ACIT,CC-I, Lucknow V. Shri Arun Agarwal, Lucknow

ITSSA 253/LKW/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3118 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 31-08-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus Share capital; Search and seizure; Document seized; Question of law; Accommodation entries; Block assessment; Bogus loan; Penny stocks; Documents seized; Reassessment proceedings; Set aside
• Section: 143(3); 142(1); 133A; 153A; 143(2); 264; 64; 13; 153; 22; 153C; 147; 68; 132

Judgement Text

I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW (THROUGH VIRTUAL HEARING) BEFORE SHRI A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER I.T.(SS)A. NO.253/LKW/2020 ASSESSMENT YEAR:2014-15 A.C.I.T., CENTRAL CIRCLE-1, LUCKNOW. VS. SHRI ARUN AGARWAL, 3/3 GULMOHAR ENCLAVE, GOKHLE MARG, LUCKNOW. PAN:ABMPA2676D (APPELLANT) (RESPONDENT) I.T.(SS)A. NO.254/LKW/2020 ASSESSMENT YEARS:2014-15 A.C.I.T., CENTRAL CIRCLE-1, LUCKNOW. VS. SHRI ARUN AGARWAL HUF, 3/3 GULMOHAR ENCLAVE, GOKHLE MARG, LUCKNOW. PAN:AACHA1811P (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THESE TWO APPEALS HAVE BEEN FILED BY THE REVENUE A GAINST THE SEPARATE ORDERS OF LEARNED CIT(A), DATED 03/06/2020 AND 17/06/2020 RESPECTIVELY PERTAINING TO ASSESSMENT YEAR 2014-15. THE GROUNDS OF APPEAL TAKEN BY THE REVENUE ARE SIMILAR IN BOTH THE APPEAL S. BOTH THE APPEALS WERE APPELLANT BY SMT. SHEELA CHOPRA, CIT, D.R. RESPONDENT BY SHRI RAKESH GARG, ADVOCATE DATE OF HEARING 02/09/2021 DATE OF PRONOUNCEMENT 20 / 10 /20 21 I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 2 HEARD TOGETHER THEREFORE, FOR THE SAKE OF CONVENIEN CE A COMMON AND CONSOLIDATED ORDER IS BEING PASSED. FOR THE SAKE O F COMPLETENESS, THE GROUNDS TAKEN BY THE REVENUE IN I.T.A. NO.253/LKW/2 020 ARE REPRODUCED BELOW: 1. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) WHILE ANNULLING THE ASSTT ORDER ON GROUN DS THAT IN ABSENCE OF ANY INCRIMINATING MATERIAL BEING FOUND D URING SEARCH, THE CONDITIONS FOR ISSUE OF NOTICE U/S 153A WERE NOT SATISFIED, ERRED AND MISREAD THE RELEVANT FACTS AND CIRCUMSTANCE AS WELL AS LEGAL PROVISIONS UNDER 153A /153C OF THE I.T. ACT, 1961. 2. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, THE LD. CIT(A), ERRED IN RELYING UPON THE DISMISSAL OF REVENUE'S SLP IN CASE OF MEETA GUTGUTIA TO CONCLUDE THAT THE BINDING JURISDICTIONAL ALLAHABAD HIGH COURT IN RAJ KUMAR AR ORA STANDS OVERRULED WITHOUT APPRECIATING THAT IT WAS ALREADY HELD BY A 3- JUDGE BENCH OF SC ITSELF IN ITS DECISION IN CASE OF KHODAY DISTILLERIES LTD IN CIVIL APPEAL NO 2432 OF 2019 AF FIRMING THE EARLIER 3- JUDGE BENCH DECISION IN CASE OF KUNHAYAM MED & ORS VS STATE OF KERALA & ANR 245 ITR 360 (SC) THAT IN LIMINE DISMISSAL OF SLP AT THRESHOLD ITSELF NEITHER CONSTI TUTES DECLARATION OF LAW NOR A BINDING PRECEDENT. HENCE, THE RELIANCE BY CIT(A) ON DISMISSAL OF SLP IN MEETA GUT GUTIA TO OVERRIDE THE BINDING JURISDICTIONAL HIGH COURT DECI SION IN RAJ KUMAR ARORA WAS AN APPARENT AND PATENT MISTAKE. 3. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, THE LD. CIT(A) ERRED IN IMPORTING & APPLYING THE RATIO OF DELHI HIGH COURT DECISION IN CASE OF KABUL CHAWLA, AS WEL L AS OTHER DECISIONS, IGNORING THE JUDICIAL DISCIPLINE AND LAW OF BINDING PRECEDENT AS THE JURISDICTIONAL HIGH COURT IN THE C ASE OF RAJ KUMAR ARORA 367 ITR 517(ALLD.) HAS ALREADY HELD THA T THERE IS WAS NO REQUIREMENT OF ASSTT U/S 153A BEING BASED ON LY ON THE BASIS OF 'INCRIMINATING MATERIAL' FOUND DURING SEAR CH. 4. WITHOUT PREJUDICE TO ABOVE GROUNDS, ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A ) ERRED IN ANNULLING THE ASSTT ORDER ON GROUNDS OF ABSENCE OF I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 3 INCRIMINATING MATERIAL WITHOUT APPRECIATING THAT TH E TERM INCRIMINATING USED BY COURTS HAS NOT BEEN DEFINED U NDER 153A AND THEREFORE ITS MEANING IS REQUIRED TO BE INFERRE D HARMONIOUSLY WITH OTHER PROVISIONS OF THE ACT DEALI NG WITH SEARCH ASSESSMENT OR LEVY OF PENALTY IN CASES OF SE ARCH ASSESSMENTS SUCH AS 153C, CLAUSE (II) OF 271AAB(C) , ETC. 5. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, THE LD. CIT(A) FAILED TO APPRECIATE THAT IN ABSENCE OF SPECIFIC USE OF TERM 'INCRIMINATING' U/S 153A, THE MEANING OF TH E TERM 'INCRIMINATING' NEEDS TO BE INFERRED AS AKIN TO THE EXPRESSION 'BEARING ON THE ASSESSMENT OF INCOME' AS APPEARING U/S 153C FOR ASSTT OF OTHER PERSON BASED ON MATERIAL FOUND D URING SEARCH. THIS EXPRESSION HAS VERY WIDE CONNOTATION A ND ENVISAGES THAT SUCH MATERIAL SHOULD BE IN THE NATUR E OF PRIMA FACIE MATERIAL ONLY HAVING LIVE NEXUS TO THE BELIEF OF IT HAVING BEARING ON ASSESSMENT OF INCOME AND NOT IN THE NATU RE OF ABSOLUTE INCRIMINATING EVIDENCE, WHICH BY ITSELF CO ULD SUGGEST/DIVULGE THE UNDISCLOSED INCOME WITHOUT ANY FURTHER ACT OF INVESTIGATION/EXAMINATION. THE DETAILED EXAM INATION OF SUCH MATERIAL FOR DIFFERENT ASSTT YEARS FINALLY REP RESENTING UNDISCLOSED MATERIAL OR NOT, WAS THE STEP ENVISAGED ONLY AFTER THE ISSUE OF NOTICE U/S 153A FOR SIX ASSTT YEARS. 6. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, THE LD. CIT(A) FAILED TO APPRECIATE THAT AFTER AMENDMEN T U/S 153C W.E.F. 01.04.2005, IT IS THE TEST OF 'BEARING ON TH E ASSESSMENT OF INCOME' ONLY WHICH NEEDS TO BE APPLIED IN PLACE OF THE TEST OF 'PRESENCE OF INCRIMINATING MATERIAL' U/S 153A AN D THE DECISION OF APEX COURT IN SINHGAD TECHNICAL EDUCATI ON SOCIETY WHICH WAS RENDERED FOR PERIOD PRIOR TO AMENDMENT W. E.F. 1/4/2005 IS THEREFORE DISTINGUISHABLE IN LAW. 7. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, THE LD. CIT(A) WHILE EVALUATING AS TO WHAT CAN BE 'INCR IMINATING', FAILED TO TAKE A NOTE OF CLAUSE (II) OF 271AAB(C) W HICH DEFINES UNDISCLOSED INCOME AS 'ANY INCOME BASED ON ENTRY IN BOOKS OF ACCOUNTS WHOLLY OR PARTLY FALSE AND WOULD NOT HA VE BEEN FOUND TO BE SO, HAD THE SEARCH NOT BEEN CONDUCTED I MPLYING THEREBY THAT UNSUPPORTED ENTRIES APPEARING IN BOOKS OF ACCOUNTS CAN ALSO FALL WITHIN THE SWEEP OF BEING IN CRIMINATING UNDER THE OTHER PROVISIONS OF THE ACT AND HENCE THE MEANING I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 4 OF TERM 'INCRIMINATING' WAS REQUIRED TO BE INFERRED HARMONIOUSLY W.R.T SUCH STATUTORY PROVISIONS. 8. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, THE LD. CIT(A) WHILE EVALUATING AS TO WHAT CAN BE 'INCR IMINATING', AGAIN FAILED TO TAKE A NOTE THAT EVEN THE PENALTY I S ATTRACTED U/S 270A(10) WHEN THERE IS MISREPORTING BASED ON RE CORDED ENTRIES IN BOOKS OF ACCOUNTS, ONCE AGAIN IMPLYING T HAT ENTRIES RECORDED IN BOOKS OF ACCOUNTS MAY STILL REPRESENT U NDISCLOSED INCOME HAVING BEARING ON THE ASSESSMENT OF INCOME O R BEING 'INCRIMINATING 1 , IF THEY ARE PARTLY RECORDED OR CAMAFLOUGED OR SHOWN TO BE FROM A SOURCE WHICH IS NOT THE REAL SOU RCE AND HENCE THE MEANING OF TERM 'INCRIMINATING' WAS REQUI RED TO BE INFERRED HARMONIOUSLY W.R.T SUCH STATUTORY PROVISIO NS. 9. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LA W, THE LD. CIT(A) ERRED IN REFERRING ONLY TO THE STATEMENT OF SHRI SANTOSH KUMAR CHAUDHARY WHOSE STATEMENT WAS RECORDE D U/S 133A ADMITTING TO HAVE PROVIDED WITH BOGUS LTCG FRO M PENNY STOCKS AND SECURITY PREMIUM THROUGH SHELL COS NOT E XITING AT GIVEN ADDRESSES, WHILE IGNORING THE STATEMENT OF SO ME OTHER PERSONS RECORDED WAS ON OATH U/S 131(1 A) SUCH AS S HRI VIRENDRA KESHRI EX DIRECTOR OF THE SHELL COS WHO AD MITTED THAT M/S ANIRUDH MOTOR AND GENERAL FINANCE PVT LTD, M/S FANTASTIC MERCHANDISE P LTD ETC WAS A PAPER CO WHEREIN THE IN DIVIDUALS OF FORTUNA GROUP BECAME DIRECTORS AND ALSO CONFIRME D THE STATEMENT OF SANTOSH CHAUDHARY AND ANOTHER PERSON SHAILENDRA GUPTA CA, AUDITOR OF TECHMECH DEVELOPER PVT LTD ALSO ADMITTED ON OATH U/S 131(1 A) THAT CO DID NOT HAVE ANY BUSINESS ACTIVITY AND THAT ITS ACCOUNTS WERE PARTIA LLY CERTIFIED ON THE BASIS OF BILLS, VOUCHERS AND BANK STATEMENTS , WHICH DID SATISFY THE CONDITION OF 'INCRIMINATING' AS WELL AS HAVING BEARING ON THE ASSTT OF INCOME AS PROVIDED U/S 153A /153C W.R.T BOGUS LOANS TAKEN BY ASSESSEE FROM SUCH SHELL CO. 10. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) ERRED IN HOLDING THAT THE STATEMENT OF S ANTOSH CHOUDHARY RECORDED BY DD1T KOLKATA COULD NOT BE TER MED AS 'INCRIMINATING' ON GROUND THAT STATEMENT RECORDED U /S 133A WAS NOT ON OATH WITHOUT APPRECIATING THAT IN THE AS STT ORDER IT WAS CLEARLY MENTIONED THAT THE STATEMENTS OF OTHER TWO PERSONS I.E. SHRI VIRENDRA KESHRI AND SHRI SHAILEND RA GUPTA CA I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 5 WERE RECORDED ON OATH BY THE DDIT(LNV) U/S 131(1 A) IN THE CAPACITY OF THE AUTHORISED OFFICER U/S 132(1) IN CO NNECTION WITH THE SEARCH IN THE FORTUNA GROUP WHEREIN THEY H AD ADMITTED THAT M/S ANIRUDH MOTOR FINANCE P LTD AND M /S TECHMECH DEVELOPER P LTD WERE MERELY PAPER COS WITH OUT ACTUAL ECONOMIC ACTIVITIES, EVEN THOUGH THE NO SURV EY COULD BE DONE AS THESE COS WERE FOUND NON-EXISTENT AT THE GIVEN ADDRESSES. IN C/T CHENNAI VS AJIT S KUMAR 93 TAXMAN .COM 294(SC), THE COURT IN THE CONTEXT OF SECTION 158BB HAS ALSO UPHELD THE USE OF INFORMATION COLLECTED IN A SURVEY IN CASE OF CONNECTED PERSON CARRIED ALONG WITH SEARCH IN OTHER PERSON FOR THE PURPOSE OF MAKING ASSTT. U/S 158BB. 11. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) ALSO ERRED IN NOT APPRECIATING THAT THE PLEA THAT THERE WAS NO INCRIMINATING MATERIAL FOR THE RELEVAN T AY FOR ISSUE OF NOTICE U/S 153A WAS RAISED FOR THE FIRST T IME BEFORE CIT(A) ONLY AND THEREFORE CIT(A) OUGHT TO HAVE GIVE N OPPORTUNITY TO THE AO ALSO BY CALLING FOR THE REMAN D REPORT IN VIEW OF THE RATIO OF DECISION IN CASE OF CIT VS BRI TISH INDIA CORPORATION LTD 337 ITR 64 (ALLD.). 12. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) ALSO ERRED IN NOT APPRECIATING THAT THE MERE FACT THAT THE BOGUS CREDIT ENTRIES ARE FOUND TO BE RECOR DED IN BOOKS OF ACCOUNTS CANNOT BY ITSELF TAKE SUCH ENTRIE S OUT OF THE SWEEP OF BEING INCRIMINATING OR HAVING A BEARING ON THE ASSTT OF INCOME. ACCORDINGLY, WHEN IT WAS ALREADY ADMITTE D BY EX DIRECTOR AND CAS OF SHELL COS THAT THEY PROVIDED ACCOMMODATION ENTRY, THE BURDEN U/S 68 COULD NOT BE SAID TO HAVE BEEN DISCHARGED BY ASSESSEE AND THIS FACT ITSE LF NOT ONLY HAD A BEARING ON ASSTT OF CORRECT INCOME EVEN IF RE CORDED IN BOOKS OF ACCOUNTS BUT ALSO WAS INCRIMINATING IN ITS ELF AS THE LENDER ENTITIES ADMITTEDLY LACKED ECONOMIC SUBSTANC E ALSO, MORE SO WHEN THE CIT(A) HAVING HIMSELF CONFIRMED TH E ADDITION ON ACCOUNT OF BOGUS LTCG CREDIT ENTRIES IN THE CASES OF SOME INDIVIDUAL ASSESSEES OF THE SAME SEARCHED G ROUP IN THE ASSTT U/S 143(3) R/W 153A IN AY 2017-18. 13. ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. CIT(A) IN LAW WHILE DELETING THE ADDITION MADE BY AO U/S 68 WITHOUT CONSIDERING THE MERITS THAT IN VIEW OF T HE AMENDED I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 6 PROVISIONS W.E.F 1/4/2013, THE BURDEN U/S 68 COULD NOT HAVE BEEN SAID TO BE DISCHARGED BY ASSESSEE JUST BY FILI NG CONFIRMATIONS/FINANCIAL STATEMENT OF SHELL COS WHIC H DID NOT HAVE ANY ECONOMIC SUBSTANCE NOR FOUND EXISTING AT G IVEN ADDRESSES, IN VIEW OF THE RATIO OF DECISION IN CASE OF N R PORTFOLIO PVT LTD 264 CTR 258(DELHI), NOVA PROMOTER S & FIN LEASE PVT LTD 252 CTR 187(DELHI), SEEMA JAIN 406 IT R 411 (DELHI), CHETAN DAS LACHMAN DAS 294 ITR 497(DELHI). 14. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) FAILED TO ALLUDE TO THE RELEVANT FACTS & CIRCUMSTANCES AND MISREAD THE LEGAL PROVISIONS TO A RRIVE AT THE CONCLUSION. 2. THE ASSESSEES HAVE ALSO FILED PETITIONS UNDER RU LE 27 WHEREBY IT HAS TAKEN A GROUND THAT APPROVAL GIVEN BY JT. CIT U/S 1 53D OF THE ACT TO THE ORDER PASSED U/S 153A IS WITHOUT APPLICATION OF MIN D AND HENCE THE ORDER PASSED U/S 153A IS NONEST AND VOID AB INITIO AND SA ME MAY BE QUASHED. HOWEVER, DURING THE COURSE OF HEARING, LEARNED COUN SEL FOR THE ASSESSEE DID NOT PRESS THE SAME AND THEREFORE, LEARNED CIT, D.R. WAS ASKED TO PROCEED WITH HER ARGUMENTS ON THE GROUNDS OF APPEAL . 3. LEARNED CIT, D.R. SUBMITTED THAT A SEARCH HAD TA KEN PLACE ON 21/04/2016 ON THE FORTUNA GROUP AND WHEREBY THE CAS ES OF THESE ASSESSEES ALONG WITH CASES OF OTHER ASSESSEES WERE REOPENED U/S 153A AND THE ASSESSING OFFICER HAD MADE CERTAIN ADDITIONS WH ICH THE LEARNED CIT(A) HAS DELETED BY HOLDING THAT THE ASSESSMENTS IN THES E CASES STOOD COMPLETED AND THEREFORE, THE ADDITIONS, IF ANY, COULD HAVE BE EN MADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL. LEARNED CIT, D.R. IN TH IS RESPECT SUBMITTED THAT WHILE HOLDING SO, LEARNED CIT(A) HAS NOT TAKEN INTO ACCOUNT THE JUDGMENT OF HON'BLE JURISDICTION HIGH COURT IN THE CASE OF RAJ KUMAR ARORA WHEREIN THE HON'BLE COURT HAS HELD THAT DURING PROCEEDINGS U/S 153A, THE ASSESSING OFFICER IS ALL EMPOWERED TO MAKE ADDITION OR MAKE R EASSESSMENT, EVEN I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 7 WITHOUT THE INCRIMINATING MATERIAL. IT WAS SUBMITT ED THAT SUCH JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT WAS A BINDING JUDGMENT AS IT WAS DELIVERED BY JURISDICTIONAL HIGH COURT. LEARNED CIT, D.R. FURTH ER SUBMITTED THAT LEARNED CIT(A) HAS ANNULLED THE ASSESSMENT WITHOUT APPRECIA TING THAT THE TERM INCRIMINATING HAS NOT BEEN DEFINED U/S 153A OF THE ACT AND THEREFORE, ITS MEANING IS REQUIRED TO BE INFERRED HARMONIOUSLY WIT H OTHER PROVISIONS OF THE ACT. IT WAS ARGUED THAT UNSUPPORTED ENTRIES APPEAR ING IN THE BOOKS OF ACCOUNT CAN ALSO FALL UNDER THE TERM INCRIMINATING DOCUMENTS AND HENCE, THE MEANING OF TERM INCRIMINATING WAS REQUIRED TO BE INFERRED HARMONIOUSLY WITH RESPECT TO THE SUCH STATUTORY PRO VISIONS. LEARNED CIT, D.R. ARGUED THAT THE ASSESSEE HAD EARNED BOGUS LONG TERM CAPITAL GAIN FROM PENNY STOCK THROUGH SHELL COMPANIES AND THE DI RECTOR OF SHELL COMPANIES HAD ADMITTED TO BE ENGAGED IN PROVIDING A CCOMMODATION ENTRIES. IT WAS FURTHER ARGUED THAT THE ASSESSEE HAD TAKEN T HE ISSUE OF NOTICE U/S 153A BEFORE THE LEARNED CIT(A) FOR THE FIRST TIME A ND THE LEARNED CIT(A) SHOULD HAVE GIVEN OPPORTUNITY TO THE ASSESSING OFFI CER BY CALLING A REMAND REPORT FROM HIM IN VIEW OF RATIO OF DECISION IN THE CASE OF HON'BLE ALLAHABAD HIGH COURT CIT VS. BRITISH CORPORATION LTD. [2011] 337 ITR 64 (ALL). IT WAS SUBMITTED THAT LEARNED CIT(A) HAS NOT APPRECIATED T HAT THE BOGUS ENTRIES EVEN RECORDED IN THE BOOKS OF ACCOUNT CANNOT BY ITS ELF TAKE SUCH ENTRIES OUT OF THE SWEEP OF BEING INCRIMINATING AND THE BURDEN U/S 68 OF THE ACT COULD NOT SAID TO HAVE BEEN DISCHARGED BY THE ASSESSEE IN VIEW OF THE FACT THAT DIRECTORS OF THESE COMPANIES HAD ADMITTED THAT THEY WERE ENGAGED IN PROVIDING ACCOMMODATION ENTRIES. IT WAS SUBMITTED THAT LEARNED CIT(A) HAD HIMSELF CONFIRMED THE ADDITION ON ACCOUNT OF LONG T ERM CAPITAL GAIN IN THE CASE OF SOME INDIVIDUAL ASSESSEES IN THE SAME GROUP AND THEREFORE, IT WAS ARGUED THAT THE ORDER PASSED BY LEARNED CIT(A) BE R EVERSED AND THAT OF THE ASSESSING OFFICER BE RESTORED. I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 8 4. LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER H AND, SUBMITTED THAT LEARNED CIT(A) HAS PASSED A VERY ELABORATE ORDER WH EREIN THE JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF RAJ KUM AR ARORA HAS BEEN FULLY DISCUSSED. IT WAS SUBMITTED THAT LEARNED CIT(A) HA S HELD THAT SINCE THE JUDGMENT IN THE CASE OF RAJ KUMAR ARORA WAS BASED O N THE JUDGMENT OF ANIL KUMAR BHATIA OF HON'BLE DELHI HIGH COURT AND RELYIN G ON THE SAME JUDGMENT OF ANIL KUMAR BHATIA, HON'BLE DELHI HIGH COURT IN T HE CASE OF KABUL CHAWLA HAS CLEARLY HELD THAT IN THE CASE OF COMPLETED ASSE SSMENTS, THE ADDITIONS CAN ONLY BE BASED ON INCRIMINATING DOCUMENTS. IT W AS FURTHER ARGUED THAT HON'BLE SUPREME COURT IN THE CASE OF MEETA GUTGUTIA HAS UPHELD THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF MEETA GUTGUTIA. THEREFORE, IT WAS ARGUED THAT THERE IS NO PERVERSE FINDING IN THE ORDER OF LEARNED CIT(A). AS REGARDS THE GROUND, TAKEN BY TH E REVENUE REGARDING NON APPLICATION OF DECISION OF APEX COURT IN THE CA SE OF SINGHAD TECHNICAL EDUCATIONAL, IT WAS SUBMITTED THAT THE ASSESSMENT I N THE PRESENT CASE HAS NOT BEEN COMPLETED U/S 153C OF THE ACT BUT HAS BEEN COMPLETED U/S 153A THEREFORE, SUCH DECISION HAS NO APPLICATION TO THE FACTS OF THE PRESENT CASES. AS REGARDS THE ARGUMENT OF LEARNED CIT, D.R. THAT U NSUPPORTED ENTRIES APPEARING IN THE BOOKS OF ACCOUNT CAN ALSO FALL INT O BEING INCRIMINATING, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ENTRIES, WHICH ARE RECORDED IN THE BOOKS OF ACCOUNT, CANNOT BE SAID TO BE INCRIMINATING. IT WAS SUBMITTED THAT THOUGH THE WORD INCRIMINATING HAS NOT BEEN DEFINED IN THE I.T. ACT BUT IN GENERAL TERMS, IT CAN BE INFERRED T HAT THE WORD INCRIMINATING IS SOMETHING WHICH HAS A BEARING ON THE TOTAL INCOM E OF THE ASSESSEE AND WHICH HAS NOT BEEN RECORDED IN THE BOOKS OF ACCOUNT . AS REGARDS THE ARGUMENTS OF LEARNED CIT, D.R. REGARDING ONUS U/S 6 8 OF THE ACT, LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT LEARNED CIT (A) HAS ALLOWED RELIEF TO THE ASSESSEE ONLY ON A LEGAL ISSUE THAT THE ADDITIO N IN THE CASE OF COMPLETED I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 9 ASSESSMENT CAN ONLY BE MADE ON THE BASIS OF SOME IN CRIMINATING MATERIAL FOUND DURING SEARCH AND THEREFORE, IT WAS PRAYED THAT THE ORDER OF LEARNED CIT(A) BE UPHELD. 5. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT A SEARCH TOOK PLACE ON THE FORTUNA GROUP OF CASES ON 21/04/2016 AND SIX ASSESSMENT YEARS, PRECEDING ASSE SSMENT YEAR IN WHICH SEARCH TOOK PLACE, WERE REOPENED FOR VARIOUS ASSESSEES AND THE PRESENT ASSESSEE IS ONE OF THE GROUP CASES. THE ORIGINAL RETURN OF INCOME FOR ASSESSMENT YEAR 2014-15 WERE FILED ON 31/03/2015 & 26/03/2015 RESPECTIVELY, THE EVIDENCE OF WHICH HAS BEEN FILED IN THE FORM OF FILING OF ACKNOWLEDGEMENT OF RETURNS. THE TIME LIMIT FOR ISSUE OF NOTICE U/S 143(2) ON 30/09/2015 FOR THESE ASSESSEE, WHICH IS MUCH BEFORE THE DATE OF SEARCH I.E. ON 21/04/2016. IT IS ALSO A N UNDISPUTED FACT THAT ADDITION HAS NOT BEEN MADE ON THE BASIS OF ANY INCRIMINATING MATERIAL BUT HAS BEEN MADE ON THE BASIS OF ENTRIES IN THE BOOKS OF ACCOUNT. T HE LUCKNOW BENCH OF THE TRIBUNAL, IN A NUMBER OF CASES, HAS HELD THAT FOR C OMPLETED ASSESSMENTS, THE ADDITIONS U/S 153A CAN ONLY BE MADE ON THE BASIS OF SOME INCRIMINATING MATERIAL. THE ARGUMENT OF LEARNED CIT, D.R. THAT UNSUPPORTED ENTRIES, RECORDED IN THE BOOKS OF ACCOUNT, ALSO COMES UNDER THE DEFINITION O F INCRIMINATING MATERIAL, IS OF NO FORCE AS THESE ENTRIES CANNOT BE CALLED INCRIMIN ATING AS THE ASSESSEE HAD RECORDED SUCH TRANSACTIONS IN THE BOOKS OF ACCOUNT. THEY ARE ALSO NOT UNSUPPORTED, BUT ARE DULY AND PROPERLY SUPPORTED BY DOCUMENTARY EVIDENCES, SUCH AS BANK STATEMENTS, DEMAT STATEMENTS AND REAL TIME TRANSACTIONS THROUGH SCREEN BASED TRADING ON RECOGNIZED STOCK EXCHANGES. SIMPLY BECAUSE CERTAIN PERSONS HAVE ADMITTED TO HAVE PROVIDED THESE ENTRIE S AS ACCOMMODATION ENTRIES, CANNOT MAKE THESE ENTRIES INCRIMINATING UN LESS SUCH PERSONS ARE SUBJECTED TO CROSS EXAMINATION BY THE ASSESSEE. AP ROPOS THE ARGUMENT OF LEARNED CIT, D.R. THAT SINGHAD TECHNICAL EDUCATION SOCIETYS CASE BY HON'BLE APEX COURT IS APPLICABLE TO THE PERIOD PRIO R TO AMENDMENT IN SECTION 153C, WE FIND THAT LEARNED CIT(A) HAS NOT RELIED ON THE ORDER OF APEX COURT I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 10 IN THE CASE OF SINGHAD TECHNICAL EDUCATION SOCIETY AND THIS ORDER RELATES TO SECTION 153C OF THE ACT WHEREAS THE ASSESSMENT, IN THESE CASES, HAS BEEN MADE U/S 153A OF THE ACT. AS REGARDS THE ARGUMENT OF LEARNED CIT, D.R. THAT THE ASSESSEE HAD NOT DISCHARGED ITS ONUS UNDER SECTION 68, WE FIND THAT LEARNED CIT(A) HAS ALLOWED RELIEF TO THE ASSESSEE O N THE BASIS OF A LEGAL ISSUE AND HAS NOT GONE INTO THE MERITS OF THE CASE. AS REGARDS THE ARGUMENTS OF LEARNED CIT, D.R. THAT THE DECISION IN THE CASE OF RAJ KUMAR ARORA, RENDERED BY HON'BLE ALLAHABAD HIGH COURT, WA S APPLICABLE, WE FIND THAT SUCH DECISION WAS BASED ON THE JUDGMENT IN THE CASE OF ANIL KUMAR BHATIA, RENDERED BY HON'BLE DELHI HIGH COURT AND HO N'BLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA HAS FOLLOWED THE JUDGME NT OF HON'BLE DELHI HIGH COURT IN THE CASE OF ANIL KUMAR BHATIA AND HAS DECIDED THE ISSUE IN FAVOUR OF ASSESSEE BY HOLDING THAT IN CASE OF COMPL ETED ASSESSMENTS, THE ADDITIONS CAN ONLY BE MADE ON THE BASIS OF INCRIMIN ATING MATERIAL AND KABUL CHAWLA HAS BEEN UPHELD BY HON'BLE SUPREME COURT AND FURTHER HON'BLE DELHI HIGH COURTS DECISION IN THE CASE OF MEETA GU TGUTIA HAS ALSO BEEN UPHELD BY HON'BLE SUPREME COURT AND MOREOVER, THESE DECISIONS HAVE BEEN RENDERED AFTER THE DECISION OF RAJ KUMAR ARORA BY H ON'BLE ALLAHABAD HIGH COURT. THEREFORE, LEARNED CIT(A) HAS RIGHTLY NOT F OLLOWED THE DECISION OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF RAJ KUM AR ARORA. THE LEARNED CIT(A) HAS CLEARLY HELD THAT THERE IS A DIFFERENCE BETWEEN A STATEMENT RECORDED UNDER SECTION 133A AND THAT RECORDED U/S 1 32(4) OF THE ACT. THE STATEMENTS WHICH HAVE BEEN RELIED BY ASSESSING OFFI CER HAVE BEEN RECORDED U/S 133A OF THE ACT AND NOT U/S 132(4) OF THE ACT. THE STATEMENT RECORDED U/S 133A HAS BEEN HELD TO BE NOT CONCLUSIVE PIECE O F EVIDENCE BY ITSELF BY VARIOUS HON'BLE HIGH COURTS AS HAS BEEN NOTED BY LE ARNED CIT(A). IN THE PRESENT CASES, THE ONLY MATERIAL IN THE POSSESSION OF THE DEPARTMENT IS THE STATEMENTS OF SHRI SANTOSH CHOUDHARY AND SHRI VIREN DER KUMAR WHICH HAVE I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 11 BEEN RECORDED POST SEARCH ON THE ASSESSEE AND DURIN G THE SURVEY U/S 133A OF THE ACT. THE LEARNED CIT(A) HAS PASSED AN ELABO RATE ORDER DISCUSSING ALL THE ASPECTS RELATING TO GROUNDS OF APPEALS AND SIMI LAR FINDINGS HAVE BEEN MADE IN BOTH THE CASES. THE RELEVANT FINDINGS OF L EARNED CIT(A) ARE CONTAINED IN PARA 11.1 TO 11.12, WHICH FOR THE SAKE OF COMPLETENESS HAVE BEEN MADE PART OF THIS ORDER AND ARE REPRODUCED BEL OW: 11.1 THE APPELLANT HAS BASICALLY SUBMITTED VIDE SU BMISSION (REPRODUCED ABOVE) THAT NO ADDITION COULD BE MADE I N A SEARCH ASSESSMENT IN ABSENCE OF ANY INCRIMINATING E VIDENCES FOUND DURING SEARCH AND SEIZURE OPERATION U/S 132 O F THE INCOME TAX ACT. 11.2 IT IS EVIDENT THAT ABOVE ADDITION IS NOT BASED ON ANY EVIDENCE FOUND OR GATHERED DURING THE SEARCH AND SE IZURE OPERATION CONDUCTED ON 21.04.2016. THE ABOVE ADDITI ON U/S 68 HAS BEEN MADE ON THE BASIS OF THE STATEMENT OF S H. SANTOSH KUMAR CHAUDHARY RECORDED ON 28.04.2016 DURI NG THE SURVEY OPERATION U/S 133A CARRIED OUT ON THE PREMIS ES SITUATED AT SITE NO. 3, 6TH FLOOR, COMMERCE HOUSE, 2- GANESH CHAND AVENUE, KOLKATA.WHICH ACCORDING TO THE ASSESS MENT ORDER OF THE AO, WAS THE REGISTERED OFFICE OF M/S T ECHMECH DEVELOPERS PVTJLTD. AT THE TIME OF SURVEY PROCEEDIN GS IT WAS FOUND THAT THE PREMISES WAS OCCUPIED BY SHRI SANTOS H CHAUDHARY, WHOSE STATEMENT WAS RECORDED DURING THE SURVEY PROCEEDINGS. HOWEVER SLIRI CHAUDHARY DENIED HAVING ANY ROLE WITH REGARDS TO THE MAINTENANCE OF THE BOOKS OF M/S TECHMECH DEVELOPERS PVTLTD. THE AO FORMED HIS BELIE F ON THE BASIS OF STATEMENT GIVEN IN RESPECT OF THE OTHER TW O GROUP COMPANIES WHICH HAD NO RELATION TO M/S TECHMECH DEV ELOPERS PVT LTD. IT IS ALSO PERTINENT TO MENTION HERE THAT THE STATEMENT WAS RETRACTED SUBSEQUENTLY. 11.3 THE ISSUE WHETHER THE AO CAN MAKE ADDITION ON ISSUE D NOT BASED ON THE SEIZED DOCUMENTS DURING THE SEARCH AND SEIZURE OPERATION U/S 132 IN CASE OF AN ASSESSMENT MADE U/S 153A HAS BEEN A SUBJECT OF PLETHORA OF LITIGATIONS. THIS ISSUE HAS BEEN FINALLY SETTLED BY THE HON'BLE APEX COURT IN CASE OF PRINCIPAL COMMISSIONER OF INCOME-TAX, CENTRAL IT, N EW DELHI I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 12 V. MEETA GUTGUTIA, [2018] 96 TAXMANN.COM 468 (SC). THE HON'BLE SUPREME COURT HAS DISMISSED THE SLP FILED B Y THE REVENUE, AGAINST THE JUDGEMENT GIVEN BY THE HON'BLE DELHI HIGH COURT IN CASE OF PRINCIPAL COMMISSIONER OF INC OME-TAX, CENTRAL -2, NEW DELHI VS. MEETA GUTGUTIA [2017] 82 TAXMANN.COM 287 (DELHI) WITH THE FOLLOWING DIRECTIO NS/ORDER:- 1. DELAY CONDONED 2. WE DO NOT FIND ANY MERIT IN THIS PETITION. THE SPE CIAL LEAVE PETITION IS ACCORDINGLY DISMISSED. 3. PENDING APPLICATION STANDS DISPOSED OF. 11.4 THE OPERATING PART OF THE JUDGEMENT OF THE HON'BLE DELHI HIGH COURT WHICH HAS BEEN AFFIRMED BY THE HON 'BLE APEX COURT IS REPRODUCED BELOW:- 55. ON THE LEGAL ASPECT OF INVOCATION OF SECTION 153A IN RELATION TO AYS 2000-01 TO 2003-04, THE CENTRAL PLA NK OF THE REVENUES SUBMISSION IS THE DECISION OF THIS COURT IN DAYAWANTI GUPTA (SUPRA). BEFORE BEGINNING TO EXAMIN E THE SAID DECISION, IT IS NECESSARY TO REVISIT THE LEGAL LANDSCAPE IN LIGHT OF THE ELABORATE ARGUMENTS ADVANCED BY THE RE VENUE. 56. SECTION 153A OF THE ACT IS TITLED 'ASSESSMENT IN CASE OF SEARCH OR REQUISITION'. IT IS CONNECTED TO SECTION 132 WHICH DEALS WITH 'SEARCH AND SEIZURE'. BOTH THESE PROVISI ONS, THEREFORE, HAVE TO BE READ TOGETHER. SECTION 153A I S INDEED AN EXTREMELY POTENT POWER WHICH ENABLES THE REVENUE TO RE- OPEN AT LEAST SIX YEARS OF ASSESSMENTS EARLIER TO T HE YEAR OF SEARCH. IT IS NOT TO BE EXERCISED LIGHTLY. IT IS ON LY IF DURING THE COURSE OF SEARCH UNDER SECTION 132 INCRIMINATING MATERIAL JUSTIFYING THE RE-OPENING OF THE ASSESSMENTS FOR SI X PREVIOUS YEARS IS FOUND THAT THE INVOCATION OF SECTION 153A QUA EACH OF THE AYS WOULD BE JUSTIFIED. 57. THE QUESTION WHETHER UNEARTHING OF INCRIMINATIN G MATERIAL RELATING TO ANY ONE OF THE AYS COULD JUSTIFY THE RE -OPENING OF THE ASSESSMENT FOR ALL THE EARLIER AYS WAS CONSIDER ED BOTH IN CIT V. ANIL KUMAR BHATIA (SUPRA) AND CIT V. CHETAN DAS LACHMAN DAS (SUPRA). INCIDENTALLY, BOTH THESE DECISIONS WERE DISCUSSED THREADBARE IN THE DECISION OF THIS COURT IN KABUL I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 13 CHAWLA (SUPRA). AS FAR AS CIT V. ANIL KUMAR BHATIA (SUPRA) WAS CONCERNED, THE COURT IN PARAGRAPH 24 OF THAT DE CISION NOTED THAT 'WE ARE NOT CONCERNED WITH A CASE WHERE NO INCRIMINATING MATERIAL WAS FOUND DURING THE SEARCH CONDUCTED UNDER SECTION 132 OF THE ACT. WE THEREFORE EXPRESS NO OPINION AS TO WHETHER SECTION 153A CAN BE INVOKED EVEN UNDER SUCH SITUATION'. THAT QUESTION WAS, THEREFORE, LEFT OPEN . AS FAR AS CIT V CHETAN DAS LACHMAN DAS (SUPRA) IS CONCERNED, IN PARA 11 OF THE DECISION IT WAS OBSERVED: '11. SECTION 153A (1) (B) PROVIDES FOR THE ASSESSME NT OR REASSESSMENT OF THE TOTAL INCOME OF THE SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH THE SEARCH TOOK PLACE. TO REPEAT, THERE IS NO CONDI TION IN THIS SECTION THAT ADDITIONS SHOULD BE STRICTLY M ADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SE ARCH OR OTHER POST-SEARCH MATERIAL OR INFORMATION AVAILA BLE WITH THE ASSESSING OFFICER WHICH CAN BE RELATED TO THE EVIDENCE FOUND. THIS, HOWEVER, DOES NOT MEAN THAT T HE ASSESSMENT UNDER SECTION 153A CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATE RIAL.' 58. IN KABUL CHAWLA (SUPRA), THE COURT DISCUSSED TH E DECISION IN FILATEX INDIA LTD. V. CIT (SUPRA) AS WELL AS THE ABOVE TWO DECISIONS AND OBSERVED AS UNDER: '31. WHAT DISTINGUISHES THE DECISIONS BOTH IN CIT V. CHETAN DAS LACHMAN DAS (SUPRA), AND FILATEX INDIA LTD. V. CIT-IV (SUPRA) IN THEIR APPLICATION TO THE PRESENT CASE IS THAT IN BOTH THE SAID CASES THERE WAS SOME MATER IAL UNEARTHED DURING THE SEARCH, WHEREAS IN THE PRESENT CASE THERE ADMITTEDLY WAS NONE. SECONDLY, IT IS PLA IN FROM A CAREFUL READING OF THE SAID TWO . DECISIONS THAT THEY DO NOT HOLD THAT ADDITIONS CAN BE VALIDLY MADE TO INCOME FORMING THE SUBJECT MATTER OF COMPLETED ASSESSMENTS PRIOR TO THE SEARCH EVEN IF NO INCRIMIN ATING MATERIAL WHATSOEVER WAS UNEARTHED DURING THE SEARCH . I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 14 32. RECENTLY BY ITS ORDER DATED 6TH JULY 2015 IN IT A NO. 369 OF 2015 (PR. COMMISSIONER OF INCOME TAX V. KURE LE PAPER MILLS P. LTD.), THIS COURT DECLINED TO FRAME A QUESTION OF LAW IN A CASE WHERE, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL BEING FOUND DURING THE SEARC H UNDER SECTION 132 OF THE ACT, THE REVENUE SOUGHT TO JUSTIFY INITIATION OF PROCEEDINGS UNDER SECTION 153 A OF THE ACT AND MAKE AN ADDITION UNDER SECTION 68 OF TH E ACT ON BOGUS SHARE CAPITAL GAIN. THE ORDER OF THE CIT(A), AFFIRMED BY THE ITAT, DELETING THE ADDITION , WAS NOT INTERFERED WITH.' 59. IN KABUL CHAWLA (SUPRA), THE COURT REFERRED TO THE DECISION OF THE RAJASTHAN HIGH COURT IN JAI STEEL ( INDIA), JODHPUR V. ACIT (2013) 36 TAXMAN 523 (RAJ). THE SAI D PART OF THE DECISION IN KABUL CHAWLA (SUPRA) IN PARAS 33 AN D 34 READS AS UNDER: '33. THE DECISION OF THE RAJASTHAN HIGH COURT IN JA I STEEL (INDIA), JODHPUR V. ACIT (SUPRA) INVOLVED A C ASE WHERE CERTAIN BOOKS OF ACCOUNTS AND OTHER DOCUMENTS THAT HAD NOT BEEN PRODUCED IN THE COURSE OF ORIGINA L ASSESSMENT WERE FOUND IN THE COURSE OF SEARCH. IT W AS HELD WHERE UNDISCLOSED INCOME OR UNDISCLOSED PROPER TY HAS BEEN FOUND AS A CONSEQUENCE OF THE SEARCH, THE SAME WOULD ALSO BE TAKEN INTO CONSIDERATION WHILE COMPUTING THE TOTAL INCOME UNDER SECTION 153A OF TH E ACT. THE COURT THEN EXPLAINED AS UNDER: '22. IN THE FIRM OPINION OF THIS COURT FROM A PLAIN READING OF THE PROVISION ALONG WITH THE PURPOSE AND PURPORT OF THE SAID PROVISION, WHICH IS INTRICATELY LINKED WITH SEARCH AND REQUISITION UNDER SECTIONS 132 AND 132A OF THE ACT, IT IS APPARENT THAT: (A) THE ASSESSMENTS OR REASSESSMENTS, WHICH STAND ABATED IN TERMS OF II PROVISO TO SECTION 153A OF THE ACT, THE AO ACTS UNDER HIS ORIGINAL JURISDICTION, FOR WHICH, ASSESSMENTS HAVE TO BE MADE; I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 15 (B) REGARDING OTHER CASES, THE ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL; AND (C) IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE.' 34. THE ARGUMENT OF THE REVENUE THAT THE AO WAS FRE E TO DISTURB INCOME DE HORS THE INCRIMINATING MATERIAL W HILE MAKING ASSESSMENT UNDER SECTION 153A OF THE ACT WAS SPECIFICALLY REJECTED BY THE COURT ON THE GROUND TH AT IT WAS 'NOT BORNE OUT FROM THE SCHEME OF THE SAID PROVISIO N' WHICH WAS IN THE CONTEXT OF SEARCH AND/OR REQUISITION. TH E COURT ALSO EXPLAINED THE PURPORT OF THE WORDS 'ASSESS' AND 'RE ASSESS', WHICH HAVE BEEN FOUND AT MORE THAN ONE PLACE IN SEC TION 153A OF THE ACT AS UNDER: '26. THE PLEA RAISED ON BEHALF OF THE ASSESSEE THAT AS THE FIRST PROVISO PROVIDES FOR ASSESSMENT OR REASSESSMENT OF THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSESSMENT Y EARS, IS MERELY READING THE SAID PROVISION IN ISOLATION A ND NOT IN THE CONTEXT OF THE ENTIRE SECTION. THE WORDS 'AS SESS' OR 'REASSESS'-HAVE BEEN USED AT MORE THAN ONE PLACE IN THE SECTION AND A HARMONIOUS CONSTRUCTION OF THE EN TIRE PROVISION WOULD LEAD TO AN IRRESISTIBLE CONCLUSION THAT THE WORD ASSESS HAS BEEN USED IN THE CONTEXT OF AN ABATED PROCEEDINGS AND REASSESS HAS BEEN USED FOR COMPLETED ASSESSMENT PROCEEDINGS, WHICH WOULD NOT ABATE AS THEY ARE NOT PENDING ON THE DATE OF INITIA TION OF THE SEARCH OR MAKING OF REQUISITION AND WHICH WO ULD ALSO NECESSARILY SUPPORT THE INTERPRETATION THAT FO R THE COMPLETED ASSESSMENTS, THE SAME CAN BE TINKERED ONL Y BASED ON THE INCRIMINATING MATERIAL FOUND DURING TH E COURSE OF SEARCH OR REQUISITION OF DOCUMENTS.' 60. IN KABUL CHAWLA (SUPRA), THE COURT ALSO TOOK NOTE OF THE DECISION OF THE BOMBAY HIGH COURT IN COMMISSIONER OF INCOME TAX V. CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD . I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 16 [2015] 58 TAXMANN.COM 78 (BOM) WHICH ACCEPTED THE PLEA THAT IF NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH IN RESPECT OF AN ISSUE, THEN NO ADDITIONS IN RESPECT OF ANY ISSUE CAN BE MADE TO THE ASSESSMENT UNDER SECTION 153A AND 153C OF THE ACT. THE LEGAL POSITION WAS THEREAFTER SUMMARIZED IN KABUL CHAWLA (SUPRA) AS UNDER: '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 THE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UNDER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF T HE ACT, NOTICE UNDER SECTION 153 A (1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDI NG THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARC H TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DA TE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUC H AYS WILL HAVE TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT A Y IN WHICH THE SEARCH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE. AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORD ERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WIL L BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSE D INCOME WOULD BE BROUGHT TO TAX'. IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITI ONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FO UND IN THE COURSE OF THE SEARCH, 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 ASSESSMENT 'CAN BE ARBITRARY OR MADE WITHOUT AN Y RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOU SLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONL Y ON THE BASIS OF SEIZED MATERIAL.' I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 17 V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CAN BE REITERATED AND THE ABAT ED ASSESSMENT OR REASSESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATABLE TO ABATED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEAR CH) AND THE WORD 'REASSESS' TO COMPLETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, T HE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND TH E ASSESSMENT UNDER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE A O. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH B Y THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 15 3 A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITIO N OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT.' 61. IT APPEARS THAT A NUMBER OF HIGH COURTS HAVE CO NCURRED WITH THE DECISION OF THIS COURT IN KABUL CHAWLA (SU PRA) BEGINNING WITH THE GUJARAT HIGH COURT IN PRINCIPAL COMMISSIONER OF INCOME TAX V. SAUMYA CONSTRUCTION P VT. LTD . (SUPRA). THERE, A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT ON 7TH OCTOBER, 2009 AND AN ASSESSMENT CAME TO BE F RAMED UNDER SECTION 143(3) READ WITH SECTION 153A(1)(B) I N DETERMINING THE TOTAL INCOME OF THE ASSESSEE OF RS. 14.5 CRORES AGAINST DECLARED INCOME OF RS. 3.44 CRORES. THE ITAT DELETED THE ADDITIONS ON THE GROUND THAT IT WAS NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF THE SEARCH IN RESPECT OF AYS UNDER CONSIDERATION I.E., AY 2006-07. THE GUJARAT HIGH COURT REFERRED TO THE DECISION IN KABUL CHAWLA (SUPRA), OF THE RAJASTHAN HIGH COURT IN JAI STEEL (INDIA), JODHPUR V. ACIT (SUPRA) AND ONE EARLIER DE CISION OF THE GUJARAT HIGH COURT ITSELF. IT EXPLAINED IN PARA 15 AND 16 AS UNDER: '15. ON A PLAIN READING OF SECTION 153A OF THE ACT, IT IS EVIDENT THAT THE TRIGGER POINT FOR EXERCISE OF POWE RS I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 18 THEREUNDER IS A SEARCH UNDER SECTION 132 OR A REQUISITION UNDER SECTION 132A OF THE ACT. ONCE A S EARCH OR REQUISITION IS MADE, A MANDATE IS CAST UPON THE ASSESSING OFFICER TO ISSUE NOTICE UNDER SECTION 153 A OF THE ACT TO THE PERSON, REQUIRING HIM TO FURNISH THE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVI OUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITI ON IS MADE AND ASSESS OR REASSESS THE SAME. SINCE THE ASSESSMENT UNDER SECTION 153A OF THE ACT IS LINKED WITH SEARCH AND REQUISITION UNDER SECTIONS 132 AND 132A OF THE ACT, IT IS EVIDENT THAT THE OBJECT OF THE SECTI ON IS TO BRING TO TAX THE UNDISCLOSED INCOME WHICH IS FOUND DURING THE COURSE OF OR PURSUANT TO THE SEARCH OR REQUISITION. HOWEVER, INSTEAD OF THE EARLIER REGIME OF BLOCK ASSESSMENT WHEREBY, IT WAS ONLY THE UNDISCLOS ED INCOME OF THE BLOCK PERIOD THAT WAS ASSESSED, SECTI ON 153A OF THE ACT SEEKS TO ASSESS THE TOTAL INCOME FO R THE ASSESSMENT YEAR, WHICH IS CLEAR FROM THE FIRST PROV ISO THERETO WHICH PROVIDES THAT THE ASSESSING OFFICER S HALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF E ACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS. THE SECOND PROVISO MAKES THE INTENTION OF TH E LEGISLATURE CLEAR AS THE SAME PROVIDES THAT ASSESSM ENT OR REASSESSMENT, IF ANY, RELATING TO THE SIX ASSESS MENT YEARS REFERRED TO IN THE SUB-SECTION PENDING ON THE DATE OF INITIATION OF SEARCH UNDER SECTION 132 OR REQUIS ITION UNDER SECTION 132A, AS THE CASE MAY BE, SHALL ABATE . SUB- SECTION (2) OF SECTION 153A OF THE ACT PROVIDE S THAT IF ANY PROCEEDING OR ANY ORDER OF ASSESSMENT OR REASSESSMENT MADE UNDER SUB-SECTION (1) IS ANNULLED IN APPEAL OR ANY OTHER LEGAL PROVISION, THEN THE ASSESSMENT OR REASSESSMENT RELATING TO ANY ASSESSME NT YEAR WHICH HAD ABATED UNDER THE SECOND PROVISO WOUL D STAND REVIVED. THE PROVISO THERETO SAYS THAT SUCH REVIVAL SHALL CEASE TO HAVE EFFECT IF SUCH ORDER OF ANNULMENT IS SET ASIDE. THUS, ANY PROCEEDING OF ASSESSMENT OR REASSESSMENT FALLING WITHIN THE SIX ASSESSMENT YEARS PRIOR TO THE SEARCH OR REQUISITION STANDS ABATED AND THE TOTAL INCOME OF THE ASSESSEE IS REQUIRED TO BE DETERMINED UNDER SECTION 153A OF THE I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 19 ACT. SIMILARLY, SUB- SECTION (2) PROVIDES FOR REVIV AL OF ANY ASSESSMENT OR REASSESSMENT WHICH STOOD ABATED, IF ANY PROCEEDING OR ANY ORDER OF ASSESSMENT OR REASSESSMENT MADE UNDER SECTION 153A OF THE ACT IS ANNULLED IN APPEAL OR ANY OTHER PROCEEDING. 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 OR THE SECTION CAN BE REGARDED AS A KEY TO THE INTERPRETATION OF THE OPERATIVE PORTION OF THE SECT ION AND IF THERE IS NO AMBIGUITY IN THE LANGUAGE OR IF IT IS PLAIN AND CLEAR, THEN THE HEADING USED IN THE SECTI ON STRENGTHENS THAT MEANING. FROM THE HEADING OF SECTI ON 153. THE INTENTION OF THE LEGISLATURE IS CLEAR, VIZ ., TO PROVIDE FOR ASSESSMENT IN CASE OF SEARCH AND REQUISITION. WHEN THE VERY PURPOSE OF THE PROVISION IS TO MAKE ASSESSMENT IN CASE OF SEARCH OR REQUISITION, I T GOES WITHOUT SAYING THAT THE ASSESSMENT HAS TO HAVE RELATION TO THE SEARCH OR REQUISITION, IN OTHER WOR DS, THE ASSESSMENT SHOULD CONNECTED WITH SOMETHING ROUND DURING THE SEARCH OR REQUISITION VIZ., INCRIMINATIN G MATERIAL WHICH REVEALS UNDISCLOSED INCOME. THUS, WH ILE IN VIEW OF THE MANDATE OF SUB-SECTION (1) OF SECTIO N 153A OF THE ACT, IN EVERY CASE WHERE THERE IS A SEA RCH OR REQUISITION, THE ASSESSING OFFICER IS OBLIGED TO ISSUE NOTICE TO SUCH PERSON TO FURNISH RETURNS OF INCOME FOR THE SIX YEARS PRECEDING THE ASSESSMENT YEAR RELEVAN T TO THE PREVIOUS YEAR IN WHICH THE SEARCH IS CONDUCTED OR REQUISITION IS MADE, ANY ADDITION' OR DISALLOWANCE CAN BE MADE ONLY ON THE BASIS OF MATERIAL COLLECTED DURING THE SEARCH OR REQUISITION, IN CASE NO INCRIMINATING MAT ERIAL IS FOUND, AS HELD BY THE RAJASTHAN HIGH COURT IN THE C ASE OF JAI STEEL (INDIA) V. ASST . CIT (SUPRA), THE EARLIER ASSESSMENT WOULD HAVE TO BE REITERATED, IN CASE WHE RE PENDING ASSESSMENTS HAVE ABATED, THE ASSESSING OFFICER CAN PASS ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS DETERMINING THE TOTAL INCOME OF THE ASSESSEE WHICH WOULD INCLUDE INCOME DECLARED IN THE RETURNS, IF ANY, FURNISHED BY THE ASSESSEE AS WELL AS UNDISCLOS ED INCOME, IF ANY, UNEARTHED DURING THE SEARCH OR REQUISITION. IN CASE WHERE A PENDING REASSESSMENT I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 20 UNDER SECTION 147 OF THE ACT HAS ABATED, NEEDLESS T O STATE THAT THE SCOPE AND AMBIT OF THE ASSESSMENT WO ULD INCLUDE ANY ORDER WHICH THE ASSESSING OFFICER COULD HAVE PASSED UNDER SECTION 147 OF THE ACT AS WELL AS UNDER SECTION 153A OF THE ACT. *** *** *** 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 PERMISSIBLE TO MAKE ADDITIONS AND DISALLOWANCE IN RESPECT OF AN THE SIX ASSESSMENT YE ARS. IN THE OPINION OF THIS COURT, THE SAID CONTENTION D OES NOT MERIT ACCEPTANCE, INASMUCH AS. THE ASSESSMENT I N RESPECT OF EACH OF THE SIX ASSESSMENT YEARS IS A SEPARATE AND DISTINCT ASSESSMENT. UNDER SECTION 15 3A OF THE ACT, ASSESSMENT HAS TO BE MADE IN RELATION T O THE SEARCH OR REQUISITION, NAMELY, IN RELATION TO MATER IAL DISCLOSED DURING THE SEARCH OR REQUISITION. IF IN R ELATION TO ANY ASSESSMENT YEAR, NO INCRIMINATING MATERIAL I S FOUND, NO ADDITION OR DISALLOWANCE CAN BE MADE IN RELATION TO THAT ASSESSMENT YEAR IN EXERCISE OF POW ERS UNDER SECTION 153A OF THE ACT AND THE EARLIER ASSESSMENT SHALL HAVE TO BE REITERATED. IN THIS REG ARD, THIS COURT IS IN COMPLETE AGREEMENT WITH THE VIEW ADOPTED BY THE RAJASTHAN HIGH COURT IN THE CASE OF JAI STEEL (INDIA) V. ASST . CIT (SUPRA). BESIDES, AS RIGHTLY POINTED OUT BY THE LEARNED COUNSEL FOR THE RESPONDE NT, THE CONTROVERSY INVOLVED IN THE PRESENT CASE STANDS CONCLUDED BY THE DECISION OF THIS COURT IN THE CASE OF CIT V. JAYABEN RATILAL SORATHIA (SUPRA) WHEREIN IT HAS BEEN HELD THAT WHILE IT CANNOT BE DISPUTED THAT CONSIDERING SECTION 153A OF THE ACT, THE ASSESSING OFFICER CAN REOPEN AND/OR ASSESS THE RETURN WITH RESPECT TO SIX PRECEDING YEARS ; HOWEVER, THERE MUS T BE SOME INCRIMINATING MATERIAL AVAILABLE WITH THE ASSE SSING OFFICER WITH RESPECT TO THE SALE TRANSACTIONS IN TH E PARTICULAR ASSESSMENT YEAR.' I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 21 62. SUBSEQUENTLY, IN PRINCIPAL COMMISSIONER OF INCOME TAX- 1 V. DEVANGI ALIAS RUPA (SUPRA), ANOTHER BENCH OF THE GUJARAT HIGH COURT REITERATED THE ABOVE LEGAL POSITION FOLL OWING ITS EARLIER DECISION IN PRINCIPAL COMMISSIONER OF INCOME TAX V. SAUMYA CONSTRUCTION P. LTD . (SUPRA) AND OF THIS COURT IN KABUL CHAWLA (SUPRA). AS FAR AS KARNATAKA HIGH COURT IS C ONCERNED, IT HAS IN CIT V. IBC KNOWLEDGE PARK P. LTD . (SUPRA) FOLLOWED THE DECISION OF THIS COURT IN KABUL CHAWLA (SUPRA) AND HELD THAT THERE HAD TO BE INCRIMINATING MATERIAL QUA EAC H OF THE AYS IN WHICH ADDITIONS WERE SOUGHT TO BE MADE PURSU ANT TO SEARCH AND SEIZURE OPERATION. THE CALCUTTA HIGH COU RT IN CIT- 2 V. SALASAR STOCK BROKING LTD . (SUPRA), TOO, FOLLOWED THE DECISION OF THIS COURT IN KABUL CHAWLA (SUPRA). IN CIT V. GURINDER SINGH BAWA (SUPRA), THE BOMBAY HIGH COURT HELD THAT: '6...ONCE AN ASSESSMENT HAS ATTAINED FINALITY FOR A PARTICULAR YEAR, I.E., IT IS NOT PENDING THEN THE S AME CANNOT BE SUBJECT TO TAX IN PROCEEDINGS UNDER SECTI ON 153A OF THE ACT. THIS OF COURSE WOULD NOT APPLY IF INCRIMINATING MATERIALS ARE GATHERED IN THE COURSE OF SEARCH OR DURING PROCEEDINGS UNDER SECTION 153A OF THE ACT WHICH ARE CONTRARY TO AND/OR NOT DISCLOSED DURI NG THE REGULAR ASSESSMENT PROCEEDINGS.' 63. EVEN THIS COURT HAS IN CIT V MAHESH KUMAR GUPTA (SUPRA) AND THE PR. COMMISSIONER OF INCOME TAX-9 V. RAM AVTAR VERMA (SUPRA) FOLLOWED THE DECISION IN KABUL CHAWLA (SUP RA). THE DECISION OF THIS COURT IN PR. COMMISSIONER OF I NCOME TAX V. KURELE PAPER MILLS P. LTD. (SUPRA) WHICH WAS REF ERRED TO IN KABUL CHAWLA (SUPRA) HAS BEEN AFFIRMED BY THE SUPRE ME COURT BY THE DISMISSAL OF THE REVENUE'S SLP ON 7TH DECEMBER, 2015. THE DECISION IN DAYAWANTI GUPTA 64. THAT BRINGS US TO THE DECISION IN DAYAWANTI GUP TA (SUPRA). AS RIGHTLY POINTED OUT BY MR. KAUSHIK, LEARNED COUN SEL APPEARING FOR THE RESPONDENT, THAT THERE ARE SEVERA L DISTINGUISHING FEATURES IN THAT CASE WHICH MAKES IT S RATIO INAPPLICABLE TO THE FACTS OF THE PRESENT CASE. IN T HE FIRST PLACE, THE ASSESSEES THERE WERE ENGAGED IN THE BUSINESS OF PAN I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 22 MASALA AND GUTKHA ETC. THE ANSWERS GIVEN TO QUESTIO NS POSED TO THE ASSESSEE IN THE COURSE OF SEARCH AND SURVEY PROCEEDINGS IN THAT CASE BRING OUT THE POINTS OF DI STINCTION. IN THE FIRST PLACE, IT WAS STATED THAT THE STATEMENT R ECORDED WAS UNDER SECTION 132(4) AND NOT UNDER SECTION 133A . IT WAS A STATEMENT BY THE ASSESSEE HIMSELF. IN RESPONSE TO Q UESTION NO. 7 WHETHER ALL THE PURCHASES MADE BY THE FAMILY FIRMS, WERE ENTERED IN THE REGULAR BOOKS OF ACCOUNT, THE A NSWER WAS: 'WE AND OUR FAMILY FIRMS NAMELY M/S ASSAM SUPARI TRADERS AND M/S BALAJI PERFUMES GENERALLY TRY TO RE CORD THE TRANSACTIONS MADE IN RESPECT OF PURCHASE, MANUFACTURING AND SALES IN OUR REGULAR BOOKS OF ACCOUNTS BUT IT IS ALSO FACT THAT SOME TIME DUE TO SOME FACTORS LIKE INABILITY OF ACCOUNTANT, OUR BUSY SCHE DULE AND SOME FAMILY PROBLEMS, VARIOUS PURCHASES AND SAL ES OF SUPARI, GUTKA AND OTHER ITEMS DEALT BY OUR FIRMS IS NOT ENTERED AND SHOWN IN THE REGULAR BOOKS OF ACCOU NTS MAINTAINED BY OUR FIRMS.' 65. THEREFORE, THERE WAS A CLEAR ADMISSION BY THE A SSESSEES IN DAYAWANTI GUPTA (SUPRA) THERE THAT THEY WERE NOT MAINTAINING REGULAR BOOKS OF ACCOUNTS AND THE TRANS ACTIONS WERE NOT RECORDED THEREIN. 66. FURTHER, IN ANSWER TO QUESTION NO. 11, THE ASSE SSEE IN DAYAWANTI GUPTA (SUPRA) WAS CONFRONTED WITH CERTAIN DOCUMENTS SEIZED DURING THE SEARCH. THE ANSWER WAS CATEGORICAL AND READS THUS: 'ANS:- I HEREBY ADMIT THAT THESE PAPERS ALSO CONTEN D DETAILS OF VARIOUS TRANSACTIONS INCLUDE PURCHASE/ SALES/ MA NUFACTURING TRADING OF GUTKHA, SUPARI MADE IN CASH OUTSIDE BOOK S OF ACCOUNTS AND THESE ARE ACTUALLY UNACCOUNTED TRANSAC TIONS MADE BY OUR TWO FIRMS NAMELY M/S ASOM TRADING AND M /S. BALAJI PERFUMES.' 67. BY CONTRAST, THERE IS NO SUCH STATEMENT IN THE PRESENT CASE WHICH CAN BE SAID TO CONSTITUTE AN ADMISSION B Y THE ASSESSEE OF A FAILURE TO RECORD ANY TRANSACTION IN THE ACCOUNTS OF THE ASSESSEE FOR THE AYS IN QUESTION. ON THE CON TRARY, THE ASSESSEE HEREIN STATED THAT, HE IS REGULARLY MAINTA INING THE I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 23 BOOKS OF ACCOUNTS. THE DISCLOSURE MADE IN THE SUM O F RS. 1.10 CRORES WAS ONLY FOR THE YEAR OF SEARCH AND NOT FOR THE EARLIER YEARS. AS ALREADY NOTICED, THE BOOKS OF ACC OUNTS MAINTAINED BY THE ASSESSEE IN THE PRESENT CASE HAVE BEEN ACCEPTED BY THE AO. IN RESPONSE TO QUESTION NO. 16 POSED TO MR. PAWAN GADIA, HE STATED THAT THERE WAS NO POSSIB ILITY OF MANIPULATION OF THE ACCOUNTS. IN DAYAWANTI GUPTA (S UPRA), BY CONTRAST, THERE WAS A CHART PREPARED CONFIRMING THA T THERE HAD BEEN A YEAR-WISE NON-RECORDING OF TRANSACTIONS. IN DAYAWANTI GUPTA (SUPRA), ON THE BASIS OF MATERIAL R ECOVERED DURING SEARCH, THE ADDITIONS WHICH WERE MADE FOR AL L THE YEARS WHEREAS ADDITIONS IN THE PRESENT CASE WERE MADE BY THE AO ONLY FOR AY 2004-05 AND NOT ANY OF THE OTHER YEARS. EVEN THE ADDITIONS MADE FOR AYS 2004-05 WERE SUBSEQUENTLY DE LETED BY THE CIT(A), WHICH ORDER WAS AFFIRMED BY THE ITAT. E VEN THE REVENUE HAS CHALLENGED ONLY TWO OF SUCH DELETIONS I N ITA NO. 306/2017. 68. IN PARA 23 OF THE DECISION IN DAYAWANTI GUPTA ( SUPRA), IT WAS OBSERVED AS UNDER: '23. THIS COURT IS OF OPINION THAT THE ITAT'S FINDI NGS DO NOT REVEAL ANY FUNDAMENTAL ERROR, CALLING FOR CORRE CTION. THE INFERENCES DRAWN IN RESPECT OF UNDECLARED INCOM E WERE PREMISED ON THE MATERIALS FOUND AS WELL AS THE STATEMENTS RECORDED BY THE ASSESSEES. THESE ADDITIO NS THEREFORE WERE NOT BASELESS. GIVEN THAT THE ASSESSI NG AUTHORITIES IN SUCH CASES HAVE TO DRAW INFERENCES, BECAUSE OF THE NATURE OF THE MATERIALS - SINCE THEY COULD BE SCANTY (AS ONE HABITUALLY CONCEALING INCOM E OR INDULGING IN CLANDESTINE OPERATIONS CAN HARDLY BE EXPECTED TO MAINTAIN METICULOUS BOOKS OR RECORDS FO R LONG AND IN ALL PROBABILITY BE ANXIOUS TO DO AWAY W ITH SUCH EVIDENCE AT THE SHORTEST POSSIBILITY) THE ELEM ENT OF GUESS WORK IS TO HAVE SOME REASONABLE NEXUS WITH TH E STATEMENTS RECORDED AND DOCUMENTS SEIZED. IN TILLS CASE, THE DIFFERENCES OF OPINION BETWEEN THE CIT (A ) ON THE ONE HAND AND THE AO AND ITAT ON THE OTHER CANNO T BE THE SOLE BASIS FOR DISAGREEING WITH WHAT IS ESSE NTIALLY A FACTUAL SURMISE THAT IS LOGICAL AND PLAUSIBLE. TH ESE FINDINGS DO NOT CALL FOR INTERFERENCE. THE SECOND I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 24 QUESTION OF LAW IS ANSWERED AGAIN IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE.' 69. WHAT WEIGHED WITH THE COURT IN THE ABOVE DECISI ON WAS THE 'HABITUAL CONCEALING OF INCOME AND INDULGING IN CLANDESTINE OPERATIONS' AND THAT A PERSON INDULGING IN SUCH ACTIVITIES 'CAN HARDLY BE ACCEPTED TO MAINTAIN METI CULOUS BOOKS OR RECORDS FOR LONG.' THESE FACTORS ARE ABSEN T IN THE PRESENT CASE. THERE WAS NO JUSTIFICATION AT ALL FOR THE AO TO PROCEED ON SURMISES AND ESTIMATES WITHOUT THERE BEI NG ANY INCRIMINATING MATERIAL QUA THE AY FOR WHICH HE SOUG HT TO MAKE ADDITIONS OF FRANCHISEE COMMISSION. 70. THE ABOVE DISTINGUISHING FACTORS IN DAYAWANTI G UPTA (SUPRA), THEREFORE, DO NOT DETRACT FROM THE SETTLED LEGAL POSITION IN KABUL CHAWLA (SUPRA) WHICH HAS BEEN FOL LOWED NOT ONLY BY THIS COURT IN ITS SUBSEQUENT DECISIONS BUT ALSO BY SEVERAL OTHER HIGH COURTS. 71. FOR ALL OF THE AFOREMENTIONED REASONS, THE COUR T IS OF THE VIEW THAT THE ITAT WAS JUSTIFIED IN HOLDING THAT TH E INVOCATION OF SECTION 153A BY THE REVENUE FOR THE AYS 2000-01 TO 2003- 04 WAS WITHOUT ANY LEGAL BASIS AS THERE WAS NO INCR IMINATING MATERIAL QUA EACH OF THOSE AYS. CONCLUSION 72. TO CONCLUDE: (I) QUESTION (I) IS ANSWERED IN THE NEGATIVE I.E., IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. IT IS HELD TH AT IN THE FACTS AND CIRCUMSTANCES, THE REVENUE WAS NOT JUSTIF IED IN INVOKING SECTION 153A OF THE ACT AGAINST THE ASSESSEE IN RELATION TO AYS 2000-01 TO AYS 2003-04. (II) QUESTION (II) IS ANSWERED IN THE AFFIRMATIVE I .E., IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. IT IS HELD THAT WITH REFERENCE TO AY 2004-05, THE ITAT WAS CORRECT IN CO NFIRMING THE ORDERS OF THE CIT(A) TO THE EXTENT IT DELETED T HE ADDITIONS MADE BY THE AO TO THE TAXABLE INCOME OF THE ASSESSE E OF FRANCHISE COMMISSION IN THE SUM OF RS. 88 LAKHS AND RENT PAYMENT FOR THE SUM OF RS. 13.79 LAKHS. I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 25 73. THE APPEALS ARE ACCORDINGLY DISMISSED BUT IN TH E CIRCUMSTANCES, NO ORDERS AS TO COSTS. 11.5 THE HON'BLE HIGH COURT IN THE ABOVE JUDGMENT HAS RELIED ON THE LANDMARK JUDGMENT GIVEN BY THE HON'BI E DELHI HIGH COURT IN CASE OF KABUL CHAWLA (SUPRA). THE HON 'BLE DELHI HIGH COURT IN CASE OF KABUL CHAWLA HAS SUMMARIZED T HE LEGAL POSITION AS UNDER:- 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 THE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UNDER: 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 FOR SIX AYS IMMEDIATELY PRECEDI NG THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARC H TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DA TE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUC H AYS WILL HAVE TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT A Y IN WHICH THE SEARCH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORD ERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WIL L BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSE D INCOME WOULD BE BROUGHT TO TAX'. IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITI ONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FO UND IN THE COURSE OF THE SEARCH, OR OTHER POST-SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 26 THE ASSESSMENT 'CAN BE ARBITRARY OR MADE WITHOUT AN Y RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOU SLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONL Y ON THE BASIS OF SEIZED MATERIAL.' V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CAN BE REITERATED AND THE ABAT ED ASSESSMENT OR REASSESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATABLE TO ABATED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEAR CH) AND THE WORD 'REASSESS' TO COMPLETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, T HE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND TH E ASSESSMENT UNDER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE A O. 11.6 IT IS EVIDENT FROM THE ABOVE JUDICIAL PRONOUNCEMENT S THAT ANY SEARCH ASSESSMENT U/S 153 A CAN BE MADE ON LY ON THE BASIS OF MATERIALS FOUND DURING SEARCH AND SEIZ URE OPERATION. VARIOUS HIGH COURTS HAVE CONCURRED WITH THE ABOVE FINDINGS GIVEN IN CASE OF KABUL CHAWLA AS CLEARLY M ENTIONED IN THE ABOVE ORDER OF HON'BLE DELHI HIGH COURT IN CASE OF MEETA GUTGUTIA. 11.7 HON'BLE DELHI HIGH COURT IN CASE OF MEETA GUTGUTIA HAS FURTHER HELD THAT STATEMENT RECORDED U/S 133A OF TH E INCOME TAX ACT IS NOT AN INCRIMINATING MATERIAL FOR THE PU RPOSE OF MAKING SEARCH ASSESSMENT U/S 153 A. THE RELEVANT EX TRACT OF THE ABOVE JUDGMENT IS REPRODUCED BELOW:- DISTINCTION BETWEEN STATEMENTS UNDER SECTIONS 132 (4) AND 133 A 40. THE MAIN PLANK OF MR. MANCHANDAS SUBMISSION WA S THAT THE DISCLOSURE MADE BY MR. PAWAN GADIA IN HIS STATEMENT UNDER SECTION 133A WAS SUFFICIENT TO BE CONSTRUED AS INCRIMINATING MATERIAL QUA ALL THE I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 27 AFOREMENTIONED AYS, THE ASSESSMENT FOR WHICH COULD BE RE-OPENED BY INVOKING SECTION 153A OF THE ACT. IT IS SIGNIFICANT THAT WHILE IN THE WRITTEN SUBMISSION DA TED 26TH APRIL, 2017, MR. MANCHANDA TERMED THE STATEMEN T OF MR. PAWAN GADIA AS 'THE STATEMENT DATED 23RD DECEMBER, 2005 RECORDED UNDER SECTION 132(4) OF THE ACT', HE WAS CAREFUL TO DESCRIBE IT AS SUCH IN THE SUBSEQUENT WRITTEN SUBMISSION DATED 2ND MAY, 2017. THIS WAS FOR A GOOD REASON. THE STATEMENT WAS IN FA CT NOT UNDER SECTION 132(4) OF THE ACT BUT UNDER SECTION 133A OF THE ACT. THERE IS A DIFFERENCE BETWEEN A STATEMENT MADE DURING A SURVEY UNDER SECTION 133A OF THE ACT AND THAT MADE DURING THE COURSE OF SEARCH UNDER SECTION 132 (4) OF THE ACT. SECTION 132(4) OF THE ACT STATES THAT THE AUTHORIZED OFFICER MAY, DURING THE COURSE OF SEARCH AND SEIZURE, 'EXAMINE ON OATH ANY PERSON WHO IS FOUND TO BE IN POSSESSION OR CONTROL OF ANY BOOKS OF ACCOUNT, DOCUMENTS, MONIES, BULLION, JEWELLERY...'AND THAT ANY STATEMENT MADE DURING SUC H EXAMINATION MAY BE USED THEREAFTER IN EVIDENCE IN A NY PROCEEDING UNDER THE ACT. ON THE OTHER HAND, SECTION 133A DOES NOT TALK OF THE RECORDING OF ANY STATEMENT ON OATH. UNDER SECTION 133A (3) (III), THE INCOME TAX AUTHORITY ACTING UNDER THE SAID PROVISION COULD 'RE CORD THE STATEMENT OF ANY PERSON WHICH MAY BE USEFUL FOR , OR RELEVANT TO, ANY PROCEEDING UNDER THIS ACT.' THEREFORE, THERE IS A CONSIDERABLE DIFFERENCE IN TH E NATURE OF THE STATEMENT RECORDED UNDER SECTION 132(4) AND THAT RECORDED UNDER SECTION 133A(3)(III) OF THE ACT. 41. THIS DISTINCTION WAS NOTICED BY THIS COURT IN CIT V. DHINGRA METAL WORKS (SUPRA). THE COURT THERE REFERRED TO THE DECISION OF THE KERALA HIGH COURT IN PAUL MATHEWS & SONS V. COMMISSIONER OF INCOME TAX (2003) 263 ITR 101 (KER) AND OF THE MADRAS HIGH COURT IN CIT V. S. KHADER KHAN SON (SUPRA) AND OBSERVED THAT THE WORD MAY OCCURRING IN SECTION 133A(3)(III) OF THE ACT 'CLARIFIES BEYOND DOUBT THAT THE MATERIAL COLLECTED AND THE STATEMENT RECORDED DURING THE SURVEY IS NOT A CONCLUSIVE PIECE OF EVIDENCE BY ITSELF.' INCIDENTAL LY, THE DECISION OF THE MADRAS HIGH COURT IN CIT V. S. KHADER I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 28 KHAN SON (SUPRA) HAS BEEN AFFIRMED BY THE SUPREME COURT BY THE DISMISSAL ON 20TH SEPTEMBER, 2012 OF S LP (CIVIL) NO. 13224/2008 FILED BY THE REVENUE AGAINST THE SAID DECISION AFTER GRANTING LEAVE. TO THE SAME EFF ECT IS THE DECISION OF THIS COURT IN CIT V. SUNRISE TOOLING SYSTEM PVT. LTD (SUPRA) AND OF THE JHARKHAND HIGH COURT IN SHREE GANESH TRADING CO. V. COMMISSIONER OF INCOME-TAX (SUPRA). THE CBDTS INSTRUCTIONS DATED 10TH MARCH, 2003 AND 18TH DECEMBER, 2014 HAVE ALSO EMPHASIZED THAT THERE SHOULD BE NO RECORDING OF STATEMENT DURING 'SEARCH/SEIZURE/OTHER PROCEEDING' UNDER THE ACT UNDER 'UNDUE PRESSURE OR COERCION'. 42. THEREFORE, IN THE PRESENT CASE, IT WOULD BE WRO NG ON THE PART OF THE REVENUE TO CHARACTERIZE THE STATEMENT OF MR. PAWAN GADIA AS BY ITSELF AN INCRIMINATING MATERIAL THAT COULD BE USED FOR MAKIN G ADDITIONS IN ALL THE AYS IN QUESTION APART FROM THE YEAR OF SEARCH. 11.8 WITH DISMISSAL OF REVENUE'S SLP AGAINST THE ABOVE JUDGMENT OF THE HON'BLE DELHI HIGH COURT ON MERIT T HE ABOVE LEGAL POSITION HAS ATTAINED FINALITY. IN THE CASE O F DCIT VS M/S CHANDIGARH DEVELOPERS PVT. LTD. (ITAT CHANDIGARH)IT A NO. 994/CHD/2017 WHEREIN THE ADDITION OF RS.50 LAKHS WA S MADE U/S 68 ON ACCOUNT OF BOGUS SHARE APPLICATION MONEY RECEIVED FROM M/S RSM METALS LTD. AND M/S OCTOMAC SOFTWARES PVT. LTD. IN THE SEARCH ASSESSMENT ORDER U/S 133 A OF TH E I.T. ACT, 1961 ON THE BASIS OF THE STATEMENT OF SHRI BHAVNESH GUPTA RECORDED ON 04.10.2012 DURING SURVEY U/S 133A WHERE IN HE ADMITTED THAT HE IS A DIRECTOR IN M/S RSM METALS LT D. AND M/S OCTOMAC SOFTWARES PVT. LTD. AND THESE COMPANIES ARE SUITCASE COMPANIES WITH DUMMY DIRECTORS AND DUMMY REGISTERED OFFICE AND IT IS ALSO CONTROLLED BY PROM OTER DIRECTOR OF THE STEEL STRIPS GROUP THROUGH THEIR TRUSTED AID E. THE HON'BLE DELETED THE ABOVE ADDITION RELYING ON THE J UDGMENT OF HON'BLE DELHI HIGH COURT GIVEN IN CASE OF CIT VS. K ABUL CHAWLA, 234 TAXMAN 300 (DELHI) IN WHICH THE HON'BLE HIGH COURT HAD UNANIMOUSLY HELD THAT IN THE ABSENCE OF A NY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH ACTION, WHEN THERE WAS NO PENDING ASSESSMENT WHICH COULD BE SAID TO HAVE ABATED ON THE DATE OF SEARCH, THE A DDITION I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 29 COULD NOT HAVE BEEN MADE AND ALSO RELYING ON THE AB OVE JUDGEMENT OF MEETA GUTGUTIA. 11.9 FROM THE PERUSAL OF THE FACTUAL MATRIX IT IS EVIDE NT THAT AS ON THE DATE; OF SEARCH , I.E. 21.04.2016, THE AS SESSMENT OF THE APPELLANT FOR THE ABOVE ASSESSMENT YEAR WAS NOT PENDING AND NO INCRIMINATING EVIDENCE PERTAINING TO THE ABO VE UNSECURED LOANS TAKEN BY THE APPELLANT DURING THE R ELEVANT ASSESSMENT YEAR WAS FOUND DURING THE SEARCH AND SEI ZURE OPERATION. THE INCRIMINATING MATERIAL, IF ANY, WAS UNEARTHED DURING THE SURVEY OPERATION U/S 133A OF THE INCOME TAX ACT IN CASE OF M/S FANTASTIC MERCHANDISE PVT. LTD. AND M/S ANIRUDHA MOTOR AND GENERAL FINANCE LTD CARRIED OUT ON 28.04. 20 I.E. SUBSEQUENT TO SEARCH OPERATION. 11.10 IT IS PERTINENT TO MENTION THAT THE JURISDICTIONAL HON'BLE ALLAHABAD HIGH COURT IN CASE OF CIT VS RAJ KUMAR AR ORA 367 ITR 517 (ALLAHABAD), HAS HELD THAT THE AO HAS POWER TO REASSESS RETURNS OF ASSESSEE NOT ONLY FOR UNDISCLOS ED INCOME FOUND DURING SEARCH OPERATION BUT ALSO WITH REGARD TO MATERIAL AVAILABLE AT THE TIME OF ORIGINAL ASSESSMENT BY REL YING ON THE JUDGMENT OF THE HON'BLE DELHI HIGH COURT GIVEN IN C ASE OF CIT V ANIL KUMAR BHATIA 211 TAXMAN 453. THE ABOVE JUDGM ENT GIVEN BY THE HON'BLE DELHI HIGH COURT IN CASE OF AN IL KUMAR BHATIA WAS CONSIDERED IN THE LANDMARK JUDGMENT GIVE N BY THE HON'BLE DELHI HIGH COURT IN CASE OF COMMISSIONER OF INCOME- TAX (CENTRAL)-III V. KABUL CHAWLA, [2015] 61 TAXMAN N.COM 412 (DELHI) WITH THE FOLLOWING OBSERVATIONS: THE DECISION IN ANIL KUMAR BHATIA 15. AT THE OUTSET THIS COURT WOULD LIKE TO OBSERVE THAT AN ANALYSIS OF THE PROVISIONS OF SECTION 153A OF TH E ACT HAS BEEN UNDERTAKEN BY THIS COURT IN THE DECISION I N ANIL KUMAR BHATIA (SUPRA), WHICH DECISION WAS GIVEN ON THE SAME DATE THAT THE COURT RENDERED ANOTHER DECIS ION IN CHETAN DAS LACHMAN DAS (SUPRA). HOWEVER, IN NEITHER CASE WAS THE COURT CONSIDERING A SITUATION WHERE THERE WAS ABSOLUTELY NO MATERIAL UNEARTHED DURING THE SEARCH, MUCH LESS ANY INCRIMINATING MATE RIAL. I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 30 16. IN ANIL KUMAR BHATIA (SUPRA), PURSUANT TO THE SEARCH CONDUCTED IN THE ASSESSEE'S RESIDENCE AND BUSINESS PREMISES ON 13TH DECEMBER 2005 UNDER SECTION 132 OF THE ACT, THE AO ISSUED NOTICES UNDER SECTION 153A CALLING UPON THE ASSESSEE TO FILE RETU RNS FOR THE SIX ASSESSMENT YEARS PRIOR TO THE YEAR IN W HICH THE SEARCH TOOK PLACE. NOTICES WERE ALSO SENT UNDER SECTION 142(1) AND 143(2) OF THE ACT TO THE ASSESSE E ON 20TH NOVEMBER, 2007 ALONG WITH DETAILED QUESTIONNAI RE. IN RESPONSE THERETO THE ASSESSEE ON 29TH NOVEMBER, 2007 SUBMITTED EXPLANATION. THEREAFTER THE AO MADE ADDITIONS TO THE INCOME INCLUDING A SUM OF RS1.50 L AKH GIVEN BY THE ASSESSEE AS LOAN TO ONE MRS. MOHINI SHARMA ON 10TH FEBRUARY, 2003. THE INFORMATION REGARDING GIVING OF THE LOAN WAS AVAILABLE FROM A DOCUMENT SEIZED FROM THE PREMISES DURING SEARCH AND FOUND UNDISCLOSED IN THE RETURN FILED FOR AY 2003-2 004. CONCLUDING THAT THE LOAN WAS GIVEN OUT OF UNACCOUNT ED INCOME, THE AO ADDED IT TO THE INCOME FOR AY 2003- 2004. AFTER THE CIT (A) CONFIRMED THE ADDITION, THE ASSESSEE APPEALED TO THE ITAT. THE ITAT AGREED WITH THE ASSESSEE THAT SINCE NO MATERIAL WAS FOUND IN TH E SEARCH PERTAINING TO THE ADDITION MADE, IT WAS NOT SUSTAINABLE IN LAW. THE ITAT NOTED THAT THE DOCUME NT RECOVERED IN THE SEARCH DURING THE SEARCH DID NOT B EAR THE SIGNATURE OF THE ASSESSEE OR MRS. MOHINI SHARMA , THE ALLEGED BORROWER WHO WAS ALSO NOT EXAMINED BY T HE DEPARTMENT. THE QUESTION BEFORE THE COURT, THEREFOR E, WAS WHETHER THE AO HAD WRONGLY INVOKED SECTION 153A OF THE ACT SINCE NO MATERIAL HAD BEEN FOUND DURING THE SEARCH TO JUSTIFY THE ADDITION MADE? 17. THIS COURT IN ANIL KUMAR BHATIA (SUPRA) THEN ANALYSED SECTION 153AOFTHE ACT AND EXPLAINED THAT W ITH THE INTRODUCTION OF THE GROUP OF SECTIONS, VIZ., SE CTIONS 153A TO 153C, THE CONCEPT OF A SINGLE BLOCK ASSESSM ENT WAS GIVEN A GO-BY. IT WAS EXPLAINED THAT WHERE A SEARCH WAS MADE AFTER 31ST MAY, 2003 THE AO WAS OBLIGED TO ISSUE NOTICES CALLING UPON THE SEARCHED PERSON TO FURNISH RETURNS FOR THE SIX AYS IMMEDIATE LY PRECEDING THE AYS RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH WAS CONDUCTED. UNDER SECTION 153A, I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 31 THE ASSESSING OFFICER WAS REQUIRED TO EXERCISE NORM AL ASSESSMENT POWERS IN RESPECT OF THE PREVIOUS YEAR I N WHICH THE SEARCH TOOK PLACE. ANOTHER SIGNIFICANT FE ATURE WAS THAT THE AO HAD POWER TO ASSESS AND REASSESS TH E 'TOTAL INCOME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEAR S. THIS MEANT THAT THERE COULD BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH B OTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX'. 18. THIS COURT IN ANIL KUMAR BHATIA (SUPRA) POSED T HE QUESTION AS UNDER: 21. A QUESTION MAY ARISE AS TO HOW THIS IS SOUGHT TO BE ACHIEVED WHERE AN ASSESSMENT ORDER HAD ALREADY BEEN PASSED IN RESPECT OF ALL OR ANY OF THOSE SIX ASSESSMENT YEARS, EITHER UNDER SECTION 143(L)(A) OR SECTION 143(3) OF THE ACT. IF SUCH AN ORDER IS ALREADY IN EXISTENCE, HAVING OBVIOUSLY BEEN PASSED PRIOR TO THE INITIATION OF THE SEARCH/REQUISITION, THE ASSESSING OFFICER IS EMPOWERED TO REOPEN THOSE PROCEEDINGS AND REASSESS THE TOTAL INCOME, TAKING NOTE OF THE UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SEARCH. FOR THIS PURPOSE, THE FETTERS IMPOSED UPON THE ASSESSING OFFICER BY THE STRICT PROCEDURE TO ASSUME JURISDICTION TO REOPEN THE ASSESSMENT UNDER SECTIONS 147 AND 148, HAVE BEEN REMOVED BY THE NON OBSTANTE CLAUSE WITH WHICH SUB SECTION (1) OF SECTION 153A OPENS.' 19. THE COURT THEN EXPLAINED THAT THE CONCEPT OF TI ME- LIMIT FOR COMPLETION OF ASSESSMENT OR REASSESSMENT UNDER SECTION 153 HAD BEEN DONE AWAY WITH IN A CASE COVERED BY SECTION 153A AND 'WITH ALL THE STOPS HAV ING BEEN PULLED OUT, THE ASSESSING OFFICER UNDER SECTIO N 153A HAS BEEN ENTRUSTED WITH THE DUTY OF BRINGING T O TAX THE TOTAL INCOME OF AN ASSESSEE WHOSE CASE IS COVERED BY SECTION 153A, BY EVEN MAKING REASSESSMENTS WITHOUT ANY FETTERS, IF NEED BE.' THE COURT THEN DEALT WITH THE SECOND PROVISO TO SECTION I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 32 153A, WHICH STATES THAT PENDING ASSESSMENT OR REASSESSMENT PROCEEDINGS IN RELATION TO ANY AY FALL ING OUT OF THE PERIOD OF SIX AYS PREVIOUS TO THE SEARCH SHALL ABATE. IN SUCH CASES ALL PENDING ASSESSMENTS, THE C OURT EXPLAINED THAT ONCE THOSE PROCEEDINGS ABATE, THE DE CKS WERE CLEARED, FOR THE AO TO PASS ASSESSMENT ORDERS FOR EACH OF THOSE SIX YEARS DETERMINING THE TOTAL INCOM E OF THE ASSESSEE. SUCH 'TOTAL INCOME' WOULD INCLUDE 'BO TH THE INCOME DECLARED IN THE RETURNS, IF ANY, FURNISH ED BY THE ASSESSEE AS WELL AS THE UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SEARCH OR REQUISITION.' THEREF ORE, MERELY BECAUSE THE RETURNS OF INCOME FILED BY THE ASSESSEE FOR THE AYS PREVIOUS TO THE DATE OF THE SE ARCH ALREADY STOOD PROCESSED UNDER SECTION 153A(L)(A) OF THE ACT IT COULD NOT BE HELD THAT THE PROVISIONS OF SEC TION 153A COULD NOT BE INVOKED. 20. AS REGARDS THE MATERIAL UNEARTHED DURING THE SEARCH THE COURT IN ANIL KUMAR BHATIA (SUPRA) THAT 'IF IT IS NOT IN DISPUTE THAT THE DOCUMENT WAS FOUND IN TH E COURSE OF THE SEARCH OF THE ASSESSEE, THEN SECTION 153A IS TRIGGERED. ONCE THE SECTION IS TRIGGERED, IT APP EARS MANDATORY FOR THE ASSESSING OFFICER TO ISSUE NOTICE S UNDER SECTION 153A CALLING UPON THE ASSESSEE TO FIL E RETURNS FOR THE SIX ASSESSMENT YEARS PRIOR TO THE Y EAR IN WHICH THE SEARCH TOOK PLACE.' THE COURT CLARIFIED I N PARA 24 AS UNDER: '24. WE ARE NOT CONCERNED WITH A CASE WHERE NO INCRIMINATING MATERIAL WAS FOUND DURING THE SEARCH CONDUCTED UNDER SECTION 132 OF THE ACT. WE, THEREFO RE, EXPRESS NO OPINION AS TO WHETHER SECTION 153A CAN B E INVOKED EVEN IN SUCH A SITUATION. THAT QUESTION IS THEREFORE LEFT OPEN. ' 21. THEREFORE IT IS CLEAR THAT THE DECISION IN ANIL KUMAR BHATIA (SUPRA) DOES NOT DEAL WITH A SITUATION WHERE, AS IN THE PRESENT CASE, NO INCRIMINATING MATERIAL WAS FOUND DURING THE SEARCH CONDUCTED UNDER SECTION 132 OF THE ACT. I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 33 11.11 THUS, THE ABOVE JUDGMENT GIVEN IN CASE OF ANIL KUMA R BHATIA (SUPRA) IS NOT APPLICABLE WHEN THERE IS NO I NCRIMINATING MATERIAL. THE ABOVE JUDGMENT GIVEN IN CASE OF KABUL CHAWLA (SUPRA) HAS BEEN FOLLOWED SUBSEQUENTLY BY VARIOUS H ON'BLE HIGH COURTS OF THE COUNTRY AND ALL OF THEM HAVE COM E TO ME CONCLUSION THAT IN CASE OF UNABATED ASSESSMENT, I.E . THE ASSESSMENT WHICH WAS NOT PENDING AS ON THE DAY OF S EARCH, NO ADDITION CAN BE MADE IN SEARCH ASSESSMENT WITHOU T ANY INCRIMINATING MATERIALS FOUND DURING SEARCH. THE OT HER INCRIMINATING MATERIALS FOUND SUBSEQUENTLY OR EARLI ER BUT NOT DURING THE SEARCH AND SEIZURE OPERATION CANNOT BE U SED IN THE SEARCH ASSESSMENT. FINALLY THE HON'BLE SUPREME COURT HAS AFFIRMED THE ABOVE DECISIONS OF VARIOUS HON'BLE HIG H COURTS IN CASE OF MEETA GUTGUTIA (SUPRA), WHICH RELIED HEAVIL Y ON THE JUDGEMENT GIVEN IN CASE OF KABUL CHAWLA(SUPRA), BY DISMISSING THE SLP OF THE REVENUE AGAINST THE JUDGM ENT GIVEN BY THE HON'BLE DELHI HIGH COURT IN CASE OF MEETA GU TGUTIA (SUPRA) ON MERIT. THUS, THE JUDGMENT GIVEN BY THE H ON'BLE ALTAHAHAD HIGH COURT IN CASE OF RAJ KUMAR ARORA HAS NOW BEEN OVERRULED BY THE ABOVE JUDGEMENT OF THE HON'BL E APEX COURT. 11.12 SINCE THE ONLY INCRIMINATING MATERIAL IN POSSESSION OF THE AO IS THE STATEMENTS RECORDED U/S 133A OF SH. S ANTOSH CHAUDHARY AND SH. VIRENDRA KUMAR KESHRI ON 28.04.20 16, I.E. SUBSEQUENT TO SEARCH OPERATION AND DURING A SURVEY U/S 133 A OPERATION CONDUCTED ON THE PREMISE OF M/S ANIRUDD H MOTOR & GENERAL FINANCE PVT. LTD., AND M/S FANTASTIC MERC HANDISE PVT. LTD. IT IS ALSO AN UNDISPUTED FACT THAT THE AS SESSMENT FOR THE ABOVE ASSESSMENT YEAR WAS NOT PENDING AS ON THE DAY OF SEARCH. THE AO SHOULD HAVE REOPENED THE ASSESSMENT U/S 147 OF THE INCOME TAX ACT IN VIEW OF THE ABOVE STAT EMENTS AFTER RECORDING REASONS INSTEAD OF CONSIDERING THES E STATEMENTS IN THE SEARCH ASSESSMENT MADE U/S 153 A. HENCE, FOLLOWING THE JUDGEMENT OF THE HON'BLE APEX COURT G IVEN IN CASE OF MEETA GUTGUTIA AND PLETHORA OF JUDGEMENTS O F VARIOUS HON'BLE HIGH COURTS OF THE COUNTRY, IT IS HELD THAT NO ADDITION U/S 68 CAN BE MADE BY THE ASSESSING OFFICER IN THE CASE OF THE APPELLANT IN A SEARCH ASSESSMENT MADE U/S 153 A OF THE INCOME TAX ACT. I.T.(SS)A. NOS.253 & 254/LKW/2020 ASSESSMENT YEARS:2014-15 34 6. THE LUCKNOW BENCH OF THE TRIBUNAL, HAS ALSO TAKE N SIMILAR VIEW, IN THE FOLLOWING CASES: (I) SHRI BALAJI BETAL NUTS PVT. LTD. VS. DCIT & ORS. IN I.T.(SS)A. NOS.105 TO 108/LKW/2019 & ORS. (II) SHRI NAVIN JAIN VS. DCIT & ORS. IN I.T.(SS)A. NOSS 639 TO 641/LKW/2019 & ORS. (III) KUNDAN CASTINGS PVT. LTD. VS. DCIT & ORS. IN I.T.A. NOS. 630 & 631/LKW/2019 & ORS. (IV) SHRI SURENDRA KUMAR GUPTA VS. DCIT IN I.T.(SS)A. NO.125/LKW/2019 7. RESPECTFULLY FOLLOWING THE JUDGMENT OF HON'BLE S UPREME COURT IN THE CASE OF MEETA GUTGUTIA AND KABUL CHAWLA AND THE JUD GMENTS OF LUCKNOW BENCHES IN THE ABOVE CASES, WE DO NOT FIND ANY INFI RMITY IN THE ORDER OF LEARNED CIT(A). THEREFORE, THE APPEALS FILED BY TH E REVENUE ARE DISMISSED. 8. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE S TAND DISMISSED AND THE PETITIONS FILED BY THE ASSESSEES UNDER RULE 27 ARE ALSO DISMISSED AS NOT PRESSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 20/10/2021) SD/. SD/. ( A. D. JAIN ) ( T. S. KAPOOR ) VICE PRESIDENT ACCOUNTANT MEMBER DATED:20/10/2021 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSISTANT REGISTRAR