D.C.I.T., CC-3(4), Kolkata, Kolkata V. M/S. Followel Engineering Ltd., Kolkata

ITSSA 26/KOL/2023

AI Insights

The case involves multiple appeals by the Deputy Commissioner of Income-tax against M/s. Followel Engineering Ltd., M/s. Arunoday Holding Pvt. Ltd., and M/s. Supersonic Career Pvt. Ltd. for the assessment years 2008-09 to 2010-11. The appeals were based on additions made under Section 68 of the Income Tax Act, 1961, concerning unexplained share application money and bogus unsecured loans. The CIT(A) had deleted these additions, which the Department challenged in the Tribunal. The Tribunal found that the additions were not supported by any incriminating material and that the application to the Settlement Commission could not be used as evidence for the additions.

• Counselvise Citation: [2023] 101 COUNSELVISE.COM (IT) 2938 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 10 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 18-06-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 29-03-2023
• Assessment Year: 2009-2010
• Appeal Filed On: 07-02-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUDIPTA GUHA
• Assessee Lawyers: Not Found
• Keywords: Reopening of assessment; Unexplained cash credit; Bogus Share capital; Search and seizure; Opportunity of cross examination; Additional evidence; Third party statement; Accommodation entries; Block assessment; Condonation of delay; reassessment proceedings; Set aside
• Section: 147; 68; 148; 132; 139; 142(1); 133A; 153A; 143(1); 250; 143(2); 69A; 264; 113; 43; 73; 153

Judgement Text

| आयकर अपीलीय अिधकरण ᭠यायपीठ, कोलकाता | IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA BEFORE SHRI RAJPAL YADAV, HON’BLE VICE PRESIDENT & DR. MANISH BORAD, HON’BLE ACCOUNTANT MEMBER I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 Deputy Commissioner of Income- Central Circle – 3(4), Kolkata Vs M/s. Followel Engineering Ltd. 4, Clyde Row Hastings Kolkata - 700022 [PAN : AAACF3644E] अपीलाथᱮ/ (Appellant) ᮧ᭜ यथᱮ/ (Respondent) I.T(SS)A. No. 26/Kol/2023 Assessment Year: 2009-10 Deputy Commissioner of Income- Central Circle – 3(4), Kolkata Vs M/s. Followel Engineering Ltd. 4, Clyde Row Hastings Kolkata - 700022 [PAN : AAACF3644E] अपीलाथᱮ/ (Appellant) ᮧ᭜ यथᱮ/ (Respondent) I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 Deputy Commissioner of Income- Central Circle – 3(4), Kolkata Vs M/s. Followel Engineering Ltd. 4, Clyde Row Hastings Kolkata - 700022 [PAN : AAACF3644E] अपीलाथᱮ/ (Appellant) ᮧ᭜ यथᱮ/ (Respondent) I.T(SS)A. No. 28/Kol/2023 Assessment Year: 2010-11 Deputy Commissioner of Income- Central Circle – 3(4), Kolkata Vs M/s. Arunoday Holding Pvt. Ltd. P-40, New CIT Road, Kolkata Lu Hush Sarani Kolkata - 700073 [PAN : AACCA0937F] अपीलाथᱮ/ (Appellant) ᮧ᭜ यथᱮ/ (Respondent) I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 2 I.T(SS)A. No. 31/Kol/2023 Assessment Year: 2008-09 Deputy Commissioner of Income- Central Circle – 3(4), Kolkata Vs M/s. Supersonic Career Pvt. Ltd. P-9, New CIT Road 3 rd Floor, Terretti Bazar Kolkata - 700073 [PAN : AADCS8259F] अपीलाथᱮ/ (Appellant) ᮧ᭜ यथᱮ/ (Respondent) I.T(SS)A. No. 32/Kol/2023 Assessment Year: 2010-11 Deputy Commissioner of Income- Central Circle – 3(4), Kolkata Vs M/s. Supersonic Career Pvt. Ltd. P-9, New CIT Road 3 rd Floor, Terretti Bazar Kolkata - 700073 [PAN : AADCS8259F] अपीलाथᱮ/ (Appellant) ᮧ᭜ यथᱮ/ (Respondent) Assessee by : Shri S.K. Tulsiyan, Advocate & Ms. Puja Somani, C.A. Revenue by : Shri Sudipta Guha, CIT, D/R सुनवाई कᳱ तारीख/Date of Hearing : 30/03/2023 घोषणा कᳱ तारीख /Date of Pronouncement: 19/06/2023 आदेश/O R D E R PER DR. MANISH BORAD, ACCOUNTANT MEMBER : ITA No. 25/Kol/2023; Assessment Year 2008-09, ITA No. 26/Kol/2023; Assessment Year 2009-10 and ITA No. 27/Kol/2023; Assessment Year 2010-11, are appeals filed by the revenue against the order of the Learned Commissioner of Income Tax (Appeals) – 21, Kolkata, (hereinafter referred to as the ‘ld. CIT(A)’), even dt. I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 3 11/11/2022 passed u/s 250 of the Income-tax Act, 1961 (hereinafter the ‘Act’). ITA No. 28/Kol/2023; Assessment Year 2010-11, is an appeal filed by the revenue against the order of the Learned Commissioner of Income Tax (Appeals) – 21, Kolkata, (hereinafter referred to as the ‘ld. CIT(A)’) passed u/s 250 of the Income-tax Act, 1961 (hereinafter the ‘Act’), dt. 03/11/2022. ITA No. 31/Kol/2023; Assessment Year 2008-09 and ITA No. 32/Kol/2023; Assessment Year 2010-11, are appeals filed by the revenue against the order of the Learned Commissioner of Income Tax (Appeals) – 21, Kolkata, (hereinafter referred to as the ‘ld. CIT(A)’) passed u/s 250 of the Income-tax Act, 1961 (hereinafter the ‘Act’), even dt. 31/10/2022. 2. The Registry has pointed out that there is a delay of eight (8) days in filing of ITA No. 25/Kol/2023; Assessment Year 2008-09, ITA No. 26/Kol/2023; Assessment Year 2009-10 and ITA No. 27/Kol/2023; Assessment Year 2010-11 and a delay of thirty eight (38) days in filing of ITA No. 28/Kol/2023; Assessment Year 2010-11, ITA No. 31/Kol/2023; Assessment Year 2008-09 and ITA No. 32/Kol/2023; Assessment Year 2010-11, in time before the Tribunal. The revenue has filed a petition for condonation of delay stating the reasons of delay. After perusing the same, we find that the revenue was prevented by sufficient cause from filing these appeals in time before the Tribunal. Hence, the delay is condoned and the appeals are admitted. I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 4 3. As the issues involved in all these appeals are identical, they were heard together and are being disposed off by way of this common order. 4. The revenue has raised the following grounds of appeal for the respective Assessment Years:- “ ITA No. 25/Kol/2023; Assessment Year 2008-09 1. On the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs.2,88,81,320/- made by the AO on account of bogus unsecured loan u/s 68 of the Income Tax Act, 1961. 2. The department craves leaves to add, modify or alter or withdraw any of the grounds of appeal before or at the time of hearing of the case.” “ ITA No. 26/Kol/2023; Assessment Year 2009-10 1. On the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs.7,07,70,000/- made by the AO on account of unexplained share application money u/s 68 of the Income Tax Act, 1961. 2. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs.12,48,20,377/- made by the AO on account of bogus unsecured loan u/s. 68 of the Income Tax Act, 1961. 3. The department craves leaves to add, modify or alter or withdraw any of the grounds of appeal before or at the time of hearing of the case.” “ ITA No. 27/Kol/2023; Assessment Year 2010-11 1. On the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs.4,70,00,000/- made by the AO on account of unexplained share application money u/s 68 of the Income Tax Act, 1961. 2. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs.7,61,95,000/- made by the AO on account of bogus unsecured loan u/s. 68 of the Income Tax Act, 1961. I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 5 3. The department craves leaves to add, modify or alter or withdraw any of the grounds of appeal before or at the time of hearing of the case.” “ ITA No. 28/Kol/2023; Assessment Year 2010-11 1. On the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs.7,35,00,000/- made by the AO on account of unexplained share application money u/s 68 of the Income Tax Act, 1961. 2. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs.22,50,00,000/- made by the AO on account of bogus unsecured loan u/s. 68 of the Income Tax Act, 1961. 3. The department craves leaves to add, modify or alter or withdraw any of the grounds of appeal before or at the time of hearing of the case.” “ ITA No. 31/Kol/2023; Assessment Year 2008-09 1. On the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs.1,62,00,000/- made by the AO on account of unexplained share application money u/s 68 of the Income Tax Act, 1961. 2. That on the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs.1,00,71,821/- made by the AO on account of bogus unsecured loan u/s. 68 of the Income Tax Act, 1961. 3. The department craves leaves to add, modify or alter or withdraw any of the grounds of appeal before or at the time of hearing of the case.” “ ITA No. 31/Kol/2023; Assessment Year 2008-09 1. On the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs.3,50,00,000/- made by the AO on account of unexplained share application money u/s 68 of the Income Tax Act, 1961. 2. The department craves leaves to add, modify or alter or withdraw any of the grounds of appeal before or at the time of hearing of the case.” I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 6 5. Brief facts of the case are that a search and seizure action was conducted u/s 132 of the Act and survey operation u/s 133A of the Act were conducted on 03/01/2018 and subsequent dates against the persons and concerns/entities of Ramnath Jhunjunwala Group (Followel Group) and the same included assessee’s in appeal before us in the instant appeals. For the Assessment Year 2012-13 to 2017-18 i.e., six Assessment Years prior to the year of search, the assessee group made disclosure before the Settlement Commission. Further for Assessment Year 2008-09 to 2010-11 there were certain transactions of unsecured loans taken during the year as well as share capital and share premium received against the allotment of equity shares. The ld. Assessing Officer observed that these share capital and share premium and unsecured loans has been taken by the assessee and group concern from the Kolkata based entry operators, namely, Ravi Kumar Newatia & Subhash Chandra Bhartia and utilized the fund to create the assets. On the basis of these observations the ld. Assessing Officer issued notice u/s 153A of the Act and more specifically referred to the 4 th proviso to Section 153A of the Act recording satisfaction to which objections were raised. It was also contended that no incriminating material relevant to the alleged unsecured loans as well as the share capital and share premium were found and since Assessment Year 2008-09 to 2010-11 are completed Assessment Years, therefore, no addition is called for. However, the ld. Assessing Officer was not satisfied and he seeked for certain more information which were not I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 7 supplied and ld. Assessing Officer accordingly concluded the assessment proceedings making additions u/s 68 of the Act for the unexplained cash credit in the form of unsecured loan as well as share capital and security premium. The details of such additions made in the hands of the assessee(s) in appeal before us is as follows:- Assessee A.Y. Amount Reasons Followell Engineering Ltd. 2008-09 2,88,81,320/- On account of being bogus unsecured loan u/s 68 of the Act. Followell Engineering Ltd. 2009-10 i) 7,07,70,000/- ii) 12,48,20,377/- i) On account of unexplained share application money u/s 68 of the Act. ii) On account of being bogus unsecured loan u/s 68 of the Act. Followell Engineering Ltd. 2010-11 i) 4,70,00,000/- ii) 7,61,95,000/- i) On account of unexplained share application money u/s 68 of the Act. ii) On account of being bogus unsecured loan u/s 68 of the Act. Arunoday Holding Pvt. Ltd. 2010-11 i) 7,35,00,000/- ii) 22,50,000/- i) On account of unexplained share application money u/s 68 of the Act. ii) On account of being bogus unsecured loan u/s 68 of the Act. Supersonic Carrier Pvt. Ltd. 2008-09 i) 1,62,00,000/- ii) 1,00,71,821/- i) On account of unexplained share application money u/s 68 of the Act. ii) On account of being bogus unsecured loan u/s 68 of the Act. Supersonic Carrier Pvt. Ltd. 2010-11 3,50,00,000/- On account of unexplained share application money u/s 68 of the Act. I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 8 6. Now, since the issues raised in all the instant appeals are common and similar type of additions have been made by the Assessing Officer u/s 68 of the Act by adopting the same analogy, we for the purpose of adjudication of the issues raised before us, will take the facts of M/s. Followel Engineering Ltd. for Assessment Year 2009- 10. 6.1. As stated by the ld. Counsel for the assessee and as per the documents and financial statements gathered by the Assessing Officer it was noticed that during Assessment Year 2009-10, there was an increase of the unsecured loans at Rs.12,48,20,377/- in the current year and the same was added as unaccounted money of the assessee and similarly based on the financial statements, the share capital and share premium totaling to Rs.7,07,70,000/- received during the year, was also added in the hands of the assessee u/s 68 of the Act. The assessee challenged these additions before the ld. CIT(A) by taking legal grounds as well as grounds on merits. So far as the legal grounds are concerned, it was claimed by the assessee that the ld. Assessing Officer erred in issuing notice u/s 153A of the Act by wrongly applying 4 th proviso to Section 153A of the Act which can be invoked only if any income represented in the form of assets are found during the course of search which has escaped the assessment for such year or years and total amount exceeds of Rs.50,00,000/-. It was also claimed before the ld. CIT(A) that no incriminating material was found during the course I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 9 of search for the year and all the alleged transactions of unsecured loans as well as share capital and share premium and the details appearing in the books of account and there is no fact on record which show that any income represented in the form of assets was found during the course of search for the years/assessee in instant appeals. It was also claimed that inference drawn by the Assessing Officer based on the settlement application filed by the assessee for the Assessment Year 2012-13 to 2017-18, is incorrect because such disclosures made by the Settlement Commission are confidential and cannot be used as an evidence against the assessee to initiate any other proceedings. As far as the merits of the case are concerned, it was claimed by the assessee that alleged additions has been made merely by taking the opening and closing balance of share capital and share premium and unsecured loans and no efforts have been made to examine the entities from whom the amounts were received and ld. Assessing Officer has seemed to merely rely upon the satisfaction borrowed from the reasons recorded for reopening of assessment for Assessment Year 2011-12, u/s 147/148 of the Act. The assessee also contended before the ld. CIT(A) that additions cannot be made in the completed assessments in absence of any incriminating material and since for Assessment Years 2008-09 to Assessment Year 2010-11, no assessment were pending and no incriminating material was found, therefore, no addition was called for. I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 10 7. So far as the statement of alleged entry operators are concerned, the same cannot constitute incriminating material because the copy of the third party statements were not provided to the assessee for cross- examination and even otherwise, these statements were available with the Assessing Officer at the time of initiation of 153A proceedings for Assessment Year 2012-13 to 2017-18, notices were issued only for Assessment Year 2012-13 to 2017-18 which clearly indicates that the Assessing Officer was convinced that there was no material requiring issuance of notice beyond six years. The ld. CIT(A) on going through these submissions of the assessee as well as the settled judicial precedents which have been dealt in detail in the impugned order allowed all the grounds raised by the assessee and even on merits granted relief to the assessee observing that these additions have been made for the completed Assessment Year for which no incriminating material was found. 8. Aggrieved, the revenue is in appeal before this Tribunal, only raising the grounds on merits of the case. 9. The ld. D/R vehemently argued supporting the order of the ld. Assessing Officer stating that when the share capital and share premium and unsecured loans received during the Assessment Year 2011-12 to 2017-18 from various parties have been accepted as bogus and accommodation entry provider in the application filed before the Settlement Commission and when the same parties have advanced the loans to the assessee and during the years under appeal as well as the I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 11 same parties have given share capital and share premium to the assessee, and when all the alleged share applicants/cash creditors are found to be accommodation entry provider and jamakharchi companies, the funds received from such source, have been utilized in creating assets and, therefore, the ld. Assessing Officer has rightly invoked the 4 th proviso to Section 153A of the Act and the same should be confirmed. The arguments of the ld. D/R were only focused on the merits of the case and so far as the legal grounds on which the assessee got relief from the ld. CIT(A), neither any ground is raised by revenue nor any submissions were made by the ld. D/R. 10. On the other hand, the ld. Counsel for the assessee took us through various documents filed in the paper book which is as follows:- SI No. Particulars Page No. Before the learned AO Before the learned CIT(A) 1. Panchnamas as under:- a. 03.01.2018 b. 05.01.2018 1 to 9 10 to 16 Yes Yes 2. Detailed explanation of seized documents found in the course of search 17 to 23 Yes Yes 3. Submission filed before AO dated 08.04.2019 24 Yes Yes 4. Satisfaction note dated 06.05.2019 25 to 30 Yes Yes 5. Reply filed by the assessee before AO dated 25.06.2019 31 to 41 Yes Yes 6. Notice issued by the learned AO for AY 2008-09 42-44 Yes Yes 7. Disposal of objections for AY 2008- 09 vide letter dated 01.10.2019 42 to 57 Yes Yes 8. Notices issued u/s 143(2) & 142(1) I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 12 dt. 07.11.2019 for AYs 2008-09, 2009-10 and 2010-11 58 to 69 Yes Yes 9. Show cause notice issued dated 20.12.2019 for AYs 2008-09, 2009- 10 and 2010-11 70 to 75 Yes Yes 10. Response to show cause dated 20-12- 2019 filed on 26-12-2019 76 to 77 Yes Yes 11. Submissions dated 25-06-2019 filed before AO 78-88 Yes Yes 12. Submission filed before AO on 15-10- 2019 89-91 Yes Yes 13. Reasons recorded for issuance of notice u/s 148 for AY 2011-12 92 to 98 Yes Yes 14. Evidence of serving of the assessment orders by postal authorities 99 to 101 Yes 15. Audited Accounts for FY 2007-08, 2008-09 and 2009-10 102-149 Yes Yes 11. Further submissions were made on account of the legal grounds as well as the grounds raised before the ld. CIT(A) and same reads as follows:- “(a) 4 th proviso to section 153A not applicable - No mention of "income represented in the form of assets" in the satisfaction note The power given by the 1st Proviso of section 153A to "assess" income to be confined to the undisclosed income unearthed during search. When nothing incriminating is found in the course of search relating to any assessment years, the assessments for such years cannot be disturbed. A search assessment under section 153A should be evidence based. The AO has nowhere even suggested that the material in relation to the impugned share capital/premium and unsecured loans had not been present before the department before the date of search. The essential condition of the existence of undisclosed income in the form of "asset" is not satisfied in this I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 13 case - since cash credits were not "assets" It would not have been lawful for the AO to invoke jurisdiction in respect of the "relevant assessment year(s)" through the issue of notice u/s 153A of the Act for the said period(s). This is the proposition that been set forth in the extract of the order in the case of Goldstone Cements Ltd wherein it has been asserted that to say, if any credits in a regular bank account, like sale proceeds/loan / share capital etc. are found to be unexplained, then it may be a case of discovery of undisclosed 'income' / 'cash credit' but it does not suggest the discovery of an undisclosed 'asset' by the assessing officer so as to bring it within the mischief of the fourth proviso to Section 153A of the Act for invoking jurisdiction u/s 153Afor the extended period of the relevant assessment years. (b) Settlement Application not an incriminating document: As regards settlement application filed by the assessee u/s.245C(1) of the Income Tax Act, 1961 it may be noted application before settlement commission cannot be equated with evidence discovered in the course of search as any disclosure made before Settlement Commission is confidential and in camera proceedings and will not operate as evidence against the assessee to initiate any other proceedings by the department as section 245HA(3) of the Income Tax Act, 1961 clearly brings out that the A.O. shall be entitled to use the material and information supplied by the assessee before the Settlement Commission only if the settlement application filed abates u/s.245HA of the Income Tax Act, 1961. I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 14 (c) The Ld. AO has simply taken the difference between opening and closing balance of "share capital and share premium" and "unsecured loans" as bogus. No effort has been made to even examine the entities from whom the amount was received, the dates of receipt in bank account or whether the said sum was received was bogus or not. The Ld. A.O. has seemed to merely rely upon the satisfaction borrowed from the Reasons Recorded for reopening of assessment for AY 2001-2012 u/s 147/148, and made an addition of the entire share capital and share premium and unsecured loans in the said period without conducting any such independent enquiry or investigation of his own for the purposes of passing search assessments and making the addition u/s 68 for the "relevant assessment years". Addition has been made of "unsecured loans" on the basis of difference in opening and closing balances without pointing out the unsecured loans which are alleged to be bogus. The Ld AO had no names or amounts which could be alleged as bogus. (d) No additions can be made for completed assessments sans incriminating documents. In the case of the relevant assessment years i.e., 2008-09, 2009-10 & 2010-11 no assessments or reassessments were pending. Hence the assessments already made for the said years attained finality and remains unabated until and unless any material indicating undisclosed income [of the value of rupees fifty lakhs or more] has been unearthed in the course of search. Assessments/reassessments not pending on the date of initiation of search do not abate. These assessment years were re-opened pursuant to the search conducted upon the applicant on 03.01.2018 by I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 15 issuance of notices u/s 153A(1)(a) of the Income Tax Act, 1961 and came under the purview of “relevant assessment years”. Year wise details in the case of Followel Engineering Ltd. is tabulated below:- AY Return Filing Date Return Processed Page No. 2008-09 30-09-2008 10-08-2009 136 2009-10 12-09-2009 04-03-2011 134 2010-11 16-09-2010 18-03-2011 135 Year wise detail in the case of Super Sonic Carrier P. Ltd. is tabulated below:- AY Return Filing Date Return Processed Page No. 2008-09 26-09-2008 18-12-2009 142 2010-11 26-09-2010 29-03-2012 144 Year wise detail in the case of Super Sonic Carrier P. Ltd. is tabulated below:- AY Return Filing Date Return Processed Page No. 2010-11 06-10-2010 15-04-2011 161 No pending proceedings as on the date of search on 03-01-2018 in all these years. The ld. AO has based the case on the fact that share capital from same names were raised in earlier years also and this information has been obtained from the MCA website and the returns of income file by the assessee. It may be noted that such details were in public domain much before search. The I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 16 said information cannot be called discovery of search and therefore does not from incriminating material. (e) The ld. AO has relied on alleged statements of the entry operators and the key persons of the group. The statements of alleged entry operators also do not constitute incriminating material more so when a copy of the third party statements was not provided to the assessee to examine the same. Even otherwise these statements were available with the ld. AO at the time of initiation of 153A proceedings for AY 2012-13 to 2017-18. In spite of this notices were issued only for A.Y. 2012-13 to 2017-18 only clearly indicating that the ld. AO was convinced that there was no material requiring issuance of notice beyond 6 years. (f) W.r.t the alleged statement of Mr.Ramnath Jhunjhunwala, the key person of the Assessee group who had (on behalf of the group) allegedly accepted the above modus operandi in his statements recorded u/s 132(4)/131 - it is submitted that the reliance on the same to invoke the 4th Proviso to Sec. 153A is also erroneous since the Assessing Officer has neither in the Satisfaction Note or the Impugned Assessment Order(s) specified as to which specific portion of the statement of Mr Juhjhunwala has he found to be incriminating vis-a-vis the existence of undisclosed income of the Assessee (represented in the form of an asset) that has escaped assessment for the relevant assessment year or years. The reliance on the said statement in a I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 17 generalized and overarching manner does not aid in the fulfilment of the criteria that have to be mandatorily met for invoking the 4th Proviso 12. Further reliance was placed on the following decisions:-  Pr. CIT vs. Meeta Gutgutia ; [2018] 96 taxmann.com 468 (SC)  CIT vs. Kabul Chawal ; 61 taxmann.com 412 (Delhi)  Andaman Timber Industries vs. Commissioner of Central Excise; [2015] 62 taxmann.com 3 (SC)  CIT vs. Sunita Dhadda; [2018] 100 taxmann.com 526 (SC)  ACIT vs. Miss Lata Mangeshkar; [1974] 97 ITR 696 (Bom.)  ACIT vs. Goldstone Cements Ltd. in ITA Nos. 126 to 131/Gau/2020 & ors. Dt. 10.12.2021  Ananthnadh Constructions and Farms (P) Ltd. vs. DCIT, CC, Mumbai; [2017] 83 taxmann.com 164 (Mumbai-Trib.)  ACIT vs. Smt. Renu Sehgal; [2019] 75 ITR (Trib.) 178 (ITAT [Jai]) 13. We have heard rival contentions and perused the record placed before us and also carefully gone through the judgments relied upon by the ld. Counsel for the assessee as well as those referred by the ld. CIT(A) in the impugned order. At the cost of repetition, we observe that a search and survey operation was conducted u/s 132 and 133A of the Act on 03/01/2018 on Ramnath Jhunjhunwal Group (Followel Group) and the assessees in appeal before us are part of this group. Since the search took place on 03/01/2018, the assessee went before the Settlement Commission and offered income as per the application I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 18 so filed for Assessment Year 2012-13 to 2017-18 based on the details available in such application by the Income Tax Settlement Commission (ITSC), the ld. Assessing Officer noticed that similar kind of unsecured loans and share capital and share premium has been received by the assessee during the Assessment Year 2008-09 to 2010- 11 and the concerns from whom such sum has been received are relating to the same entry operators who have advanced the unsecured loans, share capital and share premium to the assessee group concern and the same have been admitted as undisclosed income by the assessee. Based on these observations, the ld. Assessing Officer invoked the 4 th Proviso to Section 153A of the Act. 14. We notice that the revenue has not raised any ground challenging the relief granted by the ld. CIT(A) on the legal issues raised before it and has restricted itself only to challenging the issues on merits of the case. Even though it will be merely academic to deal with the legal issue but in order to give completeness to our adjudication, we would like to deal with both the legal issues as well as the issue on merits dealt in by the ld. CIT(A). 15. The first issue which we need to consider is whether the ld. Assessing Officer was well within his jurisdiction to issue notice u/s 153A of the Act by resorting to the 4 th proviso to Section 153A of the Act. I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 19 Since Section 153A of the Act has a direct bearing on the issue, the provisions of Section 153A of the Act are extracted below:- “153A. 51 [(1)] Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person 52 where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003 53 [but on or before the 31st day of March, 2021], the Assessing Officer shall— (a) issue notice to such person requiring him to furnish 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 54 [and for the relevant assessment year 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, 52 so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made 54 [and for the relevant assessment year or years] : Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years 54 [and for the relevant assessment year or years] : Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years 54 [and for the relevant assessment year or years] referred to in this 55 [sub-section] pending 56 on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate 56 : 57 [Provided also that the Central Government may by rules 58 made by it and published in the Official Gazette (except in cases where any assessment or reassessment has abated under the second proviso), specify the class or classes of cases in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made 59 [and for the relevant assessment year or years]:] 59 [Provided also that no notice for assessment or reassessment shall be issued by the Assessing Officer for the relevant assessment year or years unless— (a) the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year or in aggregate in the relevant assessment years; (b) the income referred to in clause (a) or part thereof has escaped assessment for such year or years; and (c) the search under section 132 is initiated or requisition under section 132A is made on or after the 1st day of April, 2017. I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 20 Explanation 1.—For the purposes of this sub-section, the expression "relevant assessment year" shall mean an assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is made. Explanation 2.—For the purposes of the fourth proviso, "asset" shall include immovable property being land or building or both, shares and securities, loans and advances, deposits in bank account.] 60 [(2) If any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the 61 [Principal Commissioner or] Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside.] Explanation.—For the removal of doubts, it is hereby declared that,— (i) save as otherwise provided in this section, section 153B and section 153C, all other provisions of this Act shall apply to the assessment made under this section; (ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year. 15.1. Now, in the above referred Section 153A of the Act, proviso 4 th which has been inserted from 01/04/2017 by the Finance Act, 2017, gives power to the Assessing Officer to issue notice u/s 153A of the Act for the years beyond six Assessment Years from the previous year in which the search is conducted but not later than ten Assessment Years from the end of the assessment year relevant to the previous year in which search is conducted. The ld. Assessing Officer noticed that during Assessment Year 2008-09 to 2010-11, there are certain transactions of unsecured loans and share capital and share premium, and drew an inference that assessee has utilized such funds to acquire the assets. However, the ld. Assessing Officer without referring to any such new asset being acquired by the assessee and not disclosed in the I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 21 regular books of accounts issued the notice u/s 153A of the Act to the assessee. And thereafter, giving reference to the application filed by the assessee before the ITSC and also taking into note that there is an increase in unsecured loans during the years as well as there is an increase in share capital and share premium, has made the addition u/s 68 of the act for the following sums:- Assessee A.Y. Amount Reasons Followell Engineering Ltd. 2008-09 2,88,81,320/- On account of being bogus unsecured loan u/s 68 of the Act. Followell Engineering Ltd. 2009-10 iii) 7,07,70,000/- iv) 12,48,20,377/- i) On account of unexplained share application money u/s 68 of the Act. ii) On account of being bogus unsecured loan u/s 68 of the Act. Followell Engineering Ltd. 2010-11 i) 4,70,00,000/- ii) 7,61,95,000/- i) On account of unexplained share application money u/s 68 of the Act. ii) On account of being bogus unsecured loan u/s 68 of the Act. Arunoday Holding Pvt. Ltd. 2010-11 iii) 7,35,00,000/- iv) 22,50,000/- i) On account of unexplained share application money u/s 68 of the Act. ii) On account of being bogus unsecured loan u/s 68 of the Act. Supersonic Carrier Pvt. Ltd. 2008-09 iii) 1,62,00,000/- iv) 1,00,71,821/- i) On account of unexplained share application money u/s 68 of the Act. ii) On account of being bogus unsecured loan u/s 68 of the Act. Supersonic Carrier Pvt. Ltd. 2010-11 3,50,00,000/- On account of unexplained share I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 22 application money u/s 68 of the Act. 15.2. We find that the ld. CIT(A), in the impugned order dealt with this issue observing as follows:- “The facts in the present appeal are identical to those discussed above. In the present case, not only has the AO not been able to bring on record the existence of the jurisdictional fact mandated by the 4th proviso to section 153A, read with the two explanations therein, in his satisfaction note, but in fact has not been able to establish its existence through his order of assessment or even during remand. In the context of the above discussions, one more objection of the appellant is worth discussing. The AR has pointed out that since the original satisfaction was supposed to be based upon the invocation of the 4 th proviso, therefore actions, if any, would necessarily have to be made upon the reasons for which this satisfaction was recorded. In this case, since no addition has been made with respect to undisclosed income presented in the form of assets, of value more than Rs 50 Lakhs in the Ays 2008-09, 2009-10 and 2010-11. Then the law prohibits any addition on any other ground being made in these cases. For this proposition, the appellant has relied upon several citations that have been made part of this order as part of the appellant's submissions. I have gone through the submissions of the appellant in this regard. In the case of the judgments of Hon'ble Bombay High Court in the case of Jet Airways (331 ITR 236) and that of the Hon'ble Delhi High Court in the case of Ranbaxy Laboratories Ltd. vs. CIT (336 ITR 136), as also of the Hon'ble Calcutta High Court in M/s Infinity Info Tech in ITAT No 60 of 2014 G A no 1736 of 2914 dated 10 sept 2014, though rendered in the context of reopening u/s. 147 of the Act, I find that the judicial opinion supports the proposition of law that if an assessment/reassessment is sought to be done on the basis of a specific material, then if no addition is done on that specific point then it is not lawful for an addition to be made on any other point. The Hon'ble Tribunal, in the case Goldstone Cements Ltd (supra) has accepted that it is lawful to apply this argument to the case of the 4 th proviso to section 153A of the Act. They, in their order, have also relied upon the judgments of Hon'ble Bombay High Court in the case of Jet Airways (331 ITR 236) and that of the Hon'ble Delhi High Court in the case of Ranbaxy Laboratories Ltd. vs. CIT (336 ITR 136), as also of the Hon'ble Calcutta High Court in I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 23 M/s Infinity Info Tech in ITAT No 60 of 2014 G A no 1736 of 2914 dated 10 sept 2014 to arrive at their conclusions. The Hon'ble Bench has observed in its order, "8.22. From our discussion (supra) it is clear that, only if any of specified 'asset/s' as defined in Explanation (2) is unearthed during the course of search and the acquisition of such an asset' being unexplained or undisclosed, which is valued Rs 50 Lakhs or more, that the AO can be said to be in possession of the jurisdictional fact to initiate proceedings u/s 153A for 7th-10th AY (AY 2011-12, in the instant case). Now, to understand the alternate ground of argument of Shi Dudhwewala, let us for the sake of argument, assume that the AO had validly invoked the jurisdiction u/s 153A for AY 2011-12. then in such an event, it has to be borne in mind that, first the AO had to make addition in respect of the purported undisclosed asset valued at Rs. 50 lakhs or more; and only thereafter the AO can venture to make any other additions/disallowance which are not in the nature & character of 'Asset' but represents undisclosed/unexplained income/expenditure/credit etc. Perusal of the assessment order impugned before us, shows that that AO did not make any addition/s in respect of escaped/undisclosed asset in the relevant AY 2011-12. We therefore find ourselves in agreement with Shri Dudhwewala that, unless the AO made addition/s of Rs. 50 Lakhs or more in relation to escaped/undisclosed asset, he could not assume jurisdiction to make addition/s on other items (viz. liabilities like credit entry etc.) The reason is simple, because in such a scenario, it bellies the claim of the AO in issuing notice u/s 153A of the Act, that he is in possession of the jurisdictional fact i.e. undisclosed asset valued Rs. 50 lakhs or more has escaped assessment, which constitutes the key to open the lock and then re-assess the income of the assessee for the 7th to 10th AY. It is therefore incumbent upon the AO to show that the key used for opening the lock for the concluded 7th to 10th AY is the most appropriate key to unlock and thereby reopen the proceedings for bringing to charge any other items of escaped/unexplained income unearthed in the course of search. However in a case where, either the assessee demonstrates that the key used by the AO for reopening the assessment is either incorrect or where the AO himself abandons the jurisdictional fact in the course of assessment proceedings, then as a corollary, it has to be held that the key used by the AO for opening the lock was incorrect and thereby the lock placed earlier on the concluded assessment remained unopened and therefore the AO could not enter upon the arena of reassessing the income of the assessee. So, when the AO fails to make any addition for the 'undisclosed asset', then it tantamount I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 24 to admission that there was no jurisdictional fact present before the AO in the first place, and the necessary corollary is that he has wrongly assumed jurisdiction u/s. 153A for AY 2011-12 and therefore AO cannot proceed further to make other items of additions/disallowances. In such a scenario, the AO has no other option but to drop the assessment proceedings. He may however proceed again, if there is any new/fresh jurisdictional fact before him, of course, subject to limitation. For this conclusion of ours, we rely on the ratio laid down in the judgments of CIT Vs Jet Airways (supra) & Ranbaxy Laboratories Ltd. VS. CIT (supra). Though these judgments were rendered in the context of reopening u/s. 147 of the Act/however the ratio decidendi will apply in the present case, because, like Section 147/148 of the Act, the AO gets the authority to assess/reassess the income of a searched person or other person u/s 153A/153C for the extended assessment years (7th to 10 th AYS) only if he has in his possession the jurisdictional fact, as discussed. If the AO is found to have assumed jurisdiction erroneously on mistaken belief about the existence of jurisdictional fact or ultimately drops it (after making enquiries in the course of assessment) while framing the reassessment order; then the AO cannot legally proceed further with the assessment/reassessment and/or make any other of additions/disallowances, because the jurisdictional fact on the strength of which he assumed section 153A jurisdiction is absent or not in existence. In the light of the aforesaid discussion, and in our considered opinion, this alternate plea of Shri Dudhwewala is well founded and deserves to be accepted.” I find that the argument of the AR in the instant case, has force. It has to be admitted that the assessment or reassessment for the relevant assessment year(s), through the invocation of the 4th proviso is an extraordinary power that can be invoked only when the specific requirement of their being material in the possession of the AO, revealing undisclosed income represented in the form of assets valued at over 50 lakh with respect to the relevant assessment years exists. It is an admitted fact that even though there must exist material in the possession of the Assessing Officer to the above effect, it is only through process of assessment/reassessment that an actual addition can be made, after it has been shown through this assessment/reassessment that this fact indeed was true and the jurisdictional fact indeed did exist. Therefore the addition in these cases would necessarily show the presence of this jurisdictional fact of their having been undisclosed income, represented in the form of assets of value 50 lakh or more pertaining to these assessment years. In this case the AO has not shown in his order that there was any addition based upon section 69, 69A or 69B. The only I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 25 addition that has been made is under section 68 of the Act, pertaining to credit entries in the books of the appellant of the form of undisclosed share capital/premium and unsecured loans. The AO, this admittedly has not demonstrated/established the existence of the jurisdictional fact even through the process of assessment. In fact, a perusal of the impugned order seems to show that there has not been any attempt at all by the AO to even address the question of the existence of the jurisdictional fact – the existence of an asset that came about as a representation of income that had escaped assessment for the relevant assessment years and which amounted to Rs 50 lakh or more. Applying the ratio of Goldstone Cements Ltd discussed above, this procedure is not valid in the case of additions being made u/s153A through the invocation of the 4th proviso to 153A. The Hon'ble Tribunal has explained this view by relying upon the concept, explained by the Hon'ble High Court in the decision cited supra of Jet Airways - of there being a key to open a lock, and without a valid key the lock could not be said to be opened. Relying respectfully upon the above cited authorities, I also am of the view that once there has been a specific requirement prescribed by the legislature for the opening of assessment proceedings then it would not be lawful to make additions other than the point on which the proceedings have been reopened or need to be reopened – if no addition has been made upon such mandatory point of opening of proceedings. As regards the second objection of the AR, listed above, I find from an examination of the material on record that there is nothing on record to substantiate the AO's assertion that the information in respect of additions made by the AO, of share capital/premium and/or unsecured loans, was of the nature of incriminating material found during the search. Without the existence of any incriminating material, since, as already discussed at length earlier in this order, the assessments for the AYS 2008-09, 2009-10 and 2010-11 had been unabated and all assessments had already been completed, no additions could in any case have been made other than those based upon incriminating material found during search. Therefore, the additions in any case would not be sustainable. Coming to an issue that has a bearing on the assessing officer's satisfaction that this was a fit case for assessment u/s 153A, within the meaning of the 4 th proviso to that section for the assessment years 2008-09, 2009-10 and 2010- 11, the AO, it may be recalled had responded to the objections raised by the appellant arising the issue of notice u/s 153A for the said periods on 06.05.2019. In this letter, as already discussed, the AO had provided the I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 26 appellant with a copy of the satisfaction note as well as what he construed to be incriminating material and the jurisdictional fact upon which he had based his satisfaction for issue of the impugned notices. Thereafter in response to another objection by the appellant, the AO once again issued a response dated 01.10.2019. In this letter inter alia, the AO, besides reiterating what he had already stated earlier in connection with the incriminating material and jurisdictional fact in his earlier letter, he introduced a further reliance for the issue of the impugned notices u/s 153A upon material that he chose to call additional evidence. The AO has reiterated this in his remand report. What has been stated in the letter of the AO to the appellant, dated 01.10.2019 this connection is as follows: "In the seized material und in the office premises of entry operator, in a hard drive which has been seized dated 03/01/2018 mazhernama dated 07/02/2019 numbered ESDL-HD-1 was found in the premises of M/s Eastern Synthetic Pvt Ltd., belongs to Subhash Chandra Bhartia. A print out of the same was attached as Annexure A of the communication dt 01.10.2019. The same is allegedly a list of entries given by the operator. The list contained a reference to “RNJ”. The same was furnished and relied upon as additional evidence.” Upon examination of this issue of additional evidence, the following distinctive points are found to emerge: a. The first and most important is that this matter of additional evidence has not been mentioned anywhere in the satisfaction note. It was not even mentioned by the AO when he was responding to a specific objection and query by the appellant in relation to the basis for the issue of notice u/s 153A of the Act, in his letter dated 06.05.2019. Therefore it cannot be said that this additional evidence had gone into the formation of a satisfaction by the AO for the existence of the jurisdictional fact, mandatory, as discussed above, for the assumption of power by the AO to issue notices u/s 153A in the context of the 4th proviso to the said section in respect of the assessment years 2008- 09, 2009-10 and 2010-11 for the assumption of jurisdiction to make an assessment with respect to these assessment years. Once this is true, then the noting of satisfaction is automatically called into question since the other material listed by the AO, as discussed above, does qualify the AO to assume the power for issue of notice in this context u/s 153A. The fact that this so- called additional evidence, a term used by the AO himself did not admittedly go into the formation of this satisfaction automatically disqualifies it from being used by the AO to use as a justification and rationale for the issue of such notices. This additional evidence, admittedly has been added to the I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 27 satisfaction note in order to justify post facto the issue of the said notices. The satisfaction note has to be read, sans this additional evidence and therefore, as per the earlier discussions, cannot be used for the issue of notices 153A in this case. b. Without prejudice to the above purely legal issue, upon examination of the data so- provided, it is found that it is in the form of excel sheets recovered from the hard disc of the entry operator showing some loan entries pertaining to the appellant. The same contains names along-with amounts of unsecured loans of Shri RNJ, one of the key persons of the group. These entries, it is seen refer to a later period than the presently impugned assessment years 2008-09, 2009-10 and 2010-11. Page 51, 52 and 56 of the paper book depict these transactions. On these pages the name mentioned is "RNJ" and "1.4.2010 to 31.3.2011" respectively. It has not been shown how these transactions relate to the present appellant and/or the presently impugned periods. I cannot also disagree with the contention of the AR of the appellant that the said notings mention transactions that are all in cheque and nowhere show that the same are bogus or accommodation entries. No noting regarding change of cash finds place in such notings. There is nothing on the face of the said data to show that the entries are bogus or not genuine. I find that the AO has not even tried to draw some form of a link or nexus between these notings and the existence of the jurisdictional fact or even anything incriminating. This is true at the time of writing his letter dated 01.10.2019 as well as at the time of forming his assessment order. Without some form of a link or nexus between this material or without showing how this could be construed as incriminating or revealing the existence of income represented in the form of assets of value over 50 lakhs for the impugned assessment years, it is difficult to accept the AO's contention that this material should be treated as additional evidence, material for justifying the content and matter of the satisfaction note. g. The above discussion is of course without prejudice to the equally legitimate grievance of the appellant that this was material that had been obtained from a third party and was being used against him without affording him the opportunity of cross-examining the person from whose premises this material was found. The legal position in this connection has been explained at length by the Hon'ble Bombay High Court in ACIT vs. I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 28 Lata Mangeshkar [1974] 97 TR 696 (Bom) where it has been explained that reliance on third party material sans corroborative evidence that has been found during the course of the assessee's search would render the addition made by the assessing officer as bad in Law. In the said case, it was held that the mere entries in the accounts of third party regarding payment to the assessee was not sufficient as there was no guarantee that the entries were genuine in absence of any corroborative evidence. In the connection of making additions based upon the entries found in the books of a third party, the Hon'ble Apex Court has clearly spelled out in the case of C. Shukla (1998) 3 SCC 410, wherein it was held that an addition cannot be made in the hands of the assessee on the basis of entries in the books of account of third parties in absence of any corroborative evidence. Therefore, on this count also it is difficult to accept the action of the AO. In summary, I have not been able to find substance in the assertion of the assessing officer made through his various communications with the appellant, or his presently impugned assessment order even through the medium of the remand report that the conditions stipulated in the 4th proviso of section 153A, read with both the explanations present therein, were met and fulfilled by the AO at the time of penning his satisfaction for issue of notice u/s 153A of the Act for the assumption of jurisdiction by him for the assessment of the income of the appellant for the assessment years 2008-09, 2009-10 and 2010-11. These conditions, it is apparent from the foregoing discussions, were not even met or fulfilled during assessment or even at the time of the remand. Not only was there nothing that was shown, during appeal proceedings, to have come into the possession of the assessing officer, on account of the search u/s 132 of the Act, that could be said to be material in the form of books of account, documents or evidence that could be said to reveal that income represented in the form assets amounting to Rs 50 lakh or more had escaped assessment in the case of the present appellant for the assessment years 2008-09, 2009-19 or 2010-11, thereby prohibiting the assessing officer from assuming jurisdiction u/s 153A of the Act for the purpose of performing the assessments for these assessment years, but it was also convincingly demonstrated that nothing incriminating was found that could have served as the basis for making the impugned additions. Therefore, for the reasons discussed in detail in the foregoing passages I cannot uphold the order of the AO. Therefore, the above set of grounds are partly allowed.” I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 29 15.3. From the above finding of the ld. CIT(A), we notice that the ld. CIT(A) has held that the ld. Assessing Officer has erred in issuing notice u/s 153A of the Act by invoking 4 th proviso to Section 153A of the Act. By placing reliance on the decision of the Tribunal in the case of Goldstone Cements Pvt. Ltd. (supra), ld. CIT(A) has further held that there is no income represented in the form of assets and in absence thereof assessment years beyond six years to the year of assessment not exceeding ten years from the year in which search took place can be subjected to assessment proceedings u/s 153A of the Act. 15.4. We observe that the basis for showing notice u/s 153A of the Act for Assessment Year 2008-09 to 2010-11, as the case may be for the assessee(s) in appeal before us, the reason adopted by the Assessing Officer was the statements of alleged entry operators running group of companies which were engaged in providing accommodation entries to the company in the case of the assessees and other group concerns. Some of the alleged accommodation entry provider companies have given loans to the assessee group companies or have invested in to the equity share capital of the group companies including payment of premium. The ld. Assessing Officer has observed that for Assessment Year 2012-13 to Assessment Year 2017-18, assessee has suo-moto offered such sum received through alleged entry operators to tax in the application filed for ITSC u/s 254C(1) of the Act. For Assessment Year 2011-12, the case of the assessee was reopened by issuing notice u/s 148 of the Act but for Assessment Year 2008-09 to 2010-11, the ld. I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 30 Assessing Officer resorted to invoke the 4 th proviso to Section 153A of the Act. 16. Though we have reproduced Section 153A of the Act in its entirety in the preceding part of this order, we would like to extract the 4 th proviso along with explanation 1 & 2:- “Provided also that no notice for assessment or reassessment shall be issued by the Assessing Officer for the relevant assessment year or years unless— (a) the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more in the relevant assessment year or in aggregate in the relevant assessment years; (b) the income referred to in clause (a) or part thereof has escaped assessment for such year or years; and (c) the search under section 132 is initiated or requisition under section 132A is made on or after the 1st day of April, 2017. Explanation 1.—For the purposes of this sub-section, the expression "relevant assessment year" shall mean an assessment year preceding the assessment year relevant to the previous year in which search is conducted or requisition is made which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is made. Explanation 2.—For the purposes of the fourth proviso, "asset" shall include immovable property being land or building or both, shares and securities, loans and advances, deposits in bank account.” 17. Now on going through the above proviso, the important aspect is that whether the Assessing Officer had in his possession books of accounts or other documents or evidence which revealed that income represented in the form of asset has escaped assessment which amounts to or likely to amount Rs.50,00,000/- or more in the relevant Assessment Year or in aggregate in the relevant Assessment Years. In the instant case, search was conducted on 03/01/2018, so total ten I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 31 Assessment Years would be from Assessment Year 2008-09 to 2017-18. From Assessment Year 2012-13 to 2017-18, are to be excluded for the purpose of 4 th Proviso to Section 153A of the Act as provided under Explanation (1) extracted above. So the remaining four Assessment Years are 2008-09 to 2011-12. Though Assessment Year 2011-12 has been reopened by the Assessing Officer by issuing notice u/s 148 of the Act but for the purposes of 4 th proviso in order to compute the amount being Rs.50,00,000/- or above in these four Assessment Years i.e., Assessment Year 2008-09 to 2011-12 would be relevant. 18. Now, before going to the extent of examining whether the amount is more than Rs.50,00,000/- or more, the first hurdle to cross is as to whether any amount representing any “asset” is found by the Assessing Officer and in the books of accounts or other documents or evidence in his possession. Explanation (1) to 4 th proviso states that the assets shall include immovable property being land or building or both, shares and securities, loans/advances, deposits in bank account. So this definition of asset for the purpose of 4 th proviso to Section 153A of the Act is specific definition and only if the asset or information about such asset as stated above are found by the search team and they are not disclosed in the regular books of account and has escaped assessment, then only the Assessing Officer can open the window under 4 th proviso. 18.1 However, in the instant case, the ld. Assessing Officer has not referred to any of such “asset” neither any information in their in the I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 32 assessment order about any immovable property being land or building or both, shares and securities, loans and advance, deposits in bank account, in the assessment order. The assets referred in the 4 th proviso are the assets which are appearing on the right side of the balance sheet whereas the Assessing Officer is referring to unsecured loan and shares capital and share premium which is on the liability side of the balance sheet. In other words, the 4 th proviso to Section 153A of the Act talks about the assets whereas the Assessing Officer has invoked the 4 th proviso by referring to liabilities which is completely inverse of what is provided under the Act. 18.2. Now once the basic condition i.e., availability of “asset” as defined under explanation 2 to 4 th proviso to Section 153A of the Act, if any, found during the course of search with the assessee/group concern is absent, nor there is any reference to any incriminating material referring to ownership of such undisclosed assets by assessee and only there is a reference of the credits received by the assessee/s which are duly disclosed in the regular books of accounts are part of the audited financial statements, issuing of notice u/s 153A of the Act then invoking the 4 th proviso to Section 153A of the Act, is invalid and bad in law and beyond jurisdiction and thus on this ground itself, the assessment order passed u/s 153A of the Act, which is the subject matter of the instant appeals before us has rightly been quashed by the ld. CIT(A) and which thus does not call for any interference. I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 33 19. The second issue that arises for our consideration is that whether a Settlement Application be considered as an incriminating document or not. 20. The ld. CIT(A) in the impugned order, has given the following findings qua the issue:- “Having decided that the material Commission could indeed have been used by the AO for ascertaining whether the jurisdictional fact as discussed above, did exist for the 'relevant assessment years' and for the isolation of this jurisdictional fact, it indeed it did exist, then the next issue to be examined is whether the material before the Hon'ble Commission, as mentioned by the AO in this satisfaction note as well as in his subsequent communications including the impugned order, viz., the settlement application did indeed indicate any incriminating material, found during the search, in relation to the relevant assessment years, 2008-09, 2009-10 and 2010-11, that revealed' the jurisdictional fact that income in the form of assets amounting cumulatively to Rs 50 lakh or more had indeed escaped assessment for these assessment years. In this connection, the appellant has submitted a copy of the SOF (Statement of facts containing the 'matter' submitted by the appellant in his application before the Commission). This is placed on record and has been duly studied. I cannot find any material that could be construed as a jurisdictional fact as discussed above. The only mention of matters for settlement in this SOF pertains to assessment years that were covered by the said application, viz., AY 2011-12 to 2018-19. There is no mention of the assessment years 2008-09 to 2010-11 at all. It is noteworthy that even in the satisfaction note recorded by the AO, the latter has not made any reference to these earlier 'relevant assessment years' in respect of which he had sought to establish, first, that there was incriminating material, and subsequently, the existence of the jurisdictional fact of escapement of income represented in the form of assets amounting to Rs 50 lakh or more for the AY 2008-09 to 2010-11 mentioned in the settlement application. I find that even upon examination of this matter in remand, the AO has not been able to shed any light upon this issue or bring on record any incriminating material, much less the existence of the jurisdictional fact in relation to the 'relevant assessment years that might have found mention in the settlement application. I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 34 Even though, neither the AO during assessment, nor during remand, nor the indeed the appellant has addressed the following issue, in my opinion, for a complete discussion of whether there indeed was any mention within the settlement application present on record in the form of the SOF (statement of facts before the Commission) - it was felt necessary to examine the said SOF thoroughly. Upon such examination, it was found that even though the SOF does not mention any issues, either in relation to the relevant assessment years in this case, viz. 2008-09, 2009-10 and 2010-11 or indeed in relation to the existence of the jurisdictional fact discussed earlier in relation to these assessment years; an examination of the order u/s 245D(4) reveals that there are some important references to issues that have a bearing upon the instant set of appeals. In the order u/s 245D(4) of the Act, the Hon'ble Commission has thought it fit to reproduce the objections raised by the PCIT in his report to the Commission under Rule 9 along with the rejoinder filed by the appellant in this respect. The issue raised before the Hon'ble Commission is as follows: The Rule-9 report on page 18 of the 245D(4) order asked that the appellant verify if all bank accounts etc had been properly reflected in the books of the appellant. The appellant replied that this was so - a fact which was duly accepted by the Commission. Further, the Rule - 9 report has noted that upon examination of the cash flows from which the disclosure before the Settlement Commission was derived, and upon verification of the details of the loans it has been found that the opening balance of unsecured loans in the name of the present appellant, as on 1.4.2010, was shown as refund of unsecured loan, and was incorporated in the cash flow before the Commission. The Rule-9 report has requested the Commission to incorporate the opening balance as additional income in the form of disclosure before the Commission, for payment of taxes before the Commission. To this the appellant had responded that these balances were from the audited books of account and that there was no cash balance that was being carried forward from earlier period than that of the period before the Commission. At the directions of the Commission, this matter was subjected to joint verification between the Department and the appellant under the aegis of the Commission. The order u/s 245D(4) in this regard, makes a mention of this joint verification and concludes that there was no cash balance just before the check-period (before 1.4.2010). The Commission has given its finding in its I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 35 order u/s 245D(4) paragraph 5.1 of its order, wherein it has accepted that there was no adverse inference that could be drawn from the objections of Rule-9 in this regard. Therefore, I find that the only reference to earlier period transactions relating to the "relevant assessment years" made before the Settlement Commission by the Department was subjected to a joint verification in which the Department was also a party, and after this verification this objection did not find favour with the Commission. It is apparent from the above discussions that the issues raised by the Rule-9 report, that is, from the office of the concerned PCIT, did not make any reference to any escapement of income in respect of the assessment years preceding the assessment years before the Commission in connection of the present appellant. The Commission did not hold any adverse view in relation to the opening balance as on 1.4.2010, in respect of the present appellant. Without prejudice to the discussions in relation to the objections raised by the Rule -9 report, two things need to be pointed out. The first is that there was no mention by the Rule -9 report or the Department during the proceedings before the Commission, of the existence of any income that had escaped assessment amounting to Rs 50 lakh or more, represented in the form of assets in relation to the AYS 2008-09, 2009-10 or 2010-11 in the case of the present appellant. The second observation emanates from the order u/s 245D(4) itself in the case of the entire group - of which the present is also a part- where it has been recorded that a joint verification of the issues involved had been undertaken under the aegis of the Commission, in which, both, the appellant's group and the officers of the Department had participated. A joint verification report was accordingly prepared. This report was discussed in the Commission and before the Bench; and that the CIT(DR), during such discussion, did not raise any objections. In such circumstances I find that I cannot lend support to the AO's contention that the jurisdictional fact necessary for invoking the power of issue of notices u/s 153A - in the form of documents, books of account or any other evidence that could reveal that income in the form of assets of value Rs50 lakh or more had escaped assessment - lay within the appellant's disclosures before the Settlement Commission. The above discussions and conclusions are, of course, without prejudice to the fact that there is force in the appellant's argument that the reliance upon the contents of the said settlement application was misplaced insofar as it was not a document that was found during search, and that the assessing I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 36 officer was relying upon the implied admission of the appellant in the settlement application that he was conceding that in relation to AY 2011-12 to 2018-19, he had indulged in introducing his own unaccounted money through the medium of routing it through shell companies. If any reliance had to be made upon such an admission, it could have been made only based upon incriminating material found during search that pertained to the relevant assessment years. This last matter has already been discussed earlier in this order. In these circumstances and for the aforementioned reasons, I cannot agree with the AO that there was material in his possession on account of the Settlement Application of the appellant that related to the assessment years 2008-09 to 2010-11 which could either be considered incriminating material found during search or that revealed the existence of the jurisdictional fact that is a sine qua now for the recording of satisfaction for the issue of notice u/s 153A, in relation to the relevant assessment years, for the purpose of assuming jurisdiction for these assessment years.” 21. Now, on going through the above findings of the ld. CIT(A) and also a perusal of the assessment order we notice that the application which was filed by the assessee before the ITSC was a mere source for the Assessing Officer to proceed for issuing showcause notice under the 4 th proviso to Section 153A of the Act. Though there is no detail about the application filed before the ITSC before us which as contended by the ld. Counsel for the assessee, is a confidential document and unless and until such application is withdrawn or the commitment made by the assessee in such application is not honored, then in such circumstances, information contained in such application with ITSC cannot be used against the assessee. In the instant case, the application was filed by the assessee and its group concern before ITSC for Assessment Year 2012-13 to 2017-18 and the same has been I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 37 accepted by the ITSC and the tax liabilities as arising therein has been paid. Thus, the assessee’s application with ITSC has been accepted. Now, once the application has been accepted the information contained therein cannot be used against the assessee for other Assessment Years unless and until other conditions provided under the Act are fulfilled which brings us again to the same point i.e., validity of initiating proceedings under the 4 th Proviso to Section 153A of the Act and as discussed above, since the conditions for invoking the provisions of 4 th proviso u/s 153A of the Act are not be fulfilled by the Assessing Officer in any of the cases before us as merely taking information from ITSC application and based on such details about the share applicants and loan providers, the action of the Assessing Officer to assess the assessee under the 4 th proviso to Section 153A of the Act, is uncalled for and unjustified. We, therefore are of the considered view that the application made before the Settlement Commission cannot be used by the Assessing Officer as an incriminating material since it is not found during the course of search and it is a mere application which the assessee filed before the ITSC after the conclusion of search. Therefore, we find no infirmity in the finding of the ld. CIT(A) that the application made before the Settlement Commission cannot be held as an incriminating material. Thus, on this legal ground also, the assessee succeeded before the ld. CIT(A) and the ld. CIT(A) has rightly allowed this ground raised by the assessee which do not call for any interference. I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 38 22. With this, both the legal grounds on which the assessee succeeded before the ld. CIT(A) and the revenue in itself having not challenged the same before us by raising the grounds but still for academic purposes, have been dealt by us and the view taken by the ld. CIT(A) is confirmed. 23. Now, so far as the merits of the case are concerned, even though dealing with them is mere academic exercise because on the legal ground itself the assessment proceedings carried out u/s 153A of the Act have been quashed by the ld. CIT(A) and the same has been confirmed by us also in favour of the assessee but since the revenue has raised the grounds only the merits of the case, now we proceed to deal with the same. 24. The first issue on merits that arises for our consideration is that the Ld. AO has simply taken the difference between opening and closing balance of “share capital and share premium” and “unsecured loans” as bogus. 24.1. The ld. CIT(A) on this issue has given the following findings:- “Without prejudice to the above discussion, in any case if we proceed further and examine the nature of the additions made by the Assessing Officer, we find as discussed earlier, that he has added bank unsecured loans and share capital and premium. Assessments of the disputed years were made u/s 153/144 of the Income Tax Act for the three assessment years in the following manner:- Assessment Year Additions made and contested in appeal 2008-09 Difference in the unsecured loan [through deposits in bank account] from the last year and the current year of Rs.2,22,81,320/- added under section 68 of the Income Tax Act, 1961 I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 39 2009-10 Money brought in the books in the form of share capital/share premium in the form of deposits in bank accounts being Rs.7,07,00,000/- added under section 68 of the Income Tax Act, 1961 Difference in the unsecured loan [through deposits in bank account] from the last year and the current year of Rs.12,48,20,377/- added u/s 68 of the Act, 1961 2010-11 Money brought in the books in the form of share capital/share premium in the form of deposits in bank accounts being Rs.4,70,00,000/- added under section 68 of the Income Tax Act, 1961 Difference in the unsecured loan [through deposits in bank account] from the last year and the current year of Rs.7,61,95,000/- added under section 68 of the Income Tax Act, 1961. The AR of the appellant has contested that it was manifestly unlawful that these additions were made on the basis of the difference of balance sheet figures from last and current year i.e., the year of addition without identifying the entry which was alleged to be bogus. That the AO has simply taken the incremental share capital & premium and unsecured loans of the all the three assessment years in question without making any effort to identify the entity from whom the said funds came, date of the entry and the reasons why such inflow should be taken as bogus. The AR has stated that In actual fact the entire share capital and premium and the unsecured loans raised in the said three years had been added without the application of mind. In view the foregoing discussions, I am inclined to agree with the view of the AR of the appellant, that an addition of the form made by the AO in the present case is incorrect and unlawful on two counts: i. That the meaning of the word "asset" used in the 4th proviso, itself precludes any addition being made in respect of section 68 of the Act - particularly with respect to share capital/premium and unsecured loans ii. That in any case the information in respect of additions made by the AO, of share capital/premium and/or unsecured loans, was not incriminating material found during the search.” 25. Going through the above finding of the ld. CIT(A) and also examining the records, we notice that in the assessment order the ld. Assessing Officer has not mentioned any detail about any of the I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 40 alleged cash creditors/share applicants. He has simply taken the difference between the opening and closing balance of share capital and share premium and unsecured loans. No efforts have been made by the ld. Assessing Officer to gather any information about the alleged receipts. Had there been any incriminating material based on which such additions have been made then the Assessing Officer certainly would have referred to the same. However, this finding of the ld. Assessing Officer of making the addition only on the basis of difference in closing and opening balance of the share capital and share premium and unsecured loans in itself proves that these additions have not been made on the basis of any incriminating material but only on the basis of the audited financial statements available with the Assessing Officer and which were duly submitted before the lower authorities at the time of filing the regular return of income. Therefore, the impugned addition was uncalled for and has been rightly deleted by the ld. CIT(A). 26. The next issue on merits relates to whether additions can be made for completed assessments in absence of any incriminating documents. 27. The ld. CIT(A) has given the following finding on this issue in the impugned order:- “The above discussions and citation have clearly brought forth the meaning of the word incriminating material that should be employed in cases such as the present appeal. This meaning has to be read in harmony with the proposition that in the case of a search and thereafter, in the case of any unabated assessments, the only additions that can be made u/s 153A can be with respect to incriminating material I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 41 found during the search. This last proposition has been affirmed through a plethora of decisions from judicial authorities across the country. Some of these have already been discussed above, in the context of the meaning of "incriminating material", while some more, being relevant in this appeal, are discussed below: The Hon'ble Delhi High Court in the case of Pr. CIT vs. Meeta Gutgutia, reported in 395 ITR 526 held as under: "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 provisions, therefore, have to be read together. Section 153A is indeed an extremely potent power which enables the Revenue to re-open at least six years of assessments earlier to the year of search. It is not to be exercised lightly, it is only if during the course of search under Section 132 incriminating material justifying the re- opening of the assessments for six previous years is found that the invocation of Section 153A qua each of the AYS would be justified." It is also pertinent to mention at this point that the SLP filed by the I.T. Department before the Supreme Court against this judgement of Delhi High Court, has already been dismissed by the Supreme Court, vide judgement in the aforesaid case reported in 257 Taxmann441, with the following comment: "High Court in impugned order held that since no incriminating material was unearthed to show that there was failure by assessee to disclose franchise income, addition made by Assessing Officer was unjustified- Whether SLP against said decision was to be dismissed - Held, yes [Para 2] [In favour of assessee" In the case of Pr.CIT vs. Ram Narain Jindal, 2017(11) TMI 1677, Hon'ble Delhi High Court had taken a similar view and the special leave petition filed by the Revenue in the Supreme Court was dismissed; as reported under 2018 (8) TMI 295 (Special Leave Petition (Civil) Diary No(s). 23833/2018)dated 03/08/2018. In the case of RRJ Securities Ltd., 2015-TIOL-2539-HC-DEL-IT, the Hon'ble Delhi High Court held as under :- “In respect of such assessments which have abated, the AO would have the jurisdiction to proceed and make an assessment. However, in respect of provided that the assets/documents received by the AO represent or indicate concluded assessments, the AO would assume jurisdiction to reassess undisclosed in the relevant assessment years. This Court in Commissioner of any undisclosed income I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 42 or possibility of any income that may be remained Income Tax (Central)-III v. Kabul Chawla: ITA 707/2014, decided on 28 th August, 2015 [2015-TIOL- 2006- HC-DEL-IT] has held that completed assessments unearthed during the course of the search or requisition of the documents. In could only be interfered with by the AO on the basis of any incriminating material absence of any incriminating material, the AO does not have any jurisdiction to interfere in concluded assessments. A similar view was taken by the judiciary in the case of Pr. CIT vs. Kurele Paper Mills P. Ltd. (2016) 380 ITR 571, where the Hon'ble Delhi High Court held that proceedings u/s 153A of the IT Act, 1961 were without jurisdiction where no assessments were pending at the time of initiation of proceedings u/s 153A and no incriminating evidence was found during the course of search: "Held, dismissing the appeal, that the order of the Commissioner (Appeals) revealed that there was a factual finding that no incriminating evidence related to share capital issued was found during the course of search as was manifest from the order of the Assessing Officer. Consequently, it was held that the Assessing Officer was not justified in invoking section 68 for the purposes of making additions on account of share capital. There was nothing to show that the factual determination was perverse.(AY. 2002-2003)." The Supreme Court has dismissed the special leave petition may filed by the Department against this judgment [2016] 380 ITR 64(St.) In the case of Kabul Chawla (2016) 380 ITR 573, the Hon'ble Delhi High Court had summarized the legal position in respect of proceedings u/s section 153A of the IT Act in paragraph 37 and conclusion of the case in paragraph 38, which are reproduced below:- "Summary of the 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 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 153A(1) will have to be mandatorily issued to the person searched requiring him to file returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 43 ii. Assessments and reassessments pending on the date of the search shall abate. The total income for such 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 AY 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 orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYS "in which both the disclosed and the undisclosed income would be brought to tax". iv. Although Section 153A does not say that additions should be strictly made on the basis of evidence found 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 any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word "assess" in Section 153A is relatable to abated proceedings (i.e. those pending on the date of search) and the word "reassess" to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the 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 AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153A 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 course of search which were not produced or not already disclosed or made known in the course of original assessment. Conclusion 38. The present appeals concern AYS 2002-03, 2005-06 and 2006-07. On the date of the search the said assessments already stood completed. Since no incriminating material was unearthed during the search, no additions could have been made to the income already assessed." I find that there are several decisions of the jurisdictional Kolkata Tribunal itself, as well as of other authorities, that have followed or underlined the above propositions I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 44 and principles of law that in the absence of any incriminating material found during search, no addition can be made u/s 153A/153C in the case of completed assessments. Several of these have been enumerated earlier in this order and no further purpose, it is felt, is to be served by further discussing these decisions individually. In view of the above mentioned judgments of various courts all over the country, which repeatedly and consistently reiterate that completed assessments can be interfered with by the AO while making the assessment under Section 153A only on the basis of some incriminating material unearthed during the course of search in the form of some document or undisclosed income or property or some other such material discovered in the course of search which was not produced or was not already disclosed or made known in the course of original assessment or was not there in the books of account, admittedly disclosed before the Department earlier than the date of search, I am of the opinion that in a search assessment made u/s. 153A, if for a particular assessment year, assessment has been concluded, then, no addition can be made without linkage to some incriminating material found during the course of search. In the instant case, the original return of income had been filed on 12.09.2009; the processing of this return u/s 143(1) had been concluded on 04.03.2011; while the search took place on 03.01.2018 and subsequent dates. Therefore, I find that as on the date of the search, since this case pertains to the AY 2009-10, all the assessments had been concluded. With this being the admitted factual position, the ratios of the various case laws discussed above and the propositions expounded by them are squarely applicable to this case. Respectfully relying upon the above authorities, I, therefore, hold that in this case while additions/disallowances could undoubtedly have been made by the AO, only those additions/disallowances that were based upon incriminating material found during the search could at all be sustainable, others would not. This last observation, of course, comes with rider: it must not be forgotten that this assessment, even though done u/s 153A of the Act, pertains actually to the "relevant assessment years as specified in the fourth proviso to section 153A. Therefore, in addition to the above proposition of law, that in this case, since all assessments had been concluded as on the date of search, and therefore additions, if any, could only have been based upon incriminating material found during the search, the 4 th Proviso also stipulates conditions which should be precedent to the issue of notice in the case of the "relevant assessment years" - conditions which mandatorily have to be satisfied before a valid notice can lawfully be issued under this section. This last issue shall also be discussed later in this order. I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 45 28. We observe that the original return of income u/s 139 of the Act, was filed by the assessees in the instant appeals before us on the following dates:- Year wise details in the case of Followel Engineering Ltd. is tabulated below:- AY Return Filing Date Return Processed 2008-09 30-09-2008 10-08-2009 2009-10 12-09-2009 04-03-2011 2010-11 16-09-2010 18-03-2011 Year wise detail in the case of Super Sonic Carrier P. Ltd. is tabulated below:- AY Return Filing Date Return Processed 2008-09 26-09-2008 18-12-2009 2010-11 26-09-2010 29-03-2012 Year wise detail in the case of Super Sonic Carrier P. Ltd. is tabulated below:- AY Return Filing Date Return Processed 2010-11 06-10-2010 15-04-2011 29. From the above details, we notice that the regular return of income were filed by the assessees. Search was conducted in the year 2018 and as on that date, none of the Assessment Years referred were pending for assessment and, therefore, they fall in the category of completed assessments and the additions during such Assessment Years in reference to the 4 th proviso to Section 153A of the Act can be made only on the basis of any incriminating material which suggests that any income represented in the form of asset has escaped the I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 46 assessment. It has been consistently held by the Hon’ble Courts that in the completed assessments/concluded assessments as on the date of search, no additions can be made in absence of any incriminating material. 30. The Kolkata ‘A’ Bench of the ITAT in the case of ACIT vs. M/s. Adhunik Infrastructure Pvt. Ltd. in I.T.(S.S.)A. Nos.: 41, 42, 43 & 44/KOL/2017; order dt. 17/04/2023, under identical circumstances had held as under:- “15. Similar view was taken in the case of Aditya Himatsingka vs. DCIT in IT(SS)A No. 27/Kol/2022 order dated 09.09.2022 wherein also for non-abated and completed assessment year it was held that addition can only be made based on the incriminating material and for arriving at this decision reliance was placed on various judgments which are mentioned in page 19 of this order passed by this Tribunal reads as follows: Sl. No. Particulars 1. CIT vs. Kabul Chawla [2015] 61 taxmann.com 412 (Delhi) 2. PCIT –vs.- Kurele Paper Mills (P) Ltd. [2017] 81 taxmann.com 82 (Delhi) 3. PCIT –vs.- Rashmi Infrastructure Pvt. Ltd. ITAT 99 of 2019, GA No. 1211 of 2019 (Calcutta HC) 4. CIT –vs.- Veerprabhu Marketing Ltd. [2016] 73 taxmann.com 149 (Calcutta) 5. PCIT –vs.- Salasar Stock Broking Ltd. ITAT No. 264 of 2016, GA No. 1929 of 2016 (Calcutta HC) 6. M/s. Mani Square Ltd. –vs.- ACIT [IT(SS)A Nos. 58/KOL/2019 & others 7. ACIT –vs.- Majestic Commercial (P) Ltd. [2020] 116 taxmann.com 412 (Kolkata Trib.) 8. PCIT –vs.- Anand Kumar Jain & Others [ITA 23/2021 & others (Delhi High Court) 9. DCIT –vs.- Bhavya Merchandise (P) Ltd. [2020] 121 taxmann.com 112 (Kolkata Trib.) 10. Sarva Priya Holdings Pvt. Ltd. –vs.- DCIT [IT(SS)A Nos. 97 & 98/KOL/2014 11. Purulia Metal Casting –vs.- DCIT [ITA No. 1217/KOL/2019) 12. DCIT –vs.- Shri Ram Realcon Pvt. Ltd. [IT(SS)A No. 14 & 15/KOL/2017 13. Vikram Financial Services Ltd. –vs.- DCIT [IT(SS)A No. 81/KOL/2010 14. DCIT –vs.- M/s. Bohra G. & NN Brothers Pvt. Ltd. [IT(SS)A No. 89/KOL/2017 16. After going through the settled judicial precedence, we notice that the year under appeal before us are AY 2009-10, AY 2010-11, AY 2011-12 & AY 2012-13 and the time limit for issuance of notice u/s 143(2) of the Act was 30 th September, 2010, 2011, 2012 & 2013 and the date of search is 17 th to 18 th December, 2014. As on the date of search the time limit for issuance of notice u/s 143(2) of the Act stood expired and no assessments were pending which could be abated. Therefore, all the impugned assessment years before us are completed and non-abated assessment years and addition during these years can be made I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 47 only based on the incriminating material evidencing that the income mentioned in such seized material has not been disclosed by the assessee. Since in the instant case there is no mention of the name of the assessee company in the seized material bearing no. AIPL/4 pages 4, 5, 6 & 7, therefore, this presumption of ld. AO that the share capital received by the assessee from share subscriber companies referred in the said seized material can be treated as bogus share capital is bad in law and not justified. 17. Thus, respectfully following the judicial precedence and under the given facts and circumstances of the case, we fail to find any infirmity in the finding of ld. CIT(A) deleting the addition u/s 68 of the Act made by ld. AO towards bogus share capital for AY 2009-10 to AY 2012-13.” 31. Recently, the Hon’ble Supreme Court in the case of Principal Commissioner of Income-tax, Central-3 v. Abhisar Buildwell (P.) Ltd. reported in [2023] 149 taxmann.com 399 (SC), while dealing with the identical issue of additions made in absence of any incriminating material during the course of search, held as under:- “5. We have heard learned counsel for the respective parties at length. The question which is posed for consideration in the present set of appeals is, as to whether in respect of completed assessments/unabated assessments, whether the jurisdiction of AO to make assessment is confined to incriminating material found during the course of search under Section 132 or requisition under Section 132A or not, i.e., whether any addition can be made by the AO in absence of any incriminating material found during the course of search under section 132 or requisition under Section 132 A of the Act, 1961 or not. 6. It is the case on behalf of the Revenue that once upon the search under Section 132 or requisition under Section 132A, the assessment has to be done under Section 153A of the Act, 1961 and the AO thereafter has the jurisdiction to pass assessment orders and to assess the ‘total income’ taking into consideration other material, though no incriminating material is found during the search even in respect of completed/unabated assessments. 7. At the outset, it is required to be noted that as such various High Courts, namely, Delhi High Court, Gujarat High Court, Bombay High Court, Karnataka High Court, Orissa High Court, Calcutta High Court, Rajasthan High Court and the Kerala High Court have taken the view that no addition can be made in respect of completed/unabated assessments in absence of any incriminating material. The I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 48 lead judgment is by the Delhi High Court in the case of Kabul Chawla (supra), which has been subsequently followed and approved by the other High Courts, referred to hereinabove. One another lead judgment on the issue is the decision of the Gujarat High Court in the case of Saumya Construction (supra), which has been followed by the Gujarat High Court in the subsequent decisions, referred to hereinabove. Only the Allahabad High Court in the case of Pr. Commissioner Of Income Tax v. Mehndipur Balaji, 2022 SCC OnLine All 444 : (2022) 447 ITR 517 has taken a contrary view. 7.1 In the case of Kabul Chawla (supra), the Delhi High Court, while considering the very issue and on interpretation of Section 153A of the Act, 1961, has summarised the legal position as under: Summary of the legal position 38. 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 153A(1) will have to be mandatorily issued to the person searched requiring him to file returns for 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 of the search shall abate. The total income for such 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 AY 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 orders for each of the six years. In other words, there will be only one assessment order in respect of each 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 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 any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material.” v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 49 reassessment can be made. The word ‘assess’ in Section 153 A is relatable to abated proceedings (i.e., those pending on the date of search) and the word ‘reassess’ to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the 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 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 course of search which were not produced or not already disclosed or made known in the course of original assessment.” 7.2 Thereafter in the case of Saumya Construction (supra), the Gujarat High Court, while referring the decision of the Delhi High Court in the case of Kabul Chawla (supra) and after considering the entire scheme of block assessment under Section 153A of the Act, 1961, had held that in case of completed assessment/unabated assessment, in absence of any incriminating material, no additional can be made by the AO and the AO has no jurisdiction to re-open the completed assessment. In paragraphs 15 & 16, it is held as under: “15.On a plain reading of section 153A of the Act, it is evident that the trigger point for exercise of powers thereunder is a search under section 132 or a requisition under section 132A of the Act. Once a search or requisition is made, a mandate is cast upon the Assessing Officer to issue notice under section 153A 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 previous year in which such search is conducted or requisition 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 section 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 undisclosed income of the block period that was assessed, section 153A of the Act seeks to assess the total income for the assessment year, which is clear from the first proviso thereto which provides that the Assessing Officer shall assess or reassess the total income in respect of each assessment year, falling within such six assessment years. The second proviso makes the intention of the Legislature clear as the same provides that assessment or reassessment, if any, relating to the six assessment years referred to in the sub-section pending on the date of initiation of search under section 132 or requisition under section 132A, as I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 50 the case may be, shall abate. Sub-section (2) of section 153A of the Act provides 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 assessment year which had abated under the second proviso would 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 Act. Similarly, sub- section (2) provides for revival 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 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 section strengthens that meaning From the heading of section 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, it goes without saying that the assessment has to have relation to the search or requisition. In other words, the assessment, should be connected with something found during the search or requisition, viz., incriminating material which reveals undisclosed income Thus, while in view of the mandate of sub-section (1) of section 153A of the Act, in every case where there is a search 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 relevant 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 material is found, as held by the Rajasthan High Court in the case of Jai Steel (India) v. Asst. CIT (supra), the earlier assessment would have to be reiterated. In case where 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 undisclosed income, if any, unearthed during the search or requisition. In case where a pending reassessment under 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 I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 51 Officer could have passed under section 147 of the Act as well as under section 153A of the Act.” 8. For the reasons stated hereinbelow, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction (supra), taking the view that no addition can be made in respect of completed assessment in absence of any incriminating material. 9. While considering the issue involved, one has to consider the object and purpose of insertion of Section 153A in the Act, 1961 and when there shall be a block assessment under Section 153A of the Act, 1961. 9.1 That prior to insertion of Section 153A in the statute, the relevant provision for block assessment was under Section 158BA of the Act, 1961. The erstwhile scheme of block assessment under Section 158BA envisaged assessment of ‘undisclosed income’ for two reasons, firstly that there were two parallel assessments envisaged under the erstwhile regime, i.e., (i) block assessment under section 158BA to assess the ‘undisclosed income’ and (ii) regular assessment in accordance with the provisions of the Act to make assessment qua income other than undisclosed income. Secondly, that the ‘undisclosed income’ was chargeable to tax at a special rate of 60% under section 113 whereas income other than ‘undisclosed income’ was required to be assessed under regular assessment procedure and was taxable at normal rate. Therefore, section 153A came to be inserted and brought on the statute. Under Section 153A regime, the intention of the legislation was to do away with the scheme of two parallel assessments and tax the ‘undisclosed’ income too at the normal rate of tax as against any special rate. Thus, after introduction of Section 153A and in case of search, there shall be block assessment for six years. Search assessments/block assessments under Section 153A are triggered by conducting of a valid search under Section 132 of the Act, 1961. The very purpose of search, which is a prerequisite/trigger for invoking the provisions of sections 153A/153C is detection of undisclosed income by undertaking extraordinary power of search and seizure, i.e., the income which cannot be detected in ordinary course of regular assessment. Thus, the foundation for making search assessments under Sections 153A/153C can be said to be the existence of incriminating material showing undisclosed income detected as a result of search. 10. On a plain reading of Section 153A of the Act, 1961, it is evident that once search or requisition is made, a mandate is cast upon the AO to issue notice under Section 153 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 previous year in which such search is I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 52 conducted or requisition is made and assess or reassess the same. Section 153A of the Act reads as under: “153A. Assessment in case of search or requisition - (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 initiated under Section 132 or books of account, other documents or any assets are requisitioned under Section 132-A after the 31st day of May, 2003, the Assessing Officer shall— (a) issue notice to such person requiring him to furnish 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 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 required to be furnished under Section 139; (b) assess or reassess the total income of six assessment years immediately preceding the assessment year relevant to the previous year in which such search is conducted or requisition is made: Provided that the Assessing Officer shall assess or reassess the total income in respect of each assessment year falling within such six assessment years: Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this sub-section pending on the date of initiation of the search under Section 132 or making of requisition under Section 132-A, as the case may be, shall abate. (2) If any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or Section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside Explanation.—For the removal of doubts, it is hereby declared that,— I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 53 (i) save as otherwise provided in this section, Section 153- B and Section 153-C, all other provisions of this Act shall apply to the assessment made under this section; (ii) in an assessment or reassessment made in respect of an assessment year under this section, the tax shall be chargeable at the rate or rates as applicable to such assessment year.” 11. As per the provisions of Section 153A, in case of a search under Section 132 or requisition under Section 132A, the AO gets the jurisdiction to assess or reassess the ‘total income’ in respect of each assessment year falling within six assessment years. However, it is required to be noted that as per the second proviso to Section 153A, the assessment or re-assessment, if any, relating to any assessment year falling within the period of six assessment years pending on the date of initiation of the search under Section 132 or making of requisition under Section 132A, as the case may be, shall abate. As per sub-section (2) of Section 153A, if any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub- section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner. Therefore, the intention of the legislation seems to be that in case of search only the pending assessment/reassessment proceedings shall abate and the AO would assume the jurisdiction to assess or reassess the ‘total income’ for the entire six years period/block assessment period. The intention does not seem to be to re-open the completed/unabated assessments, unless any incriminating material is found with respect to concerned assessment year falling within last six years preceding the search. Therefore, on true interpretation of Section 153A of the Act, 1961, in case of a search under Section 132 or requisition under Section 132A and during the search any incriminating material is found, even in case of unabated/completed assessment, the AO would have the jurisdiction to assess or reassess the ‘total income’ taking into consideration the incriminating material collected during the search and other material which would include income declared in the returns, if any, furnished by the assessee as well as the undisclosed income. However, in case during the search no incriminating material is found, in case of completed/unabated assessment, the only remedy available to the Revenue would be to initiate the reassessment proceedings under sections 147/48 of the Act, subject to fulfilment of the conditions mentioned in sections 147/148, as in such a situation, the Revenue cannot be left with no remedy. Therefore, even in case of block assessment under section 153A and in case of unabated/completed assessment and in case no incriminating material is found during the search, the power of the I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 54 Revenue to have the reassessment under sections 147/148 of the Act has to be saved, otherwise the Revenue would be left without remedy. 12. If the submission on behalf of the Revenue that in case of search even where no incriminating material is found during the course of search, even in case of unabated/completed assessment, the AO can assess or reassess the income/total income taking into consideration the other material is accepted, in that case, there will be two assessment orders, which shall not be permissible under the law. At the cost of repetition, it is observed that the assessment under Section 153A of the Act is linked with the search and requisition under Sections 132 and 132A of the Act. The object of Section 153A is to bring under tax the undisclosed income which is found during the course of search or pursuant to search or requisition. Therefore, only in a case where the undisclosed income is found on the basis of incriminating material, the AO would assume the jurisdiction to assess or reassess the total income for the entire six years block assessment period even in case of completed/unabated assessment. As per the second proviso to Section 153A, only pending assessment/reassessment shall stand abated and the AO would assume the jurisdiction with respect to such abated assessments. It does not provide that all completed/unabated assessments shall abate. If the submission on behalf of the Revenue is accepted, in that case, second proviso to section 153A and sub- section (2) of Section 153A would be redundant and/or re- writing the said provisions, which is not permissible under the law. 13. For the reasons stated hereinabove, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction (supra) and the decisions of the other High Courts taking the view that no addition can be made in respect of the completed assessments in absence of any incriminating material. 14. In view of the above and for the reasons stated above, it is concluded as under: i) that in case of search under Section 132 or requisition under Section 132A, the AO assumes the jurisdiction for block assessment under section 153A; ii) all pending assessments/reassessments shall stand abated; iii) in case any incriminating material is found/unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the ‘total income’ taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 55 iv) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under Section 132 or requisition under Section 132A of the Act, 1961. However, the completed/unabated assessments can be re-opened by the AO in exercise of powers under Sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved. The question involved in the present set of appeals and review petition is answered accordingly in terms of the above and the appeals and review petition preferred by the Revenue are hereby dismissed. No costs.” 32. In view of the above judgment of the Hon’ble Supreme Court, even on this count, the revenue’s plea is dismissed and the ld. CIT(A)’s finding deleting the impugned additions on merits stands confirmed. 33. The next issue arising before us, is whether the action of the ld. Assessing Officer obtaining the information that share capital from same names were raised in earlier years also (this information has been obtained from the MCA website and the returns of income filed by the assessee), as the basis for making the addition justified or not. We notice that such details were in public domain much before search and the said information cannot be called discovery of search and therefore does not form incriminating material. 34. The ld. CIT(A) has dealt with this issue whilst holding as under:- “I am inclined to agree with this contention of the appellant, since by no stretch of imagination can it be conceived that the ITRS or balance sheets present upon the MCA website can be construed as material found during search, much less it being incriminating. In any case, even the AO himself has admitted that these were downloaded from the MCA site and has not tried to make a case for their discovery having been made during the search. Without prejudice to the fact that it is I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 56 undisputed that this material was not found during search, making it ineligible for serving as an essential component of the jurisdictional fact; mandatory, as per the provisions of the 4th proviso to section 153A, for the issue of notice within the meaning of the 4th proviso to section 153A of the Act, read with the two explanations therein, nowhere has it, in any case, been established that there was anything incriminating found in these documents. Considering the position of law as discussed at length earlier in this order, therefore, it cannot be accepted that either ITRS or balance sheets from the MCA website could be lawfully accepted as material that was incriminating material found during search, or that it revealed the essential jurisdictional fact discussed earlier.” 34. The ld. CIT(A) has rightly held that the information obtained from the Ministry of Corporate Affairs website and the annual returns filed by the assessee cannot be construed as incriminating material because the same are available on the portal open for public and the informations appearing therein are filed by the assessee only. Therefore, the same cannot constitute the incriminating material. 35. The last issues relates to the action of the ld. Assessing Officer relying on alleged statements of the entry operators and the key persons of the group, for making the additions. 36. The findings of the ld. CIT(A) on this issue of addition made on the basis of statements of entry operator reads as under:- “Coming to the statement of the other alleged entry operator, Shri Subhash Chandra Bharatia, I find that this statement speaks about the search/survey that took place in the premises of Shri Subhash Chandra Bharatia and was recorded accordingly on 03.01.2018. Once again, nowhere is there any specifics mention in relation to any transactions with the appellant during the relevant period – AY 2008-09 to 2010- 11. It must not be forgotten that the period being referred to predates this statement by 7 to 10 years. There is no mention of any material that was found during this search/survey to connect the appellant to any of the transactions that were being held to be bogus. There was I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 57 indeed no mention of any transaction at all. Added to this is the fact that the period being referred to predated the statement by 7 to 10 years. In these circumstances. When there is no tangible connection brought on record between the appellant’s transactions and the so- called entry operator’s companies; the statements themselves make no reference to events that might or might not have taken place 7 to 10 years before these statements were recorded. In the case of one of the statements of course – of Shri Ravi Kant Newatia, there is an unequivocal admission that the statements with respect to the specified period could only have been based upon second-hand knowledge since in the case of the companies where Shri Newatia was director before 2014, he served only as a dummy director with control being with his uncle and in the remaining companies he became director only in or after 2014. In any case I cannot find any reference in these statements to the core issue that empowers an AO to record the satisfaction that this was a fit case for invoking the 4 th proviso to section 153A of the Act and to issue notice u/s 153A for the purpose of assuming jurisdiction for assessing the income of the appellant for the assessment years 2008-09 to 2010- 11 by bringing on record that it (this statement) revealed the existence of the jurisdictional fact of there being income represented in the form of assets, of 50 lakh or more, that had indeed escaped assessment. In the absence of any indication – however remote of this jurisdictional fact from these formation of satisfaction for the assumption of jurisdiction.” 36.1. The findings of the ld. CIT(A) on the issue with respect to the alleged statement of Mr. Ramnath Jhunjhunwala, is as under:- This brings us to the next issue that Shri Ramnath Jhunjhunwala, the key persons of the group, had on behalf of the group, accepted the above modus operandi in their statements recorded u/s 132(4)/131 of the IT Act during the course of search and post search enquiry. But once again this is a reliance placed by the AO upon very non-specific statements. They are specific only in so far as they neither mention any transaction related to the AYS 2008-09 to 2010-11, nor indeed do they point towards anything in the form of books of account, documents or evidence that could be said to reveal the existence of the jurisdictional fact that there existed any undisclosed income of 50 lakh or more, represented in the form of assets that pertained to the “relevant I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 58 assessment years” specified in the 4 th proviso to section 153A of the Act. In the absence of this jurisdictional fact the assessing officer could not record satisfaction for the issue of notice u/s 153A for the assumption of jurisdiction in the case of the appellant for the above stated AYS based upon these statements. The reliance of the AO upon these statements is therefore unsupportable by law in this case.” 37. As far as the reliance placed before the Assessing Officer on the statements of entry operators, first of all, we notice that the assessee was not provided any opportunity for cross-examination of the alleged entry operators. Secondly, we notice that such statements of the third person cannot be construed as an incriminating material and leave aside the statement of the third persons, even the statements taken during the course of search cannot be construed as incriminating material as held by the Hon’ble Delhi High Court in the case of Commissioner of Income-tax v. Concorde Capital Management Co. Ltd. [2011] 334 ITR 346 (Delhi). Even otherwise, the statements have been recorded in January, 2018 and the transactions which the Assessing Officer is referring to are during Assessment Year 2008-09 to 2010-11 and there is no information on record whether the person who have given statements in January, 2018 were having any connection with the alleged share applicants or cash creditors or whether the affairs were controlled and managed by them at that point of time. Therefore, we are of the considered view that since there is no direct nexus of the alleged additions with the statements given by the entry operators or with any other transactions entered into by the assessee in respect of the alleged transactions of receiving unsecured loans and share capital I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 59 and share premium money, ld. Assessing Officer grossly erred in making the addition based on alleged statements of the third parties i.e., the entry operators and the key persons of the group. 38. The last issue is regarding the reference to the alleged statement of the key person Mr. Ramnath Jhunjhunwala made by the ld. Assessing Officer while making the addition. We observe that the ld. CIT(A) has taken note of the fact including the statement recorded u/s 132(4)/131 of the Act that they were specific only to the transactions mentioned therein but no specific surrender was made pertaining to the transactions relating to the Assessment Year 2008-09 to 2010-11. We observe that the Assessing Officer has extrapolated the statement of the key person Mr. Ramnath Jhunjhunwala for the Assessment Year 2008-09 to 2010-11 which was beyond his jurisdiction since the addition for Assessment Year 2008-09 to 2010-11 could have been only on validly invoking the 4 th proviso to Section 153A of the Act which the ld. Assessing Officer failed to do so as discussed by us in the preceding para wherein we have confirmed the finding of the ld. CIT(A) quashing the subject matter of the instant appeal i.e., the order u/s 153A of the Act. Therefore, on this issue also, ld. Assessing Officer has erred in making the addition merely on the basis of the statement of the key person without fulfilling the relevant provisions of the Act which was sine-qua-non for initiating the proceedings u/s 153A of the Act for the year under appeal. Thus, no interference is called for in the order of the ld. CIT(A) on this ground also. I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 60 39. Thus, in order to conclude, in view of the discussions made herein above, we are inclined to hold that the ld. CIT(A) has rightly deleted the addition u/s 68 of the Act on the legal grounds as well as on merits and hence, we uphold the same and dismiss all the grounds raised by the revenue. 40. In the result, appeals of the revenue in IT(SS)A No. & Assessment Year Name of the assessee Result I.T(SS).A. No. 25/Kol/2023 Assessment Year: 2008-09 M/s. Followel Engineering Ltd. Dismissed I.T(SS).A. No. 26/Kol/2023 Assessment Year: 2009-10 M/s. Followel Engineering Ltd. Dismissed I.T(SS).A. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. Dismissed I.T(SS).A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. Dismissed I.T(SS).A. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. Dismissed I.T(SS).A. No. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. Dismissed Order pronounced in the Court on 19 th June, 2023 at Kolkata. Sd/- Sd/- (RAJPAL YADAV) (DR. MANISH BORAD) VICE PRESIDENT ACCOUNTANT MEMBER Kolkata, Dated 19/06/2023 *SC SrPs I.T(SS)A. No. 25/Kol/2023 Assessment Year: 2008-09 I.T(SS)A No. 26/Kol/2023 Assessment Year: 2009-10 I.T(SS)A. No. 27/Kol/2023 Assessment Year: 2010-11 M/s. Followel Engineering Ltd. I.T(SS)A. 28/Kol/2023 Assessment Year: 2010-11 M/s. Arunoday Holding Pvt. Ltd. I.T(SS)A No. 31/Kol/2023 Assessment Year: 2008-09 M/s. Supersonic Career Pvt. Ltd. I.T(SS)A No.. 32/Kol/2023 Assessment Year: 2010-11 M/s. Supersonic Career Pvt. Ltd. 61 आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant 2. ᮧ᭜यथᱮ / The Respondent 3. संबंिधत आयकर आयुᲦ / Concerned Pr. CIT 4. आयकर आयुᲦ)अपील (/ The CIT(A)- 5. िवभागीय ᮧितिनिध ,आयकर अपीलीय अिधकरण, कोलकाता/DR,ITAT, Kolkata, 6. गाडᭅ फाई/ Guard file. आदेशानुसार/ BY ORDER, TRUE COPY Assistant Registrar आयकर अपीलीय अिधकरण ITAT, Kolkata