE OF SEARCH IS TAKEN TO BE THE RELEVANT DATE FOR THE PURPOSE OF RECORDING S ATISFACTION ONE WAY OR THE OTHER, IT WOULD RESULT IN AN ANOMALOUS SITUATION WHEREIN I N SOME CASES, BECAUSE THE NOTICES UNDER SECTION 153C OF THE ACT WERE ISSUED P RIOR TO THE AMENDMENT, THEY WOULD BE SET ASIDE ON THE GROUND THAT THE BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITION DID NOT BELONG TO THE OTHER PERSON THOU GH THE SAME PERTAINED TO OR THE INFORMATION CONTAINED THEREIN RELATED TO SUCH PERSO N, WHEREAS IN OTHER CASES ARISING OUT OF THE SAME SEARCH PROCEEDINGS, MERELY BECAUSE THE NOTICES ARE ISSUED AFTER THE AMENDMENT, THE SAME WOULD BE CONSIDERED T O BE VALID AS THE BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED PERTAI N TO OR THE INFORMATION CONTAINED THEREIN RELATE TO THE OTHER PERSON. IT CO ULD NOT HAVE BEEN THE INTENTION OF THE LEGISLATURE TO DEAL WITH TWO SETS OF IDENTICALL Y SITUATED PERSONS DIFFERENTLY, MERELY BECAUSE IN ONE CASE THE ASSESSING OFFICER OF THE SEARCHED PERSON RECORDS SATISFACTION AS REQUIRED UNDER SECTION 153C OF THE ACT PRIOR TO THE COMING INTO FORCE OF THE AMENDED PROVISIONS AND IN ANY ANOTHER CASE AFTER THE COMING INTO FORCE OF THE AMENDED PROVISIONS. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 21 19.12 IN PR. CIT V. VINITA CHAURASIA, [2017] 394 IT R 758/248 TAXMAN 172/82 TAXMANN.COM 153 (DELHI), THE DELHI HIGH COUR T HAS HELD THAT, AT THE OUTSET, IT REQUIRES TO BE NOTICED THAT THE SEARCH IN THE PR ESENT CASE TOOK PLACE ON 19TH JUNE, 2009, I.E., PRIOR TO THE AMENDMENT IN SECTION 153C( 1) OF THE ACT WITH EFFECT FROM 1ST JUNE, 2015. THEREFORE, IT IS NOT OPEN TO THE REVENU E TO SEEK TO POINT OUT THAT THE DOCUMENT IN QUESTION 'PERTAINS TO' OR 'RELATES TO' THE ASSESSEE. AGAINST THIS DECISION THE REVENUE FILED A SPECIAL LEAVE PETITION BEFORE T HE SUPREME COURT BEING PR. CIT V. VINITA CHAURASIA [2018] 98 TAXMANN.COM 414/2 59 TAXMAN 88 (SC) CONDONED THE DELAY AND DISMISSED THE SPECIAL L EAVE PETITION. 19.13 IN PR. CIT V. INDEX SECURITIES (P.) LTD. , [2 017] 86 TAXMANN.COM 84 (DELHI), ON WHICH RELIANCE HAD BEEN PLACED ON BEHALF OF THE PETITIONERS, THE DELHI HIGH COURT HAS HELD THUS: '28.4 THE SUPREME COURT ALSO AGREED WITH THE DECISI ON OF THE GUJARAT HIGH COURT IN KAMLESHBHAI DHARAMSHIBHAI PATEL (SUPRA) TO THE EXTENT IT HELD THAT 'IT IS AN ESSENTIAL CONDITION PRECEDENT THAT A NY MONEY, BULLION OR JEWELLERY OR OTHER VALUABLE ARTICLES OR THING OR BO OKS OF ACCOUNT OR DOCUMENTS SEIZED OR REQUISITIONED SHOULD BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A OF THE ACT.' THE SUPREME COURT OBSERVED: 'THIS PROPOSITION OF LAW LAID DOWN BY THE HIGH COURT IS CORRECT, WHICH IS STATED BY THE BOMBAY HIGH COURT IN THE IMP UGNED JUDGMENT AS WELL.' 28.5 THE ABOVE CATEGORICAL PRONOUNCEMENT OF THE SUP REME COURT CANNOT, BY ANY STRETCH OF IMAGINATION, BE TERMED AS OBITER AS HAS BEEN SUGGESTED BY MR. MANCHANDA. EVEN THE OBITER DICTA OF THE SUPREME COU RT IS BINDING ON THIS COURT. 29. THE SEARCH IN THE CASE BEFORE THE SUPREME COURT WAS PRIOR TO 1ST JUNE 2015. APART FROM THE FACT THE SUPREME COURT APPROVED THE ABOVE DECISION OF THE GUJARAT HIGH COURT HOLDING THAT THE SEIZED DOCUMENTS SHOULD 'BELONG' TO THE OTHER PERSON, THE LEGAL POSITION IN THIS REGARD WHERE THE SEARCH HAS TAKEN PLACE PRIOR TO 1ST JUNE 2015 HAS BEEN SETTLED BY THE DECISION OF THIS COURT IN PEPSICO INDIA HOLDINGS (P.) LTD. V. ACIT (SUPRA). IN COMMISSIONER OF INCOME TAX V. VINITA CHAURASIA (SUPRA), THIS COURT REITERATED THE ABOVE LEGAL POSITION AFTE R DISCUSSING THE DECISIONS IN PRINCIPAL COMMISSIONER OF INCOME TAX V. SUPER MA LLS (P) LIMITED (SUPRA) AND COMMISSIONER OF INCOME TAX(CENTRAL)-2 V. NAU NI DH OVERSEAS PVT. LTD. (SUPRA). THE ESSENTIAL JURISDICTIONAL REQUIREM ENT FOR ASSUMPTION OF JURISDICTION UNDER SECTION 153 C OF THE ACT (AS IT STOOD PRIOR T O ITS AMENDMENT WITH EFFECT FROM 1ST JUNE 2015) QUA THE 'OTHER PERSON' (IN THIS CASE THE ASSESSEES) IS THAT THE SEIZED DOCUMENTS FORMING THE BASIS OF THE SATISFACTION NOT E MUST NOT MERELY 'PERTAIN' TO THE OTHER PERSON BUT MUST BELONG TO THE 'OTHER PERSON'. 30. IN THE PRESENT CASE, THE DOCUMENTS SEIZED WERE THE TRIAL BALANCE AND BALANCE SHEETS OF THE TWO ASSESSEES FOR THE PERIOD 1ST APRI L TO 13TH SEPTEMBER 2010 (FOR ISRPL) AND 1ST APRIL TO 4TH SEPTEMBER 2010 (FOR VSI PL). BOTH SETS OF DOCUMENTS WERE SEIZED NOT FROM THE RESPECTIVE ASSESSEES BUT F ROM THE SEARCHED PERSON I.E. JAGAT AGRO COMMODITIES (P) LTD. IN OTHER WORDS, ALT HOUGH THE SAID DOCUMENTS MIGHT 'PERTAIN' TO THE ASSESSEES, THEY DID NOT BELO NG TO THEM. THEREFORE, ONE SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 22 ESSENTIAL JURISDICTIONAL REQUIREMENT TO JUSTIFY THE ASSUMPTION OF JURISDICTION UNDER SECTION 153 C OF THE ACT WAS NOT MET IN THE CASE OF THE TWO ASSESSEES.' 19.14 THUS, IT IS THE DATE OF SEARCH THAT HAS BEEN CONSIDERED TO BE THE RELEVANT DATE FOR THE PURPOSE OF APPLYING THE AMENDED PROVISIONS OF SECTION 153C(1) OF THE ACT. 19.15 THIS COURT IS OF THE CONSIDERED VIEW THAT THE TRIGGER FOR INITIATING ACTION WHETHER UNDER SECTION 153A OR 153C OF THE ACT IS TH E SEARCH UNDER SECTION 132 OR REQUISITION UNDER SECTION 132A OF THE ACT AND THE S TATUTORY PROVISIONS AS EXISTING ON THE DATE OF THE SEARCH WOULD BE APPLICABLE. THE MERE FACT THAT THERE IS NO LIMITATION FOR THE ASSESSING OFFICER OF THE SEARCHE D PERSON TO RECORD SATISFACTION WILL NOT CHANGE THE TRIGGER POINT, NAMELY, THE DATE OF THE SEARCH. THE SATISFACTION OF THE ASSESSING OFFICER OF THE SEARCHED PERSON WOULD BE BASED ON THE MATERIAL SEIZED DURING THE COURSE OF THE SEARCH OR REQUISITION AND NOT THE ASSESSMENT MADE IN THE CASE OF THE SEARCHED PERSON, THOUGH HE MAY NOTICE S UCH FACT DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE, WHETHER THE SATI SFACTION IS RECORDED IMMEDIATELY AFTER THE SEARCH, AFTER INITIATION OF P ROCEEDINGS UNDER SECTION 153A OF THE ACT OR AFTER ASSESSMENT IS FRAMED UNDER SECTION 153A OF THE ACT IN THE CASE OF THE SEARCHED PERSON, THE TRIGGER POINT REMAINS THE SAME, VIZ., THE SEARCH AND, THEREFORE, THE STATUTORY PROVISION AS PREVAILING ON THAT DAY WOULD BE APPLICABLE. WHILE IT IS TRUE THAT SECTIONS 153A AND 153C OF THE ACT ARE MACHINERY PROVISIONS, BUT THE SAME CANNOT BE MADE APPLICABLE RETROSPECTIV ELY, WHEN THE AMENDMENT HAS EXPRESSLY BEEN GIVEN PROSPECTIVE EFFECT. BESIDES, T HOUGH SUCH PROVISIONS ARE MACHINERY PROVISIONS, THE AMENDMENT BRINGS INTO ITS FOLD PERSONS WHO ARE OTHERWISE NOT COVERED BY THE SAID PROVISIONS AND TH EREFORE, AFFECTS THE SUBSTANTIVE RIGHTS OF SUCH PERSON. IN THE OPINION OF THIS COURT , THE DECISION OF THE SUPREME COURT IN M.A. MERCHANT (SUPRA) WOULD BE SQUARELY AP PLICABLE TO THE FACTS OF THE PRESENT CASE WHEREIN IT WAS HELD THUS: 18. THIS JUDGMENT HAS BEEN FOLLOWED BY THE HONBLE G UJARAT HIGH COURT IN THE CASES OF I) MAHENDRABHAI KASTURCHAND SON VS. IT O, SCA NO.11817 OF 2019 (GUJ); II) CHARMY SANKET NAIK VS. ACIT, SCA NO.13374 OF 2019 (GUJ); III) NITA CHAITANYA SHAH, SCA NO.14059 OF 2019 (GUJ). 19. IN THE LIGHT OF THE ABOVE POSITION OF LAW, LET US TAKE NOTE OF THE SATISFACTION RECORDED BY THE AO OF THE SEARCHED PERSON AS WELL A S AO OF THE PRESENT ASSESSEES. THOUGH, THE AO IS COMMON, BUT WHILE EXE RCISING HIS DUAL CAPACITY, HE HAS RECORDED FIRST HIS SATISFACTION IN THE CAPAC ITY OF SEARCHED PERSONS AO, AND THEREAFTER HE RECORDED HIS SATISFACTION IN THE CAPACITY OF THE AO OF THE PRESENT ASSESSEES. FOR THE FACILITY OF REFERENCE, WE TAKE NOTE THE SATISFACTION FROM THE LEAD CASE OF SHRI DILIPKUMAR LALWANI PLACED AT PAGE NO.456 TO 483. RELEVANT PART OF THE SATISFACTION WHILE ISSUING NOT ICE UNDER SECTION 153C IS SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 23 AVAILABLE AT PAGE NO.457 AND WE DEEM IT APPROPRIATE TO TAKE NOTE OF THIS PART, WHICH READS AS UNDER: 20. THEREAFTER, WE FIND THAT THE AO HAS ANNEXED ANNE XURE-A WHICH CONTAINED THE DETAILS OF DOCUMENTS CONSIDERED BY HIM. ANNEXU RE-B IS THE SATISFACTION IN THE CAPACITY OF THE AO OF THE SEARCHED PERSON. IT IS A VERY EXHAUSTIVE NOTE, AND WITH THE ASSISTANCE OF THE LD.REPRESENTATIVS, WE HA VE GONE THROUGH ALL THESE PAGES. WE WOULD LIKE TO TAKE NOTE OF RELEVANT PART OF THE SATISFACTION VIZ. PARA- 7.3, WHICH READS AS UNDER: 7.3 ON THE BASIS OF DISCUSSION IN THE PRECEDING PAR AGRAPHS, IT IS NOTICED THAT XXX ACCOUNT MENTIONED IN VARIOUS DOCUMENTS SEI ZED DURING THE COURSE OF SEARCH IN THE VENUS GROUP REFERS TO SHRI DILIP K UMAR LALWANI AND THE INFORMATION CONTAINED THEREIN RELATES TO SHRI DILIP KUMAR LALWANI . THERE ARE VARIOUS TRANSACTION RECORDED IN THE CASH BOOK A ND RELATED CASH VOUCHERS. .. .. .. 7. SATISFACTION OF THE ASSESSING OFFICER OF THE PERSON REFERRED TO IN SECTION 153A THAT THE SEIZED MATERIAL REFERRED TO IN S.NO.5 RELATES/PERTAINS TO THE PERSON REFERRED TO IN S.NO.4 AS PER ANNEXURE B IN VIEW OF ABOVE FACTS AS MENTIONED IN THE ANNEXURE - B. I AM SATISFIED THAT THE DOCUMENTS SEIZED FROM THE PREMISES (I) 801-802, BROADWAY BUSINESS CENTRE, OPP. MAYORS BUNGALOWS, LAW GARDEN. ELLISBRIDGE, AHMEDABAD AND (II) TERRACE OF CRYSTAL ARCADE, NR. NAVRANGPURA TELEPHONE EXCHANGE, C.G ROAD, AHMEDABAD - CONTAINS INFORMATION,WHICH RELATES TO THE ASSESSEE, SHRI DILIP KUMAR LALWANI . FURTHER, I AM ALSO SATISFIED THAT DOCUMENTS SEIZED HAVE A BEARING ON THE DETERMINATION OF THE TOTAL INCOME OF THE ASSESSEE, | SHREE DILIP KUMAR LALWANI FOR ASSESSMENT YEARS 2009-10 TO 2014-15 THE ASSESSEE BEING OTHER THAN THE PERSON REFERRED TO IN SECTION 153A OF THE ACT. I HAVE SATISFACTION TO PROCEED AGAINST THE ASSESSEE SHRI DILIP KUMAR LALWANI AS PER THE PROVISIONS OF SECTION 153C OF THE INCOME TAX ACT, 1961. THEREFORE, IT IS FIT CASE FOR INITIATION OF PROCEEDING U/S 153C OF THE I.T.ACT . 8. ASSESSMENT YEARS INVOLVED A.Y. 2009-10 TO A.Y.2014-15 SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 24 10. IN VIEW OF ABOVE FACTS AS MENTIONED ABOVE, I AM SATISFIED THAT THE ABOVE MENTIONED DOCUMENTS SEIZED FROM THE FROM THE PREMISES (I) 801-802, BROADWAY BUSINESS CENTRE, OPP. MAYOR'S BUNGALOWS, L AW GARDEN. ELLISBRIDGE. AHMEDABAD AND (II) TERRACE OF CRYSTAL ARCADE, NR. NAVRANGPURA TELEPHONE EXCHANGE, C. G. ROAD, AHMEDAB AD CONTAINS INFORMATION WHICH RELATES TO THE ASSESSEE, SHRI DIL IP KU/RIAR LALWANI. FURTHER, I AM ALSO SATISFIED THAT SATISFIED THAT DO CUMENTS SEIZED HAVE A BEARING ON THE DETERMINATION OF THE TOTAL INCOME OF THE ASSESSEE, SHREE DILIP KUMAR LALWANI FOR ASSESSMENT YEARS 2009-10 TO 2014-15. THE ASSESSEE BEING OTHER THAN THE PERSON REFERRED TO IN SECTION 153A OF THE ACT. I HAVE SATISFACTION TO PROCEED AGAINST THE ASSESSEE SHRI DILIP KUMAR LALWANI AS PER THE PROVISIONS OF SECTION 153C OF TH E INCOME TAX ACT, 1961. THEREFORE, IT IS FIT CASE FOR INITIATION OF PROCEED ING U/S 153COF THE L.T. ACT. 21. A PERUSAL OF BOTH THE SATISFACTION WOULD INDICA TE THAT THE AO NOWHERE OBSERVED THAT THESE DOCUMENTS BELONGED TO THE ASSES SEE I.E. SHRI DILIPKUMAR LALWANI. HE ONLY OBSERVED THAT THESE DOCUMENTS CONT AINED INFORMATION WHICH RELATE TO THE ASSESSEE. THUS, IT COULD BE CONSTRUED THAT DOCUMENTS SEIZED DURING THE COURSE OF SEARCH; AGAIN CARRIED OUT IN THE CASE S OF CONCERNED THIRD PERSON, WERE OBSERVED AS RELATES TO THE ASSESSEE. THEY DO NOT BELONG TO THE ASSESSEE. WHEN THE ASSESSEE TOOK THIS OBJECTION BEFORE THE LD .FIRST APPELLATE AUTHORITY, THE LD.CIT(A) WAS OF THE VIEW THAT SINCE LAW HAS BEEN C HANGED, AND SCOPE OF SECTION 153C W.E.F. 1.6.2015 WOULD BE APPLICABLE ON THESE C ASES, BECAUSE THE ASSESSMENTS HAVE NOT BEEN CONCLUDED WHEN THE SCOPE OF SECTION 153C WAS WIDENED. THE FINDING OF THE LD.CIT(A) IS WORTH TO NOTE IN THIS CONNECTION I.E. IN THE CASE OF SHRI DILIPKUMAR LALWANI, WHICH READS AS UNDER: 4.3. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, ASSESSMENT ORDER AND SUBMISSION MADE BY THE APPELLANT. THE ASSESSING OFF ICER [DCIT, CENTRAL CIRCLE-1 (1), AHMEDABAD] OF M/S. VENUS INFRASTRUCTU RE AND DEVELOPER PVT. LTD., IN WHOSE CASE THE SEARCH WAS CONDUCTED AND DO CUMENTS RELATING TO THE APPELLANT COMPANY WAS FOUND AND SEIZED HAS RECORDED HIS SATISFACTION NOTE FOR INITIATION OF ASSESSMENT PROCEEDINGS IN THE CAS E OF APPELLANT AND FORWARDED TO THE ACIT, CIRCLE-50(L), NEW DELHI, BEI NG THE ASSESSING OFFICER OF THE APPELLANT. THE AO OF APPELLANT HAS RECORDED HIS SATISFACTION AND ISSUED NOTICE U/S. 153C OF THE I. T. ACT, 1961. THE CASE OF APPELLANT WAS SUBSEQUENTLY TRANSFERRED TO THE ACIT, CENTRAL CIRCL E -1(1), AHMEDABAD. THE APPELLANT HAD RAISED OBJECTION BEFORE THE NEW A SSESSING OFFICER AGAINST THE EARLIER NOTICE ISSUED BY DCIT, CIRCLE -50(1), N EW DELHI, U/S. 153C OF THE I. T. ACT,1961. THE AO WHO WAS ALSO AO OF M/S. VENUS INFRASTRUCTURE SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 25 AND DEVELOPER PVT. LTD. HAS WITHDRAWN THE EARLIER N OTICE AND ISSUED FRESH NOTICE DULY RECORDING THE SATISFACTION. THE APPELLA NT HAS CONTENDED THAT THE NOTICE ISSUED U/S. 153C OF THE ACT WAS NOT VALID AS THE SEIZED MATERIAL ON THE BASIS OF WHICH NOTICE U/S. 153C WAS ISSUED DID NOT BELONG TO THE APPELLANT. THE APPELLANT HAS ALSO CONTENDED THAT TH ERE IS NO PROVISION IN THE INCOME TAX ACT EITHER TO DROP THE PROCEEDINGS U/S. 153C OR TO ISSUE SECOND SET OF NOTICES. THE APPELLANT HAS ALSO RELIED UPON THE CASE LAWS IN THE CASE OF PEPSICO INDIA HOLDING PVT. LTD. VS. ACIT, RRJ SE CURITIES LTD. [62 TAXMANN.COM 391] (2015) & SINHGAD TECHNICAL EDUCATI ON SOCIETY [84 TAXMANN.COM 290]. THE AO HAS DEALT WITH THE ARGUMEN T RAISED BY THE APPELLANT IN PARA 4.9, 4.10 & PARA 5 OF ASSESSMENT ORDER. THE PROVISION OF SECTION 153C HAS BEEN AMENDED WITH EFFECT FROM 01/0 6/2015 WHERE IF THE ASSESSING OFFICER IS SATISFIED THAT ANY BOOKS OF AC COUNT OR DOCUMENTS SEIZED PERTAINS TO, OR ANY INFORMATION CONTAINED THEREIN R ELATES TO ANY PERSON, OTHER THAN THE PERSON REFERRED TO IN SECTION 153A O F THE INCOME TAX ACT, THEN BOOKS OF ACCOUNT OR DOCUMENT SHALL BE HANDED O VER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THE AO SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE NOTICE AND ASSESS OR REASSESS INCOME OF SUCH OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A. EARLIER SCOPE OF SECTION 153C WAS IN THE CASE S WHERE THE DOCUMENTS SEIZED BELONG TO THE ASSESSEE, BUT SUBSEQUENTLY THE PROVISION OF ACT HAS BEEN AMENDED BY ADDING THE WORD 'RELATING TO' IN TH E SECTION 153C. THE AO IN THE PRESENT CASE HAS ISSUED NOTICE AFTER FIRST D AY OF JUNE, 2015, THEREFORE, THE AMENDED PROVISION IS APPLICABLE IN APPELLANT'S CASE. THE AO IN THE SATISFACTION NOTE HAS REFERRED THE MATERIAL RELATIN G TO THE APPELLANT FOUND DURING THE COURSE OF SEARCH IN M/S. VENUS INFRASTRU CTURE AND DEVELOPER PVT. LTD. THE APPELLANT HAS RELIED ON THE CASE LAWS WHIC H ARE ON THE 'BELONGING TO' PRIOR TO THE AMENDED PROVISIONS OF 153C W.E.F. 01/06/2015, THEREFORE, NOT RELEVANT TO THE FACTS OF THE CASE. APPELLANT'S CONTENTION THAT THERE IS NO PROVISION FOR ISSUE OF SECOND NOTICE U/S. 153C ON T HE SAME SET OF FACTS IS NOT TENABLE AS THE ASSESSING OFFICER HAS WITHDRAWN THE EARLIER NOTICE AND ISSUED FRESH NOTICE AFTER RECORDING THE SATISFACTION. THE HONOURABLE GUJARAT HIGH COURT IN THE CASE OF A.G. GROUP CORPORATION VS. HAR SH PRAKASH [2013] [35 TAXMANN. COM 48] HAS HELD THAT, IF IN THE EARLIER N OTICE A FATAL ERROR HAS BEEN CREPT IN AO WILL BE FREE TO ISSUE ANOTHER NOTI CE PROVIDED JURISDICTION AND LIMITATION ASPECTS ARE SATISFIED. 22. THIS FINDING IS NOT IN THE LINE OF LAW LAID DOWN BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF ANILK KUMAR GOPIKISHNA AG RAWAL VS. ACIT, AND FURTHER REITERATED IN OTHER CASES. AT THIS STAGE, IT IS PERTINENT TO NOTE THAT, OTHERWISE ALSO, THESE 43 APPEALS ARE DIRECTLY COVER ED BY THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF ANILK KUMA R GOPIKISHNA AGRAWAL VS. ACIT (SUPRA) BECAUSE ON THE BASIS OF ENTRIES EMBEDDE D IN THE DOCUMENTS FOUND AT THE PREMISES OF VENUS INFRABUILD AND SHRI ASHOK VASWANI, NOTICE UNDER SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 26 SECTION 153C WAS ISSUED IN THE CASE OCEAN VALVES MF G. CO. PROPRIETOR OF THAT CONCERN FILED AN SCA NO.19647 OF 2018. THIS WAS LE AD CASE, AND NOTICE ISSUED UNDER SECTION 153C OF THE ACT WAS QUASHED. THE ABO VE FACTS ARE CONTAINED IN PARAGRAPH-2.4 OF THE HONBLE HIGH COURTS DECISION. FOR READY REFERENCE, WE TAKE NOTE OF THIS FACT FROM THERE. IT READS AS UND ER: 2.4 BY AN ORDER DATED 23.7.2018, THE ASSESSING OFF ICER REJECTED THE OBJECTIONS FILED BY THE PETITIONER.' BEING AGGRIEVED, THE PETI TIONER HAS APPROACHED THIS COURT BY WAY OF PRESENT PETITION CHALLENGING THE IMPUGNED NOTICE DATED 8.2.2018 ISSUED BY THE ASSESSING OFFICER UNDER SECTION 153C OF THE ACT FOR ASSESSMENT YEAR 2012- 13. 2A IN CASE OF VENUS GROUP, REFERENCE IS MADE TO THE FACTS AS APPEARING IN SPECIAL CIVIL APPLICATION NO. 19647 OF 2018. 2A.1 THE PETITIONER, WHO IS AN INDIVIDUAL AND PROPR IETOR OF M/S. OCEAN VALVES MFG. CO. FILED HIS RETURN OF INCOME FOR ASSE SSMENT YEAR 2012-13 ON 14.3.2013 DECLARING TOTAL INCOME OF RS.7,27,700/-. A SEARCH CAME TO BE CONDUCTED ON VARIOUS PREMISES OF SHRI ASHOK SUNDARD AS VASWANI, M/S. VENUS INFRASTRUCTURE AND DEVELOPERS P. LTD. ON 13.3 .2015. DURING THE COURSE OF SEARCH VARIOUS DOCUMENTS WERE SEIZED IN W HICH INFORMATION ABOUT TRANSACTIONS RELATING TO THE PETITIONER WAS FOUND. THE SEIZED INCRIMINATING DOCUMENTS RELATED TO UNACCOUNTED CASH TRANSACTIONS WHICH WERE ANALYSED AND CORRELATED WITH OTHER SEIZED DOCUMENTS. AMONG T HE CASH TRANSACTIONS AS RECORDED IN THE SEIZED UNACCOUNTED CASH BOOK WHI CH WAS FOUND DURING THE COURSE OF SEARCH, REFERENCE WAS ALSO MADE TO TH E PETITIONER. BASED ON SUCH SEIZED MATERIAL, THE ASSESSING OFFICER INITIAT ED PROCEEDINGS UNDER SECTION 153C OF THE ACT BY ISSUING THE IMPUGNED NOT ICES DATED 22.3.2018 AND 14.8.2018. SUBSEQUENTLY NOTICES HAVE BEEN ISSUE D TO THE PETITIONER UNDER SECTION 142(1) OF THE ACT TO WHICH THE PETITI ONER HAS RESPONDED. 23. IN THE APPEALS OF THE PRESENT ASSESSEES, IDENTI CAL SITUATION IS THERE. A PERUSAL OF THE SATISFACTION NOTE WOULD INDICATE THA T THE AO NOWHERE HELD THAT DOCUMENTS BELONGED TO THE PRESENT APPELLANTS WERE F OUND AT THE PREMISES OF SEARCHED PERSON/ENTITY. AS FAR AS CASE LAWS RELIED UPON BY THE LD.CIT-DR ARE CONCERNED THEY ARE NOT DIRECTLY ON THE POINT. HE PUT EMPHASIS ON THE DECISION OF HONBLE KERALA HIGH COURT CITED (SUPRA) FOR BUTTRES SING HIS CONTENTIONS THAT NO INCRIMINATING MATERIAL IS REQUIRED FOR PROCEEDINGS UNDER SECTION 153A OR 153C. THIS PROPOSITION IS CONTRARY TO THE DECISION OF HON BLE GUJARAT HIGH COURT RENDERED IN THE CASE OF PR.CIT VS. SAUMYA CONSTRUCTI ON P.LTD. (SUPRA). SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 27 SIMILARLY, THE ORDER OF THE ITAT REFERRED BY THE LD. CIT-DR IS WITH RESPECT TO THE PRESUMPTION OF TRUTH OF CERTAIN DOCUMENTS FOUND DUR ING THE COURSE OF SEARCH. IT IS NOT DIRECTLY ON THE POINT. OTHER ARGUMENTS RAIS ED BY THE LD.CIT-DR WERE RAISED BY THE LD.SENIOR STANDING COUNSEL BEFORE THE HONBLE GUJARAT HIGH COURT IN THE CASE OF ANIL KUMAR GOPIKISHNA AGRAWAL VS. AC IT (SUPRA) AND THOSE ARGUMENTS HAVE BEEN CONSIDERED. THOUGH, SECTION 153 C IS A PROCEDURAL SECTION, BUT THE JURISDICTION TO ASSESS AN ASSESSEE UNDER TH IS SECTION IS BEING INVOKED WITH HELP OF THE SECTION. THE AO WILL BE IN A POSITION TO PASS ASSESSMENT ORDER ONLY IF DURING THE COURSE OF SEARCH, ANY MONEY, BULLION, JE WELLERY AND OTHER VALUABLE ARTICLE OR THING, OR THE DOCUMENTS FOUND BELONG TO OTHER PERSON PRIOR TO 1.6.2015, AND THE AO OF THE SEARCHED PERSON WAS SATISFIED THA T SUCH DOCUMENTS DISCLOSED UNDISCLOSED INCOME. THE DOCUMENTS BELONGED TO THE A PPELLANTS CONSIDERED UNDER THIS COMPARTMENT OF THE ARGUMENTS WERE NOT FO UND, RATHER CERTAIN INFORMATION RELATING TO THE ASSESSEES WERE FOUND TO BE EMBEDDED IN THESE DOCUMENTS, BUT PRIOR TO 1.6.2015, JURISDICTION UNDE R SECTION 153C CANNOT BE INVOKED ON THE BASIS OF SUCH INFORMATION. THEREFORE , WE ALLOW THIS PRELIMINARY GROUND OF APPEAL RAISED BY THESE 43 APPELLANTS (ASS ESSEES) AND QUASH ALL THESE ASSESSMENT ORDERS PASSED IN THE APPEALS MENTIONED A T SERIAL NO.1 TO 43 OF THE CAUSE TITLE OF THIS ORDER. THUS ALL THE APPEALS OF T HE ASSESSEE ARE PARTLY ALLOWED WHEREAS THE REVENUES APPEAL ARE DISMISSED. COMPARTMENT NO.2 OF THE ARGUMENTS: 24. UNDER THIS FOLD OF SUBMISSION, POINT IN DISPUTE REQUIRES TOBE ADJUDICATED IS, WHETHER THE ASSESSMENT UNDER SECTION 153A IS TO BE FRAMED DIRECTLY BASED ON INCRIMINATING MATERIAL FOUND DURING THE SEARCH CARR IED OUT IN THE CASES OF THE CONCERNED ASSESSEES. UNDER THIS FOLD OF ARGUMENTS, WE TAKE UP THE FOLLOWING APPEALS: ASSESSEE APPEAL NO. ASST. YEAR APPEAL BY RAJESH SUNDERDAS VASWANI IT(SS)A 95/AHD/2019 2009 - 10 ASSESSEE SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 28 RAJESH SUNDERDAS VASWANI IT(SS)A 96/AHD/2019 2010 - 11 ASSESSEE RAJESH SUNDERDAS VASWANI IT(SS)A 97/AHD/2019 2011 - 12 ASSESSEE RAJESH SUNDERDAS VASWANI IT(SS)A 98/AHD/2019 2012 - 13 ASSESSEE RAJESH SUNDERDAS VASWANI IT(SS)A 99/AHD/2019 2013 - 14 ASSESSEE RAJESH SUNDERDAS VASWANI IT(SS)A 100/AHD/2019 2014 - 15 ASSESSEE RAJESH SUNDERDAS VASWANI IT(SS)A 101/AHD/2019 2015 - 16 ASSESSEE RAJESH SUNDERDAS VASWANI IT(SS)A 235/AHD/2019 2009 - 10 DEPARTMENT RAJESH SUNDERDAS VASWANI IT(SS)A 236/AHD/2019 2011 - 12 DEPARTMENT RAJESH SUNDERDAS VASWANI IT(SS)A 237/AHD/2019 2012 - 13 DEPARTMENT RAJESH SUNDERDAS VASWANI IT(SS)A 238/AHD/2019 2013 - 14 DEPARTMENT RAJESH SUNDERDAS VASWANI IT(SS)A 239/AHD/2019 2014 - 15 DEPARTMENT RAJESH SUNDERDAS VASWANI IT(SS)A 240/AHD/2019 2015 - 16 DEPARTMENT SANJEET MOTORS FINANCE P. LTD. IT(SS)A 109/AHD/2019 2012 - 13 ASSESSEE SANJEET MOTORS FINANCE P. LTD. IT(SS)A 110/AHD/2019 2013 - 14 ASSESSEE DEEPAK BUDHARMAL VASWANI IT(SS)A 111/AHD/2019 2009 - 10 ASSESSEE DEEPAK BUDHARMAL VASWANI IT(SS)A 112/AHD/2019 2010 - 11 ASSESSEE DEEPAK BUDHARMAL VASWANI IT(SS)A 113/AHD/2019 2011 - 12 ASSESSEE DEEPAK BUDHARMAL VASWANI IT(SS)A 114/AHD/2019 2012 - 13 ASSESSEE DEEPAK BUDHARMAL VASWANI IT(SS)A 115/AHD/2019 2013 - 14 ASSESSEE DEEPAK BUDHARMAL VASWANI IT(SS)A 116/AHD/2019 2014 - 15 ASSESSEE DEEPAK BUDHARMAL VASWANI IT(SS)A 117/AHD/2019 2015 - 16 ASSESSEE DEEPAK BUDHARMAL VASWANI IT(SS)A 248/AHD/2019 2009 - 10 DEPARTMENT DEEPAK BUDHARMAL VASWANI IT(SS)A 249/AHD/2019 2010 - 11 DEPARTMENT DEEPAK BUDHARMAL VASWANI IT(SS)A 250/AHD/2019 2011 - 12 DEPARTMENT DEEPAK BUDHARMAL VASWANI IT(SS)A 251/AHD/2019 2012 - 13 DEPARTMENT DEEPAK BUDHARMAL VASWANI IT(SS)A 252/AHD/2019 2013 - 14 DEPARTMENT DEEPAK BUDHARMAL VASWANI IT(SS)A 253/AHD/2019 2014 - 15 DEPARTMENT DEEPAK BUDHARMAL VASWANI IT(SS)A 254/AHD/2019 2015 - 16 DEPARTMENT 25. THE LD.COUNSEL FOR THE ASSESSEE WHILE IMPUGNING ORDERS OF THE REVENUE AUTHORITIES CONTENDED THAT ALMOST ALL THE HONBLE H IGH COURTS ARE UNANIMOUS ON THE POINT THAT ASSESSMENT UNDER SECTION 153A IS TO BE FRAMED ON THE BASIS OF MATERIAL FOUND DURING THE COURSE OF SEARCH OR REQUI SITIONED UNDER SECTION 132A OF THE ACT. OTHER INFORMATION GATHERED DURING THE SEARCH AND SURVEY CARRIED OUT SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 29 ON THIRD PERSON, THOSE MATERIALS CANNOT BE USED FOR THE PURPOSE OF SECTION 153A. THE AO OUGHT TO HAVE FRAMED ASSESSMENT ORDERS EITHER UNDER SECTION 153C WITH SUCH MATERIAL OR UNDER SECTION 147 OF THE ACT AS TH E CASE MAY BE. TAKING US THROUGH THE FACTS, HE POINTED OUT THAT IN HANDS OF THESE THREE ASSESSEES, THE ADDITIONS HAVE BEEN MADE BASED ON FOLLOWINGS VIZ. I) CASH BOOK SEIZED FROM TERRACE OF CYSTAL ARCADE A SHOK SUNDERDAS VASWANI AND VENUS INFRASTRUCTURE AND DEVELOPMENT P. LTD. II) MATERIAL SEIZED FROM 901, SAPPHIRE COMPLEX, SEA RCH IN THE CASE OF ASHOK SUNDERDAS VASWANI AND VENUS INFRASTRUCTURE AN D DEVELOPMENT P.LTD. III) INFORMATION GATHERED DURING VARIOUS SEARCH AND S URVEY CARRIED OUT IN THE CASE OF SHIRISH CHANDRAKANT SHAH & PRRANETA IND USTRIES LTD., I..E COMPLETELY UNCONNECTED THIRD PARTIES; IV) INFORMATION GATHERED DURING VARIOUS SEARCH AND S URVEY CARRIED OUT BY KOKATTA INVESTIGATION WING IN THE CASE OF COMPLETE LY UNCONNECTED THIRD PARTIES; 26. THE LD.COUNSEL FOR THE ASSESSEE FIRST APPRAISED US WITH THE SCHEME OF ASSESSMENTS IN THE CASE OF SEARCH. HE TOOK US THRO UGH SECTION 153A AS WELL AS 153C. THEREAFTER, HE TOOK US THROUGH THE JUDGMENTS OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF PR.CIT VS. SAUMYA CONSTRUC TION 387 ITR 529 (GUJ). HE PARTICULARLY TOOK US THROUGH PARAGRAPH NO15 ONWA RDS. APART FROM THIS JUDGMENT, HE RELIED UPON THE FOLLOWING OTHER DECISI ONS: I) DCIT VS. SMT. SHIVALI MAHAJAN AND OTHERS ITA 5585 /DEL/2015 AND OTHERS II) KRISHNA KUMAR SINGHANIA VS. DCIT - 168 ITD 271 (K OLKATTATRIB.) III) PAVITRA REALCON PVT. LTD. VS. ACIT - (2017) 87 T AXMANN.COM 142 (DELHI TRIB.) IV) CIT VS. PINAKI MISHRA 392ITR 347 (DELHI) V) DIT VS. LALITKUMAR M. PATEL - (2013) 36 TAXMAN.COM 55 4 (GUJARAT) VI) PCIT VS. SUBHASH KHATTAR - ITA 60/2017 (DEL. HC) VII) SUBHAGKHATTAR VS. ACIT - ITA 902/DEL/2015 VIII) ASHA RANI LAKHOTIA VS. ACIT - ITA 424/DEL/2015 IX) KRISHNA BHAGWAN VS. ACIT - ITA 423/DEL/2015 SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 30 X) SUSHILA LAKHOTIA VS. ACIT - ITA 770/DEL/2015 COPIES OF THESE DECISIONS HAVE BEEN PLACED ON RECOR D. AFTER APPRAISING US THE SCOPE OF ASSESSMENT UNDER SECTION 153A VIS- -VIS SECTION 153C, HE CONTENDED THAT WHEN SEARCH ACTION UNDER SECTION 132 OF THE ACT IS CARRIED OUT IN THE CASE OF PARTICULAR ASSESSEES, THEN THE FOLLOWIN G ASPECTS ARE TO BE TAKEN CARE OF, WHILE FRAMING ASSESSMENT UNDER SECTION 143(3) R .W. SECTION 153A. SECTION 143(3) R.W.S. 153A IS TO BE FRAMED STRICTLY ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH CARRIED OUT IN TH E CASE OF THE ASSESSEE. NO COGNIZANCE IS TO BE TAKEN ON ANY MATERIAL WHICH WAS NOT FOUND DURING THE COURSE OF SEARCH ACTION. IF SEARCH ACTION UNDER SECTION 1 32 OF THE ACT HAS SIMULTANEOUSLY BEEN CARRIED OUT IN THE CASES OF SOM E OTHER ASSESSEES, AND SOME MATERIAL BELONG TO THE ASSESSEE WAS FOUND, THEN SUC H MATERIAL CAN BE TAKEN INTO COGNIZANCE ONLY FOR THE PURPOSE OF PROCEEDINGS UNDE R SECTION 153C OF THE ACT, AND NOT IN THE PROCEEDINGS UNDER SECTION 153A OF TH E ACT. THUS, ACCORDING TO THE LD. COUNSEL FOR THE ASSESSEE, MATERIAL COLLECTE D DURING THE COURSE OF SEARCH ACTION CARRIED OUT IN THE CASES OF SOME THIRD PARTI ES, CANNOT BE CONSIDERED WHILE FRAMING ASSESSMENT UNDER SECTION 143(3) R.W.S. 153A OF THE ACT. FOR THAT PURPOSE, PROCEEDINGS UNDER SECTION 153C MUST BE INI TIATED. THE LD.COUNSEL FOR THE ASSESSEE THEREAFTER TOOK US THROUGH THE ASSESSM ENT ORDERS, AND SUBMITTED THAT ON THE BASIS OF FINDING RECORDED IN THE ASSESSMENT ORDERS, THE ASSESSEES HAVE COMPILED THE DETAILS IN TABULAR FORMS EXHIBITING TH E ADDITIONS MADE IN A PARTICULAR YEAR, AND BASIS ON WHICH, SUCH ADDITION WAS MADE. THESE DETAILS HAVE BEEN PLACED ON THE PAPER BOOK. TAKING US THROUGH TH ESE DETAILS, HE SPECIFICALLY SUBMITTED THAT NONE OF THE ADDITIONS WAS MADE ON TH E BASIS OF MATERIAL FOUND DURING THE COURSE OF SEARCH CARRIED OUT IN THE CASE OF THESE THREE ASSESSEES. THE ADDITIONS ARE MADE MAINLY ON THE BASIS OF FOUR MATE RIALS EXTRACTED (SUPRA) VIZ. XI) CASH BOOK SEIZED FROM TERRACE OF CYSTAL ARCADE A SHOK SUNDERDAS VASWANI AND VENUS INFRASTRUCTURE AND DEVELOPMENT P. LTD. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 31 XII) MATERIAL SEIZED FROM 901, SAPPHIRE COMPLEX, SEA RCH IN THE CASE OF ASHOK SUNDERDAS VASWANI AND VENUS INFRASTRUCTURE AN D DEVELOPMENT P.LTD. XIII) INFORMATION GATHERED DURING VARIOUS SEARCH AND S URVEY CARRIED OUT IN THE CASE OF SHIRISH CHANDRAKANT SHAH & PRRANETA IND USTRIES LTD., I..E COMPLETELY UNCONNECTED THIRD PARTIES; XIV) INFORMATION GATHERED DURING VARIOUS SEARCH AND S URVEY CARRIED OUT BY KOKATTA INVESTIGATION WING IN THE CASE OF COMPLETE LY UNCONNECTED THIRD PARTIES; 27. HE ALSO TOOK US THROUGH THE COPY OF PANCH NAMA DRAWN IN THE CASE OF ASHOK SUNDERDAS VASWANI IN ORDER TO DEMONSTRATE THA T THE CASH BOOK WAS FOUND FROM HIS PREMISES, AND OTHER MATERIAL USED WAS ALSO FOUND IN THE SEARCH CARRIED OUT AT HIS PREMISES VIZ. 901, SAPPHIRE COMPLEX. 28. ON THE OTHER HAND, THE LD.CIT-DR RELIED UPON OR DERS OF THE REVENUE AUTHORITIES. FOR BUTTRESSING HIS CONTENTIONS, HE M AINLY MADE REFERENCE TO THE FOLLOWING DECISION RENDERED BY THE HONBLE KERALA H IGH COURT: I) DR.A.V.SREEKUMAR VS. CIT, 90 TAXMANN.COM 355 (KER) II) SUNNY JACOB JEWELLERS AND WEDDING CENTRE VS. DCI, 4 8 TAXMANN.COM 347 (KER.) III) CIT VS. ST.FRANCIS CLAY DCOR TILES, 70 TAXMANN.COM 234 (KER) IV) E.N.GOPAKUMAR VS. CIT, 75 TAXMANN.COM 215 (KER) V) PR.CIT VS. SAUMYA CONSTRUCTION P.LTD., 387 ITR 529 (GUJ) VI) PAR EXCELLENCE LEASING & FINANCIAL SERVICES P.LTD. VS. ACIT, 115 TAXMANN.COM 38 (DELHI-TRIB) VII) PRAVINBHAI KESHAVBHAI PATEL VS. DCIT, 45 TAXMAN.COM 533 (AHD-TRIB.) HE SUBMITTED THAT HONBLE KERALA HIGH COURT HAS HEL D THAT FOR THE PURPOSE OF ASSESSMENT REQUIRED TO BE MADE UNDER SEC TION 153A, IT IS NOT NECESSARY THAT SEARCH SHOULD YIELD INCRIMINATING MA TERIAL. THE ROLE OF THE SEARCH IS ONLY TO ISSUE NOTICE UNDER SECTION 153A, THEREAF TER, THE AO CAN LOOK INTO ANY OTHER ASPECTS FOR DETERMINING TAXABLE INCOME. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 32 29. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND G ONE THROUGH THE RECORD CAREFULLY. BEFORE ADVERTING TO THE FACTS AND ALLEG ED SEIZED MATERIAL CONSIDERED BY THE LD.AO FOR MAKING THE ADDITION IN THE HANDS O F THE PRESENT THREE ASSESSEES, WE DEEM IT APPROPRIATE TO BEAR IN MIND THE POSITION OF LAW PROPOUNDED IN VARIOUS AUTHORITATIVE JUDGMENTS RECORDING SCOPE OF SECTION 153A OF THE ACT. WE ARE OF THE VIEW THAT IN THIS REGARD, THERE WERE LARGE NUMB ERS OF DECISIONS. FIRST WE REFER TO THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA, 380 ITR 573 (DEL). HONBLE DELHI HIGH COURT AFTER DETAILED ANALYSIS HAS SUMMARIZED THE FOLLOWING LEGAL POSITION: 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN T HE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UN DER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153 A(1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FO R SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE O F THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO BE COMPU TED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RE SPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAK ES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE AFOREMENTIONED SIX YEARS I N SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YE ARS. IN OTHER WORDS THERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EAC H OF THE SIX AYS 'IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX'. IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SE ARCH, OR OTHER POST- SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESS MENT 'CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATE RIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY O N THE BASIS OF SEIZED MATERIAL.' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMEN T CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATABLE TO ABATED PR OCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD 'REASSESS' TO C OMPLETED ASSESSMENT PROCEEDINGS . SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 33 VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE J URISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTIO N 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EA CH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT O N THE RECORD OF THE AO. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE CO URSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. 30. ITAT, DELHI BENCH IN THE CASE OF DIT VS. SMT. SHI VALI MAHAJAN AND OTHERS, RENDERED IN ITA NO.5585/DEL/2015 (COPY OF TH E DECISION PLACED ON RECORD) HAS CONSIDERED THIS ASPECT IN ITS DECISION. THEREAFTER, THE TRIBUNAL HAS SPECIFICALLY HELD THAT SERIAL NO.(IV) OF THE ABOVE PROPOSITION, THE HONBLE DELHI HIGH COURT HAS SPECIFICALLY HELD THAT ASSESSMENT UN DER SECTION 153A OF THE ACT HAS TO BE SPECIFICALLY MADE ON THE BASIS OF SEIZED MATERIAL. ITAT DELHI BENCH WAS CONSIDERING AN ASPECT WHETHER THE EVIDENCE IN T HE SHAPE OF BOOKS OF ACCOUNTS, MONEY, BULLION, JEWELLERY FOUND DURING TH E COURSE OF SEARCH RELATES TO OTHER PERSON THAN THE SEARCHED PERSON, CAN THAT BE CONSIDERED WHILE MAKING ASSESSMENT UNDER SECTION 153A OF THE ACT. LIKE IN T HE PRESENT APPEALS, SIMULTANEOUS SEARCH WAS CARRIED OUT AT THE PREMISES OF THE VENUS INFRASTRUCTURE AND ASHOK SUNDERDAS VASWANI, AND THE MATERIAL FOUND DURING THE SEARCH OF VENUS INFRASTRUCTURE DEVELOPERS OR ASHOK SUNDERDAS VASWANI COULD BE USED WHILE FRAMING THE ASSESSMENT OF RAJESH SUNDERDAS VA SWANI AND DEEPAK BUDHARMAL VASWANI UNDER SECTION 153A OF THE ACT. I TAT DELHI BENCH HAS SPECIFICALLY HELD THAT MATERIAL RECOVERED FROM THE PREMISES OF OTHER PERSON CANNOT BE USED IN THE HANDS OF THE SEARCHED PERSON. FOR THAT PURPOSE AN ASSESSMENT UNDER SECTION 153C OR 147 IS TO BE MADE. AT THIS STAGE, IN ORDER TO FORTIFY OURSELVES, WE WOULD LIKE TO MAKE REFERENCE TO THE FOLLOWING PARAGRAPHS OF THE ITAT DELHI BENCHS ORDER. IT READS AS UNDER: SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 34 15. THUS, WHEN DURING THE COURSE OF SEARCH OF AN A SSESSEE ANY BOOKS, DOCUMENT OR MONEY, BULLION, JEWELLERY ETC. IS FOUND WHICH RELATES TO A PERSON OTHER THAN THE PERSON SEARCHED, THEN THE ASS ESSING OFFICER OF THE PERSON SEARCHED SHALL HAND OVER SUCH BOOKS OF ACCOU NT, DOCUMENTS, OR VALUABLES TO THE ASSESSING OFFICER OF SUCH OTHER PE RSON AND THEREAFTER, THE ASSESSING OFFICER OF SUCH OTHER PERSON CAN PROCEED AGAINST SUCH OTHER PERSON. HOWEVER, IN THE CASE UNDER APPEAL BEFORE US , ADMITTEDLY, SECTION 153C IS NOT INVOKED IN THE CASE OF THE ASSESSEE AND THE ASSESSMENT IS FRAMED UNDER SECTION 153A. WE, RESPECTFULLY FOLLOWING THE ABOVE DECISIONS OF HON'BLE JURISDICTIONAL HIGH COURT, HOLD THAT DURING THE COURSE OF ASSESSMENT UNDER SECTION 153A, THE INCRIMINATING MA TERIAL, IF ANY, FOUND DURING THE COURSE OF SEARCH OF THE ASSESSEE ONLY CA N BE UTILIZED AND NOT THE MATERIAL FOUND IN THE SEARCH OF ANY OTHER PERSON. 31. ORDER OF THE ITAT DELHI BENCH IN OTHER CASES VIZ . ASHA RANI LAKHOTIA VS. ACIT AND SUBHAG KHATTAR VS. ACIT ARE ON THE SAME LINE . 32. HONBLE DELHI HIGH COURT IN THE CASE OF SUBHAG KHATTAR IN TAX APPEAL NO.60 OF 2017 HAS CONSIDERED THE FOLLOWING QUESTION OF LAW: 'DID THE INCOME TAX APPELLATE TRIBUNAL (ITAT) FALL INTO ERROR IN HOLDING THAT THE ADDITIONS MADE UNDER SECTION 153A READ WIT H SECTION 143(3) OF THE INCOME TAX ACT, 1961 IN THE CIRCUMSTANCES OF THE CA SE, WERE NOT JUSTIFIED AND SUPPORTABLE IN LAW? ' 33. AFTER PUTTING RELIANCE UPON ITS DECISION IN THE CASE OF CIT VS. KABUL CHAWLA (SUPRA) HAS REPLIED THIS QUESTION AS UNDER: 6. THE ASSESSEE WENT IN APPEAL BEFORE THE COMMISSI ONER OF INCOME TAX (APPEALS) WHO DISMISSED IT BY AN ORDER DATED 27TH N OVEMBER, 2014. A FURTHER APPEAL WAS FILED BY THE ASSESSEE BEFORE THE ITAT. THE ITAT, INTER ALIA, FOUND SUBSTANCE IN THE CONTENTION OF THE ASSE SSEE THAT THE ASSESSMENT UNDER SECTION 153(A) OF THE ACT, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND DURING THE SEARCH ON THE PREMISES OF THE ASSESSEE WAS NOT SUSTAINABLE IN LAW. RELIANCE WAS PLACED ON THE DECI SION OF THIS COURT IN COMMISSIONER OF INCOME TAX V. KABUL CHAWLA, [2016] 380 ITR 573. 7. A QUESTION WAS POSED TO THE LEARNED COUNSEL FOR THE REVENUE WHETHER IN THE PRESENT CASE ANYTHING INCRIMINATING HAS BEEN FO UND WHEN THE PREMISES OF THE ASSESSEE WAS SEARCHED. THE ANSWER WAS IN THE NEGATIVE. THE ENTIRE CASE AGAINST THE ASSESSEE WAS BASED ON WHAT WAS FOU ND DURING THE SEARCH OF THE PREMISES OF THE AEZ GROUP. IT IS THUS APPARE NT ON THE FACE OF IT, THAT THE NOTICE TO THE ASSESSEE UNDER SECTION 153A OF TH E ACT WAS MISCONCEIVED SINCE THE SO-CALLED INCRIMINATING MATERIAL WAS NOT FOUND DURING THE SEARCH OF THE ASSESSEE'S PREMISES. THE REVENUE COULD HAVE PROCEEDED AGAINST THE SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 35 ASSESSEE ON THE BASIS OF THE DOCUMENTS DISCOVERED U NDER ANY OTHER PROVISION OF LAW, BUT CERTAINLY, NOT UNDER SECTION 153A. THIS GOES TO THE ROOT OF THE MATTER. 34. HONBLE COURT HAS SPECIFICALLY OBSERVED FOR THE PURPOSE OF SECTION 153A THAT ONLY SEIZED MATERIAL IS REQUIRED. HOWEVER, IF THERE IS ANY OTHER INCRIMINATING MATERIAL BELONG TO THE ASSESSEE FOUND AT THE PREMISES OF THE SOME OTHER PERSON, THEN THE ASSESSMENT HAS TO BE MADE UN DER OTHER PROVISIONS AND NOT UNDER SECTION 153A OF THE ACT. HONBLE JURISDICTIO NAL HIGH COURT HAS ALSO CONSIDERED THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA (SUPRA). HONBLE GUJARAT HIGH COURT F RAMED THE FOLLOWING QUESTION OF LAW IN THE CASE OF PR.CIT VS. SAUMYA CON STRUCTION (SUPRA): '[A] WHETHER THE ORDER OF TRIBUNAL IS RIGHT IN LAW AND O N FACTS IN DELETING THE ADDITION MADE IN ASSESSMENT MADE U/S 153A OF THE ACT? [B] WHETHER THE TRIBUNAL IS RIGHT IN LAW IN HOLDING THAT THE ADDITION SHOULD BE BASED ON THE INCRIMINATING MATERIAL FOUND DURING THE COUR SE OF SEARCH UNDER NEW PROCEDURE OF ASSESSMENT U/S 153A WHICH IS DIFFERENT FROM EARLIER PROCEDURE U/S 158BC R.W.S. 158BB OF THE ACT AND BY READING INTO T HE SECTION , THE WORDS 'THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH' WHICH ARE NOT THERE IN SECTION 153A? [C] WHETHER THE TRIBUNAL ERRED IN RELYING ON THE ITAT O RDER IN SANJAY AGGARWAL V. DCIT (2014) 47 TAXMANN.COM 210 (DEL) WHICH HAS INTERPRETED UNDISCLOSED INCOME UNEARTHED DURING THE SEARCH TO I MPLY INCRIMINATING MATERIAL, AS AGAINST THE FINDING OF THE DELHI HIGH COURT IN F ILATEX INDIA LTD. V. CIT- IV (2015) 229 TAXMAN 555 WHEREIN IT IS HELD THAT DURING THE ASSESSMENT U/S 1 53A ADDITIONS NEED NOT BE RESTRICTED OR LIMITED TO INCR IMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH?' 35. HONBLE COURT CONCURRED WITH THE DECISION OF HO NBLE DELHI HIGH COURT. WE DEEM IT APPROPRIATE TO TAKE NOTE OF RELEVANT PAR T OF THE DECISION, WHICH READS AS UNDER: 16. SECTION 153A BEARS THE HEADING 'ASSESSMENT IN CASE OF SEARCH OR REQUISITION'. IT IS WELL SETTLED AS HELD BY THE SUPREME COURT IN A CATENA OF DECISIONS THAT THE HEADING OF THE SECTION CAN BE REGARDED AS A KEY TO THE INTERPRETATION OF THE OPERATIVE PORTION OF THE SECTION AND IF THERE IS NO AMBIGUITY IN THE LANGUAGE OR IF IT IS PLAIN AND CLEAR, THEN THE HEADING USED IN THE SE CTION STRENGTHENS THAT MEANING. FROM THE HEADING OF SECTION 153, THE INTENTION OF T HE LEGISLATURE IS CLEAR VIZ., TO PROVIDE FOR ASSESSMENT IN CASE OF SEARCH AND REQUIS ITION. WHEN THE VERY PURPOSE OF THE PROVISION IS TO MAKE ASSESSMENT IN CASE OF SEAR CH OR REQUISITION, IT GOES WITHOUT SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 36 SAYING THAT THE ASSESSMENT HAS TO HAVE RELATION TO THE SEARCH OR REQUISITION. IN OTHER WORDS, THE ASSESSMENT SHOULD BE CONNECTED WIT H SOMETHING FOUND DURING THE SEARCH OR REQUISITION, VIZ., INCRIMINATING MATERIAL WHICH REVEALS UNDISCLOSED INCOME. THUS, WHILE IN VIEW OF THE MANDATE OF SUB-S ECTION (1) OF SECTION 153A OF THE ACT, IN EVERY CASE WHERE THERE IS A SEARCH OR REQUI SITION, THE ASSESSING OFFICER IS OBLIGED TO ISSUE NOTICE TO SUCH PERSON TO FURNISH R ETURNS OF INCOME FOR THE SIX YEARS PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVI OUS YEAR IN WHICH THE SEARCH IS CONDUCTED OR REQUISITION IS MADE, ANY ADDITION OR D ISALLOWANCE CAN BE MADE ONLY ON THE BASIS OF MATERIAL COLLECTED DURING THE SEARC H OR REQUISITION. IN CASE NO INCRIMINATING MATERIAL IS FOUND, AS HELD BY THE RAJ ASTHAN HIGH COURT IN THE CASE OF JAI STEEL (INDIA) (SUPRA), THE EARLIER ASSESSMEN T WOULD HAVE TO BE REITERATED. IN CASE WHERE PENDING ASSESSMENTS HAVE ABATED, THE ASS ESSING OFFICER CAN PASS ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS DETERMI NING THE TOTAL INCOME OF THE ASSESSEE WHICH WOULD INCLUDE INCOME DECLARED IN THE RETURNS, IF ANY, FURNISHED BY THE ASSESSEE AS WELL AS UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SEARCH OR REQUISITION. IN CASE WHERE A PENDING REASSESSMENT U NDER SECTION 147 OF THE ACT HAS ABATED, NEEDLESS TO STATE THAT THE SCOPE AND AMBIT OF THE ASSESSMENT WOULD INCLUDE ANY ORDER WHICH THE ASSESSING OFFICER COULD HAVE PA SSED UNDER SECTION 147 OF THE ACT AS WELL AS UNDER SECTION 153A OF THE ACT. 17. IN THE FACTS OF THE PRESENT CASE, A SEARCH CAME TO BE CONDUCTED ON 07.10.2009 AND THE NOTICE WAS ISSUED TO THE ASSESSEE UNDER SEC TION 153A OF THE ACT FOR ASSESSMENT YEAR 2006-07 ON 04.08.2010. IN RESPONSE TO THE NOTICE, THE ASSESSEE FILED RETURN OF INCOME ON 18.11.2010. IN TERMS OF S ECTION 153B, THE ASSESSMENT WAS REQUIRED TO BE COMPLETED WITHIN A PERIOD OF TWO YEA RS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE SEARCH CAME TO BE CARRIED OUT, NA MELY, ON OR BEFORE 31ST MARCH, 2012. HERE, INSOFAR AS THE IMPUGNED ADDITION IS CON CERNED, THE NOTICE IN RESPECT THEREOF CAME TO BE ISSUED ON 19.12.2011 SEEKING AN EXPLANATION FROM THE ASSESSEE. THE ASSESSEE GAVE ITS RESPONSE BY REPLY DATED 21.12 .2011 CALLING UPON THE ASSESSING OFFICER TO PROVIDE COPIES OF STATEMENTS R ECORDED ON OATH OF SHRI ROHIT P. MODI AND SMT. PARESHABEN K. MODI DURING THE SEARCH AS WELL AS THE COPIES OF THE DOCUMENTS UPON WHICH THE DEPARTMENT PLACED RELIANCE FOR THE PURPOSE OF MAKING THE PROPOSED ADDITION AS WELL AS THE COPY OF THE EX PLANATION GIVEN BY SHRI ROHIT P. MODI AND SMT. PARESHABEN K. MODI REGARDING THE ON-M ONEY RECEIVED, COPIES OF THE ASSESSMENT ORDERS IN CASE OF SAID PERSONS AND ALSO REQUESTED THE ASSESSING OFFICER TO PERMIT HIM TO CROSS-EXAMINE THE SAID PERSONS. TH E ASSESSING OFFICER ISSUED SUMMONS TO THE SAID PERSONS, HOWEVER, THEY WERE OUT OF STATION AND IT WAS NOT KNOWN AS TO WHEN THEY WOULD RETURN. IN THIS BACKDRO P, WITHOUT AFFORDING ANY OPPORTUNITY TO THE ASSESSEE TO CROSS-EXAMINE THE SA ID PERSONS, THE ASSESSING OFFICER MADE THE ADDITION IN QUESTION. 18. IN THIS CASE, IT IS NOT THE CASE OF THE APPELLA NT THAT ANY INCRIMINATING MATERIAL IN RESPECT OF THE ASSESSMENT YEAR UNDER CONSIDERATION WAS FOUND DURING THE COURSE OF SEARCH. AT THE RELEVANT TIME WHEN THE NOTICE CAME T O BE ISSUED UNDER SECTION 153A OF THE ACT, THE ASSESSEE FILED ITS RETURN OF INCOME . MUCH LATER, AT THE FAG END OF THE PERIOD WITHIN WHICH THE ORDER UNDER SECTION 153A OF THE ACT WAS TO BE MADE, IN OTHER WORDS, WHEN THE LIMIT FOR FRAMING THE ASSESSM ENT AS PROVIDED UNDER SECTION 153 WAS ABOUT TO EXPIRE, THE NOTICE HAS BEEN ISSUED IN THE PRESENT CASE SEEKING TO MAKE THE PROPOSED ADDITION OF RS.11,05,51,000/- ON THE BASIS OF THE MATERIAL WHICH SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 37 WAS NOT FOUND DURING THE COURSE OF SEARCH, BUT ON T HE BASIS OF A STATEMENT OF ANOTHER PERSON. IN THE OPINION OF THIS COURT, IN A CASE LIKE THE PRESENT ONE, WHERE AN ASSESSMENT HAS BEEN FRAMED EARLIER AND NO ASSESSMEN T OR REASSESSMENT WAS PENDING ON THE DATE OF INITIATION OF SEARCH UNDER S ECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A, WHILE COMPUTING THE TOTAL INCOME OF THE ASSESSEE UNDER SECTION 153A OF THE ACT, ADDITIONS OR DISALLO WANCES CAN BE MADE ONLY ON THE BASIS OF THE INCRIMINATING MATERIAL FOUND DURING TH E SEARCH OR REQUISITION. IN THE PRESENT CASE, IT IS AN ADMITTED POSITION THAT NO IN CRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH, HOWEVER, IT IS ON THE BASIS OF SOME MATERIAL COLLECTED BY THE ASSESSING OFFICER MUCH SUBSEQUENT TO THE SEA RCH, THAT THE IMPUGNED ADDITIONS CAME TO BE MADE. 19. ON BEHALF OF THE APPELLANT, IT HAS BEEN CONTEND ED THAT IF ANY INCRIMINATING MATERIAL IS FOUND, NOTWITHSTANDING THAT IN RELATION TO THE YEAR UNDER CONSIDERATION, NO INCRIMINATING MATERIAL IS FOUND, IT WOULD BE PER MISSIBLE TO MAKE ADDITIONS AND DISALLOWANCE IN RESPECT OF ALL THE SIX ASSESSMENT Y EARS. IN THE OPINION OF THIS COURT, THE SAID CONTENTION DOES NOT MERIT ACCEPTANCE, INAS MUCH AS, THE ASSESSMENT IN RESPECT OF EACH OF THE SIX ASSESSMENT YEARS IS A SE PARATE AND DISTINCT ASSESSMENT. UNDER SECTION 153A OF THE ACT, AN ASSESSMENT HAS TO BE MADE IN RELATION TO THE SEARCH OR REQUISITION, NAMELY, IN RELATION TO MATER IAL DISCLOSED DURING THE SEARCH OR REQUISITION. IF IN RELATION TO ANY ASSESSMENT YEAR, NO INCRIMINATING MATERIAL IS FOUND, NO ADDITION OR DISALLOWANCE CAN BE MADE IN R ELATION TO THAT ASSESSMENT YEAR IN EXERCISE OF POWERS UNDER SECTION 153A OF THE ACT AND THE EARLIER ASSESSMENT SHALL HAVE TO BE REITERATED. IN THIS REGARD, THIS C OURT IS IN COMPLETE AGREEMENT WITH THE VIEW ADOPTED BY THE RAJASTHAN HIGH COURT IN THE CASE OF JAI STEEL (INDIA), JODHPUR (SUPRA). BESIDES, AS RIGHTLY POINTED OUT BY THE LEARNED COUNSEL FOR THE RESPONDENT, THE CONTROVERSY INVOLVED IN THE PRESENT CASE STANDS CONCLUDED BY THE DECISION OF THIS COURT IN THE CASE OF JAYABEN RATIL AL SORATHIA (SUPRA) WHEREIN IT HAS BEEN HELD THAT WHILE IT CANNOT BE DISPUTED THAT CON SIDERING SECTION 153A OF THE ACT, THE ASSESSING OFFICER CAN REOPEN AND/OR ASSESS THE RETURN WITH RESPECT TO SIX PRECEDING YEARS; HOWEVER, THERE MUST BE SOME INCRIM INATING MATERIAL AVAILABLE WITH THE ASSESSING OFFICER WITH RESPECT TO THE SALE TRANSACTIONS IN THE PARTICULAR ASSESSMENT YEAR. 20. FOR THE FOREGOING REASONS, IT IS NOT POSSIBLE T O STATE THAT THE IMPUGNED ORDER PASSED BY THE TRIBUNAL SUFFERS FROM ANY LEGAL INFIR MITY SO AS TO GIVE RISE TO A QUESTION OF LAW, MUCH LESS, A SUBSTANTIAL QUESTION OF LAW, WARRANTING INTERFERENCE. THE APPEAL, THEREFORE, FAILS AND IS, ACCORDINGLY, D ISMISSED. 36. AS FAR AS DECISIONS RELIED UPON BY THE LD.CIT-D R ARE CONCERNED, WE HAVE ALREADY CONSIDERED THE DECISION IN THE CASE OF E.N. GOPAKUMAR (SUPRA). OTHER DECISIONS ARE ALSO ON THE SIMILAR LINE, BUT THEY AR E NOT IN COHERENCE WITH THE POSITION OF LAW PROPOUNDED BY THE HONBLE JURISDICT IONAL HIGH COURT. THEREFORE, TRIBUNAL BEING SUBORDINATE TO THE HONBLE GUJARAT HI GH COURT, IS REQUIRED TO FIRST FOLLOW HONBLE SUPREME COURT AND THEREAFTER HONBLE JURISDICTIONAL HIGH COURT. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 38 IF NO RATIO OF THE LAW IS AVAILABLE FROM HONBLE SU PREME COURT AS WELL AS HONBLE JURISDICTIONAL HIGH COURT, THEN THE DECISIO N OF NON-JURISDICTIONAL HIGH COURT IS TO BE FOLLOWED. THEREFORE, WE DO NOT DEEM IT NECESSARY TO RECAPITULATE THE DECISIONS OF HONBLE KERALA HIGH COURT AND MAKE DISCUSSION ON THEM. LD.CIT-DR WAS UNABLE TO BRING ANY AUTHORITATIVE DECI SION FROM THE HONBLE SUPREME COURT OR FROM THE HONBLE JURISDICTIONAL HI GH COURT TO SUPPORT THE CASE OF THE REVENUE. HE MADE REFERENCE TO PARA-18 OF TH E PR.CIT VS. SAUMYA CONSTRUCTION (SUPRA), WHICH WE HAVE CONSIDERED; BUT PARAGRAPH NOWHERE BUTTRESS THE CASE OF THE LD.CIT-DR. ON A DETAILED ANALYSIS OF THESE CASE LAWS, IT IS PERTINENT TO OBSERVE THAT SCHEME OF THE INCOME TAX A CT WOULD PROVIDE THAT A REGULAR ASSESSMENT OF THE INCOME IS TO BE MADE UNDE R SECTION 143(3)/144. IN THE CASE OF AN ESCAPED INCOME, THEN A NOTICE UNDER SECT ION 148 SHOULD BE ISSUED AND THE ASSESSMENT IS TO BE MADE UNDER SECTION 147 R.W. SECTION 143(3). IN CASE A SEARCH IS CARRIED OUT ON AN ASSESSEE, THEN THAT SEA RCH COULD GIVE RISE TO A PROCEEDINGS VIZ. UNDER SECTION 153A QUA THE PERSON WHO HAS BEEN SEARCHED. THE INCOME HAS TO BE ASSESSED ON THE BASIS OF MATERIAL FOUND DURING THE COURSE OF SEARCH. THE SECOND CATEGORY OF THE PERSON IS THIRD- PARTY AND THE ASSESSMENT COULD BE MADE UNDER SECTION 153C OF THE ACT. THE A SSESSMENT UNDER SECTION 153C IS TO BE MADE ON A CONDITION THAT DURING THE C OURSE OF SEARCH ANY MONEY, BULLION, JEWELLERY, ASSETS, DOCUMENTS BELONGED TO T HE ASSESSEE PRIOR TO 1.6.2015, AND INFORMATION RELATES/PERTAINS TO ASSESSEE AFTER 1.6.2015 WAS FOUND QUA TO THE PERSON OTHER THAN THE SEARCHED PERSON. IN THAT SIT UATION, THE AO OF THE SEARCHED PERSON WOULD RECORD HIS SATISFACTION THAT SUCH MATE RIAL BELONGS TO THIRD-PERSON, AND HE WOULD TRANSMIT THAT MATERIAL ALONG WITH HIS SATISFACTION TO THE AO HAVING JURISDICTION ON SUCH OTHER PERSON. THE AO THEREAFTE R ISSUE NOTICE UNDER SECTION 153CAFTER RECORDING HIS SATISFACTION AND THE ASSESS MENT PROCEEDINGS UNDER SECTION 153C R.W. SECTION 153A WOULD COMMENCE. ONE MORE SITUATION WOULD ARISE, WHICH WE ARE GOING TO DISCUSS IN THIS VERY G ROUP IN THE LATER PART OF THE ORDER THAT MATERIAL WAS FOUND DURING THE COURSE OF SEARCH, BUT SIX YEARS HAVE SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 39 EXPIRED, THEN THE ASSESSMENT COULD BE REOPENED. I N OTHER WORDS, THE MATERIAL BELONGED TO SOME OTHER PERSON WAS FOUND DURING THE COURSE OF SEARCH. PRIOR TO 1.6.2015, A POSSIBLE ANGLE COULD BE THAT SUCH MATER IAL IS TO BE CONSTRUED, WHETHER THE INCOME HAS ESCAPED ASSESSMENT OR NOT. BROADLY, THESE ARE BASIC PARAMETERS FOR MAKING ASSESSMENT UNDER DIFFERENT SECTIONS. IN THE PRESENT GROUP OF THREE ASSESSEES IN DIFFERENT ASSESSMENT YEARS, SEARCH WAS CONDUCTED, BUT THE ADDITIONS HAVE BEEN MADE ON THE BASIS OF THE MATERIAL FOUND D URING THE SEARCH RELATING TO SOME THIRD PERSON. IN OTHER WORDS, THE AO HAS NOT MADE THE ADDITION ON THE BASIS OF MATERIAL FOUND DURING THE COURSE OF SEARCH OF THESE THREE ASSESSEES. WE WILL DISCUSS THE MATERIAL CONSIDERED BY THE AO IN T HE SUBSEQUENT PART OF HIS ORDER. PRIMARILY, AFTER LOOKING THE MATERIAL CONSI DERED BY THE AO AND COMPILED IN TABULAR FORM BY THE LD.COUNSEL FOR THE ASSESSEE, WE HAVE VERIFIED THAT THESE ADDITIONS ARE NOT BASED ON THE MATERIAL FOUND DURIN G THE COURSE OF SEARCH CONDUCTED AT THE PREMISES OF THESE THREE ASSESSEES. LET US TAKE NOTE OF THE MATERIAL CONSIDERED BY THE AO FOR MAKING THE ADDITI ON. THESE DETAILS HAVE BEEN COMPILED IN TABULAR FORM AND THEY READ AS UNDER: RAJESH SUNDERDAS VASWANI TOTAL BASIS OF ADDITION PARTICULARS 2009-10 2010-11 2011 -12 2012- 13 2013- 14 2014- 15 2015- 16 ( 09-10 TO 15-16 ) INVESTMENT IN LAND PROPERTY: LAND AT AMBALI FP - 22 72500000 0 0 0 0 0 0 72500000 NOTE - 1 LAND AT SANTEJ, SURVEY NO.618 0 2500000 650000 0 0 0 0 0 9000000 NOTE - 1 LAND AT SANTEJ, SURVEY NO.654 0 7000000 675790 0 0 0 0 0 13757900 NOTE - 1 LAND AT AMBAI - FP/22 0 28120000 0 0 0 0 0 28120000 NOTE - 1 LAND AT OGNAJ, SURVEY NO.1441/11 0 0 110000 00 2104000 0 136500 0 0 32176500 NOTE - 1 LAND AT OGNAJ, SURVEY NO.1441/12 0 0 550000 0 2444225 0 13700 0 0 29955950 NOTE - 1 LAND AT SANTEJ, SURVEY NO.669 0 0 320000 00 1000000 0 0 0 33000000 NOTE - 1 LAND AT SANTEJ, SURVEY NO.711 0 0 206000 00 3320000 0 0 0 750000 54550000 NOTE - 1 LAND AT SHILAJ, SURVEY NO.804 0 0 137200 00 25000 2600000 0 5800000 21500 45566500 NOTE - 1 SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 40 LAND AT THALTEJ, SURVEY NO.518, 519, FP 84 0 0 300000 00 1165000 00 7205000 0 1000000 0 0 228550000 NOTE - 1 LAND AT RANAKPUR, SURVEY NO.144 0 0 0 6100000 7000000 0 0 13100000 NOTE - 1 LAND AT VEJALPUR, SURVEY NO.688 0 0 0 3815000 3600000 5875000 2057925 0 33869250 NOTE - 1 LAND AT SANTEJ, SURVEY NO.712 0 0 0 0 3014800 2518000 0 5532800 NOTE - 1 LAND AT OGNAJ, SURVEY NO.1300/2 0 0 0 0 2393000 0 0 0 23930000 NOTE - 1 LAND AT OGNAJ, SURVEY NO.1441/10 0 0 0 0 0 2260000 0 0 NOTE - 1 OTHER LAND TRANSACTIONS 166667 0 412900 0 19633 1250 6200 0 4322750 NOTE - 1 EXPENSES RELATED TO PROJECTS: VENUS AMADEUS & VENUS IVY 0 0 207820 0 1800000 0 0 0 3878200 NOTE - 1 ATLANTIS & BENICIA 0 778250 668975 0 0 0 0 0 7468000 NOTE - 1 SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 41 TOTAL BASIS OF ADDITION PARTICULARS 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 ( 09-10 TO 15-16 ) INVESTMENT IN SHOPS AT 3RD EYE BUILDING, 1492000 16080 0 41814 567608 155308 354 2273164 NOTE - 1 PANCHWATI ROAD, AHMEDABAD INVESTMENT / EXPENSE AT BUNGALOW 14492605 9630436 105 5493 524910 4544693 9897843 12597300 52743280 NOTE - 1 TRANSACTIONS OF PERSONAL NATURE 7211300 21017100 7120 165 9029055 9717070 15100220 11199280 80394190 NOTE - 1 MISC. TRANSACTIONS 0 0 4507500 2300000 0 0 15933650 22741150 NOTE - 1 SMFPL & SSAHPL 0 0 0 219250000 59725567 3091050 952383 283019000 NOTE - 2 PAYMENT TO PRAKASH TEKWANI 0 0 3666667 8400000 3333333 0 0 15400000 NOTE - 1 LTCG FROM SALE OF SHARES OF PRRANETA INDUSTRIES 0 0 174102529 69266623 0 0 0 243369152 NOTE - 3 LTD. TOTAL 95862572 69061866 329427204 516754285 213634521 75043621 62033717 1361817786 NOTE - 1: ADDITIONS BASED ON 'CASH BOOK' SEIZED FRO M 'TERRACE OF CRYSTAL ARCADE' (I.E. ANNEXURE A-1 TO 142) SEARCHED IN CASE OF 'ASV' & 'VIDPL' ( NOT 'RSV' ); NOTE - 2: ADDITION BASED ON - - 'INFORMATION' GATHERED DURING VARIOUS SEARCH / SURV EY CARRIED OUT BY KOLKATTA INVESTIGATION WING IN CA SES OF COMPLETELY UNCONNECTED THIRD PARTIES ; (NOT 'RSV') ; - 'MATERIAL' SEIZED FROM '901, SAPPHIRE COMPLEX' WHIC H WAS SEARCHED IN THE CASE OF 'ASV' AND 'VIDPL' (NO T 'RSV') ; & - 'CASH BOOK' SEIZED FROM 'TERRACE OF CRYSTAL ARCADE' (I.E. ANNEXURE A-1 TO 142) SEARCHED IN THE CASE OF 'ASV' AND 'VIDPL' (NOT 'RSV') ; NOTE - 3: ADDITION BASED ON - - 'INFORMATION' GATHERED FROM 'SEARCH' AND 'SURVEY' I N THE CASE OF 'SCS' & 'PIL' I.E. COMPLETELY UNCONNE CTED THIRD PARTIES (NOT 'RSV') ; & - 'CASH BOOK' SEIZED FROM 'TERRACE OF CRYSTAL ARCADE' (I.E. ANNEXURE A-1 TO 142) SEARCHED IN THE CASE OF 'ASV' AND 'VIDPL' (NOT 'RSV') ; ASV - ASHOK SUNDERDAS VASWANI VIDPL - VENUS INFRASTRUCTURE & DEVELOPMENT PVT. LTD . RSV - RAJESH SUNDERDAS VASWANI SCS -SHIRISH CHANDRAKANT SHAH PIL - PRRANTE INDUSTRIES LTD. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 42 SANJEET MOTORS FINANCE PVT. LTD. PARTICULARS 2012-13 2013-14 TOTAL BASIS OF ADDITION SHARE CAPITAL 493300000 500000 493800000 NOTE - 1 TOTAL 493300000 500000 493800000 NOTE - 1: ADDITION BASED ON - - 'INFORMATION' GATHERED DURING VARIOUS SEARCH / SURV EY CARRIED OUT BY KOLKATTA INVESTIGATION WING IN CA SES OF COMPLETELY UNCONNECTED THIRD PARTIES (NOT 'SMFPL' ); - 'ANNEXURE A-1' SEIZED FROM '901, SAPPHIRE COMPLEX' SEARCHED IN THE CASE OF 'ASV' AND 'VIDPL' (NOT 'SMF PL') ; & - 'CASH BOOK' SEIZED FROM 'TERRACE OF CRYSTAL ARCADE' (I.E. ANNNEXURE A-1 TO 142) SEARCHED IN THE CASE O F 'ASV' AND 'VIDPL' (NOT 'SMFPL') ; ASV - ASHOK SUNDERDAS VASWANI VIDPL - VENUS INFRASTRUCTURE & DEVELOPMENT PVT. LTD . SMFPL - SANJEET MOTORS FINANCE PVT. LTD. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 43 DEEPAK BUDHARMAL VASWANI TOTAL NOTE / PARTICULARS 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 ( 09-10 TO PGS. OF DR'S P/B 15-16 ) INVESTMENT IN LAND PROPERTY: LAND AT BODAKDEV, SURVEY NO.166/1 0 0 0 0 0 11500000 43136000 54636000 PGS.36 4-365 LAND AT SHILAJ, SURVEY NO.56 0 0 7500000 4065000 102500 0 0 0 12590000 PGS.36 6-367 LAND AT VEJALPUR, SURVEY NO.688 0 0 0 3815000 3600000 58 75000 20579250 33869250 PGS.36 8-370 EXPENSES FOR SAURABHI 0 0 0 0 0 346544 161300 507844 PGS.37 1-373 TRANSACTIONS WITH THAKORE FAMILY 0 2000000 8500000 185 15000 46750000 13800000 9800000 99365000 PGS.37 4-376 INVESTMENT IN LAND AT NIDHRAD AND CHEKLA 51000000 20 250000 113426000 389277000 352579600 165404970 83490500 1175428070 PGS.37 7-393 OTHER LAND TRANSACTIONS / EXPENSES RELATED TO 464551755 195205900 674366872 505642204 359395385 257513 000 163484290 2620159406 PGS.39 4-428 LAND EXPENSES RELATED TO PROJECTS: VENUS AMADEUS & VENUS IVY 37839771 32400000 6829800 39 57300 3961000 9337450 37348810 131674131 PGS.42 9-441 ATLANTIS & BENICIA 1941000 38887150 81105770 12148850 2 9653502 6805000 5308500 175849772 PGS.44 2-455 VENUS PAHEL 0 0 31465900 6408700 8800000 45300000 903300 92877900 PGS.45 6-457 C. G. SQUARE MALL (K - MALL) 734800 430000 28446500 20 0000 150000 2186050 4310000 36457350 PGS.45 8-459 SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 44 VENUS PARKLANDS AND VENUS PARK HEIGHTS 2557500 27923 000 16950140 16761192 28639600 14460500 500000 107791932 PGS.46 0-464 SHYAM RESIDENCY 4700500 274750 15345575 25863100 498189 75 73783250 72775600 242561750 PGS.46 5-474 VS 1993000 1287900 704000 7642000 9023500 2491300 6250700 29392400 PGS.47 5-479 VENUS TOWNSHIP 0 48790 310330 36600 0 205000 250000 850720 PGS.48 0-481 SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 45 TOTAL BASIS OF ADDITION PARTICULARS 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 ( 09-10 TO 15-16 ) INVESTMENT IN SHOPS AT 3RD EYE BUILDING, 7460000 80400 0 209068 2838042 776542 1772 11365824 PGS.482-485 PANCHWATI ROAD, AHMEDABAD INVESTMENT / EXPENSE AT BUNGALOW 14492605 9630436 105 5493 524910 4544693 9897843 12597300 52743280 PGS.486-496 B-45, SARVODAY NAGAR EXPENSES 0 365000 0 0 0 0 0 365000 PGS.497-498 LAW GARDEN / NEW GARDEN 100000 0 0 0 5000000 0 0 5100000 PGS.499-500 TRANSACTIONS OF PERSONAL NATURE 2826267 3950341 11531 808 16462770 8547925 14988970 8367080 66675161 PGS.501-517 MISC. TRANSACTIONS 79414430 51002062 87796668 63425622 108511740 19364400 83749140 493264062 PGS.518-560 PAYMENT TO PRAKASH TEKWANI 0 0 3666667 8400000 3333333 0 0 15400000 NOTE 2 LTCG FROM SALE OF SHARES OF PRRANETA 0 0 195941921 53239970 0 0 0 249181891 NOTE 3 INDUSTRIES LTD. SMFPL & SSAHPL 0 0 0 219250000 59725567 3091050 952383 283019000 NOTE 4 JEWELLERY 0 0 0 0 0 0 4448456 4448456 NOTE 5 TOTAL 669611628 383735729 1284943444 1355844286 1085897862 657126869 558414381 5995574199 46 NOTE - 1: PAGES MENTIONED IN THE LAST COLUMN ARE OF DR'S PAPERBOOK RUNNING INTO 4203 PAGES; ALL THESE ADDITIONS ARE BASED ON 'CASH BOOK' SEIZED FROM 'TERRACE OF CR YSTAL ARCADE' (I.E. ANNEXURE A-1 TO 142) SEARCHED I N CASE OF 'ASV' AND 'VIDPL' (NOT 'DBV') NOTE - 2: ADDITIONS BASED ON 'CASH BOOK' SEIZED FRO M 'TERRACE OF CRYSTAL ARCADE' (I.E. ANNEXURE A-1 TO 142) SEARCHED IN CASE OF 'ASV' & 'VIDPL' ( NOT 'DBV' ); NOTE - 3: ADDITION BASED ON - - 'INFORMATION' GATHERED FROM 'SEARCH' AND 'SURVEY' I N THE CASE OF 'SCS' & 'PIL' I.E. COMPLETELY UNCONNE CTED THIRD PARTIES (NOT 'DBV') ; & - 'CASH BOOK' SEIZED FROM 'TERRACE OF CRYSTAL ARCADE' (I.E. ANNEXURE A-1 TO 142) SEARCHED IN THE CASE OF 'ASV' AND 'VIDPL' (NOT 'DBV') ; NOTE - 4: ADDITION BASED ON - - 'INFORMATION' GATHERED DURING VARIOUS SEARCH / SU RVEY CARRIED OUT BY KOLKATTA INVESTIGATION WING IN CASES OF COMPLETELY UNCONNECTED THIRD PARTIES (NOT 'DBV') ; - 'MATERIAL' SEIZED FROM '901, SAPPHIRE COMPLEX' WHIC H WAS SEARCHED IN THE CASE OF 'ASV' AND 'VIDPL' (NO T 'DBV') ; & - 'CASH BOOK' SEIZED FROM 'TERRACE OF CRYSTAL ARCADE' (I.E. ANNEXURE A-1 TO 142) SEARCHED IN THE CASE OF 'ASV' AND 'VIDPL' (NOT 'DBV') ; NOTE - 5: ADDITION BASED ON 'JEWELLERY' FOUND IN TH E CASE OF 'DBV'; ASV - ASHOK SUNDERDAS VASWANI VIDPL - VENUS INFRASTRUCTURE & DEVELOPMENT PVT. LTD . RSV - RAJESH SUNDERDAS VASWANI SCS -SHIRISH CHANDRAKANT SHAH PIL - PRRANTE INDUSTRIES LTD. DILIPKUMAR LALWANI & OTHERS (107 APPEALS) 47 37. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY, AND MATERIAL AVAILABLE ON RECORD. FOR THE SAKE OF REFERENCE, LET US TAKE THE ASSESSMENT OF SHRI DEEPAK BUDHARMAL VAS WANI FOR THE ASSESSMENT YEAR 2009-10. THE ASSESSEE HAS FILED HIS RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT ON 30.9.2009 DECLARING TOTAL INCOME AT R S.2,57,82,210/-. HIS INCOME HAS BEEN DETERMINED UNDER SECTION 153A R.W. SECTION 143(3) AT R.69,53,93,838/-. ONE OF THE ADDITIONS MADE IS OF RS.5.10 CRORES WHIC H IS DISCERNIBLE IN THE CHART ALSO. ACCORDING TO THE LD.COUNSEL FOR THE ASSESSEE , THIS ADDITION HAS BEEN MADE ON THE BASIS OF PAGES 374 TO 376 OF THE DEPARTMENT S PAPER BOOK. THE ADDITION HAS BEEN DISCUSSED IN PARA-30 OF THE ASSESSMENT ORD ER. A PERUSAL OF THE PARAGRAPH-30.2 OF THE ASSESSMENT ORDER FOR THE ASST T.YEAR 2009-10 IN THE CASE OF DEEPAK BUDHARMAL VASWANI WOULD REVEAL THAT THIS ADD ITION HAS BEEN MADE ON THE BASIS OF THE DETAILS OF CASH PAYMENTS RECORDED IN UNACCOUNTED CASH BOOK SEIZED FROM TERRACE OF CRYSTAL ARCADE. THE FOLLOWI NG OBSERVATION OF THE AO WOULD MAKE IT CLEAR: ON THE BASIS OF THE ABOVE INCRIMINATING MATERIAL S EIZED EVIDENCES, IT IS NOTICED THAT DETAILS OF CASH PAYMENT HAVE BEEN FOUND RECORD ED IN UNACCOUNTED CASH BOOK SEIZED FROM TERRACE OF CRYSTAL ARCADE, C.G.ROAD, AH MEDABAD AND UPON CORRELATION OF SEIZED DOCUMENTS, IT HAS BEEN ESTABLISHED THAT T HE LAND AT NIDHRAD, CHEKHLA VILLAGES HAVE BEEN PURCHASED BY VASWANI FAMILY MEMB ERS/VENUS GROUP CONCERNS/THAKOR FAMILY MEMBERS. THE LAND WAS PURCH ASED IN THE NAME OF THAKOR FAMILY MEMBERS BUT THE FUNDS WERE MADE AVAILABLE BY VASWANI FAMILY MEMBERS AND VENUS GROUP CONCERNS. THE ON-MONEY HAS BEEN PAI D OVER AND ABOVE THE REGISTERED VALUE OF THE LAND. 38. THUS, THE AO IS TALKING OF ON-MONEY WHICH HAS B EEN UNEARTHED, ACCORDING TO HIM, DURING THE COURSE OF SEARCH, ON T HE BASIS OF ALLEGED CASH BOOK. THIS CASH BOOK WAS NOT FOUND FROM THE PREMISES OF TH E ASSESSEE. IT WAS FOUND FROM THE PREMISES OF ASHOK SUNDERDAS VASWANI AND VE NUS INFRASTRUCTURE AND DEVELOPERS. SIMILARLY, THE LD.COUNSEL FOR THE ASSE SSEE TOOK US THROUGH VARIOUS CONCLUSIONS OF THE AO IN OTHER ASSESSMENT ORDERS, A ND THE BASIS OF THE DOCUMENTS CONSIDERED BY THE AO. NONE OF THE ADDITI ONS, EXCEPT ADDITION OF JEWELLERY IN THE ASSESSMENT YEAR 2015-16 IN THE CAS E OF DEEPAK BUDHARMAL SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 48 VASWANI WAS MADE ON THE BASIS OF SEIZED MATERIAL. AS FAR AS THE CASE OF SANJEET MOTORS AND FINANCE LTD. IS CONCERNED, THESE ADDITIO NS ARE BASED ON THE BASIS OF CERTAIN INFORMATION GATHERED DURING THE VARIOUS INV ESTIGATION CARRIED OUT BY KOLKATTA INVESTIGATION WING IN THE CASE OF COMPLETE LY AN UNCONNECTED THIRD- PERSON. SO THESE MATERIALS COULD NOT BE CONSIDERED IN THE ASSESSMENT PROCEEDINGS UNDER SECTION 153A. THEY OUGHT TO BE C ONSIDERED UNDER SOME OTHER PROVISIONS VIZ. SECTION 153C OR SOME OTHER SECTIONS ; BUT NOT UNDER THIS SECTION. 39. ON DUE CONSIDERATION OF THE ABOVE FACTS AND CIR CUMSTANCES, WE ARE OF THE VIEW THAT ADDITIONS MADE BY THE AO IN THE CASE OF R AJESH SUNDERDAS VASWANI IN DIFFERENT ASSESSMENT YEARS ARE NOT SUSTAINABLE, BEC AUSE THEY ARE NOT BASED ON THE SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH C ARRIED OUT AT HIS PREMISES. SIMILARLY, THE ADDITIONS MADE IN THE CASE OF SANJEE T MOTORS AND FINANCE ARE ALSO NOT SUSTAINABLE. AS FAR AS ADDITION IN THE CASE OF DEEPAK BUDHARMAL VASWANI IS CONCERNED THE ADDITION IN THE ASSESSMENT YEAR 2015- 16, AMOUNTING TO RS.44,48,456/- IS CONCERNED, IT DESERVES TO BE CONF IRMED BECAUSE THE MATERIAL TO THIS EFFECT WAS FOUND DURING THE COURSE OF SEARCH C ARRIED OUT AT THE PREMISES OF THE ASSESSEE. THE REST OF THE ADDITIONS ARE NOT SU PPORTED BY ANY MATERIAL WHICH WAS DISCOVERED DURING THE COURSE OF SEARCH AT HIS P REMISES. THEREFORE, THE APPEAL FOR THE ASSTT.YEAR 2015-16 IS DISMISSED, WHE REAS ALL OTHER APPEALS ARE PARTLY ALLOWED I.E. IT(SS)A NO.117/AHD/2019 IS DISM ISSED, AND REST OF THE APPEALS ARE PARTLY ALLOWED. CONSEQUENTLY, THE APP EALS OF THE REVENUE ARE DISMISSED. WE HAVE TREATED THE APPEALS OF THE ASSE SSEES AS PARTLY ALLOWED, BECAUSE IN CASE ON FURTHER APPEAL TO THE HONBLE HI GH COURT, THE POSITION OF LAW AS STOOD TODAY CHANGES ON INTERPRETATION OF THE SCO PE OF SECTION 153A THEN, EXPLANATIONS OF THE ASSESSEES ON MERIT QUA THE EVIDENCE CONSIDERED BY THE AO HAVE TO BE DEALT ON MERIT. AT THIS STAGE, THE ISS UE IS COVERED IN FAVOUR OF THE ASSESSEES BY THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT, THEREFORE, WE DO NOT DEEM IT NECESSARY TO DEAL WITH OTHER GROUNDS. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 49 40. THE PROPOSITION NO. 3 IS, WHETHER THE ASSESSMENT S FRAMED UNDER SECTION 153A OF THE ACT WERE WITHIN THE LIMITATION OR NOT? UNDER THIS FOLD OF ARGUMENTS, WE TAKE UP THE FOLLOWING APPEALS: ASHOK SUNDERDAS VASWANI APPEAL NO. ASST. YEAR APPEAL BY SECTION DATE OF ASST. ORDER WITHIN LIMITATION ? IT(SS)A 88/AHD/2019 2009-10 ASSESSEE 143(3) R.W.S. 153A 26.12.17 NO IT(SS)A 89/AHD/2019 2010-11 ASSESSEE 143(3) R.W.S. 153A 26.12.17 NO IT(SS)A 90/AHD/2019 2011-12 ASSESSEE 143(3) R.W.S. 153A 26.12.17 NO IT(SS)A 91/AHD/2019 2012-13 ASSESSEE 143(3) R.W.S. 153A 26.12.17 NO IT(SS)A 92/AHD/2019 2013-14 ASSESSEE 143(3) R.W.S. 153A 26.12.17 NO IT(SS)A 93/AHD/2019 2014-15 ASSESSEE 143(3) R.W.S. 153A 26.12.17 NO IT(SS)A 94/AHD/2019 2015-16 ASSESSEE 143(3) R.W.S. 153B 26.12.17 NO IT(SS)A241/AHD/20 19 2009-10 DEPARTMENT 143(3) R.W.S. 153A 26.12.17 NO IT(SS)A242/AHD/20 19 2010-11 DEPARTMENT 143(3) R.W.S. 153A 26.12.17 NO IT(SS)A243/AHD/20 19 2011-12 DEPARTMENT 143(3) R.W.S. 153A 26.12.17 NO IT(SS)A244/AHD/20 19 2012-13 DEPARTMENT 143(3) R.W.S. 153A 26.12.17 NO IT(SS)A245/AHD/20 19 2013-14 DEPARTMENT 143(3) R.W.S. 153A 26.12.17 NO IT(SS)A246/AHD/20 19 2014-15 DEPARTMENT 143(3) R.W.S. 153A 26.12.17 NO IT(SS)A247/AHD/20 19 2015-16 DEPARTMENT 143(3) R.W.S. 153B 26.12.17 NO SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 50 VENUS INFRASTRUCTURE & DEVELOPERS PVT. LTD. APPEAL NO. ASST. YEAR APPEAL BY SECTION DATE OF ASST. ORDER WITHIN LIMITATI ON? IT(SS)A 102/AHD/2019 2009- 10 ASSESSEE 143(3) R.W.S. 153A 29.12.17 NO IT(SS)A 103/AHD/2019 2010- 11 ASSESSEE 143(3) R.W.S. 153A 29.12.17 NO IT(SS)A 104/AHD/2019 2011- 12 ASSESSEE 143(3) R.W.S. 153A 29.12.17 NO IT(SS)A 105/AHD/2019 2012- 13 ASSESSEE 143(3) R.W.S. 153A 29.12.17 NO IT(SS)A 106/AHD/2019 2013- 14 ASSESSEE 143(3) R.W.S. 153A 29.12.17 NO IT(SS)A 107/AHD/2019 2014- 15 ASSESSEE 143(3) R.W.S. 153A 29.12.17 NO IT(SS)A 108/AHD/2019 2015- 16 ASSESSEE 143(3) R.W.S. 153A 29.12.17 NO IT(SS)A 228/AHD/2019 2009- 10 DEPARTMENT 143(3) R.W.S, 153A 29.12.17 NO IT(SS)A 229/AHD/2019 2010- 11 DEPARTMENT 143(3) R.W.S. 153A 29.12.17 NO IT(SS)A 230/AHD/2019 2011- 12 DEPARTMENT 143(3) R.W.S. 153A 29.12.17 NO IT(SS)A 231/AHD/2019 2012- 13 DEPARTMENT 143(3) R.W.S. 153A 29.12.17 NO IT(SS)A 232/AHD/2019 2013- 14 DEPARTMENT 143(3) R.W.S. 153A 29.12.17 N IT(SS)A 233/AHD/2019 2014- 15 DEPARTMENT 143(3) R.W.S. 153A 29.12.17 NO IT(SS)A 234/AHD/2019 2015- 16 DEPARTMENT 143(3) R.W.S. 153A 29.12.17 NO DEEPAK BUDHARMAL VASWANI APPEAL NO. ASST. YEAR APPEAL BY SECTION DATE OF ASST. ORDER WITHIN LIMITATION? IT(SS)A LLL/AHD/2019 2009-10 ASSESSEE 143(3) R.W.S. 153A 26.12.17 NO IT(SS)A 112/AHD/2019 2010-11 ASSESSEE 143(3) R.W.S. 153A 26.12.17 NO SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 51 IT(SS)A 113/AHD/2019 2011-12 ASSESSEE 143(3) R.W.S. 153A 26.12.17 NO IT(SS)A 114/AHD/2019 2012-13 ASSESSEE 143(3) R.W.S. 153A 26.12.17 NO IT(SS)A 115/AHD/2019 2013-14 ASSESSEE 143(3) R.W.S. 153A 26.12.17 NO IT(SS)A 116/AHD/2019 2014-15 ASSESSEE 143(3) R.W.S. 153A 26.12.17 NO IT(SS)A 117/AHD/2019 2015-16 ASSESSEE 143(3) R.W.S. 153A 26.12.17 NO IT(SS)A 248/AHD/2019 2009-10 DEPARTMENT 143(3) R.W.S. 153A 26.12.17 NO IT(SS)A 249/AHD/2019 2010-11 DEPARTMENT 143(3) R.W.S. 153A 26.12.17 NO IT(SS)A 250/AHD/2019 2011-12 DEPARTMENT 143(3) R.W.S. 153A 26.12.17 NO IT(SS)A 251/AHD/2019 2012-13 DEPARTMENT 143(3) R.W.S. 153A 26.12.17 NO IT(SS)A 252/AHD/2019 2013-14 DEPARTMENT 143(3) R.W.S. 153A 26.12.17 NO IT(SS)A 253/ARID/2019 2014-15 DEPARTMENT 143(3) R.W.S. 153A 26.12.17 NO IT(SS)A 254/AHD/2019 2015-16 DEPARTMENT 143(3) R.W.S. 153A 26.12.17 NO 41. THE LEARNED AR FOR THE ASSESSEE BEFORE US SUBMIT TED THAT THE PROVISIONS OF SECTION 153B(1)(A) OF THE ACT MANDATE THAT ASSESSME NT FOR SIX ASSESSMENT YEARS REFERRED UNDER SECTION 153A(1)(B) OF THE ACT SHOULD BE COMPLETED WITHIN A PERIOD OF 2 YEARS FROM THE END OF THE FINANCIAL YEA R IN WHICH LAST OF THE AUTHORIZATION FOR SEARCH UNDER SECTION 132 OR FOR R EQUISITION UNDER SECTION 132A OF THE ACT WAS EXECUTED. THE LEARNED AR FURTHER SUB MITTED THAT SEARCH IN CASE OF APPELLANTS HAS BEEN CONDUCTED ON 10 TH MARCH 2015 AND 12 TH MARCH 2015 AND THE SAME WAS LASTED AS ON 13 TH MARCH 2015 AT VARIOUS PREMISES OF THE APPELLANT. ACCORDINGLY, THE LD. AR CONTENDED THAT THE TIME LIM IT FOR PASSING THE ASSESSMENT ORDER WOULD EXPIRE ON 31-3-2017 I.E. WITHIN A PERIO D OF 2 YEARS FROM THE END OF THE FINANCIAL YEAR (I.E. 2014-15) IN WHICH LAST OF THE AUTHORIZATION FOR SEARCH WAS EXECUTED WHEREAS THE ASSESSMENTS HAVE BEEN FRAMED I N THE MONTH OF DECEMBER 2017AFTER THE EXPIRY OF THE TIME PROVIDED UNDER THE ACT. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 52 42. THE LEARNED COUNSEL FOR THE ASSESSEE WHILE ELABO RATING HIS ARGUMENTS UNDER THIS COMPARTMENT WOULD SUBMIT THAT BEFORE ADV ERTING TO THE FACTS FOR ADJUDICATING THIS PROPOSITION, ONE HAS TO BEAR IN M IND THE SCHEME OF INCOME TAX ACT WITH REGARD TO SEARCH ACTION CARRIED OUT UNDER S.132 OF THE ACT AS APPLICABLE ON THE DATE OF THE SEARCH IN THE PRESENT GROUP OF C ASES I.E. 10.03.2015. THUS, HE TOOK US THROUGH SECTIONS 132(3), 153A, 153C, 153B & 158BE, EXPLANATION2. HE SUBMITTED THAT AFTER THE SEARCH IS CARRIED OUT A ND INCRIMINATING MATERIAL UNEARTHED DURING THE SEARCH DISCLOSING UNDISCLOSED INCOME THEN, AO WILL ISSUE NOTICE FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECEDI NG ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED A ND ASSESSED OR RE-ASSESSED INCOME FOR SUCH SIX ASSESSMENT YEARS. 43. AS FAR AS ISSUANCE OF NOTICE UNDER S.153A UPON THE APPELLANTS HEREIN IS CONCERNED, THE ASSESSEES HAVE NOT RAISED ANY OBJECT ION BUT THEIR MAIN GRIEVANCE IS THAT ASSESSMENT ORDERS HAVE NOT BEEN PASSED WITH IN THE LIMITATION PROVIDED IN THE ACT. FOR BUTTRESSING THESE CONTENTIONS, HE TOO K US THROUGH SECTION 153B SUB SECTION (1) & (2) AND SUBMITTED THAT LANGUAGE OF SU B SECTION (2) IS VERBATIM SAME AS EXPLANATION 2 OF SECTION 158BE WHICH EARLIER GOVERNED THE AREA OF TIME LIMIT FOR PASSING ASSESSMENT ORDER IN SEARCH CASES. THE IDEA BEHIND APPRAISING US WITH BOTH SECTIONS WAS THAT MOST OF THE JUDGMENT S ON THIS ISSUE WERE DELIVERED BY THE HONBLE HIGH COURTS AND THE HONBL E SUPREME COURT WHILE EXPOUNDING AND EXPLAINING THE SCOPE OF SECTION 158B E AND THE EXPLANATION (2) INSERTED IN THIS SECTION INCOME TAX (AMENDMENT ACT, 1997) W.E.F. 01.01.1997.WE WILL BE TAKING COGNIZANCE OF BOTH THE PROVISIONS. 44. THE LEARNED COUNSEL FURTHER SUBMITTED THAT AS FA R AS TIME PERIOD FOR PASSING THE ASSESSMENT PROVIDED IN SUB-SECTION (1) OF SECTION 153B IS CONCERN, THERE IS NO DISPUTE BETWEEN THE PARTIES. THIS SECTI ON CONTEMPLATES THAT ASSESSMENT ORDER WOULD BE PASSED WITHIN TWO YEARS F ROM THE END OF THE FINANCIAL SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 53 YEAR IN WHICH THE LAST OF THE AUTHORIZATION FOR SEA RCH UNDER S.132 OF THE ACT OR REQUISITION UNDER S.132A OF THE ACT WAS EXECUTED. IT MEANS THAT IN THE PRESENT APPEALS, THE SEARCH ACTIONS STARTED ON 10.03.2015. SEARCH WAS CONCLUDED ON 13.03.2015 MEANING THEREBY LAST OF THE AUTHORIZATIO N WAS EXECUTED BEFORE THE END OF THE FY 2014-15 I.E. 31 ST MARCH, 2015. THE ASSESSMENT WAS REQUIRED TO BE PASSED BEFORE THE 31 ST MARCH, 2017 I.E. WITHIN TWO YEARS FROM 31 ST MARCH 2015 BUT PROHIBITORY ORDERS WERE PUT ON CERTAIN ITEMS/PR EMISES WHILE EXECUTING THE AUTHORIZATION OF WARRANTS. IN THE PRESENT CASE, TH ESE ORDERS WERE PUT UNDER S.132(3) ON 11 TH MARCH & 12 TH MARCH, 2015. ACCORDING TO THE REVENUE, PROHIBITORY ORDERS WERE LIFTED IN THE MONTH OF MAY AND THUS IT IS TO BE CONSTRUED THAT SEARCH WAS CONCLUDED IN F.Y. 2015-16 I.E. BEFO RE 31 ST MARCH, 2016. THE TIME LIMIT WOULD BE TWO YEARS FROM THIS DATE AND I. E. AVAILABLE UP TO 31 ST MARCH, 2018. THE ASSESSMENT ORDERS HAVE BEEN PASSED IN DE CEMBER 2017 AND THUS THE DEPARTMENT HAS TREATED ALL THE ASSESSMENT ORDERS PA SSED WITHIN THE TIME LIMIT. THE AREA OF DISPUTE BETWEEN THE PARTIES RELATES TO T HIS ASPECT. 45. THE LEARNED COUNSEL FOR THE ASSESSEE WHILE FURTH ER SUBMITTING HIS ARGUMENTS HAD CONTENDED THAT HE HAS TWO FOLD OF CON TENTION ON THIS LIMB OF ARGUMENTS; IN THE FIRST FOLD, HE SUBMIT THAT SEARCH WOULD BE TREATED AS CONCLUDED WHEN AN AUTHORIZATION OF WARRANT WAS EXECUTED AND P ANCHNAMA WAS DRAWN. IF ANY PROHIBITORY ORDER WAS PUT UNDER S.132(3), THEN IT HAS LIMITED SCOPE FOR AUTHORIZED PERSON TO RE-VISIT THE PLACE BUT IT CANN OT KEEP THE SEARCH PROCEEDINGS PENDING, SEARCH SHALL BE TERMED AS CONCLUDED. THE MOMENT AUTHORIZATION WAS EXECUTED AND THE PANCHNAMA WAS DRAWN ON THE DATE OF SEARCH OR WHENEVER AFTER CONDUCTING THE SEARCH CONTINUOUSLY THE SEARCH TEAM CAME OUT AFTER DRAWING THE PANCHNAMA. AS IN THE CASE OF ASSESSEES ALL THE WARR ANTS WERE EXECUTED BETWEEN 10.03.2015 TO 13.03.2015 AND PANCHNAMAS WERE DRAWN THEREAFTER ONLY THREE PROHIBITORY ORDERS WERE PASSED WHICH THE LEARNED CO UNSEL WILL BE EXPLAINING IN THE SECOND FOLD OF HIS CONTENTION UNDER THIS COMPAR TMENT IN ORDER TO APPRAISE US SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 54 THE SCOPE OF SECTION 153B SUB SECTION (2). THE LEAR NED COUNSEL SUBMITTED THAT IT IS VERBATIM SAME AS THE EXPLANATION (2) OF SECTION 1 58BE. THIS ASPECT HAS BEEN CONSIDERED BY HONBLE KARNATAKA HIGH COURT IN CASE OF C. RAMAIAH REDDY VS. ACIT REPORTED IN 339 ITR 210 (KAR.). THE LEARNED COUN SEL SUBMITTED THAT AGAINST THIS JUDGMENT, DEPARTMENT WENT BEFORE THE H ONBLE SUPREME COURT. THE HONBLE SUPREME COURT HAS ADMITTED THE SLP, IN OTHER WORDS, LEAVE TO FILE APPEAL AGAINST THE JUDGMENT WAS GRANTED BUT CIVIL A PPEAL WAS DISMISSED. THE LEARNED COUNSEL SUBMITTED THAT HE IS UNABLE TO LAY HIS HAND ON THE JUDGMENT OF THE HONBLE SUPREME COURT BUT HE PLACED ON RECORD T HE CASE STATUS REPORT FROM THE HONBLE SUPREME COURT SHOWING THAT CIVIL APPEAL WAS DISMISSED AGAINST THIS JUDGMENT. COPIES OF THESE DETAILS HAVE BEEN A NNEXED AS ANNEXURE A WITH THE BRIEF SYNOPSIS SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE UNDER THE HEAD ADDITIONAL NOTE. HE PARTICULARLY TOOK US TH ROUGH PARAGRAPH NO. 76. HE FURTHER RELIED UPON THE JUDGMENT OF HONBLE KERLA H IGH COURT IN THE CASE OF DR. C. BALAKRISHNAN NAIR VS. CIT REPORTED IN 237 ITR 70 ( KER.) AS WELL AS UPON THE JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE O F CIT VS. SANDHYA P. NAIK 253 ITR 534 (BOMBAY). HE PLACED ON RECORD COPI ES OF ALL THESE JUDGMENTS. 46. IN THE SECOND FOLD OF ARGUMENT IN THIS COMPARTM ENT, HE CONTENDED THAT NO DOUBT SECTION 132 SUB SECTION (3) AUTHORIZES AUTHOR IZED OFFICER FOR PUTTING PROHIBITORY ORDERS, HOWEVER, SUCH POWER CANNOT BE E XERCISED ACCORDING TO THE WHIMS OF THE OFFICER IT CAN ONLY BE EXERCISED UNDER THE CIRCUMSTANCES NAMELY; (A) IT IS NOT PRACTICABLE TO SEIZE ANY BOOKS OF ACC OUNTS, OTHER DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLES OR TH INGS & (B) REASONS FOR THE SAME THAT IS WHY IT IS NOT PRACTICABLE TO SEIZE OUGHT TO BE RECORDED BY THE CONCERNED OFFICER. IN OTHER WORDS, THE OFFICER OUGHT TO HAVE RECORDED HIS SATISFACTION AS TO WHY HE WANTS TO PUT THE PROHIBITORY ORDERS. HE FUR THER SUBMITTED THAT IF PROHIBITORY ORDER IS PUT WITH THE INTENTION TO PROL ONG THE ALLEGED SEARCH UNDER THE SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 55 IMPRESSION THAT IT WILL KEEP THE SEARCH PROCEEDING OPEN AND DEPARTMENT WILL HAVE A LONGER PERIOD OF LIMITATION FOR PASSING ASSESSMEN T ORDER THEN THAT INTENTION HAS TO BE TRUNCATED. 47. TAKING US TO THE RECORD, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ON 12 TH MARCH, 2015, 901, SAPPHIRE COMPLEX WAS SEARCHED AND A PROHIBITORY ORDER WAS PUT. THIS PROHIBITORY ORDER WAS WITH REGARD TO THE SEARCH AT ASHOK SUNDARDAS VASVANI& VENUS INFRASTRUCTURE & DEVELOPME NT PVT. LTD. THE PROHIBITORY ORDER WAS LIFTED ON 8 TH MAY, 2015. THE COPY OF THE REVOCATION OF THE PROHIBITORY ORDER HAS BEEN PLACED ON PAGE NO.21 OF THE ANNEXURE B (COLLY.) WITH SYNOPSIS OF ARGUMENT. ALONGWITH THIS ORDER, A PANCHNAMA WAS DRAWN AND COPY OF THIS PANCHNAMA HAS ALSO BEEN MADE PART OF C OLLY B, AT SERIAL NO. 5 OF THE PANCHNAMA. THE HEADING IS IN THE COURSE OF SEA RCH.(A)THE FOLLOWING WERE FOUND THEREAFTER TWO ITEMS HAVE BEEN MENTIO NED BOOKS OF ACCOUNTS, DOCUMENTS, VALUABLE ARTICLES. AGAINST THESE SERIAL NUMBERS, THE RECOVERY IS SHOWN AS NIL. A PERUSAL OF THIS DOCUMENT WOULD IND ICATE THAT NOTHING WAS SEIZED WHILE REVOKING THE PROHIBITORY ORDER. THUS, ON THE STRENGTH OF THESE DETAILS, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMI TTED THAT WHAT WAS THE REASON FOR PUTTING THE PROHIBITORY ORDER WHEN NOTHING WAS TO BE RECOVERED AND WHAT PROHIBITED THE DEPARTMENT TO INSPECT THE ALLEGED PR EMISES ON THE DATE OF SEARCH. 48. THE LEARNED COUNSEL FOR THE ASSESSEE THEREAFTER TOOK US THE SECOND PROHIBITORY ORDER. IT WAS PLACED ON 501, SAPPHIRE COMPLEX11 TH MARCH, 2015 AND LIFTED ON 5 TH MAY, 2015. THIS COMPLEX RELATES TO DEEPAK BUDHARM AL VASVANI ACCORDING TO THE PANCHNAMA 45 PAGES WERE FOUND AND SEIZED BUT NO ADDITIONS ON THE BASIS OF THESE PAGES HAVE BEEN MADE. THE CONTEN TION OF THE LEARNED COUNSEL FOR THE ASSESSEE WAS THAT WHEN THOUSANDS OF PAGES W ERE SEIZED AT THE TIME OF SEARCH WHAT PROHIBITED THE REVENUE TO TAKE POSSESSI ON OF 45 PAGES. IT IS A LOOSE FILE AND THESE DOCUMENTS WERE NOT OF ANY USE FOR TH E DEPARTMENT. SIMILARLY, THE SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 56 3 RD PROHIBITORY ORDER WAS PUT AT 801-802 BROADWAY BUSI NESS CENTRE, THIS IS ALSO CONNECTED WITH VIDPL. PROHIBITORY ORDER WAS REVOKED ON 6 TH MAY, 2015 AND TWO ANNEXURES CONTAINING 69 PAGES AND 163 PAGES WER E RECOVERED FROM THIS PLACE BUT NONE OF THE PAGE WAS USED FOR ASSESSING O R RE-ASSESSING THE INCOME OF THE ASSESSEE. THESE WERE NOT INCRIMINATING PAPERS. ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE, THIS ASPECT WOULD SHOW TH AT THESE PROHIBITORY ORDERS WERE PUT ONLY IN ORDER TO EXPLORE THE POSSIBILITY O F LONGER PERIOD OF LIMITATION FOR PASSING THE ASSESSMENT ORDER. FOR BUTTRESSING HIS CONTENTIONS, HE RELIED UPON THE FOLLOWING JUDGMENTS AND ALSO PLACED ON RECORDS OF C OPIES OF THE JUDGMENTS: 1. PCIT VS. PPC BUSINESS & PRODUCTS (P.) LTD. - (2017 ) 398 TTR 71 (DELHI) 2. CIT VS. S. K. KATYAL - (2009) 308 ITR 168 (DELHI) 3. CIT VS. SARB CONSULATE MARINE PRODUCTS (P.) LTD. - (2007) 294 ITR 444 (DELHI) 4. CIT VS. DEEPAK AGGARWAL - 308 ITR 116 (DEL) 5. CIT VS. D. D. AXLES (P.) LTD. - 323 ITR 558 (DEL) 6. A. RAKESK KUMAR JAIN VS. JCIT - (20 13) 31 TAXMANN.COM 312 (MADRAS) 7. ACIT VS. SHREE RAM LIME PRODUCTS LTD. - 137 ITD 220 (JODHPUR) (SB) 8. BHARAT SEKHSARIA VS. DCIT - (2015) 60 TAXMANN.COM 476 (MUMBAI - TRIB.) 9. DCIT VS. SUSHIL KUMAR JAIN - 127 ITD 264 (INDORE) 10. NANDLAL M. GANDHI VS. ACIT - 1 15 ITD 1 (MUMBAI) 11. PLASTIKA ENTERPRISES VS. ACIT - (2007) 161 TAXMAN 163 (MUMBAI) (MAG.) 12. SMT. NEENAWADLRWA VS. DCIT - (2003) 128 TAXMAN 14 9 (DELHI) (MAG.) 13. CIT VS. OM PRAKASHMANDORA - (2013) 37 TAXMANN.COM 426 (RAJASTHAN) 14. WOODWORD GOVERNORS INDIA VS. CIT - 253 ITR 745 ( DEL.) 49. ON THE OTHER HAND, LEARNED CITDR RELIED UPON TH E FINDINGS OF REVENUE AUTHORITIES. HE CONTENDED THAT LAST PANCHNAMA WAS DRAWN IN THE MONTH OF MAY WHEN PROHIBITORY ORDERS WERE LIFTED. THEREFORE LIM ITATION IS TO BE COUNTED FROM THE END OF THE F.Y. 2015-16 I.E. 31 ST MARCH, 2016, IF TWO YEARS ARE BEING TAKEN SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 57 FROM THIS DATE, THEN, ASSESSMENT COULD BE PASSED UP TO 31 ST MARCH, 2018. THESE WERE PASSED IN THE MONTH OF DECEMBER 2017. THEREFOR E, THEY ARE WITHIN THE LIMITATION. HE FURTHER CONTENDED THAT A SIMILAR SI TUATION WAS CONSIDERED BY THE HONBLE SUPREME COURT IN THE CASE OF VLS FINANCE LTD. VS. CIT REPORTED IN 384 ITR 1. HE PLACED ON RECORD THE COPY OF THE JUDGMENT TAKEN FROM TAXMAN AND THE CITATION IS (2016) 68 TAXMANN.COM 368. HE SUBM ITTED THAT IN THIS JUDGMENT HONBLE SUPREME COURT CONSIDERED EXPLANATION (2) TO SECTION 158BE WHICH IS SIMILAR TO SUB SECTION (2) TO SECTION 153B. HE THE REAFTER PUT RELIANCE UPON THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF PCCIT VS. PPC BUSINESS. THIS JUDGMENT HAS BEEN REFERRED BY THE ASSESSEE ALSO . THE LEARNED CITDR FURTHER RELIED UPON THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. SMT. P. SHANTI REPORTED IN33 TAXMANN.COM 674 . HE ALSO RELIED UPON THE JUDGMENT IN THE CASE OF DCIT VS. RAKESHSARIN REPORTE D IN 362 ITR 619 (MAD.). 50. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS A ND GONE THROUGH THE RECORD CAREFULLY. SECTION 153B HAS A DIRECT BEARIN G ON THE CONTROVERSY. THEREFORE, WE TAKE NOTE OF THE RELEVANT PART OF THIS SECTION. 153B. (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 1 53, THE ASSESSING OFFICER SHALL MAKE AN ORDER OF ASSESSMENT OR REASSESSMENT, (A) IN RESPECT OF EACH ASSESSMENT YEAR FALLING WIT HIN SIX ASSESSMENT YEARS REFERRED TO IN CLAUSE (B) OF 81 [SUB-SECTION (1) OF] SECTION 153A, WITHIN A PERIOD OF TWO YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE LAST OF THE AUTHORISATIONS FOR SE ARCH UNDER SECTION 132 OR FOR REQUISITION UNDER SECTION 132A WAS EXECUTED; (B) IN RESPECT OF THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED UNDER SECTION 132 OR REQUISITION IS MADE UNDER SECT ION 132A, WITHIN A PERIOD OF TWO YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE LAST OF THE AUTHORISATIONS FOR SEARCH UNDER SECTION 132 OR FOR REQUISITION UNDER SECTION 132A WAS EXECU TED : (2) THE AUTHORISATION REFERRED TO IN CLAUSE (A) AND CLAUSE (B) OF SUB-SECTION (1) SHALL BE DEEMED TO H AVE BEEN EXECUTED, (A) IN THE CASE OF SEARCH, ON THE CONCLUSION OF SE ARCH AS RECORDED IN THE LAST PANCHNAMA DRAWN IN RELATION TO ANY PERSON IN WHOSE CASE THE WARRANT OF AUTHORISATION HAS BEEN ISSUED; (B) IN THE CASE OF REQUISITION UNDER SECTION 132A , ON THE ACTUAL RECEIPT OF THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ASSETS BY THE AUTHORISED OFFICER. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 58 51. A BARE PERUSAL OF SECTION WOULD REVEAL THAT IT START WITH A NON OBSENATE CLAUSE NOTWITHSTANDING ANYTHING CONTAINED IN SE CTION 153 AN ASSESSMENT ORDER HAS TO BE PASSED WITHIN TWO YEARS FROM THE END OF THE FY IN WHICH THE LAST OF THE AUTHORIZATION FOR AND EACH UN DER S.132 OF THE ACT WAS EXECUTED OR REQUISITION UNDER S.132A IS EXECUTED. THE EXPRESSION LAST OF THE AUTHORIZATION HAS BEEN EXPLAINED IN SUB SECTION ( 2). THE EXPLANATION OF EXPRESSION LAST OF THE AUTHORIZATION PROVIDED IN SU B SECTION (2) IS IDENTICAL IN EXPLANATION (2) OF SECTION 158BE WHICH READ AS UNDER: 'EXPLANATION 2.-FOR THE REMOVAL OF DOUBTS, IT IS HE REBY DECLARED THAT THE AUTHORISATION REFERRED TO IN SUB-SECTION (1) SHALL BE DEEMED TO HAVE BEEN EXECUT ED,- (A) IN THE CASE OF SEARCH, ON THE CONCLUSION OF S EARCH AS RECORDED IN THE LAST PANCHNAMA DRAWN IN RELATION TO ANY PERSON IN WHOSE CASE THE WARRANT OF AUTHORISATION HAS BEEN ISSUED ; (B) IN THE CASE OF REQUISITION UNDER SECTION 132A , ON THE ACTUAL RECEIPT OF THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ASSETS BY THE AUTHORISED OFFICER .' 52. IN THE LARGE NUMBER OF JUDGMENTS CITED BEFORE U S BY THE PARTIES, THIS PROVISIONS UNDER S.158BE EXPLANATION (2) HAS BEEN EX PLAINED ELABORATELY AND THE FIRST JUDGMENT WE WOULD LIKE TO PUT IN SERVICE IS THE JUDGMENT OF THE HONBLE KARNATAKA HIGH COURT. THE RELEVANT DISCUSSION IN TH AT JUDGMENT IS CONTAINED IN PARA 73 TO 75 WHICH READS AS UNDER: 73. THE SECOND PROVISO TO SECTION 132(1) DEALS WIT H THE 'DEEMED SEIZURE'. WHEN IN THE COURSE OF SEARCH, IT IS NOT POSSIBLE TO SEIZE FOR THE REAS ONS SET OUT IN THE AFORESAID PROVISIONS. IT IS POS SIBLE UNDER FOUR CIRCUMSTANCES: (A) WHERE IT IS NOT POSSIBLE OR PRACTICABLE TO TAK E PHYSICAL POSSESSION OF ANY VALUABLE ARTICLE OR THING ; (B) REMOVE IT TO A SAFE PLACE DUE TO ITS VOLUME, W EIGHT; (C) OTHER PHYSICAL CHARACTERISTICS ; AND (D) DUE TO BEING ITS DANGERS NATURE. 74. THEREFORE, THE LAW RECOGNIZES SUCH A SITUATION AND HAS PROVIDED A REMEDY TO TACKLE SUCH PROBLEMS. THEAUTHORISED OFFICER HAS BEEN GIVEN A D ISCRETION FOR THE REASONS TO BE RECORDED IN WRITING TO PASS A RESTRAINT ORDER IN RESPECT OF THE ARTICLES, BOOKS AND OTHER MATERIAL WHICH HE COULD NOT TAKE PHYSICAL POSSESSION OF, I.E., BY MAKING AN INVENTORY AND LEAVING IT TO THE CUSTODY OF THE ASSESSEE AND DIRECTING HIM NOT TO PART WITH THE SAM E WITHOUT HIS PERMISSION. 75. SIMILARLY, IN CIRCUMSTANCES NOT COVERED UNDER T HOSE PROVISIONS, IT IS OPEN FOR HIM TO PASS A PROHIBITORY ORDER UNDER SUB-SECTION (3) NOT AMOUNTI NG TO SEIZURE WHICH ORDER WILL BE IN FORCE FOR A PERIOD OF 60 DAYS AFTER SECURING THE POSSESSION OF THE MATERIALS, ARTICLES, ETC., IN THE AFORESAID MANNER. ACTION UNDER SECTION 132(3) OF THE INCOME- TAX ACT CAN BE RESORTED TO ONLY IF THERE IS ANY PRACTICAL DIFFICULTY IN SEIZING THE ITEM WHICH IS L IABLE TO BE SEIZED. WHEN THERE IS NO SUCH PRACTICAL DIFFICULTY THE OFFICER IS LEFT WITH NO OTHER ALTERN ATIVE BUT TO SEIZE THE ITEM, IF HE IS OF THE VIEW T HAT IT REPRESENTED UNDISCLOSED INCOME. POWER UNDER SECTION 132(1)(III) OF THE INCOME-TAX ACT THUS CANNOT BE EXERCISED, SO AS TO CIRCUMVENT THE PROVISIONS 3 SECTION 132(1)(III) READ WITH SECTION 132(1)(V) OF THE INCOME-TAX ACT. IT IS OPEN FOR THE AUTHORISED O FFICER TO VISIT THE PLACE FOR THE PURPOSE OF SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 59 INVESTIGATION SECURING FURTHER PARTICULARS. UNDER T HE SCHEME, THE LAW PROVIDES FOR SUCH PROCEDURE. BUT NOT WHEN HE VISITS THE PREMISES FOR FURTHER INV ESTIGATION FOR THE MATERIALS ALREADY SECURED. IT DOES NOT AMOUNT TO SEARCH AS THE MATERIALS TO BE LO OKED INTO AND INVESTIGATED IS ALREADY KNOWN AND IS THE SUBJECT-MATTER OF A PROHIBITORY ORDER OR A R ESTRAINT ORDER. THOUGH IT ISJ NOT SEIZURE OR DEEMED SEIZURE, IT AMOUNTS TO DEEMED POSSESSION. WHAT IS I N YOUR POSSESSION IS TO BE LOOKED INTO TO FIND OUT, IS THERE ANY INCRIMINATING MATERIAL. IT DOES NOT AM OUNT TO SEARCH AS UNDERSTOOD UNDER SECTION 132 OF THE ACT. IT IS ONLY BECAUSE OF PAUCITY OF TIME H E HAS GONE BACK AND WANTS TO COME BACK AND LOOK INTO THE MATTER LEISURELY. THERE IS NO PROVISION IN THE CRIMINAL PROCEDURE CODE OR IN THE INCOME-TAX ACT OR THE RULES FOR POSTPONING THE SEARCH FOR A LO NG PERIOD. THEN, THE CONCEPT OF SEARCH AS UNDERSTOOD EITHER UNDER THE PROVISIONS OF THE CRIMI NAL PROCEDURE CODE OR THE ACT WHICH ARE MADE APPLICABLE EXPRESSLY, WOULD LOSE ITS MEANING. IF SU CH A COURSE IS ATTRACTED, IT IS OPEN TO AN AUTHORISED OFFICER TO KEEP THE AUTHORISATION IN HIS POCKET LIKE A SEASON TICKET AND GO ON VISITING THE PREMISES ACCORDING TO HIS WHIMS AND FANCIES. IT SER IOUSLY AFFECTS THE VALUABLE RIGHT OF THE ASSESSEE CONFERRED UNDER THE CONSTITUTION. TO KEEP THE AFFEC TED PARTIES IN A SUSPENDED ANIMATION ABOUT THE PROBABLE CONTINUATION OF SEARCH WOULD BE AGONISING. IT IS INVADING THE RIGHT AND FREEDOM OF THE PETITIONERS FOR A PERIOD MORE THAN REQUIRED OR NECE SSARY. THE ORDERS WHICH ARE PASSED UNDER SECTION 132(3) MAY HAVE A VERY FAR-REACHING EFFECT ON THE BUSINESS OF AN ASSESSEE. THE ORDER OF RESTRAINT MAY ADVERSELY AFFECT THE BUSINESS AND, TH EREFORE, ADEQUATE SAFEGUARDS ARE SOUGHT TO BE PROVIDED IN THE ACT BY THE INSERTION OF THE PROVISI ONS OF SUB-SECTION (8A) IN SECTION 132. IN ORDER THAT THE RESTRAINT ORDER MUST NOT BE CONTINUED INDE FINITELY, SUB-SECTION (8A) OF SECTION 132 PROVIDES THAT THE RESTRAINT ORDER CAN BE CONTINUED ONLY IF, BEFORE THE EXPIRY OF 60 DAYS, AND FOR REASONS TO BE RECORDED, THE COMMISSIONER GRANTS AN EXTENSION. THE PROVISIONS OF SUB-SECTION (8A) CANNOT BE BYPASSED OR RENDERED NUGATORY BY REVOKING AN ORDER UNDER SECTION 132(3) AND, THEREAFTER, PASS ANOTHER ORDER ON THE SAME DATE. IN THE NATURE OF T HINGS, THE SEARCH IS TO BE DONE EXPEDITIOUSLY AND THE UNDISCLOSED INCOME IS TO BE UNEARTHED AND PROCE EDING HAS TO BE INITIATED AGAINST SUCH PERSON AND THE TAX LEGITIMATELY DUE TO THE GOVERNMENT IS T O BE RECOVERED. THERE CANNOT BE ANY LAXITY ON THE PART OF THE AUTHORISED OFFICER IN THIS REGARD. ANY OTHER INTERPRETATION WOULD RUN COUNTER TO THE SCHEME OF SEARCH PROVISION UNDER THE ACT. THEREFORE , BY PASSING A RESTRAINT ORDER, THE TIME LIMIT AVAILABLE FOR FRAMING OF THE ORDER CANNOT BE INTEND ED. ONCE AN ORDER UNDER SECTION 132(3) HAS BEEN PASSED, THEN THE LIMITATION PERIOD COMMENCES AND SU CH ORDER CANNOT BE CONTINUED UNLESS AND UNTIL THE PROVISIONS OF SECTION 132(8A) ARE SATISFIED. 53. THOUGH HONBLE COURT HAS EXPLAINED THE SCOPE OF EXPRESSION EXECUTION OF LAST OF AUTHORIZATION BUT WE ARE OF THE VIEW TH AT HONBLE COURT THEREAFTER TOOK COGNIZANCE OF EXPLANATION (2) INSERTED BY FINA NCE ACT, 1997 AND WE DEEM IT APPROPRIATE TO TAKE NOTE OF THE DISCUSSION MADE BY THE HONBLE COURT FROM PARAGRAPH NOS. 78 TO 82 WHICH READS AS UNDER: 78. THE LAW EXPRESSLY PROVIDES FOR MORE THAN ONE A UTHORISATION. A SEARCH AUTHORISATION COULD SPECIFY ONLY ONE BUILDING/PLACE/VESSEL/VEHICLE/AIRC RAFT. THIS IS CLEAR FROM THE USE OF THE BUILDING, ETC., IN THE SINGULAR SENSE. SECTION 132(1) USES BU ILDING/PLACE/VESSEL/VEHICLE/AIRCRAFT IN SINGULAR SENSE. FURTHER, CLAUSE (A) IN FORM 45 USES THE WORD , 'TO ENTER AND SEARCH, THE SAID BUILDING/PLACE/VESSEL/VEHICLE/AIRCRAFT. WHEN THERE ARE MULTIPLE PLACES TO SEARCH AND SUCH PLACES ARE FAR OFF, IT IS IMPRACTICAL TO HAVE A SINGLE AUTHORI SATION. DIFFERENT PERSONS WILL BE CARRYING OUT SEAR CH AND EACH ONE OF THEM IS REQUIRED TO BE AUTHORISED T HROUGH THE SEARCH AUTHORISATION. IN OTHER WORDS, SEARCH AUTHORISATION SHOULD AUTHORISE A PARTICULAR OFFICIAL FOR EXECUTING THE SEARCH. THEREFORE, WHEN THERE ARE DIFFERENT PLACES TO BE SEARCHED, , S EPARATE SEARCH AUTHORISATION SHOULD BE DRAWN WITH REFERENCE TO EACH PLACE OF SEARCH. THE SAID AU THORISATIONS MAY BE ISSUED ON DIFFERENT DATES IN WHICH CASE, THE LAST OF SUCH AUTHORISATIONS IS TO B E LOOKED INTO FOR THE PURPOSE OF LIMITATION. HOWEVER, IT IS POSSIBLE THAT THERE MAY BE MORE THAN ONE AUTHORISATION ON THE SAME DAY. THEN THE QUESTION IS WHICH IS THE LAST OF SUCH AUTHORISATION S FOR THE PURPOSE OF LIMITATION. WHEN ALL THE AUTHORISATIONS ARE EXECUTED THERE WILL BE ONE PANCH NAMA IN RESPECT OF EACH SUCH AUTHORISATION. THE AUTHORISATIONS MAY BE EXECUTED ON DIFFERENT DATES A LSO. THEN THE DOUBT WOULD ARISE REGARDING WHICH AUTHORISATION TO BE LOOKED INTO FOR THE PURPOSE OF LIMITATION AS ALL OF THEM ARE LAST AUTHORISATION. I T SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 60 IS FOR REMOVAL OF THAT DOUBTS THAT THE EXPLANATION IS INSERTED. FOR THE PURPOSE OF COMPUTING THE LIMITATION, IT IS THE ONE YEAR FROM THE END OF THE MONTH IN WHICH THE LAST OF THE AUTHORISATIONS WAS EXECUTED. IF THERE ARE MORE THAN ONE AUTHORISATION ISSUED ON THE SAME DAY, THEN THE LAST PANCHNAMA DRAWN IN RELATION TO THEWARRANT OF AUTHORISATION IS SUED ON THE SAME DAY. AS THE PERIOD COMMENCES FROM THE END OF THE MONTH OF THE EXECUTION OF THE A UTHORISATION, THE LAW HAS PROVIDED FOR THE AUTHORISED OFFICER TO VISIT THE PURPOSE OF INSPECTI ON REGARDING THE MATERIAL WHICH IS THE SUBJECT- MATTER OF PROHIBITORY ORDER OR THE RESTRAINT ORDER, EVEN AFTER SEARCH. HOWEVER, THE SAID EXERCISE HAS TO BE DONE EXPEDITIOUSLY, AS THE PERIOD OF LIMITATI ON STARTS FROM THE DATE OF SEARCH WAS CONCLUDED AS EVIDENCED BY THE PANCHNAMA, AS OTHERWISE THE VERY O BJECT WITH WHICH THESE PROVISIONS WAS INTRODUCED WOULD BE DEFEATED. 79. CIRCULAR NO. 772, DATED 23RD DECEMBER, 1998, IS SUED BY CENTRAL BOARD OF DIRECT TAXES EXPLAINS THIS POSITION AS UNDER ([1999] 235 ITR (ST .) 35) : 'ACCORDING TO SECTION 158BE, LIMITATION OF 2 YEARS HAS TO BE COUNTED FROM THE END OF THE MONTH IN WHICH LAST OF THE AUTHORISATIONS WAS EXECU TED. USE OF THE WORD 'AUTHORISATIONS' IMPLIES ISSUE OF MORE THAN ONE AUTHORISATION. SUPPO SINGLY TWO AUTHORISATIONS ARE ISSUED ONE AFTER THE OTHER AND THE LAST AUTHORISATION IS E XECUTED FIRST WHILE THE AUTHORISATION ISSUED EARLIER IS EXECUTED LATER ON. IN SUCH CASE, LIMITATION SHOULD BE COUNTED FROM THE DATE OF ISSUE OF THE EXECUTION OF THE LAST AUTHORISATION , THOUGH IT IS EXECUTED EARLIER AND NOT FROM THE EXECUTION OF THE EARLIER AUTHORISATION WHICH IS EXECUTED LATER. THIS ANOMALOUS SITUATION IS INTENDED TO BE REMOVED BY INSERTION OF EXPLANATI ON 2 BELOW SECTION 158BE WITH EFFECT FROM JULY I, 1995, BY THE FINANCE (NO. 2) ACT, 1998 . THIS EXPLANATION READS AS FOLLOWS 'EXPLANATION 2.-FOR THE REMOVAL OF DOUBTS, IT IS HE REBY DECLARED THAT THE AUTHORISATION REFERRED TO IN SUB-SECTION (1) SHALL BE DEEMED TO H AVE BEEN EXECUTED,- (A) IN THE CASE OF SEARCH, ON THE CONCLUSION OF S EARCH AS RECORDED IN THE LAST PANCHNAMA DRAWN IN RELATION TO ANY PERSON IN WHOSE CASE THE WARRANT OF AUTHORISATION HAS BEEN ISSUED ; (B) IN THE CASE OF REQUISITION UNDER SECTION 132A, ON THE ACTUAL RECEIPT OF THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ASSETS BY THE AUTHORI SED OFFICER.' ACCORDING TO THIS EXPLANATION, LIMITATION IS TO BE COUNTED WITH REFERENCE TO THE LAST PANCHNAMA DRAWN ON EXECUTION OF A WARRANT OF AUTHOR ISATION AS REFERRED TO IN SECTION 158BE. THE MAIN ATTRIBUTE OF THE PANCHNAMA IS STATE D TO BE THAT IT SHOULD RECORD THE CONCLUSION OF SEARCH.' 80. THE LAW DOES NOT CONTEMPLATE THE AUTHORISED OFF ICER TO SET OUT IN ANY OF THE PANCHNAMA THAT HE HAS FINALLY CONCLUDED THE SEARCH. IF FOR ANY REA SON THE AUTHORISED OFFICER WANTS TO SEARCH THE PREMISES AGAIN, IT COOULD BE DONE BY OBTAINING A FR ESH AUTHORISATION. THERE IS NO PROHIBITION IN RESPECT OF THE SAME PREMISES. IT IS OPEN TO THE EM POWERED AUTHORITY TO ISSUE AUTHORISATION BUT WHEN THE AUTHORISATION IS ISSUED ONCE, THE AUTHORISED OF FICER CANNOT GO ON VISITING THE PREMISES UNDER THE GUISE OF SEARCH. THEREFORE, IT IS CLEAR ONCE .N PUR SUANCE OF AN AUTHORISATION ISSUED THE SEARCH COMMENCES, IT COMES TO AN END WITH THE; DRAWING OF A RANCHNAMA. WHEN THE AUTHORISED OFFICER ENTERS THE PREMISES, NORMALLY, THE PANCHNAMA IS WRI TTEN WHEN HE COMES OUT OF THE PREMISES AFTER COMPLETING THE JOB ENTRUSTED TO HIM. EVEN IF AFTER SUCH SCARE HE VISITS THE PREMISES AGAIN, FOR INVESTIGATION OR INSPECTION OF THE SUBJECT-MATTER O F RESTRAINT ORDER OR PROIIBITORY ORDER, IFA PANCHNAMA IS WRITTEN, THAT WOULD NOT BE THE PANCHNA MA WHICH HAS TO BE LOOKED INTO FOR THE PURPOSE OF COMPUTING THE PERIOD OF LIMITATION. BUT, SUCH A PANCHNAMA WOULD ONLY RECORD WHAT TRANSPIRES ON A RE-VISIT TO THE PREMISES AND THE INCRIMINATING MA TERIAL SEIZED WOULD BECOME PART OF THE SEARCH CONDUCTED IN PURSUANCE OF THE AUTHORISATION AND WOU LD BECOME THE SUBJECT-MATTER OF BLOCK ASSESSMENT PROCEEDINGS. BUT, SUCH A PANCHNAMA WOULD NOT EXTEND THE PERIOD OF LIMITATION. IT IS BECAUSE THE LIMITATION IS PRESCRIBED UNDER THE STAT UTE. IF PROCEEDINGS ARE NOT INITIATED WITHIN THE TIME PRESCRIBED, THE REMEDY IS LOST. THE ASSESSEE W OULD ACQUIRE A VALUABLE RIGHT. SUCH A RIGHT CANNOT BE AT THE MERCY OF THE OFFICIALS, WHO DO NOT DISCHARGE THEIR DUTIES IN ACCORDANCE WITH LAW. THE PROCEDURE PRESCRIBED UNDER SECTION 132 OF THE A CT IS ELABORATE AND EXHAUSTIVE. THE SAID SUBSTANTIVE PROVISION EXPRESSLY PROVIDES FOR SEARCH AND SEIZURE. IN THE ENTIRE PROVISION THERE IS NO INDICATION OF THAT SEARCH ONCE COMMENCED CAN BE POS TPONED. WHAT CAN BE POSTPONED IS ONLY SEIZURE OF THE ARTICLES. THEREFORE, ONCE SEARCH COMMENCES I T HAS TO COME TO AN END WITH THE SEARCH PARTY LEAVING THE PREMISES WHETHER ANY SEIZURE IS MADE OR NOT. THE LIMITATION FOR COMPLETION OF BLOCK ASSESSMENT IS EXPRESSLY PROVIDED UNDER SECTION 158B E WHICH CLEARLY DECLARES THAT IT IS THE EXECUTION OF THE LAST OF AUTHORISATION WHICH IS TO BE TAKEN I NTO CONSIDERATION. THE WORD 'SEIZURE' IS SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 61 CONSPICUOUSLY MISSING IN THE SAID SECTION. THE SAME CANNOT BE READ INTO THE SECTION FOR THE PURPOSE OF LIMITATION. THEN IT AMOUNTS TO REWRITING THE SEC TION BY THE COURT, WHICH IS IMPERMISSIBLE IN LAW. 81. THE AFORESAID CIRCULAR NO. 772, DATED DECEMBER 23, 1998 (SEE [1999] 235 ITR (ST.) 35) REFERS TO THIS DILEMMA FACED BY THE DEPARTMENT. '127. EXECUTION OF LAST OF THE AUTHORISATION OR REQ UISITION THE WORD 'EXECUTE' IS DEFINED IN BLACK'S LAW DICTIO NARY, FIFTH EDITION, PAGE 509 AS FOLLOWS: 'TO COMPLETE ; TO MAKE ; TO SIGN ; TO PERFORM ; TO DO ; TO CARRY OUT ACCORDING TO ITS TERMS ; TO FOLLOW UP ;TO FULFIL THE COMMAND OR PURPOSE OF ; TO PERFORM ALL NECESSARY FORMALITIES ; TO MAKE AND SIGN A CONTRACT; TO SIGN AND DELIVER A NOT ES.' THE WORD 'EXECUTION' IS DEFINED AT PAGE 510 OF THE SAID LAW DICTIONARY AS FOLLOWS : CARRY OUT SOME ACT OR COURSE OF CONDUCT TO ITS COMP LETION. NORTHWEST STEEL ROLLING MILLS V. COMMISSIONER OF INTERNAL REVENUE, C.C.A. WASH., 110 F.2D 286, 290 : COMPLETION OF AN ACT : PUTTING INTO FORCE : COMPLETION FULFILMENT : PERFECTING OF ANYTHING OR CARRYING IT INTO OPERATION AND EFFECT 'EXECUTION' A PROCESS IN ACTIO N TO CARRY INTO EFFECT THE DIRECTIONS IN A DECREE OR JUDGMENT FOUST V. FOUST, 47 CAL. 2D 121, 302 P.2D 11, 13.' IN THE LIGHT OF THE ABOVE DEFINITION OF THE WORDS ' EXECUTE' AND 'EXECUTION', ONE MAY ARGUE THAT UNTIL AND UNLESS THE FINAL ACT IS PERFORMED, T HE WARRANT OF AUTHORISATION SHOULD NOT BE TREATED ASEXECUTED AND IT ORDER OR FOR ANY OTHER RE ASON MAY NOT BE TREATED AS 'EXECUTION' OF THE WARRANT. BUT THIS INTERPRETATION WOULD BEHYPERT ECHNICAL AND IT NEEDS DETAILED DISCUSSION AS IS DONE IN THE FOLLOWING PARAS. THE QUESTION ARISES AS TO WHETHER EXECUTION OF A WA RRANT OF AUTHORISATION OR REQUISITION REFERS TO THE CONCLUSION OF THE PROCEEDINGS UNDER S ECTION 132 AND/OR 132A OR IT REFERS ONLY TO THE EXECUTION OF THEWARRANT EVEN THOUGH AS A RES ULT OF SUCH EXECUTION THE PROCEEDINGS UNDER SECTION 132 OR 132A ARE YET TO HE COMPLETED. THE LATTER SITUATION WILL INCLUDE A CASE IN WHICH A RESTRAINT ORDER132(3) IS PASSED. IN SUCH A CASE, IT CAN BE SAID THAT THOUGH THE WARRANT OF AUTHORISATION HAS BEEN EXECUTED, PROCEED INGS UNDER SECTION 132(3) ARE PENDING. SINCE THE WORD 'EXECUTE', ALSO MEANS 'TO C OMPLETE, ONE HAS TO WAIT FOR CONCLUSION OF THE PROCEEDINGS UNDER SECTION 132(3) FOR THE PUR POSE OFCOMPUTATION OF LIMITATION UNDER SECTION 158BE(1) AND THE PERIOD OF ONE YEAR HAS TO BE COMPUTED FROM THE END OF THE MONTH IN WHICH THE PROCEEDING UNDER SECTION 132(3) ARE CO NCLUDE. IF THERE ARE MORE THAN ONE WARRANT LIMITATION WILL BE COUNTED FROM THE EXECUTI ON OF THE LAST ONE. A CONTRARY VIEW IS AS MUCH POSSIBLE IF ONE WERE TO CONSIDER THE SPIRIT OF THE SCHEME WHICH ENVISAGESEXPEDITIOUS DISPOSAL OF THE SEARCH CASES A ND IT WOULD BE REASONABLE TO INTERPRET THAT EXECUTION OF WARRANT IS NOT TANTAMOUNT TO COMP LETION OF PROCEEDINGS UNDER SECTION 132 OR 132A THE PERIOD DURING WHICH THE PROCEEDINGS UNDER SECTION 132(3) REMAINED PENDING HAS TO BE EXCLUDED FOR THE PURPOSE OFCOUNTI NG LIMITATION OF ONE OR TWO YEARS UNDER SECTION 158BE. OTHERWISE, IT MAY LEAD TO ABSURD RES ULTS AS IT MAY TAKE SEVERAL YEARS BEFORE RESTRAINT UNDER SECTION 132(3) IS LIFTED AND IT MAY THUS EXTEND THE PERIOD OF ONE OR TWO YEARS BY ALL THOSE YEARS DURING WHICH PROCEEDINGS U NDER SECTION 132(3) REMAINED PENDING IT MAY BE AGREED AGAINST THIS VIEW THAT SECTION 132 (8A) TAKES CARE THAT THERE IS NO EXTENSION OF PROCEEDINGS UNDER SECTION 132(3) AND T HAT THE VIEW CANNOT BE TAKEN WITHOUT DOING VIOLENCE TO THE LANGUAGE OF THE ACT.' 82. THEREFORE, THE EXPLANATION ADDED TO REMOVE A DO UBT CANNOT BE CONSTRUED AS A PROVISION PROVIDING A LONGER PERIOD OF LIMITATION THAN THE ON E PRESCRIBED IN THE MAIN SECTION. WHEN UNDER THE SCHEME OF THE SECTION THERE IS NO INDICATION OF A S ECOND SEARCH ON THE BASIS OF THE SAME AUTHORISATION ISSUED UNDER THE SAID PROVISION, THE LEGISLATIVE INTENTION IS CLEAR AND PLAIN AND THE INTERPRETATION TO BE PLACED BY THE COURTS SHOULD BE IN HARMONY WITH SUCH AN INTENTION. THEREFORE, ONE AUTHORISATION IS TO BE ISSUED IN RESPECT OF ONE PREMISES IN PURSUANCE OF WHICH THERE CAN BE ONLY ONE SEARCH AND SUCH A SEARCH IS CONCLUDED, WHEN THE SEARCHING PARTY COMES OUT OF THE PREMISES, WHICH IS EVIDENCED BY DRAWING UP A PANCHNAMA. WHEN THERE ARE MULTIPLE PLACES TO SEARCH AND WHEN MULTIPLE AUTHORISATIONS ARE ISSUED, ON DIFFERENT DA TES OR ON THE SAME DATE OR IN RESPECT OF THE SAME PREMISES MORE THAN ONE AUTHORISATION IS ISSUED ON D IFFERENT DATES, THE LAST PANCHNAMA DRAWN IN PROOF OF CONCLUSION OF SEARCH IN RESPECT OF THE AUT HORISATION IS TO BE TAKEN INTO CONSIDERATION FOR TH E PURPOSE OF LIMITATION FOR BLOCK ASSESSMENT. CONCLUSIONS SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 62 (1) THE TRIBUNAL HAS GOT POWERS TO LOOK INTO ALL A SPECTS OF SEARCH AND A VALID SEARCH IS SINE QUA NON FOR INITIATING BLOCK ASSESSMENT. (2) MATERIALS SEIZED DURING AN INVALID SEARCH CANN OT BE USED IN BLOCK ASSESSMENT PROCEEDING BUT CAN BE USED IN OTHER ASSESSMENT PROC EEDINGS UNDER THE ACT. (3) THE POWER TO PUT PROHIBITORY ORDER UNDER SECTIO N 132(3) IS UNDER LAW BUT THE REASONS FOR DOING SO HAS TO BE RECORDED IN WRITING AND ARE JUSTICIABLE. (4) THE PERIOD OF LIMITATION STARTS ON THE DATE ON WHICH THE LAST OF AUTHORISATION HAS BEEN EXECUTED AND NOT WHEN THE AUTHORISED OFFICER S TATES THAT THE SEARCH IS FINALLY CONCLUDED. PUTTING A PROHIBITORY ORDER UNDER SECTIO N 132(3) DOES NOT ELONGATE THE STARTING POINT OF LIMITATION. 54. THE REVENUE CHALLENGED THIS ORDER BEFORE THE HON BLE SUPREME COURT SLP WAS ADMITTED BUT ULTIMATELY CIVIL APPEAL WAS DIS MISSED. THE NEXT JUDGMENT WHICH HAS BEEN PUT IN SERVICE BY BOTH THE PARTIES IS THE JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF PCIT VS. PPC BUSINESS & PRODUCTS PVT. LTD. IN THIS CASE, TWO PLACES WERE SEARCHED ONE AUT HORIZATION WAS FOR THE SEARCH TO BE UNDERTAKEN PITHAMPURA, DELHI AND OTHER PREMIS E ASHOK VIHAR, DELHI. IN THE AUTHORIZATION BOTH THE PREMISES WERE SHOWN TO B E IN POSSESSION OF THE ASSESSEE AND HIS BROTHER BOTH BEING THE DIRECTORS O F THE ENTITY INCLUDING JHM. IN RESPECT OF THE AUTHORIZATION OF THE SEARCH OF ASHOK VIHAR PREMISE OF FIRST PANCHNAMA DATED 22 ND MARCH, 2007 AND THE WARRANT WAS IN THE CASE OF ASSE SSEES BROTHER I.E. MR. SANJAY JAIN. THE SEARCH WAS CLOSED ON 22 ND MARCH, 2007 AS TEMPORARILY CONCLUDED. SECOND PANCHNAMA IN RELATIO N TO AUTHORIZATION OF ASHOK VIHAR PREMISES WAS PREPARED ON 15 TH MAY 2007 WHEN PROHIBITORY ORDER WAS LIFTED. ONE NEENA JAIN WAS THE PERSON WHO HAS MADE ACKNOWLEDGEMENT OF HAVING RECEIVED THE SECOND PANCHNAMA DATED 15 TH MAY, 2007 BUT ACCORDING TO THE ASSESSEE, THE JWELLERY BELONGING TO NEENA JAIN AT A SHOK VIHAR PREMISE WAS VALUED ON 21 ST MARCH, 2007 WHEN THE ALLEGED SEARCH WAS TEMPORARILY CONCLUDED. THE CASE OF THE ASSESSEE WAS THAT SEARCH WAS CONCLUD ED ON 22 ND MARCH, 2007 WHEN PANCHNAMA WAS PREPARED AND RESTRAIN ORDER WAS PASSED. THE CASE OF THE REVENUE, ON THE OTHER HAND, WAS THAT LIMITATION FOR PASSING THE ASSESSMENT ORDER IS TO BE SEEN FROM THE DATE WHEN PROHIBITORY ORDER WAS LIFTED AND SECOND PANCHNAMA WAS DRAWN. THE ITAT HAS HELD THAT ASSESSMEN T ORDERS WERE TIME BARRED. HONBLE DELHI HIGH COURT CONSIDERED THE JU DGMENT OF HONBLE SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 63 KARNATAKA HIGH COURT IN THE CASE OF C. RAMY REDDI A LSO CONSIDERED THE EXPLANATION (2A) TO SECTION 158BE AND OBSERVED THAT T HIS EXPLANATION (2A) IS PARE MATERIA WITH SUB-SECTION (2A) OF SECTION 153B. THE HONBLE COURT PUT RELIANCE UPON THE JUDGMENT OF C. RAMYA REDDI AND UP HELD THE ORDER OF THE ITAT. 55. THE MUCH RELIANCE PLACED BY THE LEARNED CITDR ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF VLS FINANCE LTD . WE DEEM IT APPROPRIATE TO TAKE NOTE OF THE FOLLOWING OBSERVATIONS OF THE H ONBLE SUPREME COURT FROM THIS JUDGMENT ON WHICH EMPHASIZES WAS PUT BY THE LE ARNED CITDR. 27. WE MAY POINT OUT THAT THE APPELLANTS NEVER CHA LLENGED SUBSEQUENT VISITS AND SEARCHES OF THEIR PREMISES BY THE RESPONDENTS ON THE GROUND THA T IN THE ABSENCE OF A FRESH AUTHORISATION THOSE SEARCHES WERE ILLEGAL, NULL AND VOID. NOTWITHSTANDI NG THE SAME, IT WAS ARGUED THAT AT LEAST FOR THE PURPOSE OF LIMITATION THE SUBSEQUENT SEARCHES COULD NOT BE TAKEN INTO CONSIDERATION, AS ACCORDING TO THE LEARNED COUNSEL, THE LEGAL POSITION WAS THAT TH E AUTHORISATION DATED 19TH JUNE, 1998, WAS EXECUTED ON 22ND JUNE, 1998 AND THE SEARCH CAME TO AN END WITH THAT WHEN THE SEARCH PARTY LEFT THE PREMISES ON 23RD JUNE, 1998 AFTER MAKING SEIZURE OF CERTAIN DOCUMENTS ETC AND ISSUING RESTRAINT ORDER UNDER SECTION 132(3) OF THE ACT IN RESPECT OF CERTAIN ITEMS WHICH THEY ALLEGEDLY COULD NOT SEIZE DUE TO IMPRACTICABILITY ON THAT DAY. SOME JUDGMENTS OF VARIOUS HIGH COURTS ARE RELIED UPON TO SUPPORT THIS PROPOSITION. IT WAS ALSO ARGUED THAT T HERE WAS NO CONCEPT OF 'REVALIDATION OF AUTHORISATION' PROVIDED UNDER THE ACT, WHICH HAS BE EN APPLIED BY THE HIGH COURT IN THE IMPUGNED JUDGMENT, WHICH ACCORDING TO THE LEARNED COUNSEL FO R THE APPELLANTS, AMOUNTS TO LEGISLATING A NEW CONCEPT WHICH IS CONTRARY TO LAW. 56. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT IN THIS CASE HONBLE SUPREME COURT HAS NOT INTERPRETED THE SCOPE OF SECT ION 153B(2) OR SCOPE OF EXPLANATION (2) TO SECTION 158BE THOUGH ATTENTION OF THE HONBLE SUPREME COURT WAS DRAWN BY THE ADDL. SOLICITOR GENERAL FROM THE EXPLANATION (2) OF SECTION 158BE BUT IN PARAGRAPH NO.29, HONBLE SUPREM E COURT HAD SPECIFICALLY OBSERVED THAT WITHOUT GOING INTO LEGAL NIECETY. TH US ACCORDING TO THE LEARNED COUNSEL FOR THE ASSESSEE, IT IS THE JUDGMENT ON THE FACTS OF THAT CASE. THIS ASPECT HAS BEEN CONSIDERED BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. S. K. KATIYAL. IN THIS CASE ALSO, AN IDENTICAL ISSUE CAME UP BEFORE THE HONBLE DELHI HIGH COURT AND HONBLE COURT HAS CONSIDERED T HE JUDGEMENT OF BOMBAY HIGH COURT IN THE CASE OF SANDHYA P. NAIK, KERALA H IGH COURT IN DR. C. BALAKRISHNAN NAIR &HONBLE KARNATAKA HIGH COURT IN , C. RAMAIAH REDDY, SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 64 WHILE DEALING WITH ITS EARLIER DECISION IN THE CASE OF VLS FINANCE. THE HONBLE COURT MADE FOLLOWING OBSERVATIONS: 30. THE DECISION IN VLS FINANCE (SUPRA) ALSO RESTS ON A FACTUAL BASIS WHICH IS DIFFERENT FROM THAT OF THE PRESENT APPEAL. FIRST OF ALL, VLS FINANCE (S UPRA) IS A DECISION RENDERED IN A WRIT PETITION UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA. IN EXERCISE OF ITS WRIT JURISDICTION A HIGH COURT DECIDES CASES ON THE BASIS OF AFFIDAVITS. IT IS OPE N TO THE HIGH COURT TO ARRIVE AT CONCLUSIONS OF FAC T (AS WELL AS OF LAW) BASED UPON THE AFFIDAVITS. THE PRESENT CASE IS AN APPEAL FROM THE ORDER OF THE TRIBUNAL, WHICH IS THE FINAL FACT FINDING AUTHORITY UNDER THE INCOME TAX REGIME. THE FACTS, AS DETERMINED BY THE TRIBUNAL, UNLESS THEY ARE HELD TO BE PERVERSE, FORM THE BASIS OF THE SUBSTANTIAL QUESTIONS OF LAW WHICH ARE TO BE DETERMINED BY HIGH COURT'S IN APPEALS UNDER SECTION 260A OF THE SAID ACT. IT OUGHT TO BE REMEMBERED THAT THE TRIBUN AL WAS OF THE VIEW THAT THE SEARCH AND SEIZURE, IN THE PRESENT CASE, WAS COMPLETED ON 17.11.2000. THE TRIBUNAL ALSO HELD THAT THE PANCHNAMA OF 03.01.2001 WAS MERELY A RELEASE ORDER. SECONDLY, IN VLS FINANCE (SUPRA), THE SEARCH AND SEIZURE OPERATIONS COMMENCED ON 22.06.1998 AND CONT INUED TILL 05.08.1998. AS MANY AS 16 PANCHNAMAS WERE DRAWN UPON IN RESPECT OF THE VISITS MADE TO THE ASSESSEE'S PREMISES. THERE WAS A MASS OF DOCUMENTS WHICH WERE SEARCHED AND SEIZED FR OM TIME TO TIME. THE COURT FOUND THAT THE SEARCH CONCLUDED ON 05.08.1998 AND NOT ON 22.06.199 8. THE COURT ALSO FOUND THAT THE SEARCH WAS ALSO NOT UNDULY PROLONGED. THE COURT HELD:- CONSEQUENTLY, WE ARE OF THE OPINION THAT THE RESPO NDENTS DID NOT COMPLETE THE SEARCH ON 22-6-1998, AS ALLEGED BY THE PETITIONERS, NOR DID T HEY UNDULY PROLONG IT. THE SEARCH CONCLUDED ON 5-8-1998, AND SO IN TERMS OF EXPLANATI ON 2 TO SECTION 158BE OF THE ACT THE PERIOD OF LIMITATION WOULD BEGIN FROM THE END OF AU GUST, 1998, THAT IS, 31-8-1998 ONWARDS (P. 297) 31. THE FACTUAL BASIS OF THE DECISION IN VLS FINANC E (SUPRA) IS ENTIRELY DIFFERENT TO THAT OF THE PRESENT CASE. ON LAW, THERE IS NOTHING IN VLS FINAN CE (SUPRA) WHICH CONTRADICTS WHAT WE HAVE EXPLAINED ABOVE. IF THE SEARCH CONCLUDED ON 5-8-199 8, AS HELD BY THE COURT, AND THE PANCHNAMA OF THAT DATE WAS THE LAST OF THE STRING OF 16 PANCHNAM AS, OBVIOUSLY THIS WOULD BE THE DATE ON WHICH THE SEARCH WAS CONCLUDED AND THE DATE ON WHICH THE WARR ANT OF AUTHORIZATION FOR SEARCH WAS EXECUTED. BUT, IN THE PRESENT APPEAL, NO SEARCH WHATSOEVER WA S CONDUCTED ON 03.01.2001. HENCE, THE PANCHNAMA DRAWN UP ON 3-1-2001 CANNOT BE REGARDED A S A DOCUMENT EVIDENCING THE CONCLUSION OF A SEARCH. IF THAT BE SO, 3-1-2001 CANNOT BE REGARDE D AS THE DATE ON WHICH THE WARRANT OF AUTHORIZATION WAS EXECUTED. MOREOVER, WHILE IN VLS FINANCE (SUPRA), THE COURT HELD THAT THE SEARCH WAS NOT UNDULY PROLONGED, IN THE PRESENT CASE THE G AP BETWEEN 17-11-2000 AND 3-1-2001 IS UNEXPLAINED. 57. IN OTHER WORDS, THE HONBLE DELHI HIGH COURT DI D NOT ACCEPT THE CONTENTION OF VLS FINANCE AND DISMISSED ITS WRIT PE TITION. THE DECISION OF HONBLE DELHI HIGH COURT WAS TAKEN UP TO THE HONLE SUPREME COURT AND HONBLE SUPREME COURT AFFIRMED THE DELHI HIGH COURT . THE HONBLE DELHI HIGH COURT WHILE DEALING WITH THIS POINT WAS OF THE VIEW THAT PROPOSITION IN VLS FINANCE BASED ON ITS FACTS IS ALTOGETHER DIFFERENT. 58. THE NEXT DECISION WHICH WAS RELIED UPON BY THE L EARNED COUNSEL FOR THE ASSESSEE IS THE THIRD MEMBER DECISION IN THE CASE O F NANDLAL M. GANDHI VS. ACIT 115 ITD 1. THE FACTS IN THIS CASE ARE THAT A SEARCH AND SEIZURE OPERATION WAS SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 65 CARRIED OUT UNDER S.132 OF THE ACT AT THE RESIDENTI AL PREMISES OF THE ASSESSEE ON 28 TH JULY, 1997 AND CONTINUED TILL 02:30 A.M. ON 29 TH JULY, 1997. DURING THE SAID SEARCH, CERTAIN INCRIMINATING MATERIALS WHICH INTER ALIA INCLUDED JWELLERY AND SHARES, WERE FOUND AND THE SEARCH PARTY PREPARED AN INVENTORY IN RESPECT OF SEARCH MATERIAL AS PER PARA 5 OF THE PANCHNAMA ONLY BOOKS OF ACCOUNTS AND DOCUMENTS AS PER ANNEXURE A WERE SEIZED AND NO SE IZURE WAS AFFECTED IN RESPECT OF OTHER MATERIALS FOUND DURING THE COURSE OF SEARCH INCLUDING JEWELLERY AND SHARES. IN PARA 8 OF THE PANCHNAMA, IT WAS STA TED THAT THE SEARCH WAS TEMPORARILY CONCLUDED FOR THE DAY TO BE COMMENDED S UBSEQUENTLY. HOWEVER, PROHIBITORY ORDER WAS ISSUED UNDER S.132(3) IN RESP ECT OF JEWELLERY AND SHARES FOUND FROM THE CUPBOARD KEPT IN THE BED ROOM OF ASS ESSEES SON SHRI BAKUL N. GANDHI. THE PROHIBITORY ORDER ISSUED UNDER S.132(3) OF THE ACT IN RESPECT OF JEWELLERY THEREFORE LIFTED ON 1 ST AUGUST, 1997 AT 04:00 P.M. WHILE PROHIBITORY ORDER IN RESPECT OF SHARE CERTIFICATES WAS LIFTED O N 08 TH SEPTEMBER, 1997. ON 08 TH SEPTEMBER, 1997, ANOTHER PANCHNAMA WAS PREPARED WHE REIN IT WAS STATED THE SEARCH IS FINALLY CONCLUDED AND NO OTHER COMMENTS/R EMARKS WERE RECORDED THEREIN. THE DISPUTE AROSE WHETHER IT IS TO BE CONS TRUED THAT SEARCH WAS CONCLUDED ON 28 TH JULY 1997 OR IT WAS CONCLUDED ON 08 TH SEPTEMBER, 1997. THE PERIOD OF TWO YEARS FROM THE END OF THE MONTH IN WH ICH WARRANT OF AUTHORIZATION OF SEARCH WAS EXECUTED WAS REQUIRED TO BE COMPUTED. THE BENCH WHO HEARD THE MATTER HAD DIVIDED IN ITS OPINION. THE HONBLE JUD ICIAL MEMBER HAS ASSIGNED FOUR REASONS FOR CONCLUDING THAT THE SUBSEQUENT PAN CHNAMA IS NOT A VALID PANCHNAMA FOR COMPUTING THE LIMITATION BECAUSE THER E IS NO SEARCH CARRIED OUT IN SEPTEMBER 1997 BUT THE PANCHNAMA IS PREPARED AND TH IS PANCHNAMA CANNOT BE TREATED AS A PANCHNAMA FOR THE PURPOSE OF SECTION 1 58BE READ WITH EXPLANATION (2). THE HONBLE ACCOUNTANT MEMBER DID NOT CONCUR W ITH AND TREATED THE SECOND PANCHNAMA VALID FOR COMPUTING THE LIMITATION. THE D ISPUTE REFERRED TO THE THIRD MEMBER FOR HIS OPINION AND THE QUESTION FORMULATED 602 THE THIRD MEMBER WAS; SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 66 WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE , THE ORDER UNDER S.158BC MADE BY THE AO IS TIME BARRED WITHIN THE MEANING OF SECTION 158BE OF THE ACT.? 59. THE THIRD MEMBER HAS TAKEN INTO CONSIDERATION TH E JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF SANDHYA P. NAIK AN D HONBLE KERALA HIGH COURT IN CASE OF DR. C BALAKRISHNAN NAIR. THE HON BLE THIRD MEMBER CONCUR WITH THE JUDICIAL MEMBER AND HELD THAT ISSUE IN DIS PUTE IS COVERED BY THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE O F SANDHYA P. NAIK AND IT IS TO BE CONSTRUED THAT THE SEARCH WAS CONCLUDED ON 29 TH JULY 1997 AND NOT FROM THE DATE WHEN PANCHNAMA WAS PREPARED WHILE REVOKING THE PROHIBITORY ORDER. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SANDHYA P. NAIK WHILE EXPLAINING THE SCOPE OF SECTION 132(3) HAS OBSERVED THAT PASSING R ESTRAINT ORDER UNDER SECTION 132(3), THE TIME LIMIT AVAILABLE FOR ASSESSMENT CAN NOT BE EXTENDED. THE OTHER DECISIONS REFERRED BY THE LEARNED COUNSEL FOR THE A SSESSEE ARE ALSO TO THIS EFFECT, IN THE CASE OF PPC BUSINESS HONBLE DELHI HIGH COUR T HAS CATEGORICALLY OBSERVED THAT WHEN NOTHING WAS RECOVERED WHILE REVO KING THE PROHIBITORY ORDER THERE CANNOT GIVE RISE TO SECOND PANCHNAMA. THE HON BLE COURT IN PARAGRAPH 26 OF THE JUDGMENT RECORDED THAT WHEN NOTHING NEW FOR BEING SEIZED WAS FOUND THEN THERE WOULD BE NO OCCASION TO DRAW UP A PANCHNAMA A T ALL. IT HAS BEEN DEMONSTRATED BEFORE US THAT IN THE CASE OF ASHOK SU NDARDAS VASVANI NOTHING WAS RECOVERED WHEN PROHIBITORY ORDER WAS LIFTED. 60. THE RELEVANT EXTRACT OF THE JUDGMENT OF HONBLE KERALA HIGH COURT IN THE CASE OF DR. C BALAKRISHNAN NAIR V CIT REPORTED IN 23 7 ITR 70 READS AS UNDER: 10. FROM EXT.P3 SECOND PANCHANAMA DATED 10-11-1995 SEV EN ITEMS, BOOKS OF ACCOUNT AND OTHER VALUABLE ARTICLES WERE SEIZED. THESE ARTICLES WHICH WERE AVAILABLE ON 27-10-1995 WERE PUT IN AN ALMIRAH, ACCORDING TO THE 2ND RESPONDENT, AND SEALE D SINCE SCRUTINY COULD NOT BE COMPLETED DURING THE SEARCH AND INVESTIGATION AND PROHIBITORY ORDER UNDER SECTION 132 WAS SERVED ON THE PETITIONERS. SUB-SECTION (3) OF SECTION 132 EMPOWERS THE AUTHORI SED OFFICER TO PASS AN ORDER ON THE OWNER THAT HE SHALL NOT REMOVE, PART WITH OR OTHERWISE DEAL WI TH ARTICLES AND BOOKS OF ACCOUNT, ETC., EXCEPT WITH THE PREVIOUS PERMISSION OF THE OFFICER. BUT THIS CA N BE SERVED ONLY IF IT IS NOT PRACTICABLE TO SEIZE ANY SUCH BOOKS OF ACCOUNT, OTHER DOCUMENTS, ETC. IT IS NOT STATED AS TO WHY THE BOOKS OF ACCOUNT, DOCUMENTS, ETC., WAS NOT PRACTICABLE TO BE SEIZED O N 27-10-1995. THE 2ND RESPONDENT HAD COLLECTED THE LISTED DOCUMENTS FROM THE PREMISES AND HAS PUT THEM IN THE ALMIRAH AND SEALED IT. IN THE ABSENCE OF ANY SATISFACTORY EXPLANATION AS TO WHY THE BOOKS OF ACCOUNT, PASS BOOK AND THE DOCUMENTS WERE NOT PRACTICABLE TO BE SEIZED ON 27-10-1995 ITSELF, IT IS A CASE OF CONTRAVENTION OF SUB-SECTION (3) OF SECTION 132. THE NUMBER OF DOCUMENTS, PASS BOOK AND THE JEWELLERY FOUND AND ULTIMATELY SEIZED SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 67 WERE FEW IN NUMBER AND THE STATEMENT THAT THE SCRUT INY COULD NOT BE COMPLETED, NOR PRACTICABLE TO SEIZE, IS IMPOSSIBLE TO ACCEPT ON THE FACE OF IT. I T IS IN THIS CONTEXT THE ALLEGATION MADE AGAINST TH E SECOND RESPONDENT THAT HE CARRIED AWAY CERTAIN DOCU MENTS IN HIS BAG UNAUTHORISEDLY ON 27-10-1995 AND BROUGHT THEM BACK ON 10-11-1995 ASSUMES SIGNIFI CANCE. HOWEVER, THE ACTION OF THE SEARCH PARTY HEADED BY THE SECOND RESPONDENT IN COLLECTING THE DOCUMENTS AND VARIOUS ITEMS FROM DIFFERENT PARTS OF THE PREMISES AND AGAIN PUTTING THEM IN THE ALMIRAH IN THE BED ROOM OF THE FIRST FLOOR OF THE RESIDENTIAL PREMISES IS UNREASONABLE AND NO PROVISI ON IS RELIED ON FOR SUCH A CAUSE OF ACTION. RULE 112(4C) OF THE INCOME-TAX RULES, 1962 EMPOWERS THE AUTHORISED OFFICER TO SERVE AN ORDER ON THE OWNER THAT HE SHALL NOT REMOVE, PART WITH OR OTHERW ISE DEAL WITH IT EXCEPT WITH THE PREVIOUS PERMISSION ONLY IN CASES WHERE IT IS NOT PRACTICABL E TO SEIZE THE ARTICLE OR THING OR ANY BOOKS OF ACCOUNT OR DOCUMENT. THEREFORE, THE ACTION OF THE S ECOND RESPONDENT AND HIS MEMBERS IN DUMPING THE DOCUMENTS, ETC., SEIZED IN THE ALMIRAH CANNOT B E SUPPORTED, BUT VIOLATES THE MANDATORY REQUIREMENT. 61. LIKEWISE, THE HONBLE BOMBAY HIGH COURT IN THE C ASE OF CIT V. SANDHYA P. NAIK [2002] 124 TAXMAN 384 (BOM.) HAS OBSERVED THAT WHERE A SEARCH PARTY SEIZED AND REMOVED FROM THE PREMISES OF THE ASSESSE E 5,729 GMS. OF GOLD ORNAMENTS, CASH OF RS. 1,69,000 AND BOOKS OF ACCOUN T WEIGHING NEARLY 500 KGS, THEN ARGUMENT OF THE DEPARTMENT THAT 45 KG. OF SILV ER ORNAMENTS HAD TO BE PLACED UNDER PO DUE TO THEIR WEIGHT WAS NOT FOUND TENABLE BY THE TRIBUNAL AND CONFIRMED BY THE HIGH COURT AS NO IMPRACTICABILITY WAS VISUALIZED IN NON- SEIZURE OF 45 KG. OF SILVER ORNAMENTS. 62. NOW COMING TO THE CASE ON HAND, WE FIND THAT ON THE REVOCATION OF THE PROHIBITORY ORDERS, THE SEARCH TEAM HAS SEIZED ONLY 277 PAGES WHICH WAS VERY MUCH POSSIBLE TO SEIZE THEM DURING THE SEARCH PROCE EDINGS WHICH WERE CONCLUDED ON 13 TH MARCH 2015. THE SEARCH TEAM HAS TO JUSTIFY IN THE OR DER PASSED UNDER SECTION 132(3) OF THE ACT THAT BOOKS/DOCUMENT S/VALUABLES ARE NOT PRACTICABLE TO SEIZE ALONG WITH THE REASONS OTHER T HAN THOSE MENTIONED IN SECOND PROVISO TO SECTION 132(1). 63. A SITUATION ALSO ARISES WHERE THE AUTHORISED OF FICERS IMPOSE PO CONSIDERING THAT THE GOODS FOUND IN THE SEARCH ARE NOT PRACTICABLE TO SEIZE. ON THE SUBSEQUENT VISIT, PO IS REVOKED LEADING TO INFERENC E THAT THEY CONSIDER THAT GOODS ARE NOW PRACTICABLE TO SEIZE. BUT THE AUTHORISED OF FICER HAS NOT BROUGHT ANYTHING SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 68 ON RECORD DESCRIBING IN THE PANCHNAMA OR IN THE REV OCATION ORDER HOW IT HAS BECOME PRACTICABLE TO SEIZE THE DOCUMENTS. 64. IN FACT WE ARE OF THE VIEW THAT THE CONDITIONS IMPOSED UNDER SECTION 132(3) OF THE ACT FOR PASSING THE PROHIBITORY ORDER S WERE NOT COMPLIED WITH. ACCORDINGLY, THESE ORDERS PASSED UNDER SECTION 132( 3) OF THE ACT HAVE NO VALIDITY IN THE EYES OF LAW. 65. ONCE THE PROHIBITORY ORDERS IN THE CASE ON HAND HAS BEEN HELD AS INVALID THEN THE SEARCH CONCLUDED IN THE MONTH OF MARCH 201 5 SHALL BE TAKEN AS THE BASE FOR CALCULATING THE PERIOD OF PASSING THE ASSESSMEN T ORDER AS PROVIDED UNDER SECTION 153B OF THE ACT. IN OTHER WORDS THE TIME LI MIT IN THE CASE ON HAND EXPIRES FOR PASSING THE ORDER AS ON 31 MARCH 2017. THEREFORE, IN THE PRESENT CASE THE ORDERS HAVE BEEN FRAMED BEYOND THE TIME PRESCRI BED UNDER THE PROVISIONS OF LAW. 66. BEFORE PARTING WE ALSO NOTE THAT THE BANK LOCKE RS WITH RESPECT TO WHICH PROHIBITORY ORDERS WERE PASSED UNDER SECTION 132(3) OF THE ACT WERE BELONGING TO THE OTHER PARTIES WHO ARE THE INCOME TAX ASSESSE E. ON THIS COUNT ONLY THE PROHIBITORY ORDERS PASSED BY THE AUTHORISED OFFICER IN THE NAME OF THE ASSESSEE IN CONNECTION WITH THE LOCKERS HELD BY OTHER PARTIES, THOUGH RELATED TO THE ASSESSEE CANNOT BE USED FOR EXTENDING THE TIME FOR THE ASSES SMENT PROVIDED UNDER SECTION 153B OF THE ACT. AS WE HAVE HELD THAT ASSESSMENT OR DERS HAS BEEN FRAMED BEYOND THE TIME PROVIDED UNDER THE STATUTE WHICH HA S NO VALIDITY IN THE EYES OF LAW, ACCORDINGLY WE QUASH THE SAME. 67. AS WE HAVE DECIDED THE TECHNICAL GROUND IN FAVO UR OF THE ASSESSEE AS DISCUSSED ABOVE, WE ARE NOT INCLINED TO REFER THE I SSUE ON MERIT. ACCORDINGLY WE DISMISS THE GROUNDS OF APPEAL RAISED BY THE ASSESSE E ON MERIT AS INFRUCTUOUS. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 69 68. IN THE RESULT, THE APPEALS FILED BY THE ASSESSE E ARE PARTLY ALLOWED WHEREAS THE APPEALS FILED BY THE REVENUE ARE DISMISSED. 69. THE NEXT PROPOSITION NO. 4 IS AGAINST THE VALIDI TY OF THE PROCEEDINGS UNDER SECTION 147 OF THE ACT FOR VARIOUS REASONS SPECIFIE D IN THE GROUNDS OF APPEAL BEARING NOS. 1 TO 7. UNDER THIS FOLD OF ARGUMENTS, WE TAKE UP THE FOLLOWING APPEALS: SR. NO. IT(SS)A. NO. ASST. YEAR APPELLANT RESPONDENT 1. ITA NO.805/AHD/2019 ASST. YEAR: 2008-09 DCIT, CENT. CIR. 1(1) AHMEDABAD SHRI RAJESH SUNDERDAS VASWANI ASHRAM ROAD AHMEDABAD PAN : AAOPV6848B 2. ITA 457/AHD/2019 ASST. YEAR: 2008-09 SHRI RAJESH SUNDERDAS VASWANI 10, TILA NAGAR OLD VADA ASHRAM ROAD AHMEDABAD. PAN: AAOPV6848B THE DCIT, CIR.1(1) AHMEDABAD 3. ITA NO.456/AHD/2019 ASST. YEAR: 2008-09 SHRI ASHOK SURENDRAS VASWANI 1, RAJDEEP VILLA OPP: RIVERA- 11 B/H. CHIMANBHAI INSTITUTE PRAHALAD NAGAR, SATELLITE AHMEDABAD PAN NO: AAOPV6849A THE DCIT, CENT. CIR.1(1) AHMEDABAD 4. ITA NO.806/AHD/2019 ASST. YEAR: 2008-09 THE DCIT, CENT. CIR.1(1) AHMEDABAD SHRI ASHOK SURENDRAS VASWANI 1, RAJDEEP VILLA OPP: RIVERA- 11 B/H. CHIMANBHAI INSTITUTE PRAHALAD NAGAR, SATELLITE AHMEDABAD PAN NO: AAOPV6849A 5. ITA NO.461/AHD/2019 ASST. YEAR: 2008-09 SHRI DEEPAK BUDHARMAL VASWANI 3, RAJDEEP VILLA OPP: RIVERA-11 B/H. CHIMANBHAI INSTITUTE PRAHALADNAGAR, THE DCIT, CIR.1(1) AHMEDABAD SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 70 SATELLITE AHMEDABAD PAN: AAPPV8625F 6. ITA NO. 807/AHD/2019 ASST. YEAR: 2008-09 DCIT, CENT. CIR1(1) AHMEDABAD SHRI DEEPAK BUDHARMAL VASWANI 3, RAJDEEP VILLA OPP: RIVERA-11 B/H. CHIMANBHAI INSTITUTE PRAHALADNAGAR, SATELLITE AHMEDABAD PAN: AAPPV8625F WE TAKE ITA NO. 456/AHD/2019 SHRI ASHOK SUNDERDAS VASWANI (A.Y. 2008-09) AS THE LEAD CASE. 70. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW U PHOLDING THE ASSESSMENT ORDER PASSED IN CONTRAVENTION OF SPECIFIC PROVISIONS OF SECTION 153 A BY REOPENING THE ASSESSMENT OF THE APPELLANT UNDER SECTION 147 OF THE INCOME TAX ACT, 1961 SOLELY ON THE BASIS OF DOCUMENTS SEIZED DURING THE COURSE OF SEARCH. 2. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW I N UPHOLDING THE MECHANICAL REOPENING OF THE ASSESSMENT U/S 147 OF THE INCOME TAX ACT, 1961 WITHOUT ANY INDEPENDENT APPLICATION OF MIND. 3. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE REOPENING OF THE ASSESSMENT BEYOND THE STATUTORY PERIOD OF 4 YEARS AS LAID DOWN BY THE PROVISO TO SECTION 147 OF THE INCOME TAX ACT, 1961. 4. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW U PHOLDING THE ISSUE OF NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 BEYOND THE TIME LIMIT LAID DOW N U/S 149 OF THE ACT. 5. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW I N UPHOLDING THE INFERENCE DRAWN BY THE ASSESSING OFFICER THAT THE LOOSE PAPER FOUND AND SE IZED FROM THE TERRACE OF CRYSTAL ARCADE CG ROAD AHMEDABAD REPRESENTED THE ALLEGED UNACCOUNT ED CASH BOOK OF VENUS GROUP, THAT THE SIGNATURE FOUND ON THE DOCUMENTS WERE OF THE AP PELLANT, THAT THE DATE OF TRANSACTIONS WERE RECORDED IN THE CODED FORM TO DISGUISE THE REL EVANT DATE OF TRANSACTIONS, THAT THE ENTRIES WERE RECORDED IN SUCH A WAY THAT TWO ZERO A T END OF EACH ENTRY WERE OMITTED AND THAT THE WORD 'ESTIMATE' HAD BEEN MENTIONED AGAINST THE ACTUAL TRANSACTIONS. 6. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW I N UPHOLDING THE VARIOUS ADDITIONS U/S 69, 69A, 69B AND 69C OF THE INCOME TAX ACT, 1961 RELYIN G ON THE ALLEGED CASH BOOK WHICH WAS NOT EVEN ALLEGED TO BE BELONGING TO THE APPELLANT E SPECIALLY IN VIEW OF THE AO OWN FINDINGS THAT THE ALLEGED CASH BOOK BELONGED TO VENUS GROUP AND ALSO WITHOUT IDENTIFYING THE CORRESPONDING ASSET OR INVESTMENT OR EXPENDITURE PE RTAINING/RELATING TO THE APPELLANT. 7. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE ADDITIONS MADE BY THE ASSESSING OFFICER ON THE BASIS OF THE ALLEGED SIGNA TURE OF THE APPELLANT ESPECIALLY WHEN THE INVESTMENT OR EXPENSES WERE NOT EVEN ALLEGED TO BE BELONGING/PERTAINING/RELATED TO THE APPELLANT AS THAT WAS AGAINST THE SPECIFIC LAW LAID DOWN FOR ASSESSING INCOME UNDER THE INCOME TAX ACT, 1961. 8. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN PARTLY UPHOLDING THE ADDITIONS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ALLEGED UNEXPLA INED EXPENDITURE U/S 69C OF THE INCOME TAX ACT, 1961 UNDER THE GROUP NAMED AS OTHER LAND T RANSACTIONS/EXPENSES RELATED TO LAND AMOUNTING TO RS. 1,14,87,884/-APPLYING THE PEAK PRI NCIPLE IGNORING THE FACT THAT THE ADDITIONS WERE MADE PURELY ON THE BASIS OF ALLEGED SIGNATURE OF THE APPELLANT ON THE UNILATERAL INTERPRETATION OF THE ALLEGED CASH BOOK WITHOUT ESTABLISHING THAT THE ALLEGED EXPENDITURE PERTAINED TO THE APPELLANT AND THE SAME WERE INCURRED BY THE APPELLANT AND WITHOUT ANY CORROBORATION OR CONFIRMATION OF THE AL LEGED EXPENDITURE FROM THE CORRESPONDING RECIPIENTS. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 71 9. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE ADDITIONS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ALLEGED UNEXPLAINED INVESTMENT U/S 69B OF THE INCOME TAX ACT, 1961 IN SHOPS AT 3RD EYE BUILDING, PANCHWATI R OAD, AHMEDABAD AMOUNTING TO RS. 1,00,00,000/- SOLELY ON THE BASIS OF UNILATERAL INT ERPRETATION OF THE ALLEGED CASH BOOK WITHOUT ANY THIRD PARTY EVIDENCE. 10. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE ADDITIONS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ALLEGED UNEXPLAINED INVESTMENT U/S 69B OF THE INCOME TAX ACT, 1961 IN BUNGALOW AMOUNTING TO RS. 7,84,085/-, SOLELY ON THE BASIS OF UNILATERAL INTERPRETATION OF THE ALLEGED CASH BOOK EVEN THOUGH THE APPELLANT DID NOT OWN THE ALLEGED BUNGALOW AND HAD MADE NO INVESTMENT IN THE SAME. 11. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE ADDITIONS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ALLEGED UNEXPLAINED EXPENSES OF PERSONAL NATURE U/S 69C OF THE INCOME TAX ACT, 1961 RS. 38,65,839/- AND MIS CELLANEOUS TRANSACTIONS RS. 1,55,0007- AND CONSIDERING THE REMAINING EXPENDITURES UNDER TH E AFORESAID SAID TWO GROUPINGS FOR PEAK WORKING IGNORING THE FACT THAT THE ADDITIONS W ERE MADE BY THE ASSESSING OFFICER SOLELY ON THE BASIS OF ALLEGED SIGNATURE BY THE APPELLANT BASED ON HIS UNILATERAL INTERPRETATION OF THE ALLEGED CASH BOOK WITHOUT ESTABLISHING THAT THE ALLEGED EXPENDITURES PERTAINED TO THE APPELLANT AND THE SAME WERE INCURRED BY HIM. 12. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN PARTLY UPHOLDING THE ADDITIONS MADE BY THE ASSESSING OFFICER U/S 69A OF THE ACT ON ACCOUNT OF ALLEGED NEGATIVE PEAK BALANCE OF CERTAIN GROUPINGS OF TRANSACTIONS AMOUNTING TO RS. 1,22,49,000/- ON THE BASIS OF UNILATERAL INTERPRETATION OF THE ASSESSING OFFICER OF THE ALLE GED CASH BOOK. 13. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE ADDITIONS MADE BY THE ASSESSING OFFICER UNDER SECTION 69B OF THE INCOME T AX ACT, 1961 AMOUNTING TO RS. 33000/- ON ACCOUNT OF 'SWAPANLOK' RELYING UPON THE LOOSE SH EETS SEIZED FROM THE TERRACE OF CRYSTAL ARCADE C.G. ROAD AHMEDABAD. 14. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE ADDITIONS MADE BY THE ASSESSING OFFICER UNDER SECTION 69C OF THE INCOME T AX ACT, 1961 AMOUNTING TO RS. 6,28,200/~ ON ACCOUNT OF 'ABHISHEK' MERELY ON SURMI SES AND CONJECTURES WHILE RELYING UPON THE NOTING MADE UNDER THE HEAD ABHISHEK IN THE LOOS E SHEET SEIZED FROM THE TERRACE OF CRYSTAL ARCADE AHMEDABAD. 15. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE ADDITIONS MADE BY THE ASSESSING OFFICER UNDER SECTION 69C OF THE INCOME T AX ACT, 1961 AMOUNTING TO RS. 1,05,00,000/- ON ACCOUNT OF TARMANAND KHATTER' MERE LY ON SURMISES AND CONJECTURES WHILE RELYING UPON LOOSE DUMB SHEETS ALLEGED TO BE CASH B OOK SEIZED FROM TERRACE OF CRYSTAL ARCADE C.G. ROAD AHMEDABAD. 16. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN DENYING THE APPLICATION OF PRINCIPLES OF TELESCOPING WHICH RESULTED INTO DOUBLE/MULTIPLE TAX ATION IN THE CASE OF THE APPELLANT. 17. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW I N GIVING DIRECTION TO THE ASSESSING OFFICER UNDER SECTION 150 OF THE INCOME TAX ACT, 1961 TO RE OPEN THE ASSESSMENT IN THE CASE OF M/S VENUS INFRASTRUCTURE & DEVELOPERS (P) LTD. WITHOUT PROVIDING AN OPPORTUNITY OF BEING HEARD. THE ASSESSEE HAS CHALLENGED THE VALIDITY OF THE ASSE SSMENT FRAMED UNDER SECTION 147 OF THE ACT FOR VARIOUS REASONS IN THE G ROUNDS OF APPEAL BEARING NOS. 1 TO 7. 71. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF PROPERTY DEVELOPMENT . THERE WAS A SEARCH CARRIED OUT UNDER SECTION 132 OF THE ACT DATED 10 TH AND 12 TH MARCH 2015 ON THE VASVANI GROUP. THE ASSESSEE BEING A PART OF THE GROUP WAS A LSO SUBJECT TO SEARCH ACTION SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 72 CARRIED OUT UNDER SECTION 132 OF THE ACT. DURING TH E COURSE OF SEARCH PROCEEDINGS, VARIOUS DOCUMENTS OF INCRIMINATING NAT URE WERE FOUND OUT. 72. HOWEVER, THE YEAR UNDER CONSIDERATION WAS BEYON D THE PERIOD FOR WHICH THE PROCEEDING UNDER SECTION 153A OF THE ACT COULD HAVE BEEN INITIATED. ACCORDINGLY, THE AO ON THE BASIS OF THE MATERIALS F OUND DURING THE SEARCH PROCEEDINGS INITIATED THE INCOME ESCAPEMENT PROCEED INGS UNDER SECTION 147 OF THE ACT. CONSEQUENTLY, THE AO ISSUED A NOTICE DATED 30 TH MARCH 2015 UNDER SECTION 148 OF THE ACT FOR INITIATING THE PROCEEDIN GS UNDER SECTION 147 OF THE ACT WHICH WERE COMPLETED VIDE ORDER DATED 11 TH AUGUST 2016 AFTER MAKING THE DISALLOWANCE OF RS. 45,40,09,937/- FOR DIFFERENT IT EMS OF ADDITION. 73. THE ASSESSEE, SUBSEQUENTLY CONTESTED THE VALIDIT Y OF THE ASSESSMENT FRAMED UNDER 147/143(3) OF THE ACT BESIDES CHALLENG ING THE ADDITIONS ON MERIT BEFORE THE LD. CIT-A. HOWEVER, THE LD. CIT-A UPHELD THE ASSESSMENT ORDER OF THE AO BY OBSERVING AS UNDER: 4.3. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE C ASE, RE-ASSESSMENT ORDERS AND SUBMISSIONS MADE BY THE APPELLANTS. THE ASSESSING OFFICER HAS I SSUED NOTICE U/S. 148 OF THE I. T. ACT, 1961 ON 30/03/2015 AFTER DULY RECORDING THE REASONS. THE AP PELLANTS WERE PROVIDED COPY OF REASONS RECORDED. THE APPELLANTS HAVE OBJECTED THE REOPENIN G PROCEEDINGS WHICH WERE DISPOSED OFF BY PASSING A SPEAKING ORDER BY THE ASSESSING OFFICER. SHRI ASHOKKUMAR SUNDERDAS VASWANI HAS FILED SPECIAL CIVIL APPLICATION NO, 2550 OF 2016 BEFORE H ONOURABLE GUJARAT HIGH COURT AGAINST THE NOTICE U/S. 148. THE HONOURABLE COURT HAS UPHELD TH E REOPENING OF ASSESSMENT AS UNDER:- '14. THE SECOND ISSUE PERTAINS TO RECORDING OF REAS ONS BEFORE ISSUANCE OF NOTICE. IN THIS CONTEXT, WE HAVE PERUSED THE ORIGINAL FILES. W E NOTICE THAT RELEVANT MATERIAL WAS PLACED BEFORE THE ASSESSING OFFICER ON 30.3.2015. U PON PERUSAL OF SUCH MATERIAL, CONSIDERING THE FACT THAT THE PROCESS OF REOPENING WOULD GET TIME-BARRED SOON, ON THE VERY SAME DATE, HE RECORDED HIS REASONS WHICH ARE ALSO CONTAINED IN THE FILE ALONG WITH A LETTER OF THE SIRE DATE WRITTEN BY HIM TO THE PRINCIPAL COMMISSIONER SEPICING APPROVAL. IN THE FILE, WE ALSO FIND THE APPROVAL GRANTED BY THE PRINCIPAL COMMISSIONER OF THE INCOME TAX ALSO ON 30.3.2015. IN FACT, THE SUGGESTION PLACED BY ASSESS ING OFFICER WAS FIRST SCREENED BY THE JOINT COMMISSIONER OF INCOME-TAX WHICH WAS THEN PLA CED BEFORE THE PRINCIPAL COMMISSIONER WHO RECORDED AS UNDER 'AFTER PERUSAL OF THE REASONS GIVEN BY THE ASSESSIN G OFFICER IN THE ANNEXURE, I AM SATISFIED THAT THAT THIS IS A FIT CASE FOR ISSUE OF NOTICE IN LIEU OF SECTION 148' 15. THIS WAS WRITTEN BY THE PRINCIPAL COMMISSIONER SHRI SANDEEP KAPOOR IN HIS OWN HANDWRITING BELOW WHICH HE SIGNED PUTTING THE DATE OF 30.3.2015. SUCH MATERIALS ON RECORD WOULD THEREFORE, DESTROY THE PETITIONERS' THEORY TH AT REASONS WERE RECORDED LATER BUT NOTICE WAS ISSUED PRIOR IN POINT OF TIME. ON THIS COUNT AL SO, PETITIONS MUST FAIL.' 4.6 THE APPELLANTS HAVE ALSO ARGUED THAT THE ASSES SMENT HAS BEEN REOPENED BEYOND FOUR YEARS, AND THEREFORE, PROVISO TO SECTION 147 IS APPLICABLE WHERE THE ASSESSING OFFICER HAS TO GIVE A FINDING THAT THERE WAS A FAILURE ON THE PART OF ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. IT IS SEEN THAT THE AO H AS REOPENED THE ASSESSMENT ON THE BASIS OF SEIZED SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 73 MATERIAL. THE UNACCOUNTED CASH TRANSACTIONS WERE N OT DISCLOSED BY THE APPELLANT IN REGULAR RETURN, AND THEREFORE, FAILURE WAS ON THE PART OF APPELLANT S. APPELLANTS ARGUMENT IS THEREFORE FOUND NOT CORRECT AND SAME IS REJECTED. THE GROUNDS OF APPEA L ARE ACCORDINGLY DISMISSED. 5.1.3. I HAVE CAREFULLY CONSIDERED THE FACTS OF TH E CASE, ASSESSMENT ORDERS AND SUBMISSIONS MADE BY THE APPELLANT. A SEARCH WAS INITIATED ON 10/03/ 2015 IN THE CASE OF APPELLANT AT THE VARIOUS PREMISES U/S. 132 OF THE I.T. ACT, 1961. COPY OF P ANCHNAMAS OF ALL THE SEARCH PROCEEDINGS WERE PROVIDED TO THE APPELLANT. THE ASSESSING OFFICER RE LYING UPON BOARD'S INSTRUCTION AND JUDICIAL PRONOUNCEMENTS IN THE CASE OF JAIN & JAIN V. UNION OF INDIA [1982] 134 ITR 655 (BOM.), V. K. JAIN V. UNION OF INDIA [1975] 98 ITR 469 (DELHI)] AND [S OUTHERN HERBALS LTD. V. DIT (INVESTIGATION) [1994] 207 ITR 55 (KAR.)] HAS HELD THAT THERE IS NO PROVISION OF THE ACT FOR PROVIDING COPY OF AUTHORISATION OF WARRANT TO THE ASSESSEE. THE LAW O NLY REQUIRES THAT WARRANT MUST BE PRODUCED BY THE AUTHORITY BEFORE THE COMMENCEMENT OF THE PROCEE DING OF SEARCH AND THE SAME HAS BEEN DONE. I AGREE WITH THE FINDINGS OF THE ASSESSING OFFICER TH AT AO IS NOT REQUIRED TO PROVIDE A COPY OF WARRANT OF AUTHORISATION BEFORE ASSUMING JURISDICTION U/S. 153A. THE GROUND OF APPEAL IS ACCORDINGLY DISMISSED . NOW THE ASSESSEE IN THE GROUND OF APPEAL BEFORE US HAS CHALLENGED THE VALIDITY OF THE ASSESSMENT FRAMED UNDER SECTION 147 OF THE ACT. 74. THE LEARNED AR BEFORE US CONTENDED THAT SEARCH P ROCEEDINGS ARE THE SPECIAL PROCEEDINGS AS PROVIDED UNDER SECTION 153A OF THE ACT WHICH HAS OVERRIDING EFFECT OVER SECTION 147 OF THE ACT. THUS IN THE SEARCH PROCEEDINGS ANY MATERIAL FOUND HAVING BEARING ON THE INCOME OF THE ASSESSEE, THERE CAN BE PROCEEDINGS UNDER SECTION 153A OF THE ACT. ACCORDIN GLY, THE REVENUE IS BARRED TO TAKE THE SHELTER FOR TAXING THE INCOME BASED ON THE SEARCH MATERIALS UNDER ANY OTHER PROVISIONS OF LAW I.E. 143(3), 263, 147 OF TH E ACT. THE LEARNED AR IN SUPPORT OF HIS CONTENTION RELIED ON THE FOLLOWING J UDGMENTS: AMAR JEWELLERS LTD. SCA 17598 OF 2019 (GUJ) ISHWARLAL MAHIDAS BHUT VS. ITO SCA 18983 OF 2019 (GUJ) VIKRAM MUNISHWARLAL BAJAJ VS. ITO ITA 2552/PUN/20 17 75. THE LD. AR ALSO CONTENDED THAT THERE WAS NO ADDI TION MADE IN THE ASSESSMENT ORDER FRAMED UNDER SECTION 147 R.W.S. 14 3(3) OF THE ACT DATED 11 TH AUGUST 2016 ON THE MATERIALS BASED ON WHICH RE-ASSE SSMENT PROCEEDING WAS INITIATED. ACCORDINGLY, THE LEARNED AR SUBMITTED TH AT ONCE THE ADDITIONS DOCUMENTED IN THE REASONS RECORDED WERE DROPPED BY THE AO, CONSEQUENTLY, NO ASSESSMENT UNDER SECTION 147/143(3) OF THE ACT CAN BE MADE WITH RESPECT TO THE OTHER MATERIAL WHICH COMES INTO NOTICE OF AO DURING REASSESSMENT PROCEEDING. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 74 76. THE LEARNED AR FURTHER CONTENDED THAT THE AO BEF ORE ISSUING NOTICE UNDER SECTION 148 OF THE ACT FOR INCOME ESCAPING ASSESSME NT HAS TO FORM PRIMA FACIE OPINION THAT THE INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT BASED ON SOME TANGIBLE MATERIALS AND THAT TOO AFTER VERIFICATION OF SUCH MATERIALS. BUT IN THE PRESENT CASE, THE AO WITHOUT VERIFYING THE DETAILS RECEIVED FROM THE SEARCH TEAM AND WITHOUT APPLYING HIS MIND, HAS JUST CAME TO THE CONCLUSION THAT THE INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT. 77. ON THE OTHER HAND, THE LEARNED DR CONTENDED THA T SEARCH PROCEEDINGS ARE APPLICABLE FOR THE SPECIFIED YEARS AS PROVIDED UNDE R SECTION 153A OF THE ACT. THUS TO THAT EXTENT THE PROCEEDINGS CAN ONLY BE INIT IATED UNDER SECTION 153A OF THE ACT. ANY PERIOD WHICH IS BEYOND THE PERIOD SPEC IFIED UNDER SECTION 153A OF THE ACT AND FALL WITHIN THE PERIOD PROVIDED FOR INC OME ESCAPING ASSESSMENT UNDER THE PROVISIONS OF SECTION 147 OF THE ACT, THE RE CAN BE PROCEEDINGS WHICH CAN BE INITIATED UNDER THE PROVISIONS OF SECTION 14 7 OF THE ACT. AS PER THE LEARNED DR THERE IS NO PROHIBITION FOR INITIATING T HE PROCEEDINGS UNDER SECTION 147 OF THE ACT BASED ON THE MATERIALS FOUND DURING THE COURSE OF SEARCH CARRIED OUT UNDER SECTION 132 OF THE ACT PROVIDED SUCH INIT IATION OF PROCEEDINGS IS BEYOND THE PERIOD SPECIFIED UNDER SECTION 153A OF T HE ACT. ACCORDINGLY THE LEARNED DR CONTENDED THAT THE ASSESSMENT FRAMED UND ER SECTION 147 OF THE ACT IS VALID AND WITHIN THE FRAME WORK OF LAW. 78. THE LEARNED DR HAS ALSO CONTENDED THAT THE ADDIT IONS MADE BY THE AO IN THE ASSESSMENT FRAMED UNDER SECTION 147 READ WITH S ECTION 143(3) OF THE ACT CAN BE CATEGORIZED IN TWO COMPARTMENT. IN THE 1 ST COMPARTMENT, THERE WERE THE ADDITIONS WHICH WERE DOCUMENTED IN THE REASONS RECO RDED. SIMILARLY, IN THE 2 ND COMPARTMENT, THERE WERE THE ADDITIONS WHICH WERE NO T DOCUMENTED IN THE REASONS RECORDED. AS SUCH THE ADDITIONS REPRESENTED IN THE 2 ND COMPARTMENT SIGNIFIES THOSE ITEMS OF ADDITIONS, REPRESENTING TH E ESCAPEMENT OF INCOME WHICH SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 75 WERE NOT DOCUMENTED IN THE REASONS RECORDED BUT WER E FOUND BY THE AO DURING THE ASSESSMENT PROCEEDINGS. THE LEARNED DR IN SUPPO RT OF HIS CONTENTION HAS FILED THE SUMMARY OF THE ADDITIONS REPRESENTING THE ADDITION WHICH WERE DOCUMENTED IN THE REASONS RECORDED VIZ A VIZ NOT DO CUMENTED IN THE REASONS RECORDED UNDER SECTION 147 OF THE ACT. 79. AS PER THE LD. DR, ONCE ANY ADDITION DOCUMENTED IN THE REASONS RECORDED UNDER SECTION 147 OF THE ACT HAS BEEN SUSTAINED, TH EN OTHER ADDITION (NON- DOCUMENTED IN THE REASONS RECODED) SHALL SURVIVE UN DER THE PROVISION OF SECTION 147 OF THE ACT. CONSEQUENTLY, THE ASSESSMENT FRAMED UNDER SECTION 147 OF THE ACT CANNOT BE CHALLENGED ON THE REASONING THAT THER E WAS NO ADDITION MADE TO THE TOTAL INCOME OF THE ASSESSEE AS PROPOSED/ DOCUMENTE D IN THE REASONS RECORDED. 80. THE LEARNED DR FURTHER CONTENDED THAT THE AO HAS RECORDED THE REASONS FOR INCOME ESCAPING ASSESSMENT UNDER SECTION 147 OF THE ACT AFTER APPLYING HIS MIND AND AFTER VERIFICATION OF THE SEARCH MATERIALS . 81. IN NUTSHELL THE LEARNED DR OPPOSED THE ISSUE RA ISED BY THE ASSESSEE ON THE VALIDITY OF THE ASSESSMENT FRAMED UNDER SECTION 147 /143(3) OF THE ACT AS DISCUSSED ABOVE AND FURTHER VEHEMENTLY SUPPORTED TH E ORDER OF THE AUTHORITIES BELOW. 82. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE PRECEDING DISCUSSION, WE NOTE THAT THE FOLLOWING ISSUES ARISE FOR OUR CONSIDERATION AS DET AILED UNDER: (1) WHETHER IN CASE OF SEARCH UNDER SECTION 132 OF THE ACT, THE PROCEEDING UNDER SECTION 153A OF THE CAN ONLY BE INITIATED WITHOUT RESORTING TO THE PROVISIONS OF SECTION 147 OF THE ACT. (2) WHETHER THE AO CAN INITIATE THE RE-ASSESSMENT PROCE EDING UNDER SECTION 147 OF THE ACT ON THE BASIS OF INFORMATION RECEIVED FROM THE I NVESTIGATION WING BUT WITHOUT APPLICATION OF HIS MIND ON SUCH MATERIALS. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 76 (3) WHETHER THE ORDER UNDER SECTION 147 OF THE ACT SURVIVES IN A SITUATION WHERE THERE WAS NO ADDITION WITH RESPECT TO THE ITEMS WHICH WAS DOCUMENTED IN THE REASONS RECORDED BUT THE ADDITIONS WERE MADE WITH RESPECT T O THE ISSUES WHICH COME INTO NOTICE OF THE AO DURING ASSESSMENT/RE-ASSESSMENT PROCEEDIN G UNDER SECTION 147 OF THE ACT IN THE FINAL ASSESSMENT/ REASSESSMENT ORDER UNDER SECTION 147 R.W.S. 143(3) OF THE ACT. 83. THE FIRST QUESTION ARISES FOR OUR ADJUDICATION W HETHER THE MATERIAL FOUND DURING THE SEARCH PROCEEDINGS UNDER SECTION 132 OF THE ACT CAN BE USED FOR INVOKING THE PROVISIONS OF INCOME ESCAPING ASSESSME NT UNDER SECTION 147 OF THE ACT. AT THIS JUNCTURE WERE INCLINED TO REFER THE PR OVISIONS OF SECTION 153A (1) OF THE ACT WHICH DEALS WITH THE ASSESSMENT PROCEEDINGS IN CASE OF SEARCH BEING THE SPECIAL PROCEEDINGS. THE PROVISIONS OF SECTION 153A (1) READS AS UNDER: 153A. (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139 , SECTION 147 , SECTION 148 , SECTION 149 , SECTION 151 AND SECTION 153 , IN THE CASE OF A PERSON WHERE A SEARCH IS INITIAT ED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECTION 132A AFTER THE 31ST DAY OF MAY, 2003, THE ASSESSING OFFICER SH ALL (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO F URNISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS AND FOR THE RELEVANT ASSESSMENT YE AR OR YEARS REFERRED TO IN CLAUSE (B), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRE D TO BE FURNISHED UNDER SECTION 139 ; (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASS ESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE AND FOR THE RELEVANT ASSESSMENT YEAR OR YEARS : THE ABOVE PROVISIONS BEGINS WITH THE NON OBSTANTE CL AUSE OVERRIDING THE PROVISIONS OF SECTION 147 OF THE ACT. THE PROVISION S OF SECTION 153A (1)(A) OF THE ACT PROVIDES THAT ONCE THE SEARCH UNDER SECTION 132 OF THE ACT IS CONDUCTED OR REQUISITION IS MADE UNDER SECTION 132A OF THE AC T IN THE CASE OF A PERSON, THE AO SHALL REQUIRE SUCH PERSON TO FILE RETURN OF INCO ME UNDER FOR SIX PRECEDING ASSESSMENT YEAR IMMEDIATE TO THE ASSESSMENT YEAR IN WHICH SEARCH OR REQUISITION WAS MADE. SIMILARLY THE PROVISION OF SECTION 153A(1 )(B) EMPOWERS THE AO TO ASSESS OR REASSESS THE INCOME FOR SUCH SIX ASSESSME NT YEAR PRECEDING TO THE A.Y. IN WHICH SEARCH CONDUCTED OR REQUISITION MADE. THUS IN OTHER WORDS, THE ASSESSMENT UNDER SECTION 153A OF THE ACT AS A RESUL T OF SEARCH IS APPLICABLE FOR THE SPECIFIED NUMBER OF 6 YEARS. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 77 84. TO ILLUSTRATE THE ABOVE PROVISION, IF A SEARCH W AS CONDUCTED DATED 11 TH JUNE 2015 FALLING UNDER P.Y. 2015-16 RELEVANT TO A. Y. 2016-17, THEN, THE FOLLOWING NUMBER OF ASSESSMENT YEARS WILL BE SUBJEC T TO ASSESSMENT OR REASSESSMENT UNDER THE SPECIAL PROCEEDINGS (SEARCH ASSESSMENT) UNDER SECTION 153A OF THE ACT. 1. A.Y. 2015-16 2. A.Y. 2014-15 3. A.Y. 2013-14 4. A.Y. 2012-13 5. A.Y. 2011-12 6. A.Y. 2010-11 85. THUS WHAT IS INFERRED IS THIS THAT THE ASSESSMEN T SUBSEQUENT TO SEARCH UNDER SECTION 132 OR REQUISITION MADE UNDER SECTION 132A OF THE ACT, BEING SPECIAL PROCEEDINGS, ARE GOVERNED UNDER THE PROVISI ONS OF SECTION 153A OF THE ACT. THE PROVISION OF SECTION 153A(1)(B) PROVIDES T HAT IN CASE OF SEARCH, SIX ASSESSMENT YEARS PRECEDING TO A.Y. IN WHICH SEARCH WAS CONDUCTED OR REQUISITION MADE WILL BE ASSESSED OR REASSESSED. THUS THE SITUAT ION ARISES WHETHER THE MATERIALS DISCOVERED DURING SEARCH PROCEEDINGS FOR BEYOND SIX PRECEDING A.Y. CAN BE USED FOR INVOKING THE PROVISIONS OF SECTION 147 OF THE ACT FOR THE PERIOD NOT COVERED UNDER THE PROVISIONS OF SECTION 153A OF THE ACT. THE ANSWER STANDS IN FAVOUR OF THE REVENUE. IT IS BECAUSE THERE IS NO DENIAL UNDER THE PROVISIONS OF LAW FOR USING THE SEARCH MATERIAL UNDER THE PROVISI ONS OF SECTION 147 OF THE ACT IN A SITUATION WHERE THE PERIOD/YEAR IN DISPUTE IS NOT COVERED WITHIN THE PROVISIONS OF SECTION 153A OF THE ACT. IT IS NOT OU T OF PLACE TO MENTION THAT THE CONDITIONS PRECEDENT TO INVOKING THE PROVISIONS TO SECTION 147 OF THE ACT HAVE TO BE COMPLIED BY THE REVENUE. IN HOLDING SO WE DRAW S UPPORT AND GUIDANCE FROM SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 78 THE ORDER OF HONBLE MP HIGH COURT IN CASE RAMBALLA BH GUPTA VS. ACIT REPORTED IN 288 ITR 347 WHERE IT WAS HELD AS UNDER: IN ORDER TO DECIDE THE LEGALITY AND VALIDITY OF NOT ICE ISSUED UNDER SECTION 148, IT IS NECESSARY TO SE E AS TO WHETHER CONDITIONS PRECEDENT PROVIDED IN SECT ION 148 ARE SATISFIED OR NOT. ONCE THE CONDITIONS PRESCRIBED UNDER SECTION 148 ARE FOUND PRESENT IN T HE NOTICE ISSUED THEN, IN THAT EVENT, THE NOTICE HAS TO BE UPHELD BEING ISSUED IN CONFORMITY WITH TH E REQUIREMENT OF SECTION 148. [PARA 9] WHILE DECIDING THE LEGALITY OF NOTICE ISSUED UNDER SECTION 148, IT IS NOT NECESSARY TO LOOK TO THE PROVISIONS OF SECTION 153A BECAUSE BOTH SECTIONS OP ERATE IN DIFFERENT FIELD AND SPHERE. [PARA 10] THE ASSESSING OFFICER DOES NOT HAVE JURISDICTION TO ISSUE NOTICE UNDER SECTION 148 IN RESPECT OF THOSE SIX ASSESSMENT YEARS WHICH FALL WITHIN THE EX CLUSIVE JURISDICTION OF SECTION 153A. SUCH WAS NOT THE CASE IN THE INSTANT CASE. [PARA 11] ADMITTEDLY, THE ASSESSING OFFICER HAD NOT ISSUED NO TICE OF REASSESSMENT UNDER SECTION 153A IN RESPECT OF SIX ASSESSMENT YEARS, I.E., 2003-04 TO 1 998-99 WHEREAS HE HAD ISSUED IMPUGNED NOTICE OF REASSESSMENT FOR THE ASSESSMENT YEAR 1997-98 UNDER SECTION 148 WHICH WAS THE SUBJECT-MATTER OF THE INSTANT WRIT. [PARA 12] THE SUBMISSION OF THE ASSESSEE THAT IN CASES OF SEA RCH, SECTION 148 HAD NO APPLICATION AND, SECONDLY, NO ORDER FOR REASSESSMENT COULD BE PASSED BEYOND SIX YEARS AS PROVIDED IN SECTION 153A COULD NOT BE ACCEPTED. [PARA 13] SECTION 148 BEING AN INDEPENDENT SECTION, POWERS EX ERCISED BY THE ASSESSING OFFICER CANNOT BE CURTAILED IF THE IMPUGNED NOTICE OTHERWISE SATISFIE S THE REQUIREMENT OF SECTION 148. THE ONLY FETTER PUT ON THE POWERS OF THE ASSESSING OFFICER IN TAKIN G RECOURSE TO SECTION 148 IS THAT NOTICE UNDER SAID SECTION CANNOT BE ISSUED IN RELATION TO THOSE SIX A SSESSMENT YEARS WHICH ARE DEFINED IN SECTION 153A. THIS FETTER IS DUE TO USE OF NON OBSTANTE CLA USE IN SECTION 153A. IN ALL OTHER CASES AND FOR ALL OTHER ASSESSMENT YEARS, SECTION 148 CAN ALWAYS BE R ESORTED TO SUBJECT OF COURSE TO THE CONDITION THAT IT MUST SATISFY THE REQUIREMENT SPECIFIED IN SECTIO N 148. [PARA 14] IT WAS NOT THE CASE OF THE ASSESSEE THAT THE IMPUGN ED NOTICE DID NOT SATISFY THE REQUIREMENT OF SECTION 148. ON THE OTHER HAND, IT CLEARLY APPEARED THAT FIRSTLY, NOTICE UNDER SECTION 148 COULD BE ISSUED FOR THE ASSESSMENT YEAR 1997-98 BEING WELL W ITHIN TIME, SECONDLY, THE ASSESSING OFFICER WAS EMPOWERED AND HAD AN AUTHORITY TO ISSUE SUCH NOTICE . THIRDLY, NOTICE CONTAINED REASONS AS REQUIRED UNDER SECTION 148 AND SAME WERE SUPPLIED TO THE ASS ESSEE AND LASTLY, ON THE STRENGTH OF THE MATERIAL COLLECTED IN THE RAID CONDUCTED IN THE PREMISES OF THE ASSESSEE, A FORMATION OF BELIEF FOR ESCAPE ASSESSMENT COULD VALIDLY BE FORMED FOR REOPENING OF ASSESSMENT MADE FOR THE ASSESSMENT YEAR 1997- 98. THE ASSESSEE DID NOT CHALLENGE THE NOTICE ON AN Y OF THOSE GROUNDS WHICH ALONE COULD BE MADE BASIS TO CHALLENGE THE IMPUGNED NOTICE, IT BEING IS SUED UNDER SECTION 148 AND, HENCE, THERE WAS NO DIFFICULTY IN UPHOLDING THE IMPUGNED NOTICE WHICH W AS RIGHTLY ISSUED IN CONFORMITY WITH THE REQUIREMENT OF SECTION 148. [PARA 16] IN VIEW OF THE ABOVE JUDICIAL PRONOUNCEMENT, WE HOL D THAT MATERIAL FOUND DURING THE COURSE OF SEARCH PROCEEDINGS CAN BE USED FOR INVOKING THE PROVISIONS OF SECTION 147 OF THE ACT. HOWEVER, IT IS IMPORTANT TO NOTE THAT THE PROVISIONS OF SECTION 147 OF THE ACT CAN BE INVOKED ONLY AFTER CO MPLYING THE PROVISIONS/CONDITIONS AS PROVIDED UNDER SECTION 147 /148/149/150 AND 151 OF THE ACT. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 79 86. WE ALSO NOTE THAT CASE LAW REFERRED BY THE LEAR NED AR FOR THE ASSESSEE AT THE TIME OF HEARING ARE DISTINGUISHABLE FROM THE FA CTS OF THE PRESENT CASE. IN VIEW OF THE ABOVE AND AFTER CONSIDERING THE FACTS IN TOT ALITY, WE ARE NOT INCLINED TO DISTURB THE FINDING OF THE AUTHORITIES BELOW. HENCE THE CONTENTION RAISED I.E. THE PROVISIONS OF SECTION 147 OF THE ACT CANNOT BE INVO KED IN VIEW OF THE FACT THAT THERE WAS SPECIAL PROCEEDINGS UNDER SECTION 153A OF THE ACT IN CASE OF SEARCH, BY THE ASSESSEE IS DISMISSED. THUS THE CONTENTION OF THE ASSESSEE IS HEREBY DISMISSED. 87. COMING TO THE SECOND QUESTION OF THE ASSESSEE, WE NOTE THAT THE POWER OF REASSESSMENT IS CONFERRED ON THE ASSESSING OFFICER BY THE PROVISIONS OF SECTION 147/148 OF THE ACT. BUT SUCH POWER IS SUBJECT TO TH E CERTAIN CONDITIONS LAID DOWN UNDER SECTION 147/148/149/151 OF THE ACT. ONE OF TH E VERY FIRST CONDITION IS THAT BEFORE ISSUING NOTICE UNDER SECTION 148 OF THE ACT FOR REASSESSMENT PROCEEDING UNDER SECTION 147 OF THE ACT THE AO MUST HAVE REASO N TO BELIEVE THAT INCOME HAS BEEN ESCAPED ASSESSMENT. THUS THE AO FOR THAT P URPOSE HAS TO RECORD A SATISFACTION NOTE WHICH MUST FULFILL THE PARAMETERS OF THE UNDEFINED EXPRESSION 'REASON TO BELIEVE'. THE EXPRESSION REASON TO BELI EVE OCCURRING IN SECTION 147 OF THE ACT HAS BEEN INTERPRETED BY VARIOUS HON' BLE HIGH COURTS AS WELL AS THE HON'BLE' SUPREME COURT OF INDIA IN NUMEROUS CAS ES. THE QUESTION IN THE PRESENT CASE IS AS TO WHETHER THE INFORMATION RECEI VED FROM THE INVESTIGATION WING/SEARCH TEAM WOULD CONSTITUTE 'REASON TO BELIEV E' EMPOWERING THE ASSESSING OFFICER TO REOPEN THE ASSESSMENT. INDEED THE 'REAS ON TO BELIEVE' BEING A CONDITION PRECEDENT FOR REOPENING THE ASSESSMENT IS A QUESTION OF JURISDICTION. 