Hotel Maharaja, Bargarh V. DCIT (Central), Sambalpur

ITSSA 31/CTK/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4362 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 26-02-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 19-03-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: M K GAUTAM
• Assessee Lawyers: H K PADHEE; SUDIP SAWDIA
• Keywords: Bogus Share capital; Unexplained investment; Depreciation; Search and seizure; Document seized; Period of limitation; Question of law; Initiation of penalty proceedings; Block assessment; Documents seized; Revenue expenditure; Set aside
• Section: 143(3); 142(1); 133A; 153A; 234B; 201; 143(2); 191; 264; 192; 139(4); 64; 73; 13; 153; 22; 153C; 147; 68; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE SHRI C.M. GARG, JM & SHRI L.P. SAHU, AM ( ) / IT(SS) A NO S . 26 TO 31 /CTK/201 8 ( / ASSESSMENT YEAR : 20 0 8 - 2009 TO 2 01 3 - 201 4 ) M/S HOTEL MAHARAJA, WARD NO.10, NEAR GOVT. BUS STAND, BARGARH - 768028 VS. DCIT, CENTRAL CIRCLE, SAMBALPUR ./ PAN NO. : A A BFH 8992 H AND . / ITA NO . 95 /CTK/201 8 ( / ASSESSMENT YEAR : 20 14 - 201 5 ) M/S HOTEL MAHA RAJA, WARD NO.10, NEAR GOVT. BUS STAND, BARGARH - 768028 VS. DCIT, CENTRAL CIRCLE, SAMBALPUR ./ PANNO. : A ABFH 8992 H ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI H.K.PADHEE, ADVOCATE & SH. SUDIP SAWDIA, ADVOCATE /REVENUE BY : SHRI M.K.GAUTAM , CIT - DR / DATE OF HEARING : 29 / 01 /20 20 / DATE OF PRONOUNCEMENT : 25 / 02 /20 20 / O R D E R PER L.P.SAHU, AM : TH ESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE SEPARATE ORDER S OF CIT( A ) - 2 , BHUBANESWAR , ALL DATED 06.11.2017 FOR THE ASSESSMENT YEARS 2008 - 2009 TO 2013 - 2014 & 2014 - 2015, RESPECTIVELY . IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 2 IT(SS)A NOS.26 & 2 7 /CTK/2018 2. THESE TWO APPEALS RELATE TO ASSESSMENT YEARS 2008 - 2009 & 2 0 09 - 201 0 IN WHICH THE ASSESSEE TAKEN COMMON GROUNDS WHICH ARE AS UNDER : - 1. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) OUGHT TO HAVE HELD THE ASSESSMENT SO MADE BY THE LEARNED AO TO BE TIME BARRED AS THE SEARCH & SEIZU RE OPERATION WAS CONDUCTED ON 21/22.08.2013 AND THE ASSESSMENT UNDER CONSIDERATION WAS PASSED ON DT.27.06.2016, WHICH IS EXCEEDING THE STATUTORY PERIOD OF LIMITATION AS PROVIDED U/S.L53B OF THE I.T.ACT, 1961. 2. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) OUGHT TO HAVE ENTIRELY DELETED THE ADDITION MADE BY THE AO ON ESTIMATION OF PROFIT, AS THERE IS NO MATERIAL IN THIS RESPECT RELATING/PERTAINING TO THE ASSESSMENT YEAR UNDER CONSIDERATION WAS FOUND/SEIZED DURING THE COURSE OF SEARCH & SEIZURE OPERATION U/S.132 OF THE I.T.ACT,1961 CONDUCTED ON 21/22.08.2013. 3. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ADOPTION OF PROFIT RATE BY WORKING OUT FROM A LOOSE PAPER RELATING/PERTAINING TO OTHER ASSESSMENT YEAR , IS NOT PROPER AND ALSO UNJUSTIFIED, WHICH IS ALSO OTHERWISE HIGH AND EXCESSIVE AND WITHOUT ANY MATERIAL NEXUS OR BRINGING ANY COMPATIBLE CASES. THE LEARNED CIT(A) OUGHT TO HAVE ACCEPTED THE INCOME DISCLOSED BY THE ASSESSEE - APPELLANT IN ABSENCE OF ANY INC RIMINATING MATERIAL RELATING TO THE PRESENT YEAR FOUND/SEIZED DURING THE COURSE OF SEARCH OPERATION CONDUCTED ON 21/22.08.2013. 4. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LEVY OF INTEREST U/S.234A, 234B AND 234D OF THE IT ACT, 1961 IS ILLEGAL, UNJUSTIFIED AND BAD IN LAW, WHICH THE LEARNED CIT(A) OUGHT TO HAVE VACATED. 5. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) OUGHT TO HELD AND VACATED THE INITIATION OF PENALTY PROCEEDINGS U/S.271B AND 271( 1 )(C) THE SAME BEING ILLEGAL, UNJUSTIFIED AND BAD IN LAW. 6. FOR THAT THE ASSESSEE CRAVES LEAVE TO RAISE ANY OTHER GROUND OR GROUNDS TO BE RAISED DURING THE COURSE OF HEARING OF THE APPEAL. IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 3 3. DURING THE COURSE OF HEARING OF APPEALS, THE L D.AR OF THE ASSESSEE SUBMITTED THAT EXCEPT GROUND NOS.2&3 RAISED IN BOTH THE APPEALS, OTHER GROUNDS ARE TO BE TREATED AS NOT PRESSED , WHICH IS ALSO CLEAR FROM PARA 11 OF THE WRITTEN SUBMISSION FILED BY THE ASSESSEE SEPARATELY FOR BOTH THE ASSESSMENT YEARS . ACCORDINGLY, WE DISMISS THE GROUNDS RAISED BY THE ASSESSEE IN GROUND NOS.1, 4 & 5 AS NOT PRESSED. GROUND NO.6 IS GENERAL IN NATURE, THEREFORE, DOES NOT REQUIRE ANY ADJUDICATION. THUS, WE PROCEED TO DECIDE THE GROUND NOS.2 & 3 RAISED IN THE APPEALS FOR ASS ESSMENT YEARS 2008 - 2009 & 2009 - 2010 . 4 . FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGAGED IN HOTEL BUSINESS. ON ISSUANCE OF WARRANT ISSUED BY THE DIRECTOR OF INCOME TAX (INVESTIGATION), BHUBANESWAR, A SEARCH AND SEIZURE OPERATION U/S.132 OF THE INCOME TAX A CT 1961 WAS CONDUCTED IN THE RESIDENTIAL AND BUSINESS PREMISES OF THE ASSESSEE - FIRM AT MAHARAJA HOUSE & HOTEL MAHARAJA, OPPOSITE GOVT. BUS STAND, BARGARH ON 21.08.2013. THEREFORE, THE CASE WAS TAKEN FOR SCRUTINY ASSESSMENT U/S. 153A READ WITH SECTION 143(3 ) OF THE INCOME TAX ACT 1961 AND A NOTICE U/S. 153A OF THE IT ACT 1961 WAS ISSUED TO THE ASSESSEE CALLING FOR ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2008 - 09 TO BE FILED ON OR BEFORE THE DATE SPECIFIED IN THE SAID NOTICE. IN RESPONSE TO THE SAID NOTIC E, THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION ELECTRONICALLY ON 28.08.2014 SHOWING TOTAL INCOME OF RS.2,06,900/ - IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 4 FROM HOTEL BUSINESS. EARLIER ALSO, THE ASSESSEE - FIRM HAD FILED ITS RETURN OF INCOME U/S. 139(4) ON 13. 04.2009 FOR THE YEAR UNDER CONSIDERATION SHOWING TOTAL INCOME OF RS. 27,430/ - ONLY. SUBSEQUENTLY, THE CASE WAS FIXED FOR HEARING AND NOTICES U/S, 143(2) & 142(1) OF THE INCOME TAX ACT, 1961 WERE ISSUED AND SERVED ON THE ASSESSEE ALONG WITH A QUESTIONNAIRE . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO ON VERIFICATION OF RECORDS FOUND THAT THE ASSESSEE - FIRM HAS SHOWN TO HAVE RECEIVED GROSS RECEIPTS OF RS.42,89,091/ - FROM HOTEL BUSINESS. AFTER DEDUCTING VARIOUS EXPENSES INCLUDING DEPRECIATION, THE ASSE SSEE - FIRM HAS ARRIVED AT THE GROSS PROFIT OF RS.5,03,043/ - WHICH WORKS OUT TO ABOUT 11.73%. THEREAFTER, IT HAS ARRIVED AT THE NET PROFIT OF RS.2,06,904/ - AFTER DEDUCTING INTEREST ON CAPITAL AND REMUNERATION TO PARTNERS AMOUNTING TO RS.2,48,139/ - AND RS.48, 000/ - RESPECTIVELY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO ASKED THE ASSESSEE TO FURNISH THE BASIS WITH DOCUMENTARY EVIDENCE REGARDING THE NET PROFIT ARRIVED AT AND DISCLOSED IN ITS RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S. 1 53A OF THE INCOME TAX ACT, 1961. THE ASSESSEE WAS ALSO ASKED TO PRODUCE RELEVANT BOOKS OF ACCOUNT IN SUPPORT OF THE FINANCIAL PARTICULARS/STATEMENTS FILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. FINALLY, AFTER DETAILED DISCUSSION, IN ABSENCE OF ANY EVIDENCE REGA RDING THE SOURCE OF INVESTMENT AND REGULAR BOOKS OF ACCOUNT SUCH AS CASH BOOK & LEDGER, THE AO CONCLUDED THAT THE ASSESSEE IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 5 FIRM HAS INVESTED THE AMOUNT OF RS.13,63,378/ - AS DETERMINED/ESTIMATED BY THE DEPARTMENTAL VALUATION OFFICER, OUT OF ITS OWN INCOME E ARNED FROM UNDISCLOSED SOURCES. THEREAFTER THE AO COMPLETED THE ASSESSMENT U/S.153A R.W.S.143(3) OF THE ACT FOR THE ASSESSMENT YEAR 2008 - 2009 MAKING ADDITION OF RS.13,63,378/ - TREATING THE SAME AS UNEXPLAINED INVESTMENT U/S.69 OF THE ACT AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 5 . AGGRIEVED FROM THE AOS ORDER, THE ASSESSEE APPEALED BEFORE THE CIT(A) AND THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE HAS REJECTED THE PLEA OF THE ASSESSEE WITH REGARD TO LEGAL GROUND THAT NO ADDI TION CAN BE MADE WITHOUT HAVING ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH IN THE ASSESSMENT FRAMED U/S.153A OF THE ACT AND PARTLY ALLOWED THE APPEAL OF THE ASSESSEE . 6 . FURTHER AGGRIEVED FROM THE ORDER OF THE CIT(A), THE ASSESSEE IS IN APPEALS BEFORE THE INCOME TAX APPELLATE TRIBUNAL. 7 . LD. AR WITH REGARD TO THE ABOVE LEGAL ISSUE HAS FILED WRITTEN SUBMISSIONS, WHICH ARE AS UNDER : - 1. THE APPELLANT/ASSESSEE, A FIRM, CARRIES ON HOTEL BUSINESS. ON 21/22.08. 2013, A SEARCH & SEIZURE OPERATION U/S.132 OF THE INCOME - TAX ACT, 1961 (HEREINAFTER 'THE ACT') WAS CARRIED OUT IN THE BUSINESS PREMISES OF THE ASSESSEE - FIRM. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U / S .153A R.W.S. 143(3) OF THE ACT FOR THE AYS 2008 - 09 INTERALIA MAKING ADDITION OF RS.20,15,873 ON ESTIMATION OF NET PROFIT AT 47% OF THE GROSS RECEIPTS, WHICH, IN APPEAL, IS REDUCED BY THE LEARNED CIT(A) TO RS.9,43,600 ON ESTIMATION OF NET PROFIT AT 22% OF THE GROSS RECEIPTS. SUCH ADDITION IS NOW IN DISPU TE OF THE ASSESSEE BEFORE THE IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 6 HON'BLE TRIBUNAL ON GROUNDS OF APPEAL AS RAISED IN GROUND NOS.2 AND 3, WHICH ARE AS UNDER: 2. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) OUGHT TO HAVE ENTIRELY DELETED THE ADD ITION MADE BY THE AO ON ESTIMATION OF PROFIT, AS THERE IS NO MATERIAL IN THIS RESPECT RELATING/PERTAINING TO THE ASSESSMENT 'YEAR UNDER CONSIDERATION WAS FOUND/SEIZED' DURING THE COURSE OF SEARCH & SEIZURE OPERATION U/S. 132 OF THE I.T.ACT,1961 CONDUCTED ON 21/22.08.2013. 3. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ADOPTION OF PROFIT RATE BY WORKING OUT FROM A LOOSE PAPER RELATING/PERTAINING TO OTHER ASSESSMENT YEAR, IS NOT PROPER AND ALSO UNJUSTIFIED, WHICH IS A LSO OTHERWISE - HIGH AND EXCESSIVE AND WITHOUT ANY MATERIAL NEXUS OR BRINGING ANY COMPATIBLE CASES. THE LEARNED CIT(A) OUGHT TO HAVE ACCEPTED THE INCOME DISCLOSED BY THE ASSESSEE - APPELLANT IN ABSENCE OF ANY I N CRIMINATING MATERIAL RELATING TO 'THE PRESENT YE AR FOUND/SEIZED DURING THE COURSE OF SEARCH OPERATION CONDUCTED ON 21/22.08.2013. 2. IN THIS RESPECT, IT IS HUMBLY SUBMITTED THAT AS IS EVIDENT FROM THE ASSESSMENT ORDER THAT THE ASSESSING OFFICER ESTIMATED THE NET PROFIT FOR THE ASSESSMEN T YEAR 2008 - 09 COMPLETELY .BASED ON SEIZED MATERIAL I.E., HMB - 3 PAGE NOS.30, 32 AND 60, WHICH RELATE TO ASSESSMENT YEAR 2014 - 15 (PART PERIOD), ASSESSMENT YEAR 2012 - 13 AND ASSESSMENT YEAR 2013 - 14 RESPECTIVELY,'WHICH THE CIT(A) HAS CLEARLY STATED IN PARAGRAP H 4.1 OF HIS ORDER THUS - 'THIS DOCUMENT GIVES THE ACTUAL STATE OF AFFAIRS OF THE BUSINESS OF THE APPELLANT FOR AYS 2012 - 13 F 2013 - 14 AND 2014 - 15'. NOWHERE EITHER IN THE ASSESSMENT ORDER OR IN THE FIRST APPEAL ORDER THERE IS ANY DISCUSSION OR FINDING ABOUT A NY INCRIMINATING MATERIAL BEING FOUND DURING THE SEARCH OPERATION JUSTIFYING ESTIMATION OF PROFIT FOR THE ASSESSMENT YEAR 2008 - 09. THUS IT IS CLEAR THAT THERE IS NO SEIZED MATERIAL RELATING/PERTAINING TO THE AY 2008 - 09 BUT THE ADDITION IS MADE BY BOTH THE AUTHORITIES BELOW WITHOUT ANY INCRIMINATING MATERIAL BEING SEIZED DURING THE SEARCH OPERATION. IT WAS SUBMITTED BEFORE THE LEARNED CIT(A) THAT NO SUCH ADDITION CAN BE MADE IN THE ASSESSMENT PROCEEDINGS U/S.L53A WITHOUT ANY INCRIMINATING MATERIAL FOUND DURI NG THE COURSE OF SEARCH AND THUS PRAYED FOR DELETION OF THE ADDITION ON ESTIMATION OF PROFIT AND IN SUPPORT RELIANCE WAS PLACED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS. (1) COMMISSIONER OF INCOME TAX V. KABUL CHAWLA (2015) 281 CTR (DEL) 45. (2) PRINCIPAL COMMISSIONER OF INCOME TAX V. KURELEL PAPER MILLS (P) LTD (216) 380 ITR 571 (DELHI) (3) GURINDER SINGH BAWA V. DEPUTY COMMISSIONER OF INCOME TAX (TTAT MUMBAI 'G' BENCH (2014) 150 ITD 40 (MUMBAI). (4) J.GOPAI RAO V. STATE OF OR ISSA (1993) 88 STC 488 (ORI) (5) STATE OF ORISSA V. J.P.SIKIRIA & CO (1987) 67 STC 101 (ORI.) HOWEVER, THE LEARNED CIT(A) WAS OF THE VIEW THAT THE AO IS EMPOWERED TO MAKE ADDITION EVEN WITHOUT ANY INCRIMINATING IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 7 MATERIAL BEING AVAILABLE AGAINST THE ASSESSEE AND IN SUPPORT HE PLACED RELIANCE ON THE FOLLOWING DECISIONS. 1. E.N.GOPAKUMAR V. COMMISSIONER OF INCOME - TAX (CENTRAL) [2016] 75 TAXMANN.COM 215 (KERALA). 2. COMMISSIONER OF INCOME - TAX, CENTRAL, KANPUR V. * RAJ KUMAR ARORA [2014] 52 TAXMANN.COM 172 (ALLAHABAD) 3. SMT. DAYAWANTI V. COMMISSIONER OF INCOME - TAX [2016] 75 TAXMANN.COM 308 (DELHI) 3. THAT IN THE CASE OF THE PRESENT ASSESSEE NO INCRIMINATING MATERIAL WHATSOEVER WAS FOUND RELATING OR PERTAINING TO THE ASSESSMENT YEAR UNDER CONSIDERATION DURING THE SEARCH OPERATION. LAW IS WELL SETTLED THAT IN THE ABSENCE OF ANY INCRIMINATING MATERIAL UNEARTHED DURING THE SEARCH PERTAIN ING TO ANY PARTICULAR AY, THE COMPLETED ASSESSMENT FOR THE SAID AY COULD NOT HAVE BEEN DISTURBED BY MAKING VARIOUS ADDITIONS. IN SUPPORT, THE ASSESSEE PLACES RELIANCE, ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS OUT OF CATENA OF DECISIONS IN THIS RESPECT. (1 ) COMMISSIONER OF INCOME TAX V. KABUL CHAWLA (2015) 281 CTR (DEL) 45: 380 ITR 573 (DELHI) THE LEGAL POSITION THAT EMERGES ON A PERUSAL OF SECTION 153 A AND SECTION 132 OF THE INCOME - TAX ACT, 1961, 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 IN RESPECT OF WHOM SEARCH WAS CONDUCTED REQUIRING, HIM TO FILE RETURNS FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMEN T YEAR IN WHICH THE SEARCH TAKES PLACE. (II) ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH ASSESSMENT YEARS WILL HAVE TO BE COMPUTED BY THE ASSESSING OFFICERS'' AS A FRESH EXERCISE. ( III ) THE ASSES SING OFFICER WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT ASSESSMENT YEAR IN WHICH THE SEARCH TAKES PLACE. THE ASSESSING OFFICER HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME ' OF THE SIX YEARS IN SEP ARATE 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 ASSESSMENT YEARS 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 ASSESSING OFFICER WHICH CAN HE RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE NR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY, AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF THE SEIZED MATERIAL. IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 8 (V) IN THE ABSENCE OF ANY INCRIMINATING MATERIA L, 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 ASSE SSMENT PROCEEDINGS. (VI) IN SO FAR 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 SEPARA TELY FOR EACH ASSESSMENT YEAR ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE ASSESSING OFFICER. (VII) COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE ASSESSING OFFICER 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 PRO DUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. HELD ACCORDINGLY, THAT THE MATTER RELATED TO THE ASSESSMENT YEARS 2G02 - 03, 2005 - 06 AND 2006 - 07. ON THE DATE OF THE SEARCH THE ASSESSMENTS ALREADY STOOD COMPLETED. SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEARCH, HO ADDITIONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. (2) PRINCIPAL COMMISSIONER OF INCOME - TAX V. KURELE PAPER MILLS P. LTD. [2016] 380 ITR 571 (DEL) JULY 6, 2015. HELD, DISMISSIN G 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 OF THE INCOME - TAX ACT, 1961, FOR THE PURPOSES OF MAKING ADDITIONS ON ACCOUNT OF SHARE CAPITAL. THERE WAS NOTHING TO SHOW THAT THE FACTUAL DETERMINATION WAS PERV ERSE. [THE SUPREME COURT HAS DISMISSED THE SPECIAL LEAVE PETITION FILED BY THE DEPARTMENT AGAINST THIS JUDGMENT: [2016] 380ITR (ST.) 64 ED.] (3) PR.CIT - 2 V. SALASAF STOCK BROKING LTD. (G.A. NO. 1929 OF 2016/ITAT NO. 264 OF 2016) DATED 24/08/2016 C ALCUTTA HIGH COURT IN THE SAID CASE, THE LEARNED TRIBUNAL WAS OF THE' OPINION THAT THE ASSESSING OFFICER HAD NO JURISDICTION UNDER SECTION 153 A OF THE INCOME TAX ACT TO REOPEN THE CONCLUDED CASES WHEN THE SEARCH AND SEIZURE DID NOT DISCLOSE ANY MCRIMINAT ING MATERIAL. IN TAKING THE AFORESAID VIEW, IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 9 THE LEARNED TRIBUNAL RELIED UPON A JUDGEMENT OF DELHI HIGH COURT IN THE CASE OF CIT[A] VS. KABUL CHAWLA REPORTED IN 380 ITR 573. THE AGGRIEVED REVENUE APPEALED BEFORE THE HON'BLE HIGH COURT. THE HON'BLE HIGH COU RT DISMISSED THE APPEAL BY OBSERVING AS UNDER: 'WE ARE IN AGREEMENT WITH THE VIEWS EXPRESSED BY THE KARNATAKA HIGH COURT THAT MCRIMINATING MATERIAL IS A PRE - REQUISITE BEFORE POWER COULD HAVE BEEN EXERCISED UNDER SECTIONL53C READ WITH SECTION 153A. IN THE CASE BEFORE US, THE ASSESSING OFFICER, HAS MADE DISALLOWANCES OF THE EXPENDITURE, WHICH WERE ALREADY DISCLOSED, FOR ONE REASON OR THE OTHER. BUT SUCH DISALLOWANCES WERE NOT CONTEMPLATED BY THE PROVISIONS CONTAINED UNDER SECTION 153C READ WITH SECTION 153A . THE DISALLOWANCES MADE BY THE ASSESSING OFFICER WERE UPHELD BY THE CIT(A) BUT THE LEARNED TRIBUNAL DELETED THOSE DISALLOWANCES.' IN THAT VIEW OF THE MATTER, WE ARE UNABLE TO ADMIT THE APPEAL. THE APPEAL IS, THEREFORE, DISMISSED. (4) CIT V. IBC KNOWLEDGE PARK (P) LTD. ([2016] 60 TAXMANN.COM 108 (KAR) IN THIS CASE, HON'BLE KAMATAKA HIGH COURT HAS HELD THAT MATERIALS SUCH AS BOOKS OF ACCOUNT, DOCUMENTS OR VALUABLE ASSETS FOURID DURING A SEARCH SHOULD BELONG TO A THIRD PARTY WHICH WORLD LEAD TO AN INFERENCE OF UNDISCLOSED INCOME OF SUCH THIRD PARTY. SUCH AN INFERENCE SHOULD BE RECORDED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER THE SEARCHED PERSONS' AND COMMUNICATED TO THE ASSESSING OFFICER HAVING JURIS DICTION OVER SUCH THIRD PARTY' ALONG WITH THE SEIZED DOCUMENTS AND OTHER INCRIMINATING MATERIALS ON THE BASIS OF WHICH THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH THIRD PARTY WOULD ISSUE NOTICE UNDER SECTION 153C. ON RECEIPT OF THE AFORESAID MATERI AL, THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH THIRD PARTY WOULD PROCEED AGAINST THE SAID THIRD PARTY. THUS, WHERE NO MATERIAL BELONGING TO A THIRD PARTY IS. FOUND DURING A SEARCH, BUT ONLY AN INFERENCE OF AN UNDISCLOSED INCOME IS DRAWN DURING THE COURSE OF ENQUIRY, DURING POST - SEARCH ENQUIRY, SECTION 153C WOULD HAVE NO APPLICATION. THUS, THE DETECTION OF INCRIMINATING MATERIAL LEADING TO AN INFERENCE OF UNDISCLOSED INCOME, IS A SINE QUA NON FOR INVOCATION OF SECTION 153C. (5) CIT V. VEER PRABHU MARKETING LTD. [2016] 73 TAXMANN.COM 149 (CALCUTTA). THE FACTS, IN THIS CASE, ARE THAT THE AO MADE DISALLOWANCES OF THE EXPENDITURE, WHICH WERE ALREADY DISCLOSED, FOR ONE REASON OR THE OTHER. BUT SUCH DISAL LOWANCES WERE NOT CONTEMPLATED BY THE PROVISIONS CONTAINED UNDER SECTION 153C READ WITH SECTION 153A. THE DISALLOWANCES MADE BY THE ASSESSING OFFICER WERE UPHELD BY THE CIT(A) BUT THE LEARNED TRIBUNAL DELETED THOSE DISALLOWANCES. HON'BLE CALCUTTA HIGH COUR T HAS UPHELD THE ORDER OF THE TRIBUNAL DELETING THE ADDITION. IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 10 HON'BLE CALCUTTA HIGH COURT HAS FOLLOWED THE DECISION HON'BLE KARNATAKA HIGH COURT AND IN PARA 8 OF THEIR ORDER HOLDING THAT THE VIEWS EXPRESSED BY THE KARNATAKA HIGH COURT THAT INCRIMINATING M ATERIAL IS A PREREQUISITE BEFORE POWER COLD HAVE BEEN EXERCISED UNDER SECTION 153C, READ WITH SECTION 153A IS CORRECT. (6) GURINDER SINGH BAWA V. DEPUTY COMMISSIONER OF INCOME TAX (ITAT MUMBAI 'G' BENCH (2014) 150 ITD 40 (MUMBAI). .IN THIS CASE THE ASSESSING OFFICER HAD NOT REFERRED TO ANY INCRIMINATING MATERIAL FOUND DURING THE SEARCH BASED ON WHICH ADDITION HAD BEEN MADE. HON'BLE TRIBUNAL RELYING ON THE SPECIAL BENCH DECISIONS DELETED THE ADDITIONS HOLD ING THAT THE ASSESSING OFFICER HAD NO JURISDICTION TO MAKE ADDITION UNDER S.153A. (7) HARDEV JESGWABU V. ACIT IN ITA NO,369,339,340&341/AGRA./2012 ORDER DT. 31.5.2013 (ITAT AGRA) IN THIS CASE WHERE NO ADVERSE OR INCRIMINA TING MATERIAL WAS FOUND AS A RESULT OF SEARCH WHICH CAN BE MADE THE BASIS FOR ASSESSING OFFICER TO HAVE .SATISFIED THAT THE INCOME RELATING TO THE ASSESSEE, HAS BEEN UNEARTHED DURING THE SEARCH, AND WHEN THE ASSESSING OFFICER HAS NOT REFERRED TO ANY SEIZED DOCUMENTS OR MATERIAL IN THE ASSESSMENT ORDERS ON THE BASIS OF WHICH THE ADDITION HAS BEEN, HON'BLE ITAT DELETED THE ADDITION! INCLUDING THE ADDITION OF NOTIONAL ANNUAL LETTING VALUE BEING DETERMINED ON ESTIMATION. (8) CIT VS. ANIL KR. BHATIA (2012 ), 2010 - 11 TAXMAN 453 (DEL) IN THIS CASE HON'BLE HIGH COURT HAS HELD THAT IN ABSENCE OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH AN ADDITION U/S 153A OF THE ACT CANNOT BE MADE IN THE ASSESSMENT FRAMED THERE UNDER. (9) SHRI ABHISHEK LO DHA V. DCIT IN ITA NO.4910/MUM/2015 ORDER DT. 07/10/2016 (ITAT MUMBAI) SIMILAR VIEW IS TAKEN BY HON'BLE ITAT THAT NO ADDITION U / S .153A CAN BE MADE IN ABSENCE OF INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. (10) PR.COMMFSSIONER OF INCOME - TAX, CENTRAL 2, V . MEETA GUTGUTIA IN ITA NO.306/2017 DT.25.05.2017. IN THE PRESENT CASE THE ENTIRE LAW WAS EXPLAINED ON WHETHER CONCLUDED ASSESSMENTS' CAN BE REOPENED U/S' 153A EVEN IN THE ABSENCE OF INCRIMINATING MATERIAL FOUND DURING THE SEARCH IN THE LIGHT OF THE APPARENTLY CONFLICTING VERDICTS IN CIT VS. KABUL CHAWLA 380 ITR 573 (DEL) , (SUPRA) AND DAYAWANTI GUPTA V. CIT 390 ITR 496 (DEL) IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 11 AND HELD AFFIRMATIVELY IN FAVOUR OF THE ASSESSEE. THE RELEVANT PO RTIONS OF THE JUDGEMENT ARE ON PARAGRAPHS 55 TO 71 OF THE SAID DECISION, WHICH ARE AS UNDER: '55. ON THE LEGAL ASPECT OF. INVOCATION OF SECTION 153A IN RELATION TO AYS 2000 - 01 TO 2003 - 04, THE CENTRAL PLANK OF THE REVENUE'S SUBMISSION IS THE DECISION OF THI S COURT IN DAYAWANTI GUPTA (SUPRA). BEFORE BEGINNING TO EXAMINE THE SAID DECISION, IT IS NECESSARY TO REVISIT THE LEGAL LANDSCAPE IN LIGHT OF THE ELABORATE ARGUMENTS ADVANCED BY THE REVENUE. 56. SECTION 153A OF THE ACT IS TITLED 'ASSESSMENT IN CASE OF SEA RCH 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 INV OCATION OF SECTION 153A QUA EACH OF THE AYS WOULD BE JUSTIFIED. 57. THE QUESTION WHETHER UNEARTHING OF INCRIMINATING MATERIAL RELATING TO ANY ONE OF THE AYS COULD JUSTIFY THE RE - OPENING OF THE ASSESSMENT FOR ALL THE EARLIER AYS WAS CONSIDERