The ACIT, 1(1), Indore V. Shri Girish Kumar Sharda, Indore

ITSSA 30/IND/2012

• Counselvise Citation: [2014] 121 COUNSELVISE.COM (IT) 9988 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2004-2005
• Appeal Filed On: 06-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRIDULA BAJPAI
• Keywords: Reopening of assessment; Unexplained cash credit; Bogus Share capital; Gift; Depreciation; Loose papers; Charitable institution; Rule of consistency; Question of law; Reasonable cause; Fair market value; Deemed dividend; Accommodation entries; Block assessment; Reassessment proceedings
• Section: 143(3); 153A; 14A; 133(6); 147; 131; 68; 148; 132

Judgement Text

PAGE 1 OF 79 IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : BP APS1072Q I.T.A.NO. 30 TO 33/ IND/201 2 A.Y. : 2004-05 TO 2007-08 ACIT, 1(1), INDORE. VS. SHRI GIRISH KUMAR SHARDA, 19, GUMASTA NAGAR, INDORE. APPELLANT RESPONDENT C.O.NOS. 19 TO 22 /IND/2013 (I.T.A.NOS.30 TO 33/IND/2013) A.Y. : 2004-05 TO 2007-08 SHRI GIRISH KUMAR SHARDA, 19, GUMASTA NAGAR, INDORE. VS. A CIT, 1(1), INDORE. APPELLANT RESPONDENT DEPARTMENT BY : SHRI MRIDULA BAJPAI, CIT DR ASSESSEE BY : SHRI PRAKASH JAIN, C. A. DATE OF HEARING : 28 . 1 0 .201 3 DATE OF PRONOUNCEMENT : 30 . 01 .201 4 GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 2 PAGE 2 OF 79 O R D E R PER R. C. SHARMA, A.M. THESE ARE THE APPEALS FILED BY THE REVENUE AND CROS S OBJECTIONS BY THE ASSESSEE AGAINST THE ORDER OF CIT (A) FOR THE ASSESSMENT YEARS 2004-05 TO 2007-08, IN THE MATTER OF ORDER PASSED U/S 153A/143(3) OF THE INCOME-TAX ACT, 1961. 2. COMMON GROUNDS HAVE BEEN TAKEN BY THE REVENUE IN RESPECT OF ADDITION DELETED BY THE LD.CIT(A), WHICH WERE MADE BY THE ASSESSING OFFICER U/S 68 OF THE INCOME-TAX A CT, 1961, AS WELL AS INTEREST THEREON. 3. THE FACTS OF THE CASE ARE THAT A SEARCH U/S 132 WAS CARRIED OUT AT THE ASSESSEES PREMISES ON 02.05.200 8. SIMULTANEOUSLY, THE SEARCH WAS ALSO CONDUCTED IN TH E GROUP CONCERN SHARDA COMMODITIES PVT.LTD. A BROKER IN COM MODITY EXCHANGE. THE SAID CONCERN HAD DERIVED PROFIT THROU GH TRANSACTION WITH VARIOUS COMMODITY EXCHANGES SUCH A S MULTI COMMODITY EXCHANGE OF INDIA LTD. (MCX), NATIONAL CO MMODITY & DERIVATIVE EXCHANGE LIMITED (NCDX) AND NATIONAL B OARD OF TRADE (NBOT) ON ITS OWN BEHALF AND ALSO ON BEHALF O F ITS GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 3 PAGE 3 OF 79 CLIENTS. THE ASSESSMENTS IN THE CASE OF GIRISH KUMA R SHARDA WERE ALSO FRAMED U/S 153A. THE ADDITIONS MADE PRIMA RILY RELATES TO THE UNEXPLAINED CASH CREDITS IN THE FORM OF UNSECURED LOAN FROM K.K.PATEL FINANCE LIMITED. EAST WEST FINVEST (I) LIMITED, PURVI FINVEST LIMITED AND TRIM URTIS FINVEST LIMITED. THE OTHER ITEMS OF ADDITION WERE DISALLOWA NCE OF INTEREST EXPENSES AND DISALLOWANCE OF EXPENSES U/S 14A. 4. BY THE IMPUGNED ORDER, THE LD. CIT(A) DELETED THE ADDITION AFTER HAVING THE FOLLOWING OBSERVATIONS :- 4. I HAVE ALREADY MENTIONED IN PARA 2.3 HEREIN ABOVE, THE VARIOUS ISSUES ON WHICH ADDITIONS ARE MADE IN VARIOUS CASES OF ASSESSEE GROUP UNDER APPEAL AS LISTED IN TABLE NO. 1. FOR THE SAKE OF BREVITY, I AM GIVING' MY FINDING ON EACH OF THESE ISSUES INVOLVED BEFORE GIVING MY DECISION ON THE VARIOUS GROUNDS RAISED BY THE APPELLANTS. 4.1 ISSUE NO.1: UNEXPLAINED SHARE CAPITAL, PREMIUM AND SHARE, APPLICATION MONEY GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 4 PAGE 4 OF 79 INTRODUCED AS THE SOURCE COULD NOT BE EXPLAINED BY THE ASSESSEE. THE AO HAS CONSIDERED THE SOURCE OF INTRODUCTION OF SHARE CAPITAL, PREMIUM AND / OR SHARE APPLICATION MONEY YEAR AFTER YEAR IN THE CASES OF LUNKAD GROUP AS UNEXPLAINED. THE TABLE NO.2 BELOW REFLECTS THE QUANTUM OF ADDITION MADE ON THIS ISSUE IN VARIOUS CASES OF THE GROUP. AS COULD BE SEEN FROM THE TABLE, IN SOME OF THE ASSESSMENT YEARS, INITIALLY THE ASSESSING OFFICER MADE ADDITION ON THIS ISSUE ON PROTECTIVE BASIS CONSIDERING THE MODUS OPERANDI ADOPTED BY THE GROUP IN PROVIDING ENTRIES TO THE BENEFICIARIES . LATER ON, THE SUCCESSOR ASSESSING OFFICER MADE THE ADDITION ON THE ISSUE IN OTHER ASSESSMENT YEARS ON SUBSTANTIVE BASIS, PRIMARILY ON THE GROUND THAT THE ASSESSEE HAS FAILED IN DISCHARGING THEIR ONUS TO EXPLAIN THE SOURCE OF SHARE CAPITAL, GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 5 PAGE 5 OF 79 PREMIUM AND 1 OR SHARE APPLICATION MONEY INTRODUCED IN RESPECTIVE YEARS. FOR READY REFERENCE, THE FINDING OF THE ASSESSING OFFICERS WHILE MAKING ADDITION (EITHER ON PROTECTIVE BASIS OR SUBSTANTIVE BASIS) ARE REPRODUCED HEREUNDER: 'FROM THE ASSESSMENT ORDER - LUNKAD MEDIA & ENTERTAINMENT LTD.. - IT-146/ 09-10. AY-2004-05. CIT{A)-II. INDORE . PARA C, PAGE 17- DURING THE YEAR THE ASSESSEE HAS RECEIVED SHARE CAPITAL AND SHARE PREMIUM OF RS.69,24,200/- AND RS.6,47,75,000/- FROM THE GROUP CONCERNS AND THESE AMOUNTS WERE FINALLY GIVEN ,AS ACCOMMODATION ENTRIES IN THE FORM OF UNSECURED LOAN AND SHARE APPLICATION MONEY. THE SOURCE OF SHARE CAPITAL AND SHARE PREMIUM IS CASH RECEIVED FROM BENEFICIARIES AND ROUTED THROUGH VARIOUS BANK ACCOUNTS. SINCE ASSESSEE IS IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES ONLY, THE AMOUNTS GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 6 PAGE 6 OF 79 ARE ADDED IN THE HANDS OF THE ASSESSEE ON PROTECTIVE BASIS IN THE INTEREST OF REVENUE U/S. 68 OF INCOME TAX ACT AND AS SUBSTANTIVE ADDITIONS HAS TO BE MADE IN THE HANDS OF THE BENEFICIARIES. (FROM THE ASSESSMENT ORDER - LUNKAD MEDIA & ENTERTAINMENT LTD., - IT-415/09-10, AY 2002-03. CIT(A)-I, INDORE 4.3.1 SCANNING OF SCHEDULE I OF THE BALANCE SHEET FURNISHED ALONGWITH THE ORIGINAL RETURN OF INCOME HAS REVEALED THAT DURING THE PREVIOUS YEAR 2001-02, THE ASSESSEE HAD SHOWN THE INTRODUCTION IN SHARE APPLICATION MONEY OF RS.1,41,37,000/- . 4.3.2 HERE IT IS NECESSARY TO MENTION THAT THE ASSESSEE DID NOT GIVE THE NAME OF THE PERSON(S) / CONCERNS AND ALSO THE PARTICULARS OF THE AMOUNT INTRODUCED IN THEIR NAMES UNDER THE HEAD SHARE CAPITAL IN THE RETURN. IN THIS CONTEXT, IT WO ULD BE NECESSARY TO MENTION THAT IT IS A SETTLED LAW THAT THE ONUS HEAVILY LIES UPON THE ASSESSEE TO ESTABLIS H GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 7 PAGE 7 OF 79 THE IDENTITY AND GENUINENESS OF THE TRANSACTION AND THE CREDIT WORTHINESS OF ENTRY CREDITED IN THE BOOK S OF ACCOUNTS. TAKING INTO ACCOUNT OF THE FACT THAT T HE ASSESSEE HAD NOT FURNISHED ANY MATERIAL EVIDENCE TO FURNISH THE REQUISITE DETAILS ESPECIALLY IN VIEW OF THE MODUS OPERANDI OF THE BUSINESS NOTICED FROM THE FACTS AS EMERGED FROM THE IMPOUNDED MATERIAL, I CONSIDER THE ENTIRE AMOUNT OF INTRODUCTION OF SHARE APPLICATION MONEY OF RS. 1,41,37,000/- AS UNEXPLAINED. HENCE, THE SAME IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE U/ S. 68 OF THE I.T.ACT. IN THE ASSESSMENT ORDERS FOR ALL THESE RELEVANT ASSESSMENT YEARS, THE AO HAS DETAILED THE MODUS OPERANDI ADOPTED BY THE ASSESSEE GROUP BASED ON THE NOTINGS ON THE IMPOUNDED LOOSE PAPERS AND DOCUMENTS. THE AO HAS ILLUSTRATED IN THE BODY OF THE ASSESSMENT ORDER THE NUMEROUS ENTRIES OF CASH RECEIPTS FROM VARIOUS PARTIES / M EDIATORS AND CASH PAYMENT / DEPOSIT IN BANK ACCOUNTS AS RECORDED IN GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 8 PAGE 8 OF 79 THE IMPOUNDED LOOSE PAPERS. THE ENTRIES PERTAINS TO THE PERIOD OF ABOUT ONE MONTH FROM 03.04.2006 TO 01.05.2006 . THE GROUP HAS BEEN MAINTAINING THEIR BANK ACCOUNTS OF DIFFERENT GROUP COMPANIES IN CENTURION BANK, HSBC BANK, IDBI BANK AND BANK OF RAJASTHAN. AFTER DEPOSITING THE CASH IN ANY OF T HE BANK ACCOUNT, THE FUNDS HAVE BEEN ROTATED FROM ONE BANK ACCOUNT OF THE GROUP COMPANY TO THE' BANK ACCOUNT OF OTHER GROUP COMPANIES IN THE FORM OF SHARE CAPITAL, SHARE PREMIUM AND SHARE APPLICATION MONEY WHICH WAS FINALLY UTILISED IN GIVING LOAN TO THE VARIOUS PARTIES / BENEFICIARIES AND / OR INVESTMENT BY WAY OF PROVIDING SHARE APPLICATION MONEY IN THE COMPANIES OF VARIOUS PARTIES / BENEFICIARIES. 4.1.1 THE AO HAS NOTED AS MANY AS 18 LUNKAD GROUP COMPANIES AND 5 ASSOCIATED COMPANIES. THE ADDITIONS HAVE BEEN MADE BY AND LARGE IN THE HANDS OF THOSE COMPANIES WHERE SHARE CAPITAL WAS GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 9 PAGE 9 OF 79 INTRODUCED ULTIMATELY WITH A VIEW TO TRANSFER THE FUNDS TO THE BENEFICIARIES. THE ASSESSING OFFICERS HAVE ALSO SCRUTINIZED SOME OF THE CASES OF BENEFICIARIES AND ADDED THE LOAN AND / OR SHARE APPLICATION MONEY RECEIVED BY THEM FROM LUNKAD GROUP OF COMPANIES. THIS EXERCISE, HOWEVER, HAS BEEN DONE ONLY IN SOME CASES WHERE ADS COULD LAY THEIR HANDS IN THE REGULAR COURSE WHILE SELECTION WAS MADE FOR SCRUTINY CASES. IN ONE OF THE GROUP, NAMELY, MITTAL GROUP OF CASES (M/ S. NARMADA EXTRUSION LTD. & OTHERS), THE ADDITION ON THIS ISSUE HAS BEEN MADE FOLLOWING SEARCH U/S. 132. THE VARIOUS ASSESSMENTS MADE IN THAT GROUP U/S. 153A PRIMARILY RELATES TO THE ADDITION FOR LOANS RECEIVED BY THEM FROM LUNKAD GROUP. THE OTHER CASES OF BENEFICIARIES, WHICH HAS COME ACROSS BEFORE ME DURING THE APPEAL PROCEEDINGS ARE M/ S. MITTAL APPLIANCES LTD., SANGHVI FOODS PVT. LTD., INDUS GLOBAL EDUCATION & WELFARE SOCIETY, M/ S. MAA GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 10 PAGE 10 OF 79 NARMADA ENTERPRISES AND M/ S. MAHAKAAL TRADERS. 4.1.2 THE MODUS OPERANDI AS DISCUSSED IN THE ASSESSMENT ORDERS OF LUNKAD GROUP HAVE BEEN REPEATEDLY. DESCRIBED IN THE ASSESSMENT ORDERS OF THE BENEFICIARIES ALSO BECAUSE THE BASIS OF ADDITIO N HAS BEEN ULTIMATELY THE RESULT OF SURVEY ACTION MAD E IN THE CASE OF LUNKAD GROUP. DURING THE APPEAL PROCEEDINGS BEFORE ME, IN CASES OF MOST OF THESE BENEFICIARIES, THE PLEA HAS BEEN TAKEN THAT THEY HA D TAKEN GENUINE LOAN AND/OR OBTAINED GENUINE SHARE APPLICATION MONEY FROM LUNKAD GROUP OF COMPANIES AND IN SUPPORT THEREOF, CONFIRMATION LETTERS OF LUNKAD GROUP HAVE BEEN FILED. IN THE APPEAL PROCEEDINGS OF M/S. NARMADA EXTRUSION LTD. AND OTHER CASES OF MITTAL GROUP, PLEA HAS BEEN TAKEN THAT IN THE SEARCH PROCEEDINGS U/S. 132 IN THEIR CASES, NO INCRIMINATING DOCUMENTS HAVE BEEN FOUND IN SUPPORT OF DEPARTMENT'S STAND THAT THE LOAN OBTAINED BY THEM FROM. LUNKAD GROUP WERE NOT GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 11 PAGE 11 OF 79 GENUINE AND THAT THE SAME WAS ACCOMMODATION ENTRIES IN LIEU OF EQUIVALENT AMOUNT PAID BY THEM I N CASH TO THE LUNKAD GROUP. DURING THE APPEAL PROCEEDINGS IN THE CASE OF M/S. MITTAL APPLIANCES LTD.,[IT-141/09-10, CIT(A)-II, INDORE] AND M/S. SANGHVI FOODS PVT. LTD., [IT-409/09-10, CIT(A)-II, INDORE] IT IS OBSERVED THAT THE AO HAD EVEN EXAMINED SHRI ANIL SAINI, DIRECTOR OF K.K. PATEL FINANCE LTD., (ONE OF THE ASSOCIATES OF LUNKADS) AN D SHRI SARAD DARAK, DIRECTOR OF TRIMURTI FINVEST PVT. LTD. AND POORVI FINVEST PVT. LTD. BOTH SHRI ANIL SA INI AND SHRI SARAD DARAK COULD NOT EXPLAIN THE SOURCES OF THE BANK DEPOSITS IN THE ACCOUNTS OF THOSE COMPANIES SATISFACTORILY. THE BANK ACCOUNTS OF THESE THREE COMPANIES (I.E. K.K. PATEL FINANCE LTD. , TRIMURTI FINVEST PVT. LTD. AND POORVI . FINVEST PVT . LTD.) ARE MAINTAINED IN THE INDORE SWAYAM SIDDH MAHILA CO-OPERATIVE BANK WHEREBY FUNDS WERE TRANSFERRED TO MITTAL APPLIANCES LTD., AND SANGHVI GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 12 PAGE 12 OF 79 FOODS PVT. LTD. PRIOR TO TRANSFER OF FUND, THE ACCOUNT REFLECTS DEPOSIT ENTRIES (BY CLEARING). WHE N SPECIFIC QUESTION WAS ASKED BY THE AD TO SHRI ANIL SAINI TO EXPLAIN SUCH CREDIT ENTRIES, HE FIRST SAID IT WAS SHARE CAPITAL, THEN HE SAID IT MIGHT BE LOANS AND ADVANCES WHICH MIGHT HAVE SQUARED UP. SIMILARLY, SHRI SARAD DARAK ALSO FAILED TO EXPLAIN THE SOURCES OF THE DEPOSIT IN THE BANK ACCOUNT. IN THE CIRCUMSTANCES, THE ASSESSING OFFICER, ADDL. CIT , RANGE 3, INDORE GAVE HIS FINDINGS IN THE RELEVANT ASSESSMENT ORDERS DATED 20.12.2007 WHICH IS REPRODUCED HERE AS UNDER: 1. 'THUS, THE MODUS OPERANDI IS VERY CLEAR AND SIMPLE. THE WHOLE GROUP [LUNKAD GROUP] OPENED A SERIES OF BANK ACCOUNTS IN THE NAME OF COMPANIES WHOSE TAXABLE INCOME IS PEANUT. THEY STARTED DEPOSITING CASH IN B ANK ACCOUNTS [THIS IS CONFIRMED WITH THE HELP OF IMPOUN DED DOCUMENTS DURING THE COURSE OF SURVEY PROCEEDINGS I N THE LUNKAD GROUP AND AS REFERRED EARLIER). AFTER GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 13 PAGE 13 OF 79 DEPOSITING CASH IN ONE ACCOUNT, TO GIVE IT A COLOUR OF GENUINE TRANSACTION, THROUGH CHEQUE A WEB IS CREATE D GIVING MULTIPLE ENTRIES IN MULTIPLE BANK ACCOUNTS A ND SHOWN IN THE RESPECTIVE COMPANIES EITHER, SHARE CAP ITAL, SHARE PREMIUM OR UNSECURED LOANS. BUT WHEN ONE TRIE D TO SEE THESE TRANSACTIONS IN A TOTALITY, IT APPEARS THAT IT IS A FACADE TO BRING THE UNACCOUNTED CASH AVAILABLE IN THE HANDS OF VARIOUS PERSONS IN THE SYSTEM. ' 4.1.3 IN THE BACKGROUND OF THE ABOVE FACTS, THE BASIC ISSUE BEFORE ME IN DECIDING ALL THESE APPEALS OF LUNKAD GROUP AS WELL AS BENEFICIARIES HAS BEEN AS TO WHERE ULTIMATELY THE ADDITION SHOULD BE SUSTAINED. UNDOUBTEDLY, THE LUNKAD GROUP HAS FAILED IN DISCHARGING ITS ONUS TO EXPLAIN THE SOURC E OF HUGE SHARE CAPITAL INTRODUCED YEAR AFTER YEAR IN THEIR GROUP COMPANIES. THE DOCUMENTS IMPOUNDED DURING THE SURVEY IN THE LUNKAD GROUP OF CASES, THOUGH, FOR THE LIMITED PERIOD ONLY, DO SUGGEST THE MODUS OPERANDI ADOPTED BY THEM IN PROVIDING GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 14 PAGE 14 OF 79 ENTRIES TO THE BENEFICIARIES. BUT THIS HAS NOT BEEN ACCEPTED BY THE LUNKAD GROUP SO FAR. RATHER, THEY (LUNKAD GROUP) HAVE ISSUED CONFIRMATORY LETTERS TO THE VARIOUS BENEFICIARIES IN SUPPORT OF HAVING GIVE N GENUINE LOAN AND SHARE APPLICATION MONEY. HAD THEY ACCEPTED THE MODUS OPERANDI OF PROVIDING ONLY ENTRIES, THEN THE REQUIRED RECOURSE WOULD HAVE BEEN CONFIRMING THE ADDITIONS MADE IN THE HANDS OF BENEFICIARIES. BUT THIS HAS NOT BEEN DONE SO. RATHER THE LUNKAD GROUP HAD TRIED TO RE-INFORCE THE STAND OF BENEFICIARIES BY WAY OF ISSUING CONFIRMATORY LETTERS TO THEM BUT IN THEIR OWN CASES THEY HAVE UTTERLY FAILED TO DISCHARGE THE PRIMARY ONUS OF EXPLAINING THE SOURCE. THEREFORE, IN THE CIRCUMSTANCES, THE ADDITIONS MADE ON THIS ISSUE DESERVE TO BE SUSTAINED ON SUBSTANTIVE BASIS IN THE CASES OF LUNKAD GROUP OF COMPANIES ITSELF.' 4.1.4 IN THE CONTEXT OF THE FACTS AND FINDINGS AS G IVEN IN THE LUNKAD GROUP OF CASES, IT HAS BEEN HELD THAT GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 15 PAGE 15 OF 79 THE LUNKAD GROUP HAD FAILED IN DISCHARGING ITS ONUS TO EXPLAIN THE SOURCE OF HUGE SHARE CAPITAL INTRODUCED YEAR AFTER YEAR IN THEIR GROUP COMPANIES . THE DOCUMENTS IMPOUNDED DURING THE SURVEY IN THE LUNKAD GROUP OF CASES, THOUGH, FOR THE LIMITED PERIOD ONLY, DO SUGGEST THE MODUS OPERANDI ADOPTED BY THEM IN PROVIDING ENTRIES TO THE BENEFICIARIES. BUT THIS HAS NOT BEEN ACCEPTED BY TH E LUNKAD GROUP SO FAR. RATHER, THEY (LUNKAD GROUP) HAVE ISSUED - CONFIRMATORY LETTERS TO THE VARIOUS BENEFICIARIES IN SUPPORT OF HAVING GIVEN GENUINE LOAN AND SHARE APPLICATION MONEY. HAD THEY ACCEPTED THE MODUS OPERANDI OF PROVIDING ONLY ENTRIES, THEN THE REQUIRED RECOURSE WOULD HAVE BEEN CONFIRMING THE ADDITIONS MADE IN THE HANDS OF BENEFICIARIES. BUT THIS HAS NOT BEEN DONE SO. RATHE R THE LUNKAD GROUP HAD TRIED TO RE-INFORCE THE STAND OF BENEFICIARIES BY WAY OF ISSUING CONFIRMATORY LETTERS TO THEM BUT IN THEIR OWN GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 16 PAGE 16 OF 79 CASES THEY HAVE UTTERLY FAILED TO DISCHARGE THE PRIMARY ONUS OF EXPLAINING THE SOURCE. THEREFORE, IN THE CIRCUMSTANCES, THE ADDITIONS MADE ON THIS ISSUE WERE SUSTAINED ON SUBSTANTIVE BASIS IN THE CASES OF LUNKAD GROUP OF COMPANIES ITSELF. CONFIRMING ADDITION ON THE SAME ISSUE IN THE HANDS OF BENEFICIARIES WOULD AMOUNT DOUBLE ADDITION [THOUGH ON DIFFERENT HANDS]. FURTHER IN THE FACTS OF THE CASE, THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF METACHEM INDUSTRIES LIMITED SUPPORTS THE GROUNDS OF THE ASSESSEE. THE FINDINGS GIVEN IN THE LUNKAD GROUP ARE ALSO APPLICABLE IN THE CASES OF THEIR ASSOCIATE COMPANIES PARTICULARLY TRIMURTI FINVEST LTD AND EAST WEST FINVEST INDIA LIMITED. IT IS NOTED THAT THOUGH THE AO CONCERNED IN THE CASE OF THIS ASSESSEE TRUST HAS TREATED K.K. PATEL FINANCE LTD AS ASSOCIATE OF LUNKAD GROUP, BUT NO GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 17 PAGE 17 OF 79 ADVERSE FINDING WERE GIVEN IN THE CASES OF K K. PATEL FINANCE LTD [ ASSESSED WITH ACIT-5(L) INDORE] BY THE RESPECTIVE ASSESSING OFFICER AS REGARDS TO SOURCE OF THEIR- SHARE CAPITAL. ACCORDINGLY, KEEPING IN VIEW THE FINDINGS WHICH HAS BEEN GIVEN BY ME IN LUNKAD GROUP OF CASES AND FOLLOWING THE PRINCIPAL OF CONSISTENCY, THE ADDITION MADE U/ S 68 IN RESPECT OF LOANS TAKEN FROM LUNKAD GROUP OF COMPANIES AND THEIR ASSOCIATES AS LISTED IN TABLE NO.4, CAN NOT BE SUSTAINED IN THE CASES OF THIS BENEFICIARY ASSESSEE TRUST.' 4.2.3 AS MENTIONED EARLIER, THE RELEVANT COMPANIES FROM WHICH UNSECURED LOAN WAS OBTAINED BY THE PRESENT ASSESSEE (SHRI GIRISH KUMAR SHARDA) ARE K K PATEL FINANCE LTD, PURVI FINVEST LTD , TRIMURTI FINVEST PVT. LTD., EAST WEST FINVEST (I) LTD. ALL THESE COMPANIES ' GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 18 PAGE 18 OF 79 ARE AMONGST LUNKAD GROUP OF COMPANIES & THEIR ASSOCIATES, WHEREFROM SHARE CAPITAL AND /OR UNSECURED LOAN WAS OBTAINED BY THE VARIOUS BENEFICIARIES (INCLUDING THE ASSESSEE). IN VIEW OF THE DETAILED FINDINGS MADE IN THE APPELLATE ORDER DATED 16.03.2011 IN THE CASE OF LUNKAD MEDIA & ENTERTAINMENT LTD IT- 415/09-10 FOR A.Y. 2002-03, THE ADDITIONS WERE ALSO SUSTAINED IN OTHER CASES OF LUNKAD GROUP AND ASSOCIATES SUCH AS LUNKAD SECURITIES LTD., RAJVEER MKTG. & INVT. LTD, PARKSONS SECURITIES LTD, WEST END MGT. TECHNOLOGIES PVT. LTD. IT WAS HELD THEREIN THAT THE LUNKAD GROUP HAD CATEGORICALLY FAILED IN DISCHARGING ITS ONUS TO EXPLAIN THE SOURCE OF HUGE SHARE CAPITAL INTRODUCED YEAR AFTER YEAR IN THEIR GROUP COMPANIES; THAT THE DOCUMENTS IMPOUNDED DURING THE SURVEY IN THE LUNKAD GROUP OF CASES, THOUGH FOR THE LIMITED PERIOD GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 19 PAGE 19 OF 79 ONLY, HAD SUGGESTED THE MODUS OPERANDI ADOPTED BY THEM IN PROVIDING ENTRIES TO THE BENEFICIARIES; BUT IN VIEW OF THE STAND TAKEN BY THE LUNKAD GROUP, [WHO HAD RATHER ISSUED CONFIRMATORY LETTERS TO THE VARIOUS BENEFICIARIES IN SUPPORT OF HAVING GIVEN GENUINE LOAN AND SHARE APPLICATION MONEY ON THE ONE HAND AND HAD FAILED UTTERLY TO DISCHARGE THE PRIMARY ONUS OF EXPLAINING THE SOURCE IN THEIR OWN CASES], ADDITION WAS TO BE SUSTAINED IN THE HANDS OF LUNKAD GROUP OF COMPANIES. IT WAS ALSO OBSERVED THEREIN THAT HAD THE LUNKAD GROUP ACCEPTED GIVING ENTRIES TO THOSE BENEFICIARIES THEN I WOULD HAVE SUSTAINED THE ADDITION IN THE CASE OF BENEFICIARIES. BUT SINCE THAT WAS NOT DONE SO AND THE LUNKAD GROUP RATHER HAD ATTEMPTED TO REINFORCE THE STAND OF BENEFICIARIES SAYING THAT THE UNSECURED LOAN AND SHARE CAPITAL GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 20 PAGE 20 OF 79 GIVEN TO THE BENEFICIARIES WERE NO LONGER THE ACCOMMODATION ENTRIES BUT RATHER GENUINE TRANSACTIONS, I HAD TAKEN DECISION TO GRANT RELIEF IN THE CASE OF BENEFICIARIES BECAUSE OTHERWISE THAT WOULD HAVE AMOUNTED TO DOUBLE ADDITION ON THE SAME ITEM THOUGH ON DIFFERENT HANDS. IT IS NOTED THAT THE RELEVANT APPEALS IN THE CASE OF PURVI FINVEST PVT. LTD, EAST WEST FINVEST (I) LTD AND TRIMURTI FINVEST PVT. LTD COULD NOT BE DECIDED DUE TO CHANGE IN THE JURISDICTION (APPEALS WERE TRANSFERRED TO BILASPUR), BUT THE FACTS ARE THAT THESE COMPANIES WERE ALSO THE ASSOCIATES OF LUNKAD GROUP AND THEREFORE THE FINDING GIVEN IN THE CASE OF LUNKAD MEDIA & ENTERTAINMENT LTD IS SQUARELY APPLICABLE IN THE CASES OF PURVI FINVEST PVT. LTD., EAST WEST FINVEST (I) LTD., AND TRIMURTI FINVEST PVT. LTD. ALSO. FROM MY APPELLATE ORDER IN THE CASE OF AGRAWAL GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 21 PAGE 21 OF 79 CHARITABLE TRUST, IT-372/2009-10, IT IS NOTED THAT NO ADVERSE FINDINGS HAD BEEN GIVEN BY THE ASSESSING OFFICER CONCERNED IN THE CASE OF K.K PATEL FINANCE LTD (ASSESSED WITH ACIT 5(1), INDORE] AS REGARDS TO THE SOURCE OF THEIR SHARE CAPITAL. ACCORDINGLY, KEEPING IN VIEW THE FINDINGS WHICH HAVE BEEN GIVEN BY ME IN THE LUNKAD GROUP OF CASES AS WELL AS IN THE CASE OF NARMADA EXTRUSION LTD IT-385/08-09 AND THE CASE RELIED UPON BY THE ASSESSEE I.E. AGRAWAL CHARITABLE TRUST, IT-372/09- 10 (A.Y.2007-08 ORDER DATED 14.06.2011) AND FOLLOWING THE RULE OF CONSISTENCY, THE ADDITION MADE U/S. 68 IN RESPECT OF THE LOANS TAKEN FROM THE SAID COMPANIES I.E. K. K. PATEL FINANCE LTD, PURVI FINVEST LTD . TRIMURTI FINVEST PVT. LTD., EAST WEST FINVEST (I) LTD, AS LISTED IN TABLE 2 ABOVE, CANNOT BE SUSTAINED IN THE CASES OF THIS BENEFICIARY ASSESSEE ALSO. THE AD IS DIRECTED TO DELETE THE ADDITION. ACCORDINGLY, THE ADDITION OF RS.1,35,50,000/- (IN A.Y.2004-05), GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 22 PAGE 22 OF 79 RS.18,00,000/- (IN A.Y.2005-06) AND RS.15,00,000/- (IN A.Y. 2006-07) STANDS DELETED. 4.3 GROUND NO.(3): THROUGH THIS GROUND, THE ASSESSEE HAS CHALLENGED THE ADDITION ON ACCOUNT OF DISALLOWANCE OF INTEREST EXPENSES AND DISALLOWANCE U/S 14A FOR RS.5,75,371/- & RS.1,00189/- RESPECTIVELY. 4.3.1 AS REGARDS TO DISALLOWANCE OF INTEREST OF RS.5,75,371/-, IT HAS BEEN SUBMITTED THAT THE DISALLOWANCE IS BASED ON THE ADDITION OF CASH CREDITS U/ S.68. I HAVE ALREADY DELETED THE ADDITION ON ACCOUNT OF CASH CREDITS (REFER PARA 4.2) IN VIEW THEREOF, DISALLOWANCE OF INTEREST CANNOT BE SUSTAINED. AS A RESULT, THE ADDITION OF RS. 5,75,371/- ON ACCOUNT OF DISALLOWANCE OF INTEREST STANDS DELETED. GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 23 PAGE 23 OF 79 5. AGAINST THE ABOVE ORDER OF CIT(A), REVENUE IS IN AP PEAL BEFORE US. ASSESSEE HAS ALSO FILED CROSS OBJECTION. IN THE CROSS OBJECTION, THE ASSESSEE IS AGGRIEVED FOR ADDITION M ADE U/S 153A, WHEN NO INCRIMINATING DOCUMENTS RELATING TO T HE ASSESSMENT YEAR IN QUESTION WAS FOUND AND SEIZED FR OM THE PREMISES OF THE ASSESSEE. 6. THERE WAS MARGINAL DELAY IN FILING THE CROSS OBJECT ION. KEEPING IN VIEW THE REASONABLE CAUSE FOR DELAY, IN THE INTEREST OF JUSTICE WE CONDONE THE DELAY AND CROSS OBJECTION S ARE ALSO HEARD ON MERIT. 7. THE ASSESSEE HAS FILED THE WRITTEN SYNOPSIS OF THE ARGUMENTS, WHICH READS AS UNDER :- WITH REFERENCE TO THE HEARING OF ABOVE REFERRED C ROSS OBJECTIONS WE HAVE TO SUBMIT THAT THE SHORT FACTS O F THE CASE ARE THAT A SEARCH AND SEIZER OPERATION U/S 132 WAS CARR IED OUT AT THE ASSESSEE'S PREMISES AND COMPANY SHARDA COMMODIT IES PVT. LTD., OF WHICH ASSESSEE IS DIRECTOR ON 02.05.2008. NO INCRIMINATING DOCUMENT WAS FOUND AND SEIZED DURING THE COURSE OF SEARCH. CONSEQUENT TO THE SEARCH NOTICES RELATED 153(A) WAS GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 24 PAGE 24 OF 79 ISSUED IN RESPECT OF ALL THE YEARS AND FOLLOWING AD DITION WERE MADE:- S.NO. PARTICULAR ASSESSMENT YEAR 2004-05 ASSESSMENT YEAR 2005-06 ASSESSMENT YEAR 2006-07 ASSESSMENT YEAR 2007-08 01. UNEXPLAINED CASH CREDITS 1,35,50,000/- 18,00,000/- 15,00,000/- 02. DISALLOWANCE OUT OF INTEREST 5,75,371/- 30,24,946/- 28,30,354/- 10,91,968/- 03. DISALLOWANCE 14A 1,00,189/- 1,27,806/- 1,02,645/- 17,988/- AGGRIEVED BY THE ORDER OF THE LD. A.O. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD.CIT(A) WHO DELETED THE ADDITIO N MADE ON ACCOUNT OF UNEXPLAINED CASH CREDITS AND DISALLOWANC E OF INTEREST AND CONFIRMED THE DISALLOWANCE U/S 14A IN RESPECT OF ALL THE YEARS. AGGRIEVED BY THE ORDER OF THE LD.CIT(A) THE DEPARTM ENT FILED APPEALS FOR ALL THE ASSESSMENT YEARS BEARING ITA NO .SS 30 TO 33/IND/2012 AND ASSESSEE FILED CROSS OBJECTIONS IN RESPECT OF ALL THESE YEARS. IN ALL THE YEARS ASSESSEE HAS TAKE N A COMMON LEGAL GROUND WHICH IS REPRODUCE HEREIN UNDER:- GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 25 PAGE 25 OF 79 '01. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD.A.O ERRED IN COMPLETING THE ASSESSMENT U/S 153A READ WITH SECTION 143(3) OF THE I.T.ACT AND MA KING ADDITION U/S 68 ON ACCOUNT OF CASH CREDIT AND INTER EST THEREON EVEN WHEN NO INCRIMINATING DOCUMENT RELATIN G TO THE ASSESSMENT YEAR IN QUESTION IS FOUND AND SEI ZED FROM THE PREMISES OF THE ASSESSEE.' TO DECIDE THE ABOVE GROUND IT IS ESSENTIAL TO DEAL WITH THE FACTS OF THE CASE IN BRIEF WHICH ARE AS UNDER:- 1. THAT THE ASSESSEE FILED ORIGINAL RETURN OF INCOM E FOR THE ABOVE ASSESSMENT YEARS WITHIN THE STATUTORY TIME LI MIT AND THE TIME FOR ISSUE OF NOTICE U/S 143(2) WAS EXPIRED FOR THE ASSESSMENT YEAR 2004-05 TO 2006-07 WHICH WILL BE CL EAR FROM THE FOLLOWINGS:- S.NO. A.Y. DATE OF FILING OF RETURN OF INCOME DATE UPTO WHICH NOTICE U/S 143(2) TO BE ISSUED WHETHER NOTICE U/S. 143(2) WAS ISSUED 01. 2004-05 01.11.2004 30.11.2005 NO GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 26 PAGE 26 OF 79 02. 2005-06 31.10.2005 31.10.2006 YES, ASSESSMENT COMPLETED U/S 143(3) ON 10.12.2007 I.E. PRIOR TO SEARCH. COPY OF ORDER ENCLOSED. 03. 2006-07 31.10.2006 31.10.2007 NO 04. 2007-08 31.07.2007 30.09.2008 NO 2. A SEARCH AND SEIZER OPERATION U/S 132 OF THE I.T.AC T., WAS CARRIED AT THE PREMISES OF THE ASSESSEE ON 02.05.20 08. THUS THE TIME LIMIT FOR ISSUANCE OF NOTICE U/S 143( 2) IN RESPECT OF ASSESSMENT YEAR 2004-05 & 2006-07 WAS EXPIRED ON THE DATE OF SEARCH AND THE ASSESSMENT FO R THE A.Y. 2005-06 WAS COMPLETED PRIOR TO SEARCH AND NO N OTICE IN RESPECT OF ASSESSMENT YEAR 2007-08 WAS ISSUED TI LL THE DATE OF SEARCH I.E. 02.05.2008 OR TILL THE LAST DUE DATE FOR SELECTION I.E., 30.09.2008. 3. FROM THE ABOVE FACTS TWO ISSUES ARISES IN THESE APPEALS WHICH ARE AS UNDER :- (I) DURING THE SEARCH OPERATIONS NO INCRIMINATING DOCUMENT WAS FOUND AND SEIZED, WHICH COULD INDICATE ANY UNDISCLOSED INCOME. GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 27 PAGE 27 OF 79 (II) THE ONLY ADDITION MADE BY THE A.O. WAS ON ACC OUNT OF CASH CREDIT U/S 68, INTEREST THEREON AND DISALLOWAN CE U/S 14A . ON THESE TWO ISSUES THE SPECIAL BENCH OF ITAT IN TH E CASE OF ALL CARGO GLOBAL LOGISTICS LTD VS. DCIT REPORTED IN 137 ITD 287 (MUM-SB) AND VARIOUS BENCHES OF TRIBUNAL AND SO ALS O DELHI HIGH COURT IN THE CASE OF ANIL KUMAR BHATIA AFTER A NALYZING SECTION 153A AND SO ALSO CBDT CIRCULAR HELD THAT NO ADDITION COULD BE MADE IN ASSESSMENT U/S 153A / 143 (3) WHEN NO INCRIMINATING DOCUMENT WAS FOUND AND SEIZED DURING THE COURSE OF SEARCH , WHICH COULD INDICATE ANY UNDISCLOSED IN COME IN THE COMPLETED ASSESSMENT WHICH ARE NOT ABATE. THE SAME WILL BE CLEAR FROM THE FOLLOWINGS:- (I) SECTION 153A AS INTRODUCED IN THE STATUTE W.E. F 01.06.2005, WHEREIN THE SECTION STARTS WITH THE NON OBSTANTE PHRASE 'NOTWITHSTANDING ... ', THEREFORE, AS SOON AS THE SEARCH IS CONCLUDED, THE AO HAVING JURISDICT ION OVER THE ASSESSEE, A JURISDICTION IS CAST UPON THE AO TO ISSUE NOTICES UNDER SECTION 153A(1), FOR THE PRECEDING SI X YEARS, GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 28 PAGE 28 OF 79 CALLING UPON THAT PERSON TO FILE ITS RETURNS. AS SO ON AS THE NOTICES ARE ISSUED, DUE PROCESS OF LAW SHALL BEGIN AND AO AND THE ASSESSEE ARE REQUIRED TO FOLLOW THE SAME, W HICH SHALL CULMINATE WITH THE AO TO ASSESS OR REASSESS T HE TOTAL INCOME OF THE SEARCHED PERSON IN ALL THE SIX YEARS IN QUESTION. WHILE CASTING THIS JURISDICTION OVER THE AO, THE LEGISLATURE, TO REMOVE ALL THE DIFFICULTIES WITH RE GARD TO THE MULTIPLICITY OF PROCEEDINGS PENDING ON THE DATE OF INITIATION OF SEARCH, THROUGH 2 ND PROVISO, EXPUNGED ALL THOSE PROCEEDINGS, SO THAT THE ASSESSEE AND THE AO SHALL, AS PER CLAUSE(II), ASSESS OR REASSESS THE TOTAL INCOME OF THE SEARCHED PERSON. THIS BARRIER HAS BEEN SET UP BY TH E LEGISLATURE ONLY WITH REGARD TO PROCEEDINGS THAT WE RE FOUND PENDING BEFORE THE AO ON THE DATE OF SEARCH. THEREF ORE, A PROCEEDING WHICH IS PENDING, ONLY THOSE PROCEEDINGS SHALL GET ABATED. IN OTHER WORDS, ANY PROCEEDING THAT HAS REACHED ITS FINALITY SHALL NOT BE DISTURBED, AS PER THE CLARIFICATION ISSUED BY THE CBDT, THROUGH CIRCULAR NO. 7, DATED 05.09.2003 (SUPRA), UNLESS THERE ARE MATERIAL S GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 29 PAGE 29 OF 79 FOUND, INDICATING EXISTENCE OF INCOME EMBEDDED IN T HOSE INCRIMINATING DOCUMENT(S). (II) BY MAKING ABOVE ANALYSIS ON THE ABOVE FACTS T HE HON'BLE SPECIAL BENCH IN ALL CARGO GLOBAL LOGISTICS HELD AS UNDER.- FACTS OF THE CASE NARRATED IN PARA 5 WHICH READS AS UNDER.- '5. THE APPEALS INVOLVED ASSESSMENT YEAR 2004-05 TO 2009-10. THE FACTS ARE SUMMARIZED HERE, IN THE PREVIOUS YEAR S RELEVANT TO ASSESSMENT YEAR 2004-05 TO 2008-09, THE ASSESSEE HAD BEEN OPERATING THE CFS AT JAWAHAR LAL NEHRU PORT TR UST. SUCH CFS WAS ALSO OPERATED AT CHENNAI IN THE PREVIOUS YE AR RELEVANT TO ASSESSMENT YEAR 2009-10. THE FACTS FOR ASSESSMENT YEAR 2004-05 WAS COMPLETED ON 30 TH DECEMBER 2006 UNDER SECTION 143(3) OF THE ACT. THE RETURN FO R ASSESSMENT YEAR 2005-06 WAS PROCESSED ON 21 ST SEPTEMBER, 2006 UNDER SECTION 143(1) RETURN ASSESSMENT YEAR 20 06-07 WAS ALSO PROCESSED ON 27 TH NOVEMBER, 2007 UNDER SECTION 143(1). THUS NO PROCEEDING WAS PENDING FOR THESE YE ARS ON 10 TH JULY, 2009 WHEN SEARCH WAS CONDUCTED UNDER SECTION 132(1) . IN THE ORIGINAL PROCEEDINGS FOR ASSESSMENT YEAR 200 4-05, THE GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 30 PAGE 30 OF 79 CLAIM OF THE ASSESSEE UNDER SECTION 80-IA(4) WAS SC RUTINIZED BY ISSUING A QUESTIONNAIRE DATED 25 TH MAY, 2006. INFORMATION AND CLARIFICATION WERE SOUGHT AND VIDE POINT NO. 20 (A), THE ASSESSEE WAS REQUIRED TO FURNISH A NOTE ON THE UNIT WITH REFERENCE TO ITS COMMISSIONING AND CAPITAL WORK-IN- PROGRESS SHOWN IN THE BALANCE SHEET. THIS POINT WAS SPECIFIC ALLY RESPONDED TO IN LETTER DATED 6 TH AUGUST, 2006, IN WHICH IT WAS SUBMITTED THAT THE CFS ACTIVITY COMMENCED FROM 7 TH APRIL, 2003. A NOTIFICATION HAD BEEN RECEIVED FROM THE COM MISSIONER OF CUSTOMS (IMPORT), JAWAHAR CUSTOMS HOUSE BEARING NO.3 OF 2003 DATED 28 TH FEB, 2003, CLASSIFYING THE AREA OF 3,282 SQUARE MTRS. AS 'CUSTOMS AREA' FOR THE PURPOSE OF S TORAGE, STUFFING/DE-STUFFING AND CLEARANCE OF EXPORT/IMPORT CARGO. SUBSEQUENTLY THE COMMISSIONER HAS NOTIFIED THE SAME AREA AS 'CUSTOMS AREA' FOR EXPORT CARGO AND THE ASSESSEE HA S BEEN CERTIFIED AS A CUSTODIAN FOR CARGO UNDER CUSTOMS AC T, 1962, COPIES OF RELEVANT NOTIFICATIONS WERE ALSO ENCLOSED . ON THE ABOVE FACTS THE HONBLE SPECIAL BENCH IN PAR A 58 HELD AS UNDER.- GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 31 PAGE 31 OF 79 '58. THUS QUESTION NO.1 BEFORE US IS ANSWERED A) AS UNDER: (A) IN ASSESSMENTS THAT ARE ABATED, THE A.O. RETAI NS THE ORIGINAL JURISDICTION AS WELL AS JURISDICTION CONFE RRED ON HIM UNDER SECTION 153A FOR WHICH ASSESSMENTS SHALL BE MADE FOR EACH OF THE SIX ASSESSMENT YEARS SEPARATEL Y: (B) IN OTHER CASES, IN ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT UNDER SECTION 153A WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL, . WHICH IN THE CONTEXT OF RELEVANT PROVIS IONS MEANS. (I) BOOKS OF ACCOUNT, OTHER DOCUMENTS, FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINA L ASSESSMENT, AND (I) UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH. (III) THEREFORE WHAT EMERGES IS THAT NO DOUBT 153A SHALL BE INITIATED, AND ALL THE SIX YEARS SHALL BECOME SUBJE CT MATTER OF ASSESSMENT UNDER SECTION 153A. THE AO SHALL GET THE FREE HAND, THOUGH ABATEMENT, ONLY ON THE PROCEEDING S THAT ARE / IS PENDING. IT IS, IN THESE ABATED PROCEEDING S, AO CAN GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 32 PAGE 32 OF 79 FRAME THE ASSESSMENT(S) AFRESH. BUT IN A CASE OR IN A CIRCUMSTANCES WHERE THE PROCEEDINGS HAVE REACHED FINALITY, ASSESSMENT UNDER SECTION 153A READ WITH 143 (3) HAS TO BE MAD AS WAS ORIGINALLY MADE/ ASSESSED AND IN CASE WHERE CERTAIN INCRIMINATING DOCUMENTS HAVE BEE N FOUND INDICATING UNDISCLOSED INCOME, THEN THE ADDIT ION SHALL ONLY BE RESTRICTED TO THOSE DOCUMENTS/INCRIMI NATING MATERIAL, AND CLUBBED ONLY TO THE ASSESSMENT FRAMED ORIGINALLY, AS THE LAW DOES NOT PERMIT THE AO TO DI STURB ALREADY CONCLUDED ISSUES, WHETHER IT PERTAINED TO A NY OTHER INCOME OR EXPENDITURE OR DEDUCTIONS AS ALSO OBSERVED BY THE HON'BLE DELHI HIGH COURT IN THE CAS E OF ANIL KUMAR BHATIA. '18. A PERUSAL OF SECTION 153A SHOWS THAT IT STARTS WITH A NON OBSTANTE CLAUSE RELATING TO NORMAL ASSESSMENT, PROCEDURE WHICH IS COVERED BY SECTIONS 139, 147, 24 8, 249, 151 AND 153 IN RESPECT OF SEARCHES MADE AFTER 31.5.2003. THESE SECTIONS, THE APPLICABILITY OF WHI CH .HAS BEEN EXCLUDED, RELATE TO RETURNS, ASSESSMENT AND GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 33 PAGE 33 OF 79 REASSESSMENT PROVISIONS. PRIOR TO, THE INTRODUCTION OF THESE THREE SECTIONS, THERE WAS CHAPTER XIV-B OF THE ACT, WHICH TOOK CARE OF THE ASSESSMENT TO BE MADE IN CASES OF SEARCH & SEIZURE. SUCH AN ASSESSMENT WAS POPULARLY KNOWN A S 'BLOCK ASSESSMENT' BECAUSE THE CHAPTER PROVIDED FOR A SINGLE ASSESSMENT BE MADE IN RESPECT OF A PERIOD OF A BLOCK OF TEN ASSESSMENT YEARS PRIOR TO THE ASSESSME NT YEAR IN WHICH THE SEARCH WAS MADE. IN ADDITION TO T HESE TEN ASSESSMENT YEARS, THE BROKEN PERIOD UP TO THE D ATE ON WHICH THE SEARCH WAS CONDUCTED WAS ALSO INCLUDED IN WHAT WAS KNOWN AS 'BLOCK PERIOD'. THOUGH A SINGLE ASSESSMENT ORDER WAS TO BE PASSED, THE UNDISCLOSED INCOME WAS TO BE ASSESSED IN THE DIFFERENT ASSESSME NT YEAS TO WHICH IT RELATED. BUT ALL THIS HAD TO BE MA DE IN A SINGLE ASSESSMENT ORDER. THE BLOCK ASSESSMENT SO MA DE WAS INDEPENDENT OF AND IN, ADDITION TO THE NORMAL ASSESSMENT PROCEEDINGS AS CLARIFIED BY THE EXPLANAT ION BELOW SECTION 158BA(2). AFTER THE INTRODUCTION OF T HE GROUP OF SECTIONS NAMELY, 153A TO 1 53C, THE SINGLE BLOCK GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 34 PAGE 34 OF 79 ASSESSMENT CONCEPT WAS GIVEN A GO-BY. UNDER THE NEW SECTION 153A, IN A CASE WHERE SEARCH IS 'INITIATED UNDER SECTION 132 OR REQUISITION OF BOOKS OF ACCOUNT, DOC UMENTS OR ASSETS IS MADE UNDER SECTION 132A AFTER 31.5.200 8, THE ASSESSING OFFICER IS OBLIGED TO ISSUE NOTICES C ALLING UPON THE SEARCHED PERSON TO FURNISH RETURNS FOR THE SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSME NT YEAR RELEVANT TO THE PREVIOUS YEAR IN. WHICH THE SE ARCH WAS CONDUCTED OR REQUISITION WAS MADE. THE OTHER DIFFERENCE IS THAT THERE IS NO BROKEN PERIOD FROM T HE FIRST DAY OF APRIL OF THE FINANCIAL YEAR IN WHICH THE SEA RCH TOOK PLACE OR THE REQUISITION WAS MADE AND ENDING WITH T HE DATE OF SEARCH/REQUISITION. UNDER SECTION 153A AND THE NEW SCHEME PROVIDED FOR, THE AO IS REQUIRED TO EXER CISE THE NORMAL ASSESSMENT POWERS IN RESPECT OF THE PREV IOUS YEAR IN WHICH THE SEARCH TOOK PLACE. 19. UNDER THE PROVISIONS OF SECTION 153A, AS WE HA VE ALREADY NOTICED, THE ASSESSING OFFICER IS BOUND TO ISSUE NOTICE TO THE ASSESSEE TO FURNISH RETURNS FOR EACH GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 35 PAGE 35 OF 79 ASSESSMENT YEAR FALLING WITHIN THE SVC ASSESSMENT Y EARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH OR REQUISITIO N WAS MADE. ANOTHER SIGNIFICANT FEATURE OF THIS SECTION I S THAT THE ASSESSING OFFICER IS EMPOWERED ASSESS OR REASSESS T HE 'TOTAL INCOME' OF THE AFORESAID YEARS. THIS IS SIGN IFICANT DEPARTURE FROM THE EARLIER BLOCK ASSESSMENT SCHEME IN WHICH THE BLOCK ASSESSMENT ROPED IN ONLY THE UNDISC LOSED INCOME AND THE REGULAR ASSESSMENT PROCEEDINGS WERE PRESERVED, RESULTING IN MULTZLE ASSESSMENTS. UNDER SECTION 153A, HOWEVER, THE ASSESSING OFFICER HAS BE EN GIVEN THE POWER TO ASSESSEE OR REASSESS THE 'TOTAL INCOME OF THE SIX ASSESSMENT YEARS IN QUESTION IN SEPARATE ASSESSMENT ORDERS. THIS MEANS THAT THERE CAN BE ONL Y ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX ASSE SSMENT .YEARS, IN WHICH BOTH THE DISCLOSED AND THE UNDISCL OSED INCOME WOULD BE BROUGHT TO TAX. 20. A QUESTION MAY ARISE AS TO HOW THIS IS TO BE SO UGHT TO BE ACHIEVED WHERE AN ASSESSMENT ORDER HAD ALREADY B EEN GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 36 PAGE 36 OF 79 PASSED IN RESPECT OF ALL OR ANY OF THOSE SIX ASSESS MENT YEARS, EITHER UNDER SECTION 143(1)(A) OR SECTION 14 3(3) OF THE ACT. IF SUCH AN ORDER IS ALREADY IN EXISTENCE, HAVING OBVIOUSLY BEEN PASSED PRIOR TO THE INITIATION OF TH E SEARCH/REQUISITION, THE ASSESSING OFFICER IS EMPOWE RED TO REOPEN THOSE PROCEEDINGS AND REASSESS THE TOTAL INC OME TAKING NOTE OF THE UNDISCLOSED INCOME, IF ANY, UNEA RTHED DURING THE SEARCH. FOR THIS PURPOSE, THE FITTERS IM POSED UPON THE ASSESSING OFFICER BY THE STRICT PROCEDURE TO ASSUME JURISDICTION TO REOPEN THE ASSESSMENT UNDER SECTION 147 AND 148, HAVE BEEN REMOVED BY THE NON OBSTANTE CLAUSE WITH WHICH SUB SECTION (1) OF SECTI ON 153A OPENS. THE TIME-LIMIT WITHIN WHICH THE NOTICE UNDER SECTION 148 CAN BE ISSUED, AS PROVIDED IN SECTION 149 HAS A LSO BEEN MADE INAPPLICABLE BY THE NON OBSTANTE CLAUSE. SECTION 151 WHICH REQUIRES SANCTION TO BE OBTAINED BY THE ASSESSING OFFICER BY ISSUE OF NOTICE TO REOPEN THE ASSESSMENT UNDER SECTION 148 HAS ALSO BEEN EXCLUDED IN A CASE COVERED BY SECTION 153A. THE TIME-LIMIT PRES CRIBED GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 37 PAGE 37 OF 79 FOR COMPLETION OF AN ASSESSMENT OR REASSESSMENT BY SECTION 153 HAS ALSO BEEN DONE AWAY WITH IN A CASE COVERED BY SECTION 153A WITH ALL THE STOP HAVING BE EN PULLED OUT, THE ASSESSING OFFICER UNDER SECTION 153 A HAS BEEN ENTRUSTED WITH THE DUTY OF BRINGING TO TAX THE TOTAL INCOME OF AN ASSESSEE WHOSE CASE IS COVERED BY SECT ION 153A, BY EVEN MAKING REASSESSMENTS WITHOUT ANY FETT ERS, IF NEED BE. 21. NOW THERE CAN BE CASES WHERE AT THE TIME WHEN T HE SEARCH IS INITIATED OR REQUISITION IS MADE, THE ASS ESSMENT OR REASSESSMENT PROCEEDINGS RELATING TO ANY ASSESSM ENT YEAR FALLING WITHIN THE PERIOD OF THE SIX ASSESSMEN T YEARS MENTIONED ABOVE, MAY BE PENDING. IN SUCH A CASE, TH E SECOND PROVISO TO SUB SECTION (1) OF SECTION 153A S AYS THAT SUCH PROCEEDINGS SHALL ABATE'. THE REASON IS NOT FAR TO SEEK; UNDER SECTION 153A, THERE IS NO ROOM FOR M ULTIPLE ASSESSMENT ORDERS IN RESPECT OF ANY OF THE SIX ASSESSMENT YEARS UNDER CONSIDERATION. THAT IS BECAU SE THE ASSESSING OFFICER HAS TO DETERMINE NOT MERELY T HE GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 38 PAGE 38 OF 79 UNDISCLOSED INCOME OF THE ASSESSEE, BUT ALSO THE TO TAL INCOME' OF THE ASSESSEE IN WHOSE CASE A SEARCH OR REQUISITION HAS BEEN INITIATED. OBVIOUSLY THERE CAN NOT BE SEVERAL ORDERS FOR THE SANE ASSESSMENT YEAR DETERMI NING THE TOTAL INCOME OF THE ASSESSEE IN ORDER TO ENSURE THIS STATE OF AFFAIRS NAMELY, THAT IN RESPECT THE SIX AS SESSMENT YEARS PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE YEAR IN WHICH THE SEARCH TOOK PLACE THERE IS ONLY ONE DETERMINATION OF THE TOTAL INCOME, IT HAS BEEN PROV IDED IN THE SECOND PROVISO OF SUB SUB-SECTION 153A THAT ANY PROCEEDINGS FOR ASSESSMENT OR REASSESSMENT OF THE ASSESSEE WHICH ARE PENDING ON THE DATE OF INITIATIO N OF THE SEARCH OR MAKING REQUISITION 'SHALL ABATE'. ONC E THOSE PROCEEDINGS ABATE, THE DECKS ARE CLEARED, FOR THE ASSESSING OFFICER TO PASS ASSESSMENT ORDERS FOR EAC H OF THOSE SIX YEARS DETERMINING THE TOTAL INCOME OF THE ASSESSEE WHICH WOULD INCLUDE BOTH THE INCOME DECLAR ED IN THE RETURNS, IF ANY, FURNISHED BY THE ASSESSEE A S WELL AS THE UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 39 PAGE 39 OF 79 SEARCH OR REQUISITION. THE POSITION THUS EMERGING- IS THAT WHERE ASSESSMENT OR REASSESSMENT PROCEEDINGS ARE PENDING COMPLETION WHEN THE SEARCH IS INITIATED OR REQUISITION IS MADE THEY WILL ABATE MAKING WAY FOR THE ASSESSING OFFICER TO DETERMINE THE TOTAL INCOME OF THE ASSESSEE IN WHICH THE UNDISCLOSED INCOME WOULD ALSO BE INCLUDED BUT IN CASES WHERE THE ASSESSMENT OR REASSESSMENT PROCEEDINGS HAVE ALREADY BEEN COMPLETE D AND ASSESSMENT ORDERS HAVE BEEN PASSED DETERMINING THE ASSESSEE'S TOTAL INCOME AND SUCH ORDERS ARE SUBSISTING AT THE TIME WHEN THE SEARCH OR THE REQUI SITION IS MADE, THERE IS NO QUESTION OF ANY ABATEMENT SINC E NO PROCEEDINGS ARE PENDING. IN THIS LATTER SITUATION, THE ASSESSING OFFICER WILL REOPEN THE ASSESSMENTS OR REASSESSMENTS ALREADY MADE (WITHOUT HAVING THE NEED TO FALLOW THE STRICT PROVISIONS OR COMPLYING WITH THE STRICT CONDITIONS OF SECTIONS 147, 148 AND 151) AND DETERM INE THE TOTAL INCOME OF THE ASSESSEE. SUCH DETERMINATIO N IN THE ORDERS PASSED UNDER SECTION 153A WOULD BE SIMIL AR GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 40 PAGE 40 OF 79 TO THE ORDERS PASSED IN ANY REASSESSMENT, WHERE THE TOTAL INCOME DETERMINED IN THE ORIGINAL ASSESSMENT ORDER AND THE INCOME THAT ESCAPED ASSESSMENT ARE CLUBBED TOGETHER AND ASSESSED AS THE TOTAL INCOME' (IV) FROM THE ABOVE IT IS CLEAR THAT NO DISTINCTIO N HAVE BEEN MADE BY THE COURTS IN ASSESSMENT COMPLETED EITHER U /S 143(1) OR 143(3) WHICH WILL BE CLEAR FROM THE BEARE R READING OF PARA 16(A) OF THE JUDGMENT. WHICH IS REP ORTED IN 147 TTJ RELEVANT PAGE IS 529 THE SAID PARA READ AS UNDER:- 'IN THE CASE OF LMJ INTERNATIONAL (SUPRA), IN PARA 13, IT IS MENTIONED THAT THE TOTAL INCOME OF THE ASSESSEE IS TO BE RECOMPUTED ON THE BASIS OF THE UNDISCLOSED INCOME UNEARTHED DURING SEARCH AND THE SAME IS TO BE ADDED TO REGULAR INCOME ASSESSED UNDER SECTION 143(3) OR COM PUTED UNDER SECTION 143(1) .IN PARA NO. 14, IT IS MENTION ED THAT THE DEPARTMENT SEEKS TO PLACE INTERPRETATION ON THE PROVISIONS, WHICH IF ACCEPTED, WOULD LEAD TO SERIOU S HARDSHIP, INCONVENIENCE, INJUSTICE, ABSURDITY AND GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 41 PAGE 41 OF 79 ANOMALY. FINALLY, IT HAS BEEN MENTIONED THAT THE BO ARD CIRCULAR NO. 7 OF 2003, DATED 5 TH SEPTEMBER, 2003 (2003) 184 CTR (ST) 33. CLEARLY INDICATES THAT THE APPEAL, REVISION ETC. ARISING OUT OF EARLIER ASSESSMENT SHALL NOT AB ATE, WHICH MEANS THAT THERE IS NO MERGER OF EARLIER ASSESSMENTS WITH THE ASSESSMENT MADE UNDER THE NEW SCHEME'. (V) FURTHER IN PARA 55(D) & (G) TO (I) THE HONBLE BENCH OBSERVED AS UNDER:- 'PARA D '(D)IN THE CASE OF PADMASUNDARA RAO (DEED.) (SUPRA ) A NOTE OF CAUTION HAS BEEN MADE THAT WHILE INTERPRETI NG A STATUTE, CASUS OMISSUS SHOULD NOT BE READILY INFERR ED. INSTEAD ALL PARTS OF A STATUTE OR SECTION MUST BE C ONSTRUED TOGETHER WITH REFERENCE TO THE CONTEXT AND OTHER CL AUSE SO AS TO MAKE IT A CONSISTENT STATUTE. WE HAVE READ TH E PROVISIONS OF SECTION 132(1) AND SECTION 153A TOGET HER, WHICH ARE N THE NATURE OF CAUSE AND EFFECT AND THER EFORE IN OUR HUMBLE OPINION WE HAVE RIGHTLY READ THEM TOGETH ER, READING SECTION 153A IN ISOLATION AND AS INTERPRETE D BY THE LEARNED STANDING COUNSEL WOULD HAVE THE EFFECT THAT IN GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 42 PAGE 42 OF 79 CASE OF AN ASSESSMENT, WHICH IS NOT PENDING AND WHE RE NOTHING IS FOUND, THE SAME MAY BE REOPENED. SUCH INTERPRETATION WILL PRODUCE A RESULT THAT AN ASSESS MENT WHICH HAS COME TO AN END AND FOR WHICH THERE IS NO CAUSE OF REOPENING SHALL REVIVE SIMPLY BECAUSE A SEARCH H AS BEEN CONDUCTED. ACCORDING TO US, THIS WILL NOT BE HARMONIOUS INTERPRETATION OF VARIOUS PROVISIONS OF SECTION 132 AND 153A. (G) IN THE CASE OF C.B. GAUTAMA (SUPRA), THE FINDIN G WAS THAT PROVISIONS CONTAINED IN CHAPTER XX-C DO NOT CO NFER UNFETTERED POWERS ON THE APPROPRIATE AUTHORITIES FO R PRE- EMPTIVE PURCHASE- OF A PROPERTY, WHEN IT HAS BEEN A GREED TO BE SOLD BY THE ASSESSEE FOR A CONSIDERATION SIGN IFICANTLY LOWER THAN THE FAIR MARKET VALUE. WE ARE OF THE VIE W THE PROVISIONS IN SECTION 153A ALSO DO NOT CONFER ANY ARBITRARY OR UNBRIDLED POWER ON THE A.O. HOWEVER, T HAT IS NOT THE REAL ISSUE. THE REAL ISSUE IS WHETHER THERE IS ANY SANCTITY OF COMPLETED ASSESSMENT IN RESPECT OF WHIC H NOTHING HAS BEEN FOUND IN SEARCH. WHEN WE LOOK TO A NY GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 43 PAGE 43 OF 79 OTHER PROVISIONS REGARDING REOPENING OF ASSESSMENT, WE FIND THAT THERE ARE CERTAIN PRECONDITIONS TO BE SAT ISFIED FOR DOING SO. THE PRECONDITION IN THIS CASE IS THE INIT IATION AND CONDUCTING OF THE SEARCH. THE AVOWED PURPOSES OF SE ARCH HAVE ALREADY BEEN STATED BY US. IN CASE DECIDED UND ER SECTION 147 OR 263, THE SCOPE OF ASSESSMENT IS NARR OWER THAN THE SCOPE OF ORIGINAL ASSESSMENT. THIS IS BECA USE MATTER WHICH HAS BEEN DISCUSSED AND DEBATED IN ASSESSMENT, WHICH HAS BECOME FINAL, AND FOR WHICH T HERE IS NO REASON TO AGITATE AGAIN IN THE REASSESSMENT, THERE IS NO REASON TO REOPEN THEM. THIS CONSIDERATION WOULD BE APPLICABLE IN THE REASSESSMENT UNDER SECTION 153A A ND GUIDELINES CAN BE CLEARLY DISCERNED IN THE PROVISIO N CONTAINED IN SECTION 132(1). (H) IN THE CASE OF MAHINDRA SARI EMPORIUM (SUPRA), IT HAS BEEN HELD THAT ABATEMENT KILLS THE RIGHT TO SUE AND HAS THE EFFECT OF UNCEREMONIOUSLY TERMINATING PENDING LEGAL PROCEEDINGS WITHOUT ANY REGARD TO MER ITS, SUCH ABATEMENT TAKES PLACE ONLY IN RESPECT OF A PEN DING GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 44 PAGE 44 OF 79 ASSESSMENT. THERE IS NO WORD IN THE PROVISION TO TH E EFFECT THAT EVEN COMPLETED ASSESSMENTS ABATE. THEREFORE , SANCTITY OF SUCH ASSESSMENT SHOULD BE MAINTAINED EXCEPT WHEN SOMETHING IS FOUND IN SEARCH WHICH GOES AGAINST SUCH SANCTITY. WE ARE OF THE VIE W THAT THE SANCTITY IS VIOLATED NOT ONLY ON DETECTION OF UNDISCLOSED INCOME OR ASSET BUT ALSO WHEN BOOKS OF ACCOUNT OR OTHER DOCUMENTS WHICH SHOULD HAVE BEEN PRODUCED IN ORIGINAL ASSESSMENT AS THEY WERE RELEVA NT TO THE ASSESSMENT, HAVE NOT BEEN PRODUCED, BUT FOUN D IN THE COURSE OF SEARCH. (I) THE DECISION IN THE CASE OF RAMALLAH GUPTA (SUP RA) LEADS TO THE CONCLUSION THAT RECOURSE TO SECTION 14 7 CANNOT BE TAKEN FOR THE YEARS WHICH ARE COVERED UND ER SECTION 153A. THERE IS OTHER FINDING REGARDING REASSESSMENT OF 6 YEARS ALSO, WHICH IS INCIDENTAL T O THE AFORESAID FINDING. WE MAY ADD THAT WE HAVE NOT HELD THAT THE ASSESSMENT CAN BE MADE ONLY FOR THOSE YEAR S IN RESPECT OF WHICH BOOKS OR ASSETS ETC, ARE FOUND WE GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 45 PAGE 45 OF 79 HAVE COME TO THE CLEAR FINDING THAT ASSESSMENT/ REASSESSMENT FOR ALL SIX YEARS WILL HAVE TO BE MADE . THE REAL QUESTION IS THE SCOPE OF REASSESSMENT WHIC H IS NOT PENDING, FOR WHICH WE HAVE READ PROVISIONS OF SECTION 132(1) AND SECTION 153A TOGETHER. THUS THE TOTAL INCOME UNDER REASSESSMENT MAY BE THE SAME AS IN THE ORIGINAL ASSESSMENT OR MAY BE HIGHER THAN TH AT, DEPENDING UPON THE MATERIALS WHICH ARE UNCOVERED IN THE COURSE OF SEARCH. WE ARE ALSO OF THE VIEW THAT ISSUE OF NOTICE FOR SIX YEARS AND COMPUTING REASSESSMENT FOR THESE YEARS EVEN IF NO MATERIAL IS FOUND IN THE COU RSE OF SEARCH FOR SOME YEARS EVEN IF NO MATERIAL IS FOUND IN THE COURSE OF SEARCH FOR SOME YEARS DOES NOT AMOUNT TO HARASSMENT ETC. AND EVEN IF IT DOES SO, THE SAME HA S TO BE IGNORED IN VIEW OF THE CLEAR STATUTORY PROVISION . (II) FOLLOWING THE ABOVE DECISION OF SPECIAL BENCH THE VARIOUS BENCHES OF THE HOBBLE TRIBUNALS HAVE DECIDED THAT W HERE THE TIME LIMIT FOR ISSUANCE OF NOTICE U/S 143(2) WA S EXPIRED, IN ASSESSMENT U/S 153A / 153C THE ADDITION GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 46 PAGE 46 OF 79 COULD BE MADE ONLY ON THE BASIS OF INCRIMINATING DOCUMENTS FOUND AND SEIZED DURING THE COURSE OF SEA RCH. SOME OF THE DECISIONS ARE AS UNDER:- (A) GURINDER SINGH BIWA VS. DY. CIT ITA NOS. 2075 & 266 9 (MUM) OF 2010 ORDER DATED NOVEMBER 16, 2012. IN THE INSTANT CASE THE HON'BLE BENCH' OF WHICH THE HON'BL E PRESIDENT OF IT AT WAS ALSO ONE OF THE SIGNATORY HE LD AS UNDER:- PARA 6 'WE HAVE PERUSED THE RECORDS AND CONSIDERED THE RIV AL CONTENTIONS CAREFULLY. THE DISPUTE RAISED IS RAISED LEGAL VALIDITY OF ADDITION MADE BY AO UNDER SECTION 153A OF THE AC T, UNDER THE PROVISIONS OF SECTION 153A, IN ALL CASES, WHERE SEARCH IS CONDUCTED UNDER SECTION 132 OF THE ACT, AO IS EMPOW ERED TO ASSESS OR REASSESS TOTAL INCOME OF SIX ASSESSMENT Y EARS PRECEDING THE ASSESSMENT YEAR IN WHICH SEARCH WAS C ONDUCTED THE SECTION ALSO PROVIDES THAT ASSESSMENT OR REASSE SSMENT RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN PERI OD OF SIX ASSESSMENT YEARS IF PENDING ON THE DATE OF INITIATI ON OF SEARCH GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 47 PAGE 47 OF 79 SHALL ABATE. THERE HAVE BEEN DIVERGENT VIEWS REGARD ING SCOPE OF APPLICATION OF SECTION 153A IN CASES 'WHERE NO I NCRIMINATING MATERIAL WAS FOUND INDICATING ANY UNDISCLOSED INCOM E. SOME OF THE TRIBUNAL BENCHES HAD TAKEN THE VIEW THAT IN CAS E NO INCRIMINATING MATERIAL WAS FOUND AO HAD NO JURISDIC TION TO MAKE ASSESSMENT OR REASSESSMENT UNDER SECTION 153A WHILE SOME OTHER BENCHES HELD THAT JURISDICTION UNDER SEC TION 153A WAS AUTOMATIC TO REASSESS SIX IMMEDIATE PRECEDING ASSESSMENT YEARS IRRESPECTIVE OF THE FACT WHETHER A NY INCRIMINATING MATERIAL WAS FOUND OR NOT. ANOTHER AS PECT ON WHICH THERE HAD BEEN DIVERGENT VIEWS WAS WHETHER EV EN IF AD HAD JURISDICTION UNDER SECTION 153A , ADDITION CAN BE MADE IN ASSESSMENT / REASSESSMENT ONLY WHEN SOME INCRIMINAT ING MATERIAL HAS BEEN FOUND. ALL THESE ASPECT HAD BEEN REFERRED TO THE SPECIAL BENCH OF THE TRIBUNAL IN CASE OF ALLCAR GO GLOBAL LOGISTICS LTD VS. DY CIT (2012) 137 ITD 287 AND ORD ER OF SPECIAL BENCH DATED 06.07. 2012 HAS BEEN REFERRED. 6.1 THE SPECIAL BENCH IN THE CASE OF ALLCARGO GLOBA L LOGISTICS LTD (SUPRA) HAS HELD THAT PROVISIONS OF SECTION 153 A COME GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 48 PAGE 48 OF 79 INTO OPERATION IF A SEARCH OR REQUISITION IS INITIA TED AFTER 31.05.2003 AND NO SATISFACTION OF THIS CONDITION, T HE AO IS UNDER OBLIGATION TO ISSUE NOTICE TO THE PERSON REQU IRING HIM TO FURNISH THE RETURN OF INCOME FOR SIX YEARS IMMEDIAT ELY PRECEDING THE YEAR OF SEARCH. THE SPECIAL BENCH FUR THER HELD THAT IN CASE ASSESSMENT HAS ABATED, THE AO RETAINS THE ORIGINAL JURISDICTION AS WELL AS JURISDICTION UNDER SECTION 153A FOR WHICH ASSESSMENT SHALL BE MADE FOR EACH ASSESSMENT YEAR SEPARATELY. THUS IN CASE WHERE ASSE SSMENT HAS ABATED THE AO CAN MAKE ADDITION IN THE ASSESSME NT, EVEN IF NO INCRIMINATING MATERIAL HAS BEEN FOUND. B UT IN OTHER CASES THE SPECIAL BENCH HELD THAT THE ASSESSMENT UN DER SECTION 153A CAN BE MADE ON THE BASIS OF INCRIMINAT ING MATERIAL WHICH IN THE CONTEXT OF RELEVANT PROVISION S MEANS BOOKS OF ACCOUNT AND OTHER DOCUMENTS FOUND IN THE C OURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL A SSESSMENT AND 'UNDISCLOSED INCOME OR PROPERTY DISCLOSED DURIN G THE COURSE OF SEARCH. IN THE PRESENT CASE, THE ASSESSME NT HAD BEEN COMPLETED UNDER SUMMARY SCHEME UNDER SECTION 1 43(1) GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 49 PAGE 49 OF 79 AND TIME LIMIT FOR ISSUE OF NOTICE UNDER SECTION 14 3(2) HAD EXPIRED ON THE DATE OF SEARCH. THEREFORE, THERE WAS NO ASSESSMENT PENDING IN THIS CASE AND IN SUCH A CASE THERE WAS NO QUESTION OF ABATEMENT. THEREFORE, ADDITION C OULD BE MADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL FO UND DURING SEARCH. 6.2 IN THIS CASE, THE AO HAD MADE ASSESSMENT ON THE INFORMATION /MATERIAL AVAILABLE IN THE RETURN OF IN COME. THE INFORMATION REGARDING THE GIFT WAS AVAILABLE IN THE RETURN OF INCOME AS CAPITAL ACCOUNT HAD BEEN CREDITED BY THE ASSESSEE BY THE AMOUNT OF GIFT. SIMILAR WAS THE POS ITION IN RELATION TO ADDITION UNDER SECTION 2(22)(E) . THE A O HAD NOT REFERRED TO ANY INCRIMINATING MATERIAL FOUND DURING THE SEARCH BASED ON WHICH ADDITION HAD BEEN MADE. THERE FORE FOLLOWING THE DECISION OF THE SPECIAL BENCH (SUPRA) , WE HOLD THAT THE AO HAD NO JURISDICTION TO MAKE ADDITION UN DER SECTION 153A. THE ADDITION MADE IS THEREFORE DELETE D ON THIS LEGAL GROUND. ON MERIT ALSO WE DO NOT FIND ANY CASE TO SUSTAIN THE ADDITION. THE ADDITION MADE IS ON ACCOU NT OF GIFT GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 50 PAGE 50 OF 79 WHICH IS NOTHING BUT LOAN TAKEN BY THE ASSESSEE WHI CH WAS CONVERTED INTO GIFT DURING THE YEAR. THUS SOURCE OF GIFT WAS LOAN WHICH THE AO HIMSELF HAS ADMITTED HAD BEEN TAK EN BY THE ASSESSEE IN THE YEAR PRIOR TO 2000. THEREFORE, ADDITION IF ANY COULD HAVE BEEN MADE IN THE YEAR OF LOAN. SIMIL ARLY, CLAIM OF THE ASSESSEE AND FINDING OF CIT(A) THAT TH ERE WAS NO ACCUMULATED PROFIT HAS NOT BEEN CONTROVERTED BEF ORE US. WE AGREE WITH CIT(A) THAT CURRENT YEAR PROFIT HAS T O BE EXCLUDED. THEREFORE, THERE IS NO CASE FOR ANY ADDIT ION UNDER SECTION 2(22)(E) . WE, THEREFORE, DISMISS THE APPEA L OF THE REVENUE AND ALLOW THE APPEAL FILED BY THE ASSESSEE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED AND THAT BY THE REVENUE IS DISMISSED'. (B) IN THE CASE OF ACIT VS. PRATIBHA INDUSTRIES LTD ITA NO. 2197 TO 2199 !MUM/2008 ORDER DATED 19.12.2012 THE HONB1E ITAT MUMBAI BENCH 'C' MUMBAI HELD AS UNDER:- PARA 50 'WE FIND THERE IS COMPLETE DISHARMONY IN THE CIRCUM STANCES, GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 51 PAGE 51 OF 79 BECAUSE, THE ACT ALLOWS SIX ASSESSMENTS YEARS TO BE OPEN VIDE SECTION 153A FOR BEING ASSESSED OR REASSESSED TO ASCERTAIN TOTAL INCOME, THEREFORE, THE AO IS BOUND TO PASS AN ORDER UNDER SECTION 153A READ WITH 143(3) , WHIC H, ACCORDING THE ANIL KUMAR BHATIA (SUPRA), 'SUCH DETERMINATION , IN THE ORDERS PASSED UNDER SECTION 153A WOULD BE SIMILAR TO THE ORDERS PASSED IN ANY REASSE SSMENT , WHERE THE TOTAL INCOME DETERMINED IN THE ORIGINAL ASSESSMENT ORDER AND THE INCOME THAT ESCAPED ASSESS MENT ARE CLUBBED TOGETHER AND ASSESSED AS THE TOTAL INCO ME'. THEREFORE, THE AO. ACCORDINGLY HAS TO STOP SHORT IN THESE PROCEEDINGS AND RESTRICT HIMSELF TO THE INCOME ALRE ADY DETERMINED /ASSESSED IN THE ALREADY CONCLUDED PROCEEDINGS FOR THE YEAR(S), WHETHER UNDER SECTION 143(1) OR 143(3) .THUS IT IS A CASE OF VALID NOTICE UNDER SEC TION 153A, WITH NO UNDISCLOSED INCOME TO BE CLUBBED WITH INCOM E ORIGINALLY ASSESSED AND FINALIZED HOWEVER, IT HAS T O BE ADDED HERE THAT PROCEEDINGS UNDER SECTION 153A ARE LINKED TO THE SEARCH HAVING BEEN INITIATED ON THE PERSON, NOT WITH GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 52 PAGE 52 OF 79 THE DOCUMENTS FOUND AND SEIZED THE DOCUMENTS SO FOU ND AND SEIZED, MAY BECOME USEFUL TO THE AO FOR MAKING AN ASSESSMENT OF TOTAL INCOME UNDER SECTION 153A READ WITH 143(3). (B) IN THE CASE OF SHREE YAMUNA PROTEINS DAHOD VS. ACIT CC-1, BARODA ITA NO. 227 TO 232 /AHD/2010 ORDER DATED 21.09.2012 THE HON'BLE ITAT AHMEDABAD BENCH HELD AS UNDER:- PARA 6 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED T HE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE HAVE ALREADY NOTED THAT THE ASSESSMENT FOR THE ASSESSMENT YEARS 200102 TO 2004- 05 HAVE NOT ABATED BECAUSE THE ASSESSMENT PROCEEDINGS WERE NOT PENDING FOR THESE FOUR YEARS ON THE DATE OF SEA RCH I.E. 19.09.2006. BUT THE ASSESSMENT FOR THE REMAINING TW O YEARS I.E. ASSESSMENT YEARS 2005-06 AND 2006-07 HAV E ABATED. IN OUR CONSIDERED OPINION, FOR THE PURPOSE OF ASSESSING THE INCOME FOR EARLIER FOUR YEARS I.E. AS SESSMENT GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 53 PAGE 53 OF 79 YEARS 2001-02 TO 2004-05, THE ASSESSEE CANNOT BE AL LOWED TO RAISE A NEW CLAIM REGARDING DEPRECIATION CLAIMED AND ALLOWED AT A LESSER AMOUNT IN THE RETURN FILED BY I T U/S 139(1) BECAUSE IN THOSE CASES, WHERE THE ASSESSMENT S HAVE NOT ABATED, THE ONLY CHANGE WHICH CAN BE MADE IN TH E ASSESSMENT U/S 153A OVER AND ABOVE THE 'ASSESSMENT ALREADY COMPLETED, IS TO BE ON THE BASIS OF THE MAT ERIAL FOUND IN THE COURSE OF SEARCH. BUT IN THE CASE OF T HOSE YEARS WHERE THE ASSESSMENTS HAVE BEEN ABATED, THE ASSESSM ENT HAS TO BE MADE INCLUDING THE ORIGINAL AS WELL AS REASSESSMENT ON THE BASIS OF MATERIAL FOUND IN THE COURSE OF SEARCH. THIS VIEW OF US FINDS SUPPORT FROM THE DECI SION OF SPECIAL BENCH OF THE TRIBUNAL RENDERED IN THE CASE OF AIRWIDE EXPRESS CARGO VS.ITD IN 1. T.A. NO. 721/AHD/2008 ORDER DATED 21.10.2011. (D) ACIT CENT. CIRCLE -40 VS. SAF YEAST C. PVT LTD, . ITA NO. 4230/MUM/20 11 PARA 6 WE OBSERVE THAT AO HAS MADE ADHOC DISALLOWANCE WHIL E GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 54 PAGE 54 OF 79 COMPLETING ASSESSMENT U/S 143(3) R.W.S.153A OF THE ACT, WHICH ARE NOT BASED ON ANY OF THE SEIZED MATERIAL F OUND DURING THE COURSE OF SEARCH. WE ARE OF THE CONSIDER ED VIEW THAT WHILE MAKING THE ASSESSMENT PURSUANT TO SEARCH TAKEN PLACE AND THAT TOO IN A CASE WHERE ORIGINAL RETURN HAD ALREADY BEEN ACCEPTED U/S 143(1) OF THE ACT BEFORE THE SEARCH HAD TAKEN PLACE, ADHOC DISALLOWANCE MADE BY AO IS NOT JUSTIFIED. SIMILAR QUESTION WAS ALSO CONSIDERED IN THE BLOCK ASSESSMENT BY HON'BLE CALCUTTA HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS .ASHIM KRISHNA MON DAL 270 ITR 160 (CAL), WHEREIN, IT WAS HELD THAT NO ADD ITION CAN BE MADE IN THE BLOCK ASSESSMENT BASED ON ESTIMATE. IN VIEW OF ABOVE FACTS THAT THE ADHOC DISALLOWANCE IS NOT B ASED ON ANY MATERIAL FOUND DURING THE COURSE OF SEARCH THAT THE CLAIM OF THE ASSESSEE IS NOT GENUINE, WE HOLD THE O RDER OF LD CIT(A) TO DELETE THE ADHOC DISALLOWANCE MADE BY AO DOES NOT CALL FOR ANY INTERFERENCE. ( E) ACIT KOLKATA V S. HINDUSTAN STORAGE & DISTRIBU TION CO. LTD.' IN IT (SS) A NO. 135/KOL/2011 ORDER DATED 04. 08.2012 GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 55 PAGE 55 OF 79 PARA 3 IN VIEW OF THE ABOVE DISCUSSION AND ALSO BEARING IN MIND THE BINDING NATURE OF SPECIAL BENCH DECISION IN THE CAS E OF ALL CARGO LOGISTICS LTD. *SUPRA), WE CONFIRM THE STAND OF THE COMMISSIONER (APPEALS), WHEREIN IT HAS BEEN HELD TH AT WHERE INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH PROCEEDINGS RELATING TO ANY ASSESSMENT YEAR, THE CO MPLETED ASSESSMENT FOR SUCH YEARS CANNOT BE DISTURBED. THE STAND SO TAKEN BY THE COMMISSIONER IS CONSISTENT WITH THE STAND TAKEN BY THE SPECIAL BENCH, MUMBAI OF THIS TRIBUNAL , WHICH HAS BEEN POINTED OUT EARLIER, IS A BINDING JUDICIAL PRECEDENCE FOR US. ACCORDINGLY, GRIEVANCES OF THE ASSESSING OF FICER ARE REJECTED. (F) SHRI SHANKAR R.JHUNJHUNWALA VS. ACIT AURANGABAD IT NO. 225/PN111 ORDER DATED 31.07.2012 PARA 8. EVEN VIEWED IN THE AFORESAID CONTEXT, WE FIND THAT THE CLAIM OF THE ASSESSEE IS UNTENABLE. IN THIS CASE, AS THE GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 56 PAGE 56 OF 79 COMMISSIONER OF INCOME TAX (APPEALS) HAS OBSERVED, THE INCOME RETURNED BY THE ASSESSEE UNDER SECTION 139(1 ) OF THE ACT HAS ACHIEVED FINALITY. EVEN BEFORE US, THE ASSE SSEE HAS NOT ASSERTED THAT ON THE DATE OF SEARCH THE ASSESSM ENT FOR THE INSTANT YEAR WAS PENDING SO AS TO ABATE. THEREF ORE, IN THIS CASE WHERE INCOME RETURNED UNDER SECTION 139(1 ) HAS BECOME FINAL, IN TERMS OF THE DECISION IF THE SPECI AL BENCH IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD (SUPRA) THE ASSESSMENT UNDER SECTION 153A IS TO BE MADE ONLY O N THE BASIS OF 'INCRIMINATING MATERIAL' WHICH HAS BEEN EX PLAINED TO MEAN(I) BOOKS OF ACCOUNT , OTHER DOCUMENTS, FOUN D IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT AND (II) UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH, THEREFORE, IN O UR VIEW, FOR THE AFORESAID REASON THE CLAIM OF THE ASSESSEE IN QUESTION HAS BEEN RIGHTLY NEGATED BY THE LOWER AUTH ORITIES. (G) HIREN N PATEL VS. ACIT , MUMBAI ITA NO. 39/40/41/MUM/2010 ORDER DATED 12.10.2012 PARA 2.3 GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 57 PAGE 57 OF 79 IN THE CASE, OF THE ASSESSEE NO ASSESSMENT UNDER SE CTION 143(3) HAD BEEN MADE FOR ASSESSMENT YEAR 2002-03 AN D TIME PERIOD FOR ISSUE OF NOTICE UNDER SECTION 143(2 ) HAD EXPIRED ON 31.03.2006 I.E. BEFORE DATE OF SEARCH AN D TIME LIMIT FOR ISSUE OF INTIMATION HAD ALSO EXPIRED ON T HAT DATE. THEREFORE, ASSESSMENT IN ASSESSMENT YEAR 2002-03 HA D ATTAINED FINALITY AND , THERE WAS NO QUESTION OF AB ATEMENT OF ANY PROCEEDINGS. THEREFORE , IN VIEW OF THE DECI SION OF SPECIAL BENCH (SUPRA), IN ASSESSMENT YEAR 2004-05, ADDITION CAN BE MADE ONLY ON THE BASIS OF INCRIMINA TING MATERIAL FOUND IN THE COURSE OF SEARCH. IN THIS CAS E THE DISALLOWANCE OF INTEREST WAS NOT BASED ON SEIZED MA TERIAL AND THEREFORE , AO HAD NO JURISDICTION TO MAKE IN ASSESSMENT UNDER SECTION 153(3) OF THE ACT. THE SAM E VIEW HAS BEEN TAKEN BY THE TRIBUNAL IN CASE OF BROTHER O F THE ASSESSEE SHRI ATITHI N PATEL IN WHICH ON IDENTICAL FACTS THE TRIBUNAL HAS DELETED ADDITION MADE BY AO NO DISTING UISHING FEATURES HAVE BEEN BROUGHT TO OUR NOTICE BY THE LD. DEPARTMENTAL REPRESENTATIVE. THEREFORE, FOLLOWING T HE SAID GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 58 PAGE 58 OF 79 DECISION NO ADDITION CAN BE MADE IN CASE OF ASSESSE E IN ASSESSMENT YEAR 2004-05. WE, THEREFORE, SET ASIDE T HE ORDER OF CIT(A) AND DELETE THE ADDITION MADE BY AO IN ASSESSMENT YEAR 2004-05. (H) ATITHI N PATEL VS ACIT CEN.CIR -10 MUMBAI ITA N O. 43/MUM/2010 ORDER DATED 22.08.2012 PARA 3 SO FAR AS THE STATUS OF THE RETURN AND ASSESSMENT I S CONCERNED, UPTO THE DATE OF SEARCH I.E., 04.10.2006 FOR THE VARIOUS ASSESSMENT YEARS, THE SAME ARE GIVEN HEREUN DER:- ASSESSME NT YEAR DATE OF ORIGINAL RETURN FIELD DATE OF INTIMATION I ASSESSMENT DATE UPTO WHICH NOTICE U/S 143 COULD BE ISSUED REMARK 2004-05 30.03.2005 31.03.2006 31.03.2006 NO NOTICE U/S 143(2) WAS ISSUED, THEREFORE, THE ASSESSMENT HAS ATTAINED FINALITY BEFORE THE DATE OF SEARCH I.E. 04.10.06 2005-06 17.04.2006 31.03.2008 30.04.2007 THE TIME LIMIT FOR ISSUANCE OF NOTICE U/S 143(2) HAS NOT BEEN EXPIRED. THEREFORE THE ASSESSMENT WAS STILL OPEN AND IN VIEW OF THE PROVISIONS OF SECTION 153A SUCH ASSESSMENT GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 59 PAGE 59 OF 79 GETS ABATED 2006-07 31.03.2007 31.03.2008 31.01.2008 THE TIME LIMIT FOR ISSUANCE OF NOTICE U/S 143(2) HAS N OT BEEN EXPIRED. THEREFORE THE ASSESSMENT WAS STILL OPEN AND IN VIEW OF THE PROVISIONS OF SECTION 153A SUCH ASSESSMENT GETS ABATED UNDER SECTION 153A THE ASSESSING OFFICER IS EMPOWERED TO ASSESSEE OR REASSESS THE TOTAL INCOME FOR SIX ASSESSMENT YEARS, PROCEEDING TO THE YEAR OF ASSESSMENT IN WHICH SEARCH HAS TAKEN PLACE. THERE CAN BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF SIX ASSESSMENT YEARS. IF THE ASSESSMENT PROCEEDINGS ARE PENDING COMPLETION, ON THE DATE OF SEARCH IS INITIATED, THEY WILL GET ABATED AND THE ASSESSING OFFICER HAS TO COMPLETE THE ASSESSMENT ON THE TOTAL INCOME INCLUDING DISCLOSED AND UNDISCLOSED INCOME. IF THE ASSESSMENT PROCEEDINGS HAVE ALREADY COMPLETED OR ATTAINED FINALITY. THEN GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 60 PAGE 60 OF 79 THERE IS NO QUESTION OF ANY ABATEMENT SINCE NO PROCEEDINGS ARE PENDING. THUS, SO FAR AS THE ASSESSMENT YEAR 2004-05 IS CONCERNED, NO ASSESSMENT PROCEEDINGS WAS PENDING AND IT HAD ATTAINED FINALITY PRIOR TO THE DATE OF SEARCH AND , THEREFORE , SUCH AN ASSESSMENT WILL NOT GET ABATE I N VIEW OF THE PROVISIONS OF SECTION L53A. (I) RECENTLY THE HON'BLE INDORE BENCH, INDORE FOLL OWING THE ABOVE DECISIONS IN THE CASE OF ARUN SEHLOT , BHOPAL IT(SS) A.NOS. 186 TO 192/IND/2012 ORDER DATED 30.04.2013 HELD AS UNDER:- PAGE 61 PARA 28 'WE HAVE CONSIDERED THE RIVAL SUBMISSION AND FOUND FROM RECORD THAT ASSESSMENT FOR ASSESSMENT YEAR 2003-04 AND 2004-05 WAS COMPLETED U/S 143(3) . IN RESPECT OF ASSESSMENT YEAR 2005-06, FOR WHICH THE RETURN WAS FILED ON 31.03.2006, THE SAME WAS PROCESSED U/S 143(1), THE DUE DATE OF NOTICE U/S 143(2) WAS EXPIRED ON 31.03.2007. SIMILARLY GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 61 PAGE 61 OF 79 FOR ASSESSMENT YEAR 2006-07, THE RETURN WAS FILED ON 24.01.2007. THE SAME WAS PROCESSED U/S 143(1) AND THE TIME LIMIT FOR ISSUANCE OF NOTICE U/ S 143(2) EXPIRED ON 31.01.2008. IN THIS CASE, SEARCH WAS CONDUCTED ON 30.05.2008. THUS, FOR THE ASSESSMENT YEAR 2003-04 TO 2006-07, IT CAN BE SAID THAT NO ASSESSMENTS WERE PENDING, APPLYING THE PROPOSITION OF LAW DISCUSSED HEREINABOVE. HOWEVER, WITH RESPECT TO NO INCRIMINATING MATERIAL FOUND DURING COURSE OF SEARCH, THE OBSERVATION OF THE ASSESSING OFFICER WAS AS UNDER:- ' IT WAS FOUND DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAS RECEIVED LOANS AND ADVANCES OF VARIOUS AMOUNTS FROM THREE PRIVATE LIMITED COMPANIES, EITHER IN HIS INDIVIDUAL CAPACIT Y OR AS PROPRIETOR OF HIS FIRMS RAJ INDUSTRIES AND AR UN SAHLOT & ASSOCIATES . FURTHER IT WAS NOTICED THAT RAJ HOMES PRIVATE LIMITED (RHPL) HAS BEEN GIVING LOANS TO VARIOUS COMPANIES. IT WAS FOUND THAT THE GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 62 PAGE 62 OF 79 ASSESSEE WAS SUBSTANTIALLY INTERESTED BOTH IN THE AFFAIRS OF RHPL AND THESE OTHER COMPANIES WHICH WERE THE RECIPIENT OF SUCH LOANS. FURTHER IT WAS NOTICED THAT THESE LOANS WERE NOT FOR BUSINESS PURPOSES AS THE ASSESSEE, HIS FIRMS AND THE COMPANIES IN WHICH HE WAS SUBSTANTIALLY INTERESTED WERE ALSO HAVING BUSINESS DEALINGS WITH RHPL AND WERE ALSO OUTSTANDING IN THE COLUMN OF SUNDRY DEBTORS. HENCE, IT WAS CLEARLY SEEN THAT THESE LOAN S WERE JUST TRANSFER OF FUNDS.' 29. IT IS CLEAR FROM THE FINDING RECORDED BY THE ASSESSING OFFICER IN HIS ASSESSMENT ORDER FRAMED U/S 153A THAT THE FACT REGARDING ASSESSEE HAVING RECEIVED LOANS AND ADVANCES FROM THREE COMPANIES, WAS FOUND ONLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS. NOWHERE THE ASSESSING OFFICER HAS REFERRED ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH SO AS TO INDICATE THAT ADVANCE WAS GIVEN TO THE ASSESSEE IN CONTRAVENTION OF GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 63 PAGE 63 OF 79 PROVISIONS OF SECTION 2(22) (E). HOWEVER, WE FOUND THAT CIT(A) WHILE DEALING WITH THIS ISSUE HAVE NOTE D THAT ' THE INFORMATION THAT THE ASSESSEE HAS NOT PAID TAX ON DEEMED DIVIDEND TAXABLE U/S 2(22)(E) CAME TO THE KNOWLEDGE OF THE AUTHORIZED OFFICER DURING THE COURSE OF SEARCH.' 30. IT IS CLEAR FROM THE ABOVE THAT CONTRADICTORY FINDING HAS BEEN RECORDED BY THE CIT(A) WITH RESPECT TO INFORMATION THAT ASSESSEE HAS NOT PAID TAX ON DEEMED DIVIDEND TAXABLE U/S 2(22) (E) CAME TO THE KNOWLEDGE OF AUTHORIZED OFFICE DURING THE COURSE OF SEARCH. HOWEVER, THE CIT(A) HAS NOT REFERRED TO ANY INCRIMINATING MATERIAL INDICATING CONTRAVENTION OF PROVISIONS OF SECTION 2(22)(E) AS FOUND DURING THE COURSE OF SEARCH. EVEN DURING THE COURSE OF HEARING BEFORE US, THE LD. CIT DR DID NOT REFER TO ANY INCRIMINATING MATERIAL FOUND DURING TH E COURSE OF SEARCH TO SUBSTANTIATE THE OBSERVATION OF CIT(A) . ON THE OTHER HAND, THE LD. AUTHORIZED GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 64 PAGE 64 OF 79 REPRESENTATIVE HAS VEHEMENTLY ARGUED THAT AS PER THE FINDING RECORDED BY THE ASSESSING OFFICER IN TH E ASSESSMENT ORDER U/S 153A, THE FACT THAT ADVANCES HAVING NOT BEEN MADE FOR BUSINESS PURPOSES BY THE ALLEGED COMPANY TO THE ASSESSEE CAME TO THE NOTICE OF DEPARTMENT ONLY DURING THE ASSESSMENT AND NOT DURING COURSE OF SEARCH. 31. IN VIEW OF THE ABOVE CONTRADICTION IN THE FINDINGS RECORDED BY THE ASSESSING OFFICER AND CIT(A), THE ADDITIONS MADE U/S 2(22)(E) IN THE ASSESSMENT YEARS 2003-04 TO 2006-07 ARE RESTORED BACK TO THE FILE OF ASSESSING OFFICER FOR DECIDING AFRESH THIS LEGAL ISSUE AFTER GIVING CLEAR FINDING WITH REGARD TO INCRIMINATING DOCUMENTS, IF ANY, FOUND DURING THE COURSE OF SEARCH INDICATING CONTRAVENTIO N OF PROVISION OF SECTION 2(22)(E) OF THE ACT. THE ASSESSING OFFICER IS DIRECTED TO DECIDE THE LEGAL ISSUE TAKING INTO CONSIDERING THE DECISION OF SPECI AL BENCH AND THE DECISION IN THE CASE OF GURINDER GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 65 PAGE 65 OF 79 SINGH BABA (SUPRA) AS DISCUSSED ABOVE. WE DIRECT ACCORDINGLY. IN THE INSTANT CASE FROM THE ASSESSMENT ORDER AND THE ORDER OF THE LD. CIT(A) ITSELF IT IS CLEAR THAT NO INCRIMINATING DOCUMENT RELATING TO CASH CREDIT AND SO ALSO RELATING TO THE INTEREST THERE ON AND DISALLOWANCE U/S 14A WAS FOUND AND THE TIME LIMIT FOR ISSUANCE OF NOTICE U/S 143(2) WAS EXPIRED FOR THE ASSESSMENT YEARS 2004-05 TO 2006-07 AND AS SUCH NO ASSESSMENT WAS PENDING BEFORE THE ASSESSING OFFICER FOR THESE YEARS AT THE TIME OF IMITATION OF SEARCH CONSEQUENT THERETO ADDITIONS MADE BY THE LD. A.O. FOR THESE ASSESSMENT YEARS LIABLE TO DELETED ONLY ON THIS SCORE. AS TO THE ADDITION OF RS. 10,91,968/- MADE ON ACCOUNT OF INTEREST ON CASH CREDIT FOR THE ASSESSMENT YEAR 2007-08 IS ALSO LIABLE TO BE DELETED AS NO ADDITION ON ACCOUNT OF CASH CREDIT WERE MADE IN THE ASSESSMENT YEAR 2007-08 AND THE SAID INTEREST IS GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 66 PAGE 66 OF 79 RELATED TO THE ADDITION OF CASH CREDIT MADE IN THE EARLIER YEAR WHICH ARE LIABLE TO BE DELETED IN VIEW OF THE VARIOUS DECISIONS REFERRED HEREIN ABOVE. 8. ON THE OTHER HAND, THE LD. SENIOR DR RELIED ON THE ORDER OF ASSESSING OFFICER AND CONTENDED THAT THE I SSUE HAS BEEN DECIDED BY CO-ORDINATE BENCH IN THE CASE OF NA RMADA EXTRUSIONS ORDER DATED 30.12.2011. 9. RIVAL CONTENTIONS HAVE BEEN CONSIDERED AND RECORDS PERUSED. FROM THE RECORD, WE FOUND THAT THE ASSESSE E HAD BORROWED LOANS FROM THE FOLLOWING PARTIES :- S.NO. N AME OF THE PARTIES & ADDRESS PAN NO. 1. M/S. K.K.PATEL FINANCE LTD., 114, STARLIT TOWER, Y.N. ROAD, INDORE. AABCK4282G 2. M/S. PURVI FINVEST LTD., G-1, RUDRAKSH, 127, BAIKUNTHDHAM COLONY, INDORE (M.P.) AABCP6564C 3. M/S. TRIMURTI FINVEST LTD.,9, BHOJ NAGAR, ANNAPURNA ROAD, INDORE. AAACT6383N 4. M/S.EAST WEST FINVEST LTD., G01,RUDRAKSH, 127, BAIKUNTHDHAM COLONY, INDORE MP AAACE6834D GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 67 PAGE 67 OF 79 10. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFI CER ASKED THE ASSESSEE TO ESTABLISH IDENTITY, GENUINENE SS AND CREDITWORTHINESS OF THESE CREDITORS. IT WAS SUBMITT ED THAT M/S. K.K.PATEL FINANCE LIMITED, INDORE, IS BEING REGULAR LY ASSESSED TO TAX AND ENGAGED IN THE FINANCE ACTIVITIES AND TH EY HAVE GIVEN THE DEPOSITS ON INTEREST BASIS TO OTHER ALSO. AS PER BALANCE SHEET FILED WITH THE DEPARTMENT THEY HAVE S HARE CAPITAL TO THE TUNE OF RS. 89,32,500/- AND RESERVE AND SURPLUS OF RS. 61,453,923/- TOTAL AMOUNTING TO RS. 1,50,76, 423/-. M/S. EAST WEST FINVEST INDIA LIMITED, INDORE, IS BE ING REGULARLY ASSESSED TO TAX AND FILED CONFIRMATION OF ACCOUNT ALONGWITH THE BANK STATEMENT IN WHICH TRANSACTION O F ASSESSEE IS REFLECTED. THE SAID COMPANY ALSO ENGAGED IN THE BUSINESS OF FINANCE ACTIVITIES AND THEY HAVE GIVEN THE DEPOSITS AS AND WHEN MATURITY OF DEPOSITS RECEIVED FROM OTHERS. M/S . PURVI FINVEST LIMITED, INDORE, IS BEING REGULARLY ASSESSE D TO TAX AND FILED CONFIRMATION OF ACCOUNT ALONGWITH THE BANK ST ATEMENT IN WHICH TRANSACTION OF ASSESSEE IS REFLECTED. THE ADD RESS OF THE CREDITOR AND M/S. EAST WEST FINVEST INDIA LIMITED I S COMMON GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 68 PAGE 68 OF 79 AND IT MAY BE POSSIBLE THAT THE DIRECTORS ARE COMMO N AND HENCE SIGNED BY ONE PERSON. THE SAID COMPANY ALSO E NGAGED IN THE BUSINESS OF FINANCE ACTIVITIES AND THEY HAVE GIVEN THE DEPOSITS AS AND WHEN MATURITY OF DEPOSITS RECEIVED FROM OTHERS. 11. FROM THE RECORD, WE ALSO FOUND THAT THE LD. ASSESS ING OFFICER ASKED TO EXPLAIN THE GENUINENESS OF THE CRE DITS AS WELL AS IDENTITY AND CREDITWORTHINESS OF THE CREDITORS. IN RESPONSE, THE ASSESSEE FILED CONFIRMATION FROM THE SAID CREDI TORS. 12. HOWEVER, THE ASSESSING OFFICER DID NOT AGREE WITH THE ASSESSEES CONTENTION AND ADDED THE AMOUNT U/S 68 O F THE INCOME-TAX ACT, 1961. BY THE IMPUGNED ORDER, THE LD . CIT(A) DELETED THE ADDITION BY FOLLOWING HIS ORDER IN ANOT HER ASSESSEE, WHEREIN SIMILAR ADDITIONS WERE DELETED BY OBSERVING THAT THESE ADDITIONS WERE NOT WARRANTED IN THE HANDS OF THE AS SESSEE BUT IN THE HANDS OF THE LENDERS. DURING THE COURSE OF H EARING, THE LD. CIT DR DREW OUR ATTENTION TO THE ORDER OF THE T RIBUNAL, IN THE CASE OF NARMADA EXTRUSIONS ORDER DATED 30.12.20 11, WHEREIN THE TRIBUNAL HAVE OBSERVED THAT THE LD. CIT (A) WAS NOT GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 69 PAGE 69 OF 79 JUSTIFIED IN DELETING THE ADDITION ON THE GROUND TH AT THE ADDITION IS TO BE MADE IN THE HANDS OF THE PERSON W HO HAS GIVEN THE LOAN AND NOT IN THE HANDS OF THE BENEFICI ARIES. IT IS CLEAR FROM THE ORDER OF THE TRIBUNAL IN THAT ORDER OF THE LD. CIT(A) WAS REVERSED ON THE ISSUE OF TAXABILITY OF T HE IMPUGNED AMOUNT IN THE HANDS OF CREDITORS OR ASSESSEE WHO WA S BENEFICIARIES. THE TRIBUNAL HAVE HELD THAT AMOUNT I S REQUIRED TO BE ADDED IN THE HANDS OF THE BENEFICIARIES, THUS , REASONING GIVEN BY THE LD.CIT(A) WAS NOT ACCEPTED. HOWEVER, I N THIS ORDER OF NARMADA EXTRUSIONS (SUPRA), THE TRIBUNAL HAVE AL SO DEALT WITH THE MERIT OF THE ADDITION AND FOUND THAT ADDIT ION TO BE RESTRICTED TO THE EXTENT OF ENTRIES FOUND IN THE MA TERIAL COLLECTED DURING THE COURSE OF SURVEY AT LUNKAD GRO UP AND NOT TO THE EXTENT OF ENTIRE AMOUNT OF LOAN SO TAKEN FRO M LUNKAD GROUP. 13. FROM THE RECORD, WE FOUND THAT ASSESSING OFFICER HA S MADE ADDITION IN RESPECT OF THE LOANS WHICH WERE TA KEN AND EVEN REPAID BY THE ASSESSEE. WHILE MAKING THE ADDIT ION, GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 70 PAGE 70 OF 79 FOLLOWING WAS THE PRECISE OBSERVATIONS OF THE ASSES SING OFFICER :- THE ASSESSEES BALANCE SHEET REFLECTS CREDITS AMOUNTING TO RS. 2,70,21,800/-. HE ASKED TO EXPLAIN THE GENUINENESS OF THE CREDITS AS WELL AS IDENTITY AND CREDITWORTHINESS OF THE CREDITOR, IN RESPONSE, THE ASSESSEE HAS FILED CONFIRMATIONS FROM THE SAID CREDITORS, IN RESPONSE, THE ASSESSEE HAS FILED CONFIRMATIONS FROM THE SAID CREDITORS, COPIES OF FI NAL ACCOUNTS HAVE BEEN FILED IN RESPECT OF ONE CREDITOR AND COPY OF ACKNOWLEDGEMENT OF RETURN IN RESPECT OF ONE PERSON. THE LENDERS NAMES INCLUDE SOME OF THE PERSONS WHO ARE CONSIDERED TO BE REGULAR NAME LENDERS. THE NAMES IN QUESTION ALONGWITH THE AMOUN T SHOWN AS RECEIVED FROM THEM ARE REFLECTED BELOW :- 1. M/S. K.K.PATEL FINANCE LIMITED, INDORE RS. 10,00,000/- 2. M/S.EAST WEST FINVEST INDIA LIMITED, INDORE RS. 35,00,000/- 3. M/S. PURVI FINVEST LTD.,INDROE. RS. 29,00,000/- 4. M/S.TRIMURTHI FINVEST LTD.,INDROE. RS. 61,50,000/- TOTAL RS. 1,35,50,000/ - GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 71 PAGE 71 OF 79 THE SAME WORDINGS ARE GIVEN IN THE SUBSEQUENT ASSESSMENT YEARS FOR MAKING THE ADDITION OF CASH CREDIT. 14. THE LD. CIT(A) HAS DELETED THE ADDITION BY OBSE RVING THAT ADDITION IS WARRANTED IN THE HANDS OF LENDERS AND NOT IN THE HANDS OF THE ASSESSEE, OTHERWISE IT WILL AMOUNT TO DOUBLE ADDITION. ON MERIT OF THE ADDITION SO MADE BY THE A SSESSING OFFICER, WE DO NOT FIND ANY SUBSTANCE IN SO FAR AS THE ASSESSEE HAS DISCHARGED THE ONUS CASTED UPON A COST UPON HIM BY FILING A CONFIRMATION CERTIFICATE OF THE CREDITORS DULY SI GNED AND SPECIFYING FULL NAME, ADDRESS AND PAN OF THE CREDIT ORS. IN ADDITION TO THE CONFIRMATION CERTIFICATE THE ASSESS EE HAS ALSO FILED THE ACKNOWLEDGEMENT FOR FILING OF RETURN OF I NCOME BY THE CREDITOR ALONG WITH THEIR COMPUTATION OF INCOME, AU DITED ACCOUNTS, BANK STATEMENTS AND COPIES OF ACCOUNT. 15. AFTER PERUSING BANK STATEMENT OF THE CREDITORS AS PLACED ON RECORD, WE FIND THAT NO CASH WAS DEPOSITE D IN THE BANK PRIOR TO ISSUANCE OF CHEQUE MOREOVER THERE IS NO CASH GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 72 PAGE 72 OF 79 TRANSACTION IN THE BANK STATEMENT AND WE FOUND THAT ALL THE AMOUNTS ARE RECEIVED AND PAID THROUGH ACCOUNT PAYEE CHEQUES. 16. AS PER MATERIAL PLACED ON RECORD, WE FOUND THAT THE LD. ASSESSING OFFICER HAS NOT MADE ANY EFFORTS BY CALLI NG INFORMATION U/S 133(6) OR BY ISSUING SUMMON U/S 131 TO ANY OF THE CREDITORS WHICH IS EVIDENT FROM THE ASSESSME NT ORDER ITSELF. MOREOVER, IT IS ALSO CLEAR FROM THE ASSESSM ENT ORDER THAT THE ASSESSING OFFICER HAD NEVER ASKED THE ASSESSEE TO PRODUCE THE CREDITORS. 17. AS PER REQUIREMENT OF SECTION 68 THE SUM CREDITED I N THE BOOKS OF ACCOUNTS CAN BE CONSIDERED TO BE THE I NCOME OF THE ASSESSEE IN A CASE WHERE THE ASSESSEE DOES NOT OFFER ANY EXPLANATION OR THE EXPLANATION OFFERED BY HIM, IN T HE OPINION OF ASSESSING OFFICER IS NOT SATISFACTORY. THE EXPLA NATION OF THE ASSESSEE IN THE PRESENT CASE IS THAT ALL THESE CRED ITORS ARE INCOME TAX ASSESSEES AND THEIR PANS HAVE GIVEN ALON GWITH THEIR COPY OF BANK ACCOUNT AS WELL AS PRECEDING YEA RS. BY FILING THESE EVIDENCES, IT CAN BE SAID THAT THE ASSESSEE H AD GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 73 PAGE 73 OF 79 DISCHARGED THE INITIAL BURDEN LAID UPON HIM UNDER S ECTION 68. WHEN THE PARTICULARS REGARDING INCOME TAX ASSESSMEN T AND BANK ACCOUNT, AUDITED BALANCE SHEET DULY INDICATING ADVANCING OF LOAN TO THE ASSESSEE, HAVE BEEN FILED THEN INITIAL BURDEN HAS TO BE HELD TO BE DISCHARGED AND THEN THE BURDEN SHIFTS ON THE REVENUE TO SHOW THAT WHAT IS STATED O R EXPLAINED BY THE ASSESSEE IS NOT SATISFACTORY. NO MATERIAL WH ATSOEVER, HAS BEEN BROUGHT ON RECORD BY THE LD. ASSESSING OFF ICER TO SHOW THAT WHAT WAS EXPLAINED BY THE ASSESSEE, WAS N OT A CORRECT STATE OF AFFAIRS. IF ANY SUM IS FOUND CREDI TED IN THE ACCOUNTS OF THE CREDITORS. THEN THE CREDITORS MAY B E EXAMINED SO AS TO EXPLAIN THE CREDIT SO FAR AS THE SOURCE OF DEPOSIT IN THE ACCOUNT OF THE ASSESSEE IS CONCERNED. THE ASSESSEE CAN BE CONSIDERED TO HAVE EXPLAINED BY BRINGING THE MATERI AL ON RECORD IN THE SHAPE OF CONFIRMATIONS, BANK ACCOUNT AND INCOME TAX NUMBERS OF THAT PERSON. THUS THE ASSESSE E HAD FILED AMPLE EVIDENCE TO DISCHARGE THE BURDEN CAST U PON HIM AND THE LD. ASSESSING OFFICER HAS NOT BROUGHT ANY M ATERIAL ON RECORD TO SHOW THAT THE EXPLANATION FILED BY THE AS SESSEE, WAS GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 74 PAGE 74 OF 79 IN ANY MANNER, UNSATISFACTORY CONSEQUENT THERETO TH E EVIDENCE FILED BY THE ASSESSEE REMAIN UNREBUTTED. 18. THERE IS NO DISPUTE TO THE FACT THAT THE LOAN TAKEN FROM THESE CREDITORS WERE DULY REPAID BY THE ASSESSEE BY ACCOUNT PAYEE CHEQUES IN THE ASSESSMENT YEARS 2005-06 TO 20 07-08 I.E. MUCH PRIOR TO THE DATE OF SEARCH CARRIED BY TH E DEPARTMENT WHICH IS EVIDENT FROM COPIES OF ACCOUNT OF THESE CR EDITORS AVAILABLE ON RECORD. 19. AFTER PERUSING THE BALANCE SHEET OF VARIOUS LENDER COMPANIES AS PER THE AUDITED ACCOUNTS, WE FOUND THA T ALL THE PARTIES FROM WHOM LOAN WAS TAKEN WERE HAVING SUBSTA NTIAL FUNDS AVAILABLE WITH THEM TO ADVANCE THE MONEY. POS ITION OF SHARE CAPITAL, RESERVES AND SURPLUS CASH AND BALANC E, AS PER THE AUDITED BALANCE SHEET WITH VARIOUS COMPANIES WE RE AS UNDER :- NAME OF THE CREDITOR PAID UP SHARE CAPITAL AS ON 31 ST MARCH RESERVE & SURPLUS AS ON 31 ST MARCH CASH & BANK BALANCE AS ON 31 ST MARCH, 2004. EAST WEST FINVEST INDIA LIMITED 3,67,11,000/ - 86,424/ - 21,31,898/ - PURVI FINVEST 4,47,67,000/ - 63,229/ - 20,62,494/ - GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 75 PAGE 75 OF 79 LTD. TRI MURTI FINVEST PVT.LTD. 3,60,00,000/ - 3,08,99,041/ - 21,23,021/ - K.K.PATEL FINANCE LIMITED 89,32, 500 61,43,922/ - 26,73,752/ - 20. MERELY ON THE BASIS OF RETURNED INCOME, THE ASSESSI NG OFFICER JUMPED TO THE CONCLUSION THAT THESE LENDERS WERE NOT HAVING SUFFICIENT FUNDS TO ADVANCE THE MONEY TO THE ASSESSEE. THE LD. ASSESSING OFFICER WITHOUT GOING THROUGH THE AUDITED ACCOUNTS UNNECESSARILY GONE ON THE FACT THAT THESE CREDITORS ARE NOT HAVING SUFFICIENT INCOME TO ADVANCE THE MON EY. IT IS SETTLED LAW THAT THE FINANCIAL WORTH OF A COMPANY C OULD NOT BE JUDGED WITH ITS INCOME BUT ONE HAS TO SEE THAT HOW MANY FUNDS IS AVAILABLE WITH IT IN THE BANK ACCOUNT AT T HE TIME OF ADVANCING LOAN. 21. IT WAS ALSO CONTENTION OF LD. AUTHORIZED REPRESENTA TIVE THAT THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITIO N BY RELYING ON VARIOUS DECISIONS GIVEN IN HIS ORDER IN ADDITION TO THAT RELIANCE WAS ALSO PLACED ON THE FOLLOWING DECISION :- GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 76 PAGE 76 OF 79 (A) CIT VS. ORISSA CORPORATION P.LTD., 159 ITR 78 ( S.C.) IN THE INSTANT CASE, THE HON'BLE APEX COURT HELD AS UN DER :- IN THIS CASE, THE ASSESSEE HAD GIVEN THE NAMES AND ADDRESS OF THE ALLEGED CREDITORS. IT WAS IN THE KNO WLEDGE OF THE REVENUE THAT THE SAID CREDITORS WERE INCOME TAX ASSESSEES. THEIR INDEX NUMBERS WERE INCOME-TAX ASSESSEES. THEIR INDEX NUMBERS WERE IN THE FILE OF THE REVENUE. THE REVENUE DID NOT EXAMINE THE SOURCE OF INCOME OF THE SAID ALLEGED CREDITORS TO FIND OUT WH ETHER THEY WERE CREDIT WORTHY OR WERE SUCH WHO COULD ADVA NCE THE ALLEGED LOANS. THERE WAS NO EFFORT MADE TO PURS UE THE SO-CALLED ALLEGED CREDITORS. IN THOSE CIRCUMSTANCES , THE ASSESSEE COULD NOT DO ANYTHING FURTHER. IN THE PREM ISES, IF THE TRIBUNAL CAME TO THE CONCLUSION THAT THE ASSESS EE HAS DISCHARGED THE BURDEN THAT LAY ON HIM, THEN IT COUL D NOT BE SAID THAT SUCH A CONCLUSION WAS UNREASONABLE OR PRESERVE OR BASED ON NO EVIDENCE. IF THE CONCLUSION IS GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 77 PAGE 77 OF 79 BASED ON SAME EVIDENCE ON WHICH A CONCLUSION COULD BE ARRIVED AT, NO QUESTION OF LAW AS SUCH ARISES. 22. NOW COMING TO THE DECISION OF NARMADA EXTRUSIONS LIMITED IN I.T(SS).A.NOS. 327/IND/2011 ORDER DATED 30.12.2011, AS CITED BY THE LD. CIT DR, WE FOUND TH AT IN THIS CASE ALSO ON MERIT IT WAS HELD THAT THE ADDITION SH OULD BE RESTRICTED WITH REFERENCE TO THE INCRIMINATING DOC UMENTS FOUND DURING COURSE OF SURVEY IN THE CASE OF LUNKAD GROUP FROM 1.4.2006 TO 1.5.2006. IT WAS ALSO OBSERVED AT PAGE 53 OF THE SAID ORDER THAT THE ADDITION SHOULD BE MADE WIT H REFERENCE TO THE AMOUNT OF CASH FOUND TO BE GIVEN BY THE AS SESSEE TO THE LUNKAD GROUP AS PER INCRIMINATING DOCUMENTS SO FOUND AT LUNKAD GROUP DURING SURVEY AFTER GIVING OPPORTUNITY TO THE ASSESSEE FOR CROSS EXAMINATION. MERELY PRESUMPTION WITHOUT ANY MATERIAL ON RECORD TO THE EFFECT THAT EVEN IN R ESPECT OF EARLIER YEARS, THE ASSESSEE MIGHT HAVE GIVEN CASH T O THE LUNKAD GROUP FOR GETTING UNSECURED LOAN, IS NOT JUS TIFIED. IN THE INSTANT CASE BEFORE US, THE ASSESSING OFFICER C OULD NOT BRING OUT ANY MATERIAL TO SUGGEST THAT ANY INCRIMIN ATING ENTRY GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 78 PAGE 78 OF 79 WAS FOUND IN THE DOCUMENTS SO COLLECTED BY THE DEPA RTMENT FROM LUNKAD GROUP WHICH PERTAINS TO THE PERIOD 1.4. 2006 TO 1.5.2006. IT IS NOT IN DISPUTE THAT ALL THE LOAN TR ANSACTIONS WERE THROUGH ACCOUNT PAYEE CHEQUES, CONFIRMATIONS W ERE GIVEN, CREDITWORTHINESS WERE ALSO PROVED FROM THE BALANCE SHEET. FURTHERMORE, ALL THE LOANS WERE ALSO REPAID BY CHEQUES, WE, THEREFORE, DO NOT FIND ANY MERIT IN THE ACTION OF ASSESSING OFFICER FOR MAKING ANY ADDITION IN RESPECT OF THESE LOAN TRANSACTIONS. 23. AS THE ADDITION MADE U/S 68 IS HELD TO BE NOT JUSTI FIED, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DELETING THE DISALLOWANCE OF INTEREST, WHICH WAS BASED ON TH E ADDITION OF CASH CREDIT U/S 68. 24. AS WE HAVE ALREADY DEALT WITH THE ISSUE ON MERIT WE ARE NOT GOING IN THE VALIDITY OF THE ASSESSMENT FRA MED U/S 153A READ WITH SECTION 143(3) FOR MAKING ADDITION, WHERE NO INCRIMINATING MATERIAL RELATING TO ASSESSMENT YEARS IN QUESTION WERE FOUND AND SEIZED FROM THE PREMISES OF THE ASSESSEE. GIRISH KUMAR SHARDA, INDORE. I.T.A.NOS. 30 TO 33/IND/2012 AND C.O.NOS. 19 TO 22/ IND/2012 79 PAGE 79 OF 79 25. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE AS W ELL AS CROSS OBJECTIONS FILED BY THE ASSESSEE ARE DISMI SSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 30 TH JANUARY, 2014. SD/- SD/- (JOGINDER SINGH) (R. C. SHARMA) JUDIC IAL MEMBER ACCOUNTANT MEMBER DATED : 30 TH JANUARY, 2014. CPU* 26.27.12.30.1