88. THE EXPRESSION 'REASON TO BELIEVE' OCCURRING IN SECTION 147 OF THE ACT INTER-ALIA POSTULATES THAT THE INFORMATION RECEIVED FROM INVESTIGATION WING, EMANATING FROM THE SEARCH RECORDS WOULD NOT PER SE EMPOWER THE ASSESSING OFFICER TO EXERCISE THE POWER OF REASSESS MENT. SUCH INFORMATION WITH REGARD TO ESCAPEMENT OF INCOME WHICH COMES INTO POS SESSION OF AN ASSESSING SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 80 OFFICER HAS TO BE PROCESSED AND, ON THE BASIS, THER EOF AN OPINION HAS TO BE FORMED OBJECTIVELY BEFORE ISSUING NOTICE UNDER SECT ION 148 OF THE ACT TO AN ASSESSEE. IN OTHER WORDS THE INFORMATION RECEIVED F ROM THE INVESTIGATION WING CANNOT BE SAID TO BE TANGIBLE MATERIAL PER SE WITHOUT A FURTHER INQUIRY BEING UNDERTAKEN FAILING WHICH THE DECISION OF THE ASSESS ING OFFICER IN ISSUING NOTICE FOR REOPENING OF ASSESSMENT WOULD BE A RESULT OF BO RROWED SATISFACTION AND NOTICES WOULD BE AS A RESULT OF ASSUMPTION OF JURIS DICTION. WHILE THE REPORT OF THE INVESTIGATION WING MIGHT H AVE CONSTITUTED MATERIAL ON THE BASIS OF WHICH THE ASSESSING OFFICE R FORMED THE REASONS TO BELIEVE, THE PROCESS OF ARRIVING AT SUCH SATISFACTI ON COULD NOT BE A MERE REPETITION OF THE REPORT OF INVESTIGATION WING. 89. IN THE ASSESSEE'S CASE, THE CRUCIAL LINK BETWEE N THE INFORMATION MADE AVAILABLE TO THE ASSESSING OFFICER AND THE FORMATIO N OF BELIEF WAS ABSENT. THE 'REASONS TO BELIEVE' RECORDED WERE NOT REASONS BUT ONLY CONCLUSIONS AND A REPRODUCTION OF THE INFORMATION RECEIVED FROM THE D IRECTOR (INVESTIGATION). HENCE IT IS NOTHING BUT A 'BORROWED SATISFACTION'. 90. THE AO, IN THE REASONS RECORDED, DISCUSSED IN DE TAILS THE MATERIALS FOUND BY THE SEARCH TEAM AND THEREAFTER INITIATED THE PRO CEEDINGS BY OBSERVING AS DETAILED UNDER: ON THE BASIS OF ANALYSIS BASE ON ABOVE SEIZED DOCUM ENTS IT HAS BEEN FOUND THAT THESE TRANSACTION ARE DONE IN CASH BY ASV (ASHOK SUNDERDAS VASWANI) F OR THE RELEVANT ASSESSMENT YEAR 2008-09. DATE PAGE NO./ANNEXURE RECEIPT (RS.) REFERENCE OF RECEIPT PAYMENT (RS.) REFERENCE OF PAYMENT 5.10.2007 145/A-64 9800000 VEJALPUR-1062 71P 61500 ASV 450000 ASV SARAFI FROM GOPAL/ISHWAR - - 08.10.2007 140/A-64 10400000 VEJALPUR-1062 41400 AS V SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 81 71P 3300000 ASV - - 15.10.2007 126/A-64 9800000 VEJALPUR-1062 71P 2500000 ASV 1700000 ASV 1057600 ASV - - 68837 ASV - - 15000 ASV 24.10.2007 104/A-64 5000000 VEJALPUR-1062 71P 11400 ASV 1000000 ASV - - 8.02.2008 81/A-66 5000000 VEJALPUR 1062 - - 8.02.2008 81/A-66 500000 ASV - - TOTAL 43980000 3755737 IN VIEW OF THE ABOVE FACTS, I HAVE REASON TO BELIEV E THAT INCOME AMOUNTING TO RS. 4,77,35,737/- CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT BY REASON OF THE FAILURE OF THE ASSESSEE TO DISCLOSE FULLY AND T RULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. 91. THUS WHAT IS INFERRED FROM THE SATISFACTION RECO RDED BY THE AO IS THAT THERE WAS NO APPLICATION OF THE MIND OF THE AO WHIC H WAS PRE-REQUISITE FOR ACQUIRING THE JURISDICTION UNDER SECTION 147/148 OF THE ACT. AS SUCH THE AO IN THE REASON RECORDED NOWHERE MENTIONED HOW HE REACHE D TO BELIEVE THAT THE INFORMATION RECEIVED FORM THE INVESTIGATION WING RE PRESENT INCOME OF THE ASSESSEE AND SUCH INCOME HAS ESCAPED ASSESSMENT. TH ERE IS NO MENTION IN REASONS RECORDED WITH RESPECT TO THE FACT THAT WHET HER THE ASSESSEE HAS FILED ORIGINAL RETURN OR WEATHER ASSESSMENT UNDER SECTION 143(3) WAS MADE EARLIER OR NOT. IF ASSESSMENT UNDER SECTION 143(3) COMPLETED EARLIER THEN HOW IT WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE ALL MATERIAL FACTS FULLY AND TRULY DURING ASSESSMENT PROCEEDING FOR INITIATING REASSES SMENT PROCEEDING AFTER EXPIRY OF 4 YEAR FROM THE END OF RELEVANT ASSESSMENT YEAR. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 82 92. FURTHER, WE NOTE THAT SEARCH UNDER SECTION 132 OF ACT WAS CONDUCTED AS ON 10 TH AND 12 TH MARCH 2015 IN CASE OF ASSESSEE GROUP. THE LAST DAT E OF PANCHNAMA WAS MADE AS ON 6 TH AND 8 TH MAY 2015. FROM THIS WHAT DOUBT ARISES IS THAT THERE WAS NO MATERIAL AVAILABLE BEFORE THE AO AS ON THE DATE OF ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT TO ANALYZE AND FORM A PRIMA FACIE BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT FOR THE YEAR UNDER CONSIDERATION. 93. IN THE PRESENT CASE THE SEARCH INFORMATION RECE IVED FROM THE INVESTIGATION WING WAS USED TO FORM THE REASON TO BELIEVE BY THE AO BUT WITHOUT APPLYING THE MIND. THUS THE REASONS WERE MERELY RECORDED ON THE BORROWED SATISFACTION BY THE AO. THE SOURCE FOR ALL THE CONCLUSIONS WAS OF TH E INVESTIGATION REPORT. THE TANGIBLE MATERIAL WHICH FORMED THE BASIS FOR THE BE LIEF THAT INCOME HAD ESCAPED ASSESSMENT MUST BE EVIDENT FROM A READING OF THE RE ASONS. THE REASONS FAILED TO DEMONSTRATE THE LINK BETWEEN THE TANGIBLE MATERIAL AND THE FORMATION OF THE REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMEN T. THE ASSESSING OFFICER HAD NOT INDEPENDENTLY CONSIDERED THE TANGIBLE MATER IAL WHICH FORMED THE BASIS FOR THE REASONS TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMENT. 94. THE HON'BLE HIGH COURT OF BOMBAY IN THE CASE PRINCIPAL COMMISSIONER OF INCOME-TAX-5 V. SHODIMAN INVESTMENTS (P.) LTD. REPORTED IN 422 ITR 337 HOLDING THAT REOPENING NOTICE ON THE BASIS OF INTIM ATION FROM DDIT (INVESTIGATION) ABOUT A PARTICULAR ENTITY ENTERING INTO SUSPICIOUS TRANSACTIONS, WAS CLEARLY IN BREACH OF THE SETTLED POSITION OF LAW TH AT REOPENING NOTICE HAS TO BE ISSUED BY THE ASSESSING OFFICER ON HIS OWN SATISFAC TION AND NOT ON BORROWED SATISFACTION. THE HONBLE COURT HAS PRONOUNCED AS UN DER: '12. THE RE-OPENING OF AN ASSESSMENT IS AN EXERCISE OF EXTRA-ORDINARY POWER ON THE PART OF THE ASSESSING OFFICER, AS IT LEADS TO UNSETTLING THE SE TTLED ISSUE/ASSESSMENTS. THEREFORE, THE REASONS TO BELIEVE HAVE TO BE NECESSARILY RECORDED IN TERMS OF SECTION 148 OF THE ACT, BEFORE RE-OPENING NOTICE, IS ISSUED. THESE REASONS, MUST INDICATE THE MATERIA L (WHATEVER REASONS) WHICH FORM THE BASIS OF RE- OPENING ASSESSMENT AND ITS REASONS WHICH WOULD EVID ENCE THE LINKAGE/NEXUS TO THE CONCLUSION THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. TH IS IS A SETTLED POSITION AS OBSERVED BY THE SUPREME COURT IN S. NARAYANAPPA V. CIT [1967] 63 IT R 219, THAT IT IS OPEN TO EXAMINE WHETHER THE REASON TO BELIEVE HAS RATIONAL CONNECTION WITH THE FORMATION OF THE BELIEF. TO THE SAME EFFECT, THE APEX COURT IN ITO V. LAKHMANI MERWAL DAS [1976] 103 ITR 437 HAD LAID DOWN THAT THE REASONS TO SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 83 BELIEVE MUST HAVE RATIONAL CONNECTION WITH OR RELEV ANT BEARING ON THE FORMATION OF BELIEF I.E. THERE MUST BE A LIVE LINK BETWEEN MATERIAL COMING THE NOT ICE OF THE ASSESSING OFFICER AND THE FORMATION OF BELIEF REGARDING ESCAPEMENT OF INCOME. IF THE AFORE SAID REQUIREMENT ARE NOT MET, THE ASSESSEE IS ENTITLED TO CHALLENGE THE VERY ACT OF RE-OPENING OF ASSESSMENT AND ASSUMING JURISDICTION ON THE PART OF THE ASSESSING OFFICER. 13. IN THIS CASE, THE REASONS AS MADE AVAILABLE TO THE RESPONDENT- ASSESSEE AS PRODUCED BEFORE THE TRIBUNAL MERELY INDICATES INFORMATION RECEIVED FROM THE DIT (INVESTIGATION) ABOUT A PARTICULAR ENTITY, ENTERING INTO SUSPICIOUS TRANSACTIONS. HOWE VER, THAT MATERIAL IS NOT FURTHER LINKED BY ANY REASON TO COME TO THE CONCLUSION THAT THE RESPONDEN T-ASSESSEE HAS INDULGED IN ANY ACTIVITY WHICH COULD GIVE RISE TO REASON TO BELIEVE ON THE PART OF THE ASSESSING OFFICER THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. IT IS FOR THIS REASON T HAT THE RECORDED REASONS EVEN DOES NOT INDICATE THE AMOUNT WHICH ACCORDING TO THE ASSESSING OFFICER , HAS ESCAPED ASSESSMENT. THIS IS AN EVIDENCE OF A FISHING ENQUIRY AND NOT A REASONABLE BELIEF TH AT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. 14. FURTHER, THE REASONS CLEARLY SHOWS THAT THE ASS ESSING OFFICER HAS NOT APPLIED HIS MIND TO THE INFORMATION RECEIVED BY HIM FROM THE DDIT (INV.). T HE ASSESSING OFFICER HAS MERELY ISSUED A RE- OPENING NOTICE ON THE BASIS OF INTIMATION REGARDING RE-OPENING NOTICE FROM THE DDIT (INV.) THIS IS CLEARLY IN BREACH OF THE SETTLED POSITION IN LAW TH AT RE- OPENING NOTICE HAS TO BE ISSUED BY THE ASSESSING OFFICE ON HIS OWN SATISFACTION AND NOT ON BORROWED SATISFACTION.' 95. THE POWER TO REOPEN A COMPLETED ASSESSMENT UNDER SECTION 147 OF THE ACT HAS BEEN BESTOWED ON THE ASSESSING OFFICER, IF HE HAS REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR. HOWEVER, THIS BELIEF THAT INCOME HAS ESCAPED ASSESS MENT HAS TO BE THE REASONABLE BELIEF OF THE ASSESSING OFFICER HIMSELF AND CANNOT BE AN OPINION AND/OR BELIEF OF SOME OTHER AUTHORITY. ON THE BASIS OF THE INFORMATION BY ITSELF RECEIVED FROM ANOTHER AGENCY, THERE CANNOT BE ANY R EASSESSMENT PROCEEDINGS. HOWEVER, AFTER CONSIDERING THE INFORMATION/MATERIAL RECEIVED FROM OTHER SOURCE, THE ASSESSING OFFICER IS REQUIRED TO CONSIDER THE M ATERIAL ON RECORD IN CASE OF THE ASSESSEE BY APPLYING HIS MIND AND THEREAFTER IS REQ UIRED TO FORM AN INDEPENDENT OPINION ON THE BASIS OF THE MATERIAL ON RECORD THAT THE INFORMATION HAS BEARING ON THE INCOME OF THE ASSESSEE AND SUCH INCOME HAS ESCA PED ASSESSMENT. WITHOUT FORMING SUCH AN OPINION, SOLELY AND MECHANICALLY RE LYING UPON THE INFORMATION RECEIVED FROM OTHER SOURCE, THERE CANNOT BE ANY REA SSESSMENT. IT IS ALSO ESTABLISHED PRINCIPLE OF LAW THAT IF A PARTICULAR A UTHORITY HAS BEEN DESIGNATED TO RECORD HIS/HER SATISFACTION ON ANY PARTICULAR ISSUE , THEN IT IS THAT AUTHORITY ALONE WHO SHOULD APPLY HIS/HER INDEPENDENT MIND TO RECORD HIS/HER SATISFACTION AND FURTHER MANDATORY CONDITION IS THAT THE SATISFACTIO N RECORDED SHOULD BE SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 84 'INDEPENDENT' AND NOT 'BORROWED' OR 'DICTATED' SATI SFACTION. LAW IN THIS REGARD IS NOW WELL-SETTLED. 96. THE HON'BLE SUPREME COURT IN THE CASE OF ANIRUDH SINHJI KARAN SINHJI JADEJA V. STATE OF GUJARAT REPORTED IN [1995] 5 SCC 302 AS WELL HAS HELD THAT IF A STATUTORY AUTHORITY HAS BEEN VESTED WITH JURISDICTI ON, HE HAS TO EXERCISE IT ACCORDING TO ITS OWN DISCRETION. IF DISCRETION IS E XERCISED UNDER THE DIRECTION OR IN COMPLIANCE WITH SOME HIGHER AUTHORITIES INSTRUCT ION, THEN IT WILL BE A CASE OF FAILURE TO EXERCISE DISCRETION ALTOGETHER. THE CASE S REOPENED ON THE BASIS OF INFORMATION RECEIVED FROM THE OTHER DEPARTMENTS ARE ALSO GOVERNED BY THE AFORESAID PRINCIPLE OF MAKING AN INDEPENDENT INQUIR Y AND RECORDING OF SATISFACTION BY THE ASSESSING OFFICER ISSUING NO TICE UNDER SECTION 148 OF THE ACT. 97. THIRD PARTY INFORMATION IS ONLY AN INFORMATION A ND DOES NOT CONSTITUTE 'REASON TO BELIEVE' UNTIL AND UNLESS THE THIRD PART Y INFORMATION IS SUBJECTED TO INVESTIGATION AND ON THE BASIS THEREOF INDEPENDENT REASONS ARE RECORDED BY THE ASSESSING OFFICER BEFORE ISSUANCE OF NOTICE UNDER S ECTION 148 OF THE ACT. 98. MOVING FURTHER, WE ALSO NOTE THAT THE ASSESSEE WAS ALREADY ASSESSED UNDER THE PROVISIONS OF SECTION 143(3) OF THE ACT VIDE OR DER DATED 22 ND NOVEMBER 2010. ACCORDINGLY THE 1 ST PROVISO IN SECTION 147 OF THE ACT HAS A DIRECT BEA RING ON THE ISSUE ON HAND. IT IS STATED THEREIN THAT THE RE CANNOT BE ANY ACTION UNDER SECTION 147 OF THE ACT AFTER THE EXPIRY OF THE 4 YE ARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNTIL AND UNLESS THE INCOME CHARGEA BLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF TH E FAILURE ON THE PART OF THE ASSESSEE TO MAKE DISCLOSURE OF ALL THE MATERIAL FAC TS TRULY AND FULLY NECESSARY FOR ASSESSMENT. IN THE PRESENT CASE, WE HAVE ALREADY HE LD THAT INITIATION OF THE PROCEEDINGS UNDER SECTION 147 OF THE ACT WAS BASED ON THE BORROWED SATISFACTION. THUS IT IS IMPLIED THAT THE AO HAS NO T APPLIED HIS MIND TO ARRIVE AT SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 85 THE CONCLUSION THAT THERE WAS OF FAILURE ON THE PAR T OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL THE MATERIAL FACTS. IN OTHER WO RDS, MENTIONING BY THE AO THAT THE ASSESSEE HAS FAILED TO DISCLOSE ALL MATERIAL FA CTS IN THE REASONS RECORDED IS NOT SUFFICIENT ENOUGH. RATHER THE AO IS UNDER THE OBLIG ATION TO ARRIVE AT SUCH CONCLUSION THAT THE ASSESSEE FAILED TO DISCLOSE ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT AFTER APPLYING HIS MIND AND VERIFICATION OF THE FACTS. BUT THE AO HAS NOT DONE SO. IN HOLDING SO WE DRAW SUPPORT AND GUID ANCE FROM THE JUDGMENT OF HONBLE BOMBAY HIGH COURT IN CASE OF GATEWAY LEASING (P.) LTD VS. ACIT REPORTED IN 117 TAXMANN.COM 442 WHERE IT WAS HELD A S UNDER: 35. HAVING DISCUSSED THE ABOVE, WE MAY ONCE AGAIN REVE RT BACK TO THE REASONS FURNISHED BY RESPONDENT NO. 2 FOR RE-OPENING OF ASSESSMENT UNDER SECTION 147 OF THE ACT. AFTER REFERRING TO THE INFORMATION RECEIVED FOLLOWING SEARCH AND SEIZURE A CTION CARRIED OUT IN THE PREMISES OF SHRI NARESH JAIN, IT WAS STATED THAT INFORMATION SHOWED THAT PE TITIONER HAD TRADED IN THE SHARES OF M/S. SCAN STEELS LTD., AND WAS IN RECEIPT OF RS. 23,98,014.00 AND THEREFORE, RESPONDENT NO. 2 CONCLUDED THAT HE HAD REASONS TO BELIEVE THAT THIS AMOUNT HAD ESCA PED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT. 36. FIRST OF ALL IT WOULD BE EVIDENT FROM THE MATERIAL S ON RECORD THAT PETITIONER HAD DISCLOSED THE ABOVE INFORMATION TO THE ASSESSING OFFICER IN THE C OURSE OF THE ASSESSMENT PROCEEDINGS. ALL RELATED DETAILS AND INFORMATION SOUGHT FOR BY THE ASSESSING OFFICER WERE FURNISHED BY THE PETITIONER. SEVERAL HEARINGS TOOK PLACE IN THIS REGARD WHERE-AFTER THE ASSESSING OFFICER HAD CONCLUDED THE ASSESSMENT PROCEEDINGS BY PASSING ASSESSMENT ORDER UNDER SECTI ON 143 (3) OF THE ACT. THUS IT WOULD APPEAR THAT PETITIONER HAD DISCLOSED THE PRIMARY FACTS AT ITS DISPOSAL TO THE ASSESSING OFFICER FOR THE PURPOSE OF ASSESSMENT. HE HAD ALSO EXPLAINED WHATEV ER QUERIES WERE PUT BY THE ASSESSING OFFICER WITH REGARD TO THE PRIMARY FACTS DURING THE HEARING S. 37. IN SUCH CIRCUMSTANCES, IT CANNOT BE SAID THAT PETI TIONER DID NOT DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. CONSEQ UENTLY, RESPONDENT NO. 2 COULD NOT HAVE ARRIVED AT THE SATISFACTION THAT HE HAD REASONS TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT. IN THE ABSENCE OF THE SAME, RESPONDENT NO. 2 COULD NOT HAVE ASSUMED JURISDICTION AND ISSUED THE IMPUGNED NOTICE UNDER SECTION 148 OF THE ACT IN VIEW OF THE ABOVE, WE HOLD THAT THE INITIATION O F PROCEEDINGS UNDER SECTION 147/148 OF THE ACT ARE NOT VALID IN THE EYE S OF LAW AND LIABLE TO BE QUASHED FOR THE REASON THAT THE AO FAILED TO APPLY HIS MIND. THUS THE REASONS WERE MERELY RECORDED ON THE BORROWED SATISFACTION B Y THE AO. THE SOURCE FOR ALL THE CONCLUSIONS WAS OF THE INVESTIGATION REPORT. AC CORDINGLY, WE QUASH THE SAME. 99. MOVING AHEAD TO QUESTION NUMBER 3WE NOTE THAT I F THE ASSESSING OFFICER HAS REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR, HE MAY, SUBJECT TO THE PRO VISIONS OF SECTIONS 148 TO SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 86 153, ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OT HER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION, OR RE -COMPUTE THE LOSS OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE, AS T HE CASE MAY BE, FOR THE ASSESSMENT YEAR CONCERNED. THE ISSUE ARISES WHETHER AO ON HAVING DROPPED THE ITEM OF ESCAPED INCOME, ON THE BASIS OF WHICH REASO NS TO BELIEVE WERE FORMED AND NOTICE U/S. 148 WAS ISSUED, AFTER GETTING A SAT ISFACTORY EXPLANATION FROM THE ASSESSEE, CAN VALIDLY TAX 'OTHER ITEMS OF ESCAPED I NCOME' WHICH COME TO HIS NOTICE DURING REASSESSMENT PROCEEDINGS. IN THIS REG ARD, THE COURTS HAVE NOTICED THAT THE PARLIAMENT HAS USED THE WORDS 'ASSESS OR R EASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPE D ASSESSMENT', THE WORDS 'AND ALSO' CANNOT BE READ AS BEING IN THE ALTERNATI VE. THE CORRECT INTERPRETATION WOULD BE TO REGARD THOSE WORDS AS BEING CONJUNCTIVE AND CUMULATIVE. IT IS OF SOME SIGNIFICANCE THAT THE PARLIAMENT HAS NOT USED THE WORD 'OR'. THE LEGISLATURE DID NOT REST CONTENT BY MERELY USING THE WORD 'AND' . IT HAS BEEN EMPHASIZED THAT THE WORDS 'AND', AS WELL AS 'ALSO' HAVE BEEN USED T OGETHER AND IN CONJUNCTION. 100. EVIDENTLY, THEREFORE, WHAT THE PARLIAMENT INTEN DS BY USE OF THE WORDS 'AND ALSO' IS THAT THE AO, UPON THE FORMATION OF A REASO N TO BELIEVE UNDER SECTION 147 AND THE ISSUANCE OF A NOTICE UNDER SECTION 148(2) M UST ASSESS OR REASSESS: (I) 'SUCH INCOME'; AND ALSO (II) ANY OTHER INCOME CHARG EABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SU BSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THE SECTION. THE WORDS 'SUCH I NCOME' REFER TO THE INCOME WHICH BECAME THE BASIS FOR RECORDING REASONS AND IS SUE OF NOTICE U/S. 148. THE EXPRESSION 'ANY OTHER INCOME' REFERS TO SUCH ESCAPE D INCOME WHICH CAME TO THE NOTICE OF THE AO DURING THE COURSE OF REASSESSMENT PROCEEDINGS AND IN RESPECT OF WHICH NO REASONS WERE RECORDED BEFORE ISSUE OF NOTI CE U/S 148. THE HONBLE BOMBAY HIGH COURTS IN CASE OF CIT VS. JET AIRWAYS RE PORTED IN 331 ITR 236 HAVE HELD THAT: SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 87 INTERPRETING THE PROVISION AS IT STANDS WITHOUT ADD ING OR DEDUCTING FROM THE WORDS USED BY THE PARLIAMENT, IT IS CLEAR THAT UPON FORMATION OF A RE ASON TO BELIEVE UNDER SECTION 147 AND FOLLOWING THE ISSUANCE OF A NOTICE UNDER SECTION 148, THE ASS ESSING OFFICER HAS THE POWER TO ASSESS OR REASSESS THE INCOME WHICH HE HAS REASON TO BELIEVE HAD ESCAP ED ASSESSMENT AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX. THE WORDS 'AND ALSO' CANNOT BE I GNORED. THE INTERPRETATION WHICH THE COURT PLACES ON THE PROVISION SHOULD NOT RESULT IN DILUTI NG THE EFFECT OF THESE WORDS OR RENDERING ANY PART OF THE LANGUAGE USED BY THE PARLIAMENT OTIOSE. THE PARLIAMENT HAVING USED THE WORDS 'ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHAR GEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT', THE WORDS 'AND ALSO' CANNOT BE READ AS BEING IN THE ALTERNATIVE. ON THE CONTRARY, THE CORRECT INTERPRETATION WOULD BE TO REGARD THESE WORDS AS BE ING CONJUNCTIVE AND CUMULATIVE. IT IS OF SOME SIGNIFICANCE THAT THE PARLIAMENT HAS NOT USED THE W ORD 'OR'. THE LEGISLATURE DID NOT REST CONTENT BY MERELY USING THE WORD 'AND'. THE WORDS 'AND' AS WEL L AS 'ALSO' HAVE BEEN USED TOGETHER AND IN CONJUNCTION. EVIDENTLY, THEREFORE, WHAT THE PARLIAM ENT INTENDS BY USE OF THE WORDS 'AND ALSO' IS THAT THE ASSESSING OFFICER, UPON THE FORMATION OF A REAS ON TO BELIEVE UNDER SECTION 147 AND THE ISSUANCE OF A NOTICE UNDER SECTION 148(2), MUST ASSESS OR RE ASSESS: ( I ) 'SUCH INCOME'; AND ALSO ( II ) ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSME NT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THE SECTION. THE WORDS 'SUCH INCOME' REFER TO THE INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND IN RESPECT OF WHICH THE ASSESSING OFFICER HAS FORMED A REASON TO BELIEVE THAT IT HAS ESCAPED ASSE SSMENT. HENCE, THE LANGUAGE USED BY THE PARLIAMENT IS INDICATIVE OF THE POSITION THAT THE A SSESSMENT OR REASSESSMENT MUST BE IN RESPECT OF THE INCOME IN RESPECT OF WHICH HE HAS FORMED A REASON T O BELIEVE THAT IT HAS ESCAPED ASSESSMENT AND ALSO IN RESPECT OF ANY OTHER INCOME WHICH COMES TO HIS NOTICE SUBSEQUENTLY DURING THE COURSE OF THE PROCEEDINGS AS HAVING ESCAPED ASSESSMENT. IF THE IN COME, THE ESCAPEMENT OF WHICH WAS THE BASIS OF THE FORMATION OF THE REASON TO BELIEVE, IS NOT ASSE SSED OR REASSESSED, IT WOULD NOT BE OPEN TO THE ASSESSING OFFICER TO INDEPENDENTLY ASSESS ONLY THAT INCOME WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THE SECTION AS HAVING ESCAPED ASSESSMENT. IF UPON THE ISSUANCE OF A NOTICE UNDER SECTION 148(2), THE ASSE SSING OFFICER ACCEPTS THE OBJECTIONS OF THE ASSESSEE AND DOES NOT ASSESS OR REASSESS THE INCOME WHICH WAS THE BASIS OF THE NOTICE, IT WOULD NOT BE OPEN TO HIM TO ASSESS INCOME UNDER SOME OTHER IS SUE INDEPENDENTLY. THE PARLIAMENT, WHEN IT ENACTED THE PROVISIONS OF SECTION 147 WITH EFFECT F ROM 1-4-1989, CLEARLY STIPULATED THAT THE ASSESSING OFFICER HAS TO ASSESS OR REASSESS THE INCOME WHICH HE HAD REASON TO BELIEVE HAD ESCAPED ASSESSMENT AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH C AME TO HIS NOTICE DURING THE PROCEEDINGS. IN THE ABSENCE OF THE ASSESSMENT OR REASSESSMENT OF TH E FORMER, HE CANNOT INDEPENDENTLY ASSESS THE LATTER. [PARA 11] SIMILARLY THE HONBLE KARNATAKA HIGH COURT IN CASE OF N GOVINDRAJU V ITO REPORTED IN 377 ITR 243 HELD AS UNDER: 24. THE 'REASON TO BELIEVE' THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT, IS ONE ASPECT OF THE MATTER. IF SUCH REASON EXISTS, THE ASSESSING OFFICER CAN UNDOUBTEDLY ASSESS OR REASSESS SUCH INCOME, FOR WHICH THERE IS SUCH 'REASON TO BELIEVE' THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THIS IS THE FIRST PART OF THE SECTION A ND UP TO THIS EXTENT, THERE IS NO DISPUTE. 25. IT IS THE LATTER PART OF THE SECTION THAT IS TO BE INTERPRETED BY THIS COURT, WHICH IS AS TO WHETHER THE SECOND PART RELATING TO 'ANY OTHER INCOME' IS T O BE READ IN CONJUNCTION WITH THE FIRST PART (RELATING TO 'SUCH INCOME') OR NOT. IF IT IS TO BE READ IN CONJUNCTION, THEN WITHOUT THERE BEING ANY ADDITION MADE WITH REGARD TO 'SUCH INCOME' (FOR WHI CH REASON HAD BEEN GIVEN IN THE NOTICE FOR REOPENING THE ASSESSMENT), THE SECOND PART CANNOT B E INVOKED. BUT IF IT IS NOT TO BE READ IN CONJUNCTION, THE SECOND PART CAN BE INVOKED INDEPEN DENTLY EVEN WITHOUT THE REASON FOR THE FIRST PART SURVIVING. 26. FROM A PLAIN READING OF SECTION 147 OF THE ACT IT IS CLEAR THAT ITS LATTER PART PROVIDES THAT 'ANY OTHER INCOME' CHARGEABLE TO TAX WHICH HAS ESCAPED A SSESSMENT AND WHICH HAS COME TO THE NOTICE OF THE ASSESSING OFFICER SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS, CAN ALSO BE TAXED. THE SAID TWO PARTS OF THE SECTION HAVING BEEN JOINED BY THE WORD S 'AND ALSO', WHAT WE HAVE TO NOW CONSIDER IS WHETHER 'AND ALSO' WOULD BE CONJUNCTIVE, OR THE SEC OND PART HAS TO BE TREATED AS INDEPENDENT OF THE FIRST PART. IF WE TREAT IT AS CONJUNCTIVE, THEN CER TAINLY IF THE REASON TO BELIEVE IS THERE FOR A PART ICULAR GROUND OR ISSUE WITH REGARD TO ESCAPED INCOME WHICH HAS TO BE ASSESSED OR REASSESSED, AND SUCH SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 88 GROUND IS NOT FOUND OR DOES NOT SURVIVE, THEN THE A SSESSMENT OR REASSESSMENT OF 'ANY OTHER INCOME' WHICH IS CHARGEABLE TO TAX AND HAS ESCAPED ASSESSME NT, CANNOT BE MADE. 101. IN THE LIGHT OF THE ABOVE STATED DISCUSSION, W E PROCEED TO ADJUDICATE THE ISSUE ON HAND. FROM THE REASONS RECORDED WE NOTE TH AT THE AO HAS PROPOSED THE ADDITIONS IN THE REASONS RECORDED AS DETAILED UNDER : ON THE BASIS OF ANALYSIS BASE ON ABOVE SEIZED DOCUM ENTS IT HAS BEEN FOUND THAT THESE TRANSACTION ARE DONE IN CASH BY ASV (ASHOK SUNDERDA S VASWANI) FOR THE RELEVANT ASSESSMENT YEAR 2008-09. DATE PAGE NO./ANNEXURE RECEIPT (RS.) REFERENCE OF RECEIPT PAYMENT (RS.) REFERENCE OF PAYMENT 5.10.2007 145/A-64 9800000 VEJALPUR-1062 71P 61500 ASV 450000 ASV SARAFI FROM GOPAL/ISHWAR - - 08.10.2007 140/A-64 10400000 VEJALPUR-1062 71P 41400 ASV 3300000 ASV - - 15.10.2007 126/A-64 9800000 VEJALPUR-1062 71P 2500000 ASV 1700000 ASV 1057600 ASV - - 68837 ASV - - 15000 ASV 24.10.2007 104/A-64 5000000 VEJALPUR-1062 71P 11400 ASV 1000000 ASV - - 8.02.2008 81/A-66 5000000 VEJALPUR 1062 - - 8.02.2008 81/A-66 500000 ASV - - TOTAL 43980000 3755737 HOWEVER, THE AO HAS MADE THE ADDITION IN THE ASSESS MENT FRAMED UNDER SECTION 147/143(3) OF THE ACT AS DETAILED UNDER: SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 89 SR.NO. ITEM OF ADDITION AMOUNT (IN RS.) 1. PARMANAND KHATTAR 1,05,00,000/- 2. INVESTMENT IN SHOP IN 3 RD EYE 1,00,00,000/- 3. INVESTMENT IN BUNGALOWS 10,45,410/- 4. GOLDEN 4,16,35,050/- 5. SWAPNALOK 33,000/- 6. ABHISHEK 6,28,200/- 7. TRANSACTION OF PERSONAL NATURE 8,29,49,396/- 8. TRANSACTION MARKS AS AGAINST EC/SARAFI ETC 28,30,01,684/- 9. TRANSACTION RELATED TO PROJECTS 37,31,117/- 10. OTHER LAND TRANSACTION 74,25,715/- 11. MISCELLANEOUS TRANSACTIONS 1,35,60,365/- ON COMPARISON TO THE ABOVE ADDITIONS DOCUMENTED BY THE AO IN THE REASONS RECORDED WITH THE ACTUAL ADDITION MADE BY T HE AO IN THE ASSESSMENT ORDER, WE NOTE THAT THERE WAS NO ADDITION MADE BY T HE AO IN THE ASSESSMENT ORDER WHICH WAS PROPOSED IN THE REASONS RECORDED BY THE AO IN ACTUALITY. 102. THE LEARNED DR AT THE TIME OF HEARING HAS SUBMI TTED THAT THE FOLLOWING ADDITION MADE BY THE AO IN THE ASSESSMENT FRAMED UN DER SECTION 147 /143(3) OF THE ACT WERE ALSO PROPOSED IN THE REASONS RECORDED. ON ANALYSIS OF CASH BOOK (TOTAL 142 ANNEXURE), IT W AS NOTICED THAT SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 90 (I) RS.8,29,49,396/- IS IN NATURE OF PAYMENT IN CASH WA S RECORDED IN NAME OF THE ASSESSEE. (II) RS.1,35,60,365/- IS IN NATURE OF PAYMENT IN CASH WH ICH WAS PAID TO OTHERS. THE ABOVE PAYMENTS MADE BY THE ASSESSEE WERE REMAIN ED UNEXPLAINED AND FOLLOWING ADDITIONS WERE MADE: SR. NO PARTICULARS AMOUNT IN RS. 1 UNEXPLAINED EXPENDITURE TOWARDS PAYMENT MADE IN CASH (PERSONAL NATURE) 8,29,49,396 2 UNEXPLAINED EXPENDITURE (MISCELLANEOUS TRANSACTION) 1,35,60,365 IN VIEW OF THE ABOVE, THE LEARNED DR CONTENDED BEFO RE US THAT THE ASSESSMENT FRAMED UNDER SECTION 147/143(3) OF THE A CT IS VALID AS 2 ADDITION WHICH WERE PROPOSED IN THE REASONS RECORDED WERE AL SO ACTUALLY ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 103. HOWEVER, ON COMPARISON OF THE ADDITIONS PROPOS ED IN THE REASON TO BELIEVE RECORDED FOR THE ASSESSMENT UNDER SECTION 1 47 OF THE ACT WITH THE ACTUAL ADDITION MADE BY THE AO AS CONTENDED BY THE LEARNED DR HEREINABOVE, WE FIND THAT THE ADDITIONS WHICH WERE PROPOSED IN THE REASO NS RECORDED WERE NOT MATCHING WITH THE ACTUAL ADDITIONS MADE BY THE AO I N THE ASSESSMENT ORDER UNDER SECTION 147/143(3) OF THE ACT. AS SUCH THE AM OUNT OF ADDITION VIZ A VIZ THE BASIS OF RE-OPENING AS PROPOSED IN THE REASONS RECORDED WERE NOT MATCHING WITH THE ADDITION MADE BY THE AO IN THE ASSESSMENT FRAMED UNDER SECTION 147/143(3) OF THE ACT. ACCORDINGLY, WE HOLD THAT TH ERE CANNOT BE ANY ADDITION IN THE ASSESSMENT FRAMED UNDER SECTION 147/143(3) OF T HE ACT IN THE GIVEN FACTS AND CIRCUMSTANCES. IN VIEW OF THE ABOVE WE QUASH THE AS SESSMENT FRAMED UNDER 147 OF THE ACT. HENCE, THE GROUNDS OF APPEAL OF THE ASS ESSEE ARE ALLOWED. 104. THE ASSESSEE IN GROUNDS NOS. 1 TO 18 OF THE APP EAL HAS CHALLENGED THE ADDITIONS MADE BY THE AO ON MERIT WHICH WERE PARTLY CONFIRMED BY THE LD. CIT- A. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 91 105. AS THE ASSESSMENT ORDER FRAMED UNDER SECTION 1 47 R.W.S. 143(3) OF THE ACT HAS BEEN HELD AS INVALID BY US IN THE PARAGRAPH BEA RING NO.78OF THIS ORDER, THEREFORE WE ARE NOT INCLINED TO DECIDE THE ISSUES RAISED BY THE ASSESSEE ON MERIT. ACCORDINGLY, WE DISMISS THE SAME AS INFRUCTUOUS. COMING TO THE REVENUE APPEAL NO.806/AHD/2019 FOR A. Y. 2008-09. 106. AT THE OUTSET WE NOTE THAT THE ASSESSMENT FRAM ED UNDER SECTION 147/143(3) HAVE BEEN HELD BY US AS INVALID IN THE A PPEAL FILED BY THE ASSESSEE BEARING ITA NO.456/AHD/2019 FOR A.Y. 2008-09 AT PAR AGRAPH NO.105 OF THIS ORDER. ACCORDINGLY, WE HOLD THAT NO SEPARATE ADJUDI CATION IS REQUIRED FOR THE GROUNDS RAISED BY THE REVENUE. ACCORDINGLY, WE DISM ISS THE APPEAL FILED BY THE REVENUE AS INFRUCTUOUS. 107. IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E BEARING ITA NO.456/AHD/209 IS PARTLY ALLOWED AND APPEAL FILED B Y THE REVENUE BEARING ITA NO. 806/AHD/2018 IS DISMISS AS INFRUCTUOUS. COMING TO THE ITA NO. 457/AHD/2019, AN APPEAL FILED BY THE ASSESSEE FOR A.Y. 2008-09 108. AT THE OUTSET, WE NOTE THAT ISSUES RAISED BY T HE ASSESSEE ARE IDENTICAL TO THE ISSUE RAISED BY THE ASSESSEE IN ITA NO. 456/AHD/201 9 WHICH HAS BEEN DECIDED IN FAVOR OF THE ASSESSEE BY US VIDE PARAGRAPH NO.10 7 OF THIS ORDER. RESPECTFULLY FOLLOWING THE SAME, THE APPEAL FILED BY THE ASSESSE E IS PARTLY ALLOWED. NOW COMING TO THE REVENUE APPEAL BEARING NO. ITA NO .805/AHD/2019 FOR A.Y. 2008-09 109. AT THE TIME OF HEARING, IT WAS SUBMITTED BY TH E LD.AR FOR THE ASSESSEE THAT APPEAL FILED BY THE REVENUE IS HIT BY RECENTLY ISSU ED CBDT CIRCULAR NO.17 OF 2019 DATED 08/08/2019 REVISING THE PREVIOUS THRESHO LDS PERTAINING TO TAX EFFECTS. AS PER AFORESAID CIRCULAR, ALL PENDING APPEALS FILE D BY REVENUE ARE LIABLE TO BE SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 92 DISMISSED AS A MEASURE FOR REDUCING LITIGATION WHER E THE TAX EFFECT DOES NOT EXCEED THE PRESCRIBED MONETARY LIMIT WHICH IS NOW R EVISED AT RS.50 LAKHS. IN THE INSTANT CASE, THE TAX EFFECT ON THE DISPUTED IS SUES RAISED BY THE REVENUE IS STATED TO BE NOT EXCEEDING RS.50 LAKHS AND THEREFOR E APPEAL OF THE REVENUE IS REQUIRED TO BE DISMISSED IN LIMINE. 110. THE LEARNED DR FOR THE REVENUE FAIRLY ADMITTED T HE APPLICABILITY OF THE CBDT CIRCULAR NO. 17 OF 2019. ACCORDINGLY, APPEAL OF THE REVENUE IS DISMISSED AS NOT MAINTAINABLE. HOWEVER, IT WILL BE OPEN TO T HE REVENUE TO SEEK RESTORATION OF ITS APPEAL ON SHOWING INAPPLICABILITY OF THE AFO RESAID CBDT CIRCULAR IN ANY MANNER. 111. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED DUE TO LOW TAX EFFECT. 112. IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E BEARING ITA NO.457/AHD/2019 IS PARTLY ALLOWED AND APPEAL FILED BY THE REVENUE BEARING ITA NO. 805/AHD/2019 IS DISMISS DUE TO LOW TAX EFFECT. NOW COMING TO THE ITA NO.461/AHD/2018 APPEAL FILED BY THE ASSESSEE AND ITA NO.807/AHD/2019 APPEAL FILED BY THE REVENUE FOR A. Y. 2008-09. 113. AT THE OUTSET, WE NOTE THAT ISSUES RAISED BY T HE ASSESSEE AND THE REVENUE ARE IDENTICAL TO THE ISSUE RAISED BY THE ASSESSEE I TA NO. 456/AHD/2019 WHICH HAS BEEN DECIDED IN FAVOR OF THE ASSESSEE AND AGAIN ST THE REVENUE BY US VIDE PARAGRAPH NO.87 TO 89 OF THIS ORDER. RESPECTFULLY F OLLOWING THE SAME, THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IS PARTLY ALLOWED AND APPEAL FILED BY THE REVENUE IS DISMISS AS INFRUCTUOUS. 114. IN THE COMBINED RESULTS THE APPEALS FILED BY T HE REVENUE AND DIFFERENT ASSESSEE ARE AS FOLLOWS: SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 93 SR.NO. ITA NO. ASSESSEE A.Y APPEAL BY RESULT 1. 456/AHD.2019 ASHOK S VASWANI 2008-09 ASSESSEE PARTLY ALLOWED 2. 806/AHD/2019 -DO- -DO- REVENUE DISMISS AS INFRUCTUOUS 3. 457/AHD/2019 RAJESH S VASWANI -DO- ASSESSE PARTLY ALLOWED 4. 805/AHD/2019 -DO- -DO- REVENUE DISMISS DUE TO LOW TAX EFFECT 5. 461/AHD/2019 DEEPAK B VASWANI -DO- ASSESSEE PARTLY ALLOWED 6. 807/AHD/2019 -DO- -DO- REVENUE DISMISS AS INFRUCTUOUS ITA NO. 837/AHD/2019 M/S. VENUS INFRABUILD (A.Y. 2015-16) 115. THE NEXT PROPOSITION NO. 5 IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE ADDITION MADE BY THE AO FOR RS. 46,45,274.00 ON ACCOUNT OF INTEREST FREE LOANS AND ADVANCES PROVIDED TO THE PARTNERS IN ITA N O. 837/AHD/2019 M/S. VENUS INFRABUILD (A.Y. 2015-16). 116. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS O F APPEAL: 1. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW I N HOLDING THAT THE JURISDICTION UNDER SECTION 153C OF THE INCOME TAX ACT, 1961 WAS CORRECTLY ASSU MED BY THE ASSESSING OFFICER WITHOUT DEALING WITH VARIOUS INFIRMITIES OF FACTS AND LAW W ITH REGARD TO THE ASSUMPTION OF JURISDICTION U/S 153C HAVING BEEN POINTED OUT BY TH E APPELLANT. 2. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE ASSESSMENT ORDER U/S 143(3) R.W.S 153A(1) OF THE INCOME TAX ACT, 1961 PASSED BY THE ASSESSING OFFICER ON 26.12.2017 WHICH IS BEYOND THE TIME LIMITATION AS LAID DOWN U/ S 153B OF THE ACT. 3. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE ADDITIONS MADE BY THE ASSESSING OFFICER RELYING ON THE ALLEGED INCRIMINAT ING MATERIAL WHICH WAS NEITHER SEIZED FROM A PLACE COVERED BY SEARCH IN THE CASE OF APPEL LANT NOR EVEN ALLEGED TO BE BELONGING TO THE APPELLANT IN CONTRAVENTION OF THE SETTLED LAW O N THE SCOPE OF ASSESSMENT U/S 153A OF THE INCOME TAX ACT, 1961. 4. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE INFERENCE DRAWN BY THE ASSESSING OFFICER THAT THE LOOSE PAPER FOUND AND SE IZED FROM THE TERRACE OF CRYSTAL ARCADE CG ROAD AHMEDABAD REPRESENTED THE ALLEGED UNACCOUNT ED CASH BOOK OF VENUS GROUP, THAT THE SIGNATURE FOUND ON THE DOCUMENTS WERE OF THE FA MILY MEMBERS OF THE APPELLANT, THAT THE DATE OF TRANSACTIONS WERE RECORDED IN THE CODED FOR M TO DISGUISE THE RELEVANT DATE OF TRANSACTIONS, THAT THE ENTRIES WERE RECORDED IN SUC H A WAY THAT TWO ZERO AT END OF EACH ENTRY WERE OMITTED AND THAT THE WORD 'ESTIMATE' HAD BEEN MENTIONED AGAINST THE ACTUAL TRANSACTIONS. 5. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE ADDITIONS RELYING ON THE ALLEGED CASH BOOK WHICH WAS NOT EVEN ALLEGED TO BE BELONGING TO THE APPELLANT ESPECIALLY IN VIEW OF THE AO OWN FINDINGS THAT THE ALLEGED CAS H BOOK BELONGED TO VENUS GROUP AND ALSO WITHOUT IDENTIFYING THECORRESPONDING ASSET OR INVESTMENT OR EXPENDITURE PERTAINING/RELATING TO THE APPELLANT. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 94 6. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE ADDITIONS MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ALLEGED UNEXPLAINED EXPENDITURE U/S 69C OF THE INCOME TAX ACT, 1961 BEING FOR THE PROJECT DEVELOPED BY TH E APPELLANT AT BARODA NAMELY VENUS PAHEL ON PEAK BASIS, WITHOUT ESTABLISHING THAT THE ALLEGED EXPENDITURE WAS MADE BY THE APPELLANT AND WITHOUT ANY CORROBORATION OF THE ALLE GED EXPENDITURE FROM THE CORRESPONDING RECIPIENTS. 7. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW I N CONFIRMING THE ADDITIONS ON THE BASIS OF ALLEGED UNACCOUNTED RECEIPTS AND PAYMENTS WHEN ALL THESE ALLEGED RECEIPTS AND PAYMENTS WERE PERTAINING TO THE PROJECT AND THE APPELLANT'S ACCOUNTING OF ENTIRE EXPENSES IN THE YEAR UNDER CONSIDERATION AS PROJECT WORK IN PROGRESS AND RECEIPTS FROM THE CUSTOMERS AS ADVANCES WAS ACCEPTED BY THE ASSESSING OFFICER AND UPHELD BY THE LD. CIT (A). 8. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW I N CHANGING THE ENTIRE BASIS OF ADDITION WITHOUT PROVIDING ADEQUATE OPPORTUNITY OF BEING HEA RD TO THE APPELLANT. 9. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN DENYING THE APPLICATION OF PRINCIPLES OF TELESCOPING WHICH RESULTED INTO DOUBLE/MULTIPLE TAX ATION. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION ON ACCO UNT OF NOTIONAL ADDITION FOR NON CHARGING OF INTEREST AMOUNTING TO RS. 46,45,274/- W HEN THE PARTNERSHIP DEED ITSELF PROVIDED THAT CHARGING OF INTEREST ON DEBIT BALANCE IS NOT M ANDATORY. 11. THE LD. CIT (A) HAS ERRED ON FACTS AND IN LAW I N CONFIRMING THE ADDITION ON ACCOUNT OF NOTIONAL INTEREST WITHOUT GIVING A CORRESPONDING DI RECTION FOR CLAIM OF EXPENDITURE OF THE INTEREST BY THE PARTNERS OF THE AFORESAID INTEREST / AMOUNT. 12. THE APPELLANT CRAVES FOR LIBERTY TO ADD FRESH G ROUND(S) OF APPEAL AND ALSO TO AMEND, ALTER, MODIFY ANY OF THE GROUNDS OF APPEAL. THE ASSESSEE IN GROUND NO. 1 TO 3 HAS CHALLENGED THE VALIDITY OF THE ASSESSMENT FRAMED UNDER SECTION 143(3) OF THE ACT O N ACCOUNT OF VARIOUS REASONS. 117. AT THE OUTSET THE LEARNED AR FOR THE ASSESSEE BEFORE US SUBMITTED THAT HE HAS BEEN INSTRUCTED BY THE ASSESSEE NOT TO PRESS IM PUGNED GROUNDS OF APPEAL. ACCORDINGLY WE DISMISS THE SAME AS NOT PRESSED. 118. THE ISSUES RAISED BY THE ASSESSEE IN GROUND NO. 4 TO 9 ARE AGAINST VARIOUS ADDITIONS MADE BY THE AO WHICH WERE SUBSEQUENTLY PA RTLY CONFIRMED BY THE LEARNED CIT (A). 119. AT THE OUTSET THE LEARNED AR FOR THE ASSESSEE BEFORE US SUBMITTED THAT HE HAS BEEN INSTRUCTED BY THE ASSESSEE NOT TO PRESS IM PUGNED GROUNDS OF APPEAL ON ACCOUNT OF SMALLNESS OF THE AMOUNT. ACCORDINGLY WE DISMISS THE SAME AS NOT PRESSED. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 95 120. THE LAST ISSUE RAISED BY THE ASSESSEE IN GROUND NO. 10 AND 11 IS THAT LEARNED CIT (A) ERRED IN CONFIRMING THE ADDITION MAD E BY THE AO FOR RS. 46,45,274.00 ON ACCOUNT OF INTEREST FREE LOANS AND ADVANCES PROVIDED TO THE PARTNERS. 121. THE ASSESSEE IN THE PRESENT CASE IS A PARTNERSH IP FIRM AND ENGAGED IN THE BUSINESS OF CONSTRUCTION ACTIVITIES. THE AO DURING T HE ASSESSMENT PROCEEDINGS FOUND THAT THE ASSESSEE HAS BEEN INCURRING INTEREST COST ON THE CAPITAL CONTRIBUTED BY THE PARTNERS AND AT THE SAME TIME THE ASSESSEE H AS NOT BEEN CHARGING ANY INTEREST FROM THE PARTNERS FOR THE LOANS AND ADVANC ES EXTENDED TO THEM DESPITE THERE WAS THE CLAUSE IN THE DEED OF PARTNERSHIP FOR CHARGING INTEREST ON THE LOANS AND ADVANCES GIVEN TO THE PARTNERS. AS PER THE AO T HE INTEREST THAT SHOULD HAVE BEEN CHARGED FROM THE PARTNERS STANDS AT RS.59,41,7 68.00 ONLY IN THE EARLIER YEARS. THE DETAILS OF SUCH INTEREST IS GIVEN HEREUND ER: ASSESSMENT YEAR 2012-13 RS. 9,72,212.00 ASSESSMENT YEAR 2013-14 RS. 49,69,559.00 122. THE AO FURTHER FOUND THAT THE ASSESSEE HAS NOT DEBITED ANY INTEREST EXPENSES TO THE PROFIT AND LOSS ACCOUNT WHICH WAS I NCURRED ON THE CAPITAL CONTRIBUTED BY THE PARTNERS IN THE ASSESSMENT YEARS 2012-13 AND 2013-14 RESPECTIVELY. AS SUCH, THE AMOUNT OF INTEREST EXPEN SES WAS CAPITALIZED IN THE WORK-IN-PROGRESS. HOWEVER, THE ASSESSEE IN THE YEAR UNDER CONSIDERATION HAS RECOGNIZED THE INCOME BASED ON PERCENTAGE OF PROJEC T COMPLETION METHOD. AS SUCH THE ASSESSEE HAS RECOGNIZED THE INCOME FOR THE YEAR UNDER CONSIDERATION TO THE TUNE OF 78.18% BASED ON PERCENTAGE OF PROJECT C OMPLETION METHOD. ACCORDINGLY THE AO WAS OF THE VIEW THAT SUCH INTERE ST INCOME ON THE LOANS AND ADVANCES GIVEN TO THE PARTNERS AS DISCUSSED ABOVE S HOULD HAVE BEEN RECOGNIZED AS INCOME FOR RS. 46,45,274.00 BEING 78.18% OF THE INTEREST I.E. RS.59,41,768.00 AND THE BALANCE AMOUNT OF RS.12,96,494.00 (RS. 59,4 1,768.00-46,45,274.00) SHOULD HAVE BEEN REDUCED FROM THE CAPITAL WORK-IN-P ROGRESS SHOWN IN THE YEAR SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 96 UNDER CONSIDERATION. CONSEQUENTLY, THE AO DISALLOWE D THE SUM OF RS. 46,45,274.00 REPRESENTING THE AMOUNT OF INTEREST TH AT SHOULD HAVE BEEN CHARGED ON THE ADVANCES GIVEN TO THE PARTNERS AND FINALLY A DDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 123. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARNED CIT (A) WHO CONFIRMED THE ORDER OF THE AO BY OBSERVING AS UNDER : 10.4. DECISION: I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, ASSESSMENT ORDER AND SUBMISSION FILED BY THE APPELLANT. THE ASSESSING OFFICER IN THE ASSESSM ENT ORDER HAS NOTED THAT THERE IS A DEBIT BALANCE OF RS.44,23,493/-OF PARTNER SHRI NARANDAS N. HAMRAJ ANI AND RS.46,07,443/- OF M/S. VENUS INFRASTRUCTURE AND DEVELOPERS PVT. LTD. IN A. Y. 20 12-13. SIMILARLY, THERE IS DEBIT BALANCE OF PARTNERS CAPITAL IN RESPECT OF SHRI DHANRAJ G. MANG LANI, RS.86,01,167/-, SHRI KAMLESHKUMAR D. MANGLANI OF RS.77,41,047/-, SHRI NARANDAS N. HAMRAJ ANI OF RS.4,98,21,976/- AND RS.8,67,46,820/- OF M/S. VENUS INFRASTRUCTURE AND DEVELOPERS PVF. LT D. IN A. Y. 2013-14. APPELLANTHAS NOT CHARGED INTEREST ON PARTNERS ON THE DEBIT BALANCE. THE ASSE SSING OFFICER HAS NOTED THAT APPELLANT WAS REQUIRED TO CHARGE INTEREST @ 12% ON THE DEBIT BALA NCE IN A. Y. 2012-13 & 2013-14 AND ACCORDINGLY THE INTEREST COST ON PROJECT WILL DECRE ASE BY RS.59,41,768/- IN A. Y. 2015-16. AS 78.16% OF THE PROJECT HAS BEEN COMPLETED DURING THE YEAR, AO HAS MADE THE ADDITION OF RS.46,45,274/- BEING 78.16% OF THE INTEREST CHARGEABLE FROM PARTNE RS OF RS.59,41,768/- IN A. Y. 2015-16. APPELLANT HAS CONTENDED THAT ASSESSING OFFICER HAS ASSUMED THAT INTEREST ON PARTNERS CAPITAL IS TO BE CHARGED MANDATORY @ 12% THOUGH IT HAS BEEN SPECIFICALLY MENTIONED IN CLAUSE - 6 OF THE PARTNERSHIP DEED THAT INTEREST MAY BE CHARGE D ON THE DEBIT BALANCE AS PER MUTUAL UNDERSTANDING OR THE PARTNERS. IT HAS ALSO BEEN MEN TIONED THAT INTEREST CAN BE INCREASED OR DECREASED AT THE MUTUAL UNDERSTANDING OF PARTNERS. THE ASSESSING OFFICER HAS NOT MADE ANY ADDITION OF INTEREST CHARGEABLE ON PARTNERS IN A. Y . 2012-13 & 2013-14 BUT HAS GIVEN EFFECT OF INTEREST IN A. Y. 2015-16 WHICH IS CONTRARY TO HIS OWN STAND. THE APPELLANT HAS ALSO SUBMITTED THAT THERE IS NO INCRIMINATING MATERIAL RELATING TO NATI ONALLY COMPUTED INTEREST, THEREFORE, NO ADDITION CAN BE MADE U/S. 153C. APPELLANT HAS RELIED ON VARI OUS CASE LAWS. IT IS SEEN THAT APPELLANT HAS PAID INTEREST ON THE PARTNER'S CAPITAL @ 12%, BUT HAS NOT CHARGED INTEREST ON THE DEBIT BALANCE OF THE PARTNE RS. THE APPELLANT HAS BEEN PAYING INTEREST ON THE CAPITAL ON ONE HAND AND ADVANCING MONEY TO OTHER PA RTNERS INTEREST FREE. THE ASSESSING OFFICER, WAS THEREFORE, JUSTIFIED TO MAKE ADJUSTMENT ON ACCO UNT OF INTEREST CAPITALISED IN THE CONSTRUCTION WORK. AS REGARD TO APPELLANT'S ARGUMENT ON THE ADDI TION MADE NOT ON THE BASIS OF INCRIMINATING MATERIAL AND RELIANCE ON THE CASE OF PCIT V. SAUMYA CONSTRUCTION (P.) LTD. [2017] 81 TAXMANN.COM 292 (GUJ), THE SAME IS NOT APPLICABLE I N APPELLANT'S CASE AS ASSESSMENT FOR A. Y. 2015-16 WAS PENDING ON THE DATE OF INITIATION OF SE ARCH U/S. 132 OF THE I. T. ACT, 1961. AS REGARD TO APPELLANT'S ARGUMENT THAT ASSESSING OFFICER HAS NOT MADE ADDITION OF INTEREST ON DEBIT BALANCE IN A. YS. 2012-13 & 2013-14 IS NOT MATERIAL AS ASSESSING OFFICER HAS POWER TO RE-COMPUTE THE WORK IN PROGRESS IN A. Y. 2015-16 IN WHICH 78.18% OF THE PR OJECT HAS BEEN COMPLETED. IN VIEW OF THE ABOVE, THE ADDITION MADE BY THE AO IS CONFIRMED. THE GROUN D OF APPEAL IS ACCORDINGLY DISMISSED . BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A) THE ASSESSEE IS IN APPEAL BEFORE US. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 97 124. THE LEARNED AR BEFORE US SUBMITTED THAT IT WAS NOT MANDATORY TO CHARGE INTEREST ON THE AMOUNT OF THE LOANS AND ADVANCES GI VEN TO THE PARTNERS. AS SUCH IT WAS OPTIONAL TO CHARGE INTEREST FROM THE PARTNERS W HICH CAN BE VERIFIED FROM THE PARTNERSHIP DEED. 125. ALTERNATIVELY, THE LEARNED AR CONTENDED THAT A MOUNT OF INTEREST TREATED AS INCOME BY THE AO IN THE YEAR UNDER CONSIDERATION PE RTAINS TO THE ASSESSMENT YEAR 2012-13 AND 2013-14. THEREFORE IF AT ALL AN AD DITION IS TO BE MADE OR THE EFFECT OF THE SAME HAS TO BE GIVEN BY REDUCING THE CAPITAL WORK-IN-PROGRESS THAT CAN BE DONE IN THE RESPECTIVE ASSESSMENT YEARS I.E. 2012-13 & 2013-14 AND NOT IN THE YEAR UNDER CONSIDERATION. 126. ON THE OTHER HAND THE LEARNED DR VEHEMENTLY SU PPORTED THE ORDER OF THE AUTHORITIES BELOW. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PA RTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THERE IS NO DISPUTE IN THE FACTS OF THE CASE ON HAND WHICH HAVE ALREADY BEEN DISCUSSED IN THE PRECEDING PARAGRAPH. THEREFORE, FOR THE SAKE OF BREVITY AND CONVENIENCE, WE ARE NOT INCLINE D TO REPEAT THE SAME. AT THIS JUNCTURE WE ARE TENDING TO REFER THE RELEVANT CLAUS E AS INCORPORATED IN THE DEED OF PARTNERSHIP WHICH WAS SUBMITTED BY THE ASSESSEE BEF ORE THE LEARNED CIT (A) DURING THE PROCEEDINGS. THE RELEVANT CLAUSE READS AS UNDER: IN OUR PARTNERSHIP FIRM PARTNERS CAN BRING CAPITAL BY MUTUAL UNDERSTANDING AND AS PER THE NEED OF THE BUSINESS ACCORDING TO THE SHARING OF PARTNERSHI P RATIO AND AS PER THE SECTION 40(B) OF THE INCOME TAX ACT, 1961 INTEREST WILL BE GIVEN @ 12 % SIMPLE INTEREST ON CAPITAL ACCOUNT/LOAN ACCOUNT IN EVERY ACCOUNTING YEAR AND AS PER THE MUTUAL UNDE RSTANDING OF THE PARTNERS THE INTEREST CAN BE INCREASED OR DECREASED AND IN THE SAME WAY ON DEBIT BALANCE OF THE PARTNERS, THE FIRM CAN CHARGE THE INTEREST AS PER THE MUTUAL UNDERSTANDING OF THE PARTNERS IT CAN BE INCREASED OR DECREASED. AS WELL AS IF ANY EXTRA CAPITAL IS REQUIRED FOR BUSINE SS THAT CAN BE BROUGHT FROM OUTSIDE WITH INTEREST O R WITHOUT INTEREST BY WAY OF LOAN FROM THE BANK OR SA RAFI FROM THE PRIVATE PARTIES AND '. INTEREST ON TH E SAME WILL BE DEBITED TO THE PROFIT AND LOSS ACCOUNT OF THE FIRM' 127. ON PERUSAL OF THE ABOVE CLAUSE, WE FIND THAT I T WAS NOT MANDATORY TO CHARGE THE INTEREST ON THE AMOUNT OF LOANS AND ADVA NCES GIVEN TO THE PARTNERS, RATHER IT WAS BASED ON THE MUTUAL ACCEPTANCE OF THE PARTNERS. ACCORDINGLY, TO OUR SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 98 UNDERSTANDING, THE ASSESSEE HAS NOT CHARGED ANY INT EREST FROM THE PARTNERS ON THE AMOUNT OF LOAN/ADVANCES PROVIDED TO THE PARTNERS. I T WAS THE WISDOM OF THE ASSESSEE NOT TO CHARGE THE INTEREST FROM THE PARTNE RS AND THE AO CANNOT DIRECT TO DO OTHERWISE. IN HOLDING SO WE DRAW SUPPORT AND GUI DANCE FROM THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OFPR.CIT VS. ALIDHRA TAXSPIN ENGINEERS TAX APPEAL NO. 265 OF 2017 WHEREIN IT WAS HELD AS UN DER: [4.0] WE HAVE HEARD SHRI SUDHIR MEHTA, LEARNED ADV OCATE APPEARING ON BEHALF OF THE REVENUE. ON INTERPRETATION OF THE PARTNERSHIP AGREEMENT AND CONSIDERING THE WISH OF THE PARTNERS REFLECTED IN THE PARTNERSHIP DEED, NOT TO PAY /CHAR GE INTEREST ON THE PARTNERS CAPITAL AND THE REMUNERATION, THE LEARNED TRIBUNAL HAS RIGHTLY DELE TED THE DISALLOWANCE MADE BY THE ASSESSING OFFICER WITH RESPECT TO THE DEDUCTION CLAIMED UNDER SECTION 80IB OF THE INCOME TAX ACT. AS RIGHTLY OBSERVED BY THE LEARNED TRIBUNAL, MERE INCORPORATIO N OF INTEREST ON THE PARTNERS' CAPITAL AND REMUNERATION DOES NOT SIGNIFY THAT THE SAME ARE MAN DATORY IN NATURE. WE CONCUR WITH THE VIEW TAKEN BY THE LEARNED TRIBUNAL. WE SEE NO REASON TO INTERFERE WITH THE IMPUGNED JUDGMENT AND ORDER PASSED BY THE LEARNED TRIBUNAL. NO SUBSTANTIAL QU ESTIONS OF LAW ARISE IN THE PRESENT TAX APPEAL. THE PRESENT TAX APPEAL DESERVES TO BE DISMISSED AND IS ACCORDINGLY DISMISSED. WE ALSO FIND FORCE IN THE ALTERNATE CONTENTION OF T HE LEARNED AR FOR THE ASSESSEE. THE AMOUNT OF INTEREST WHICH IS IN DISPUT E PERTAINS TO THE EARLIER ASSESSMENT YEAR. AT ALL ANY ADJUSTMENT IF NEED TO B E MADE , THEN THE AO CAN DO SO IN THE RESPECTIVE ASSESSMENT YEARS 2012-13 AND 2 013-14 WITHOUT DISTURBING THE SAME IN THE YEAR UNDER CONSIDERATION. 128. IN VIEW OF THE ABOVE, WE ARE NOT IMPRESSED WIT H THE FINDING OF THE AUTHORITIES BELOW AND THEREFORE DECLINE TO UPHOLD T HE SAME. THUS WE SET ASIDE THE FINDING OF THE LEARNED CIT (A) AND DIRECT THE AO TO DELETE THE ADDITION MADE BY HIM. HENCE THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 129. IN THE COMBINED RESULT: 1. ITA NO. 118 TO 123/A/2019 APPEAL FILED BY THE A SSESSEE IS PARTLY ALLOWED. 2. ITA NO. 124 TO 129/A/2019 APPEAL FILED BY THE A SSESSEE IS PARTLY ALLOWED. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 99 3. ITA NO. 130 TO 135/A/2019 APPEAL FILED BY THE A SSESSEE IS PARTLY ALLOWED. 4. ITA NO. 204 TO 206/A/2019 APPEAL FILED BY THE A SSESSEE IS PARTLY ALLOWED. 5. ITA NO. 278 & 279/A/2019 APPEAL FILED BY THE AS SESSEE IS PARTLY ALLOWED. 6. ITA NO. 280 TO 284/A/2019 APPEAL FILED BY THE A SSESSEE IS PARTLY ALLOWED. 7. ITA NO. 834 TO 836/A/2019 APPEAL FILED BY THE A SSESSEE IS PARTLY ALLOWED. 8. ITA NO. 75 TO 80/A/2019 APPEAL FILED BY THE ASS ESSEE IS PARTLY ALLOWED. 9. ITA NO. 195 TO 200/A/2019 APPEAL FILED BY THE R EVENUE IS DISMISSED. 10. ITA NO. 88 TO 94/A/2019 APPEAL FILED BY THE AS SESSEE IS PARTLY ALLOWED. 11. ITA NO. 241 TO 247/A/2019 APPEAL FILED BY THE REVENUE IS DISMISSED. 12. ITA NO. 102 TO 108/A/2019 APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. 13. ITA NO. 228 TO 234/A/2019 APPEAL FILED BY THE REVENUE IS DISMISSED. 14. ITA NO. 111 TO 117/A/2019 APPEAL FILED BY THE ASSESSEE ONLY ITA NO. 117/A/2019 IS DISMISSED AND REMAINING ARE PARTLY ALLOWED. 15. ITA NO. 248 TO 254/A/2019 APPEAL FILED BY THE REVENUE IS DISMISSED. 16. ITA NO. 95 TO 101/A/2019 APPEAL FILED BY THE A SSESSEE IS PARTLY ALLOWED. 17. ITA NO. 805/A/2019 APPEAL FILED BY THE REVENUE IS DISMISSED. SHRI DILIPKUMAR LALWANI AND OTHERS (107 APPEALS) 100 18. ITA NO. 235 TO 240/A/2019 APPEAL FILED BY THE REVENUE IS DISMISSED. 19. ITA NO. 109&110/A/2019 APPEAL FILED BY THE ASS ESSEE IS PARTLY ALLOWED. 20. ITA NO. 456/A/2019 APPEAL FILED BY THE ASSESSE E IS PARTLY ALLOWED. 21. ITA NO. 806/A/2019 APPEAL FILED BY THE REVENUE IS DISMISSED. 22. ITA NO. 457/A/2019 APPEAL FILED BY THE ASSESSE E IS PARTLY ALLOWED. 23. ITA NO. 461/A/2019 APPEAL FILED BY THE ASSESSE E IS PARTLY ALLOWED. 24. ITA NO. 807/A/2019 APPEAL FILED BY THE REVENUE IS DISMISSED. 25. IT(SS)A NO. 837/A/2019 APPEAL FILED BY THE ASSE SSEE IS PARTLY ALLOWED. . ORDER PRONOUNCED IN THE COURT ON 12 TH NOVEMBER, 2020 AT AHMEDABAD. S D / - (WASEEM AHMED) ACCOUNTANT MEMBER S D / - (RAJPAL YADAV) VICE-PRESIDENT AHMEDABAD; DATED12/11/2020 TRUE COPY / COPY OF THE ORDER FORWARDED TO : 1. '# / THE APPELLANT 2. $%'# / THE RESPONDENT. 3. && ' / CONCERNED CIT 4. ' ( ) / THE CIT(A) 5. *+, $-- , / DR, ITAT, 6. ,/0 1 / GUARD FILE. !' # $!% / BY ORDER, &/$'!( )*+!% ( DY./ASSTT.REGISTRAR) (% +,( -.%/, '1!2! / ITAT, AHMEDABAD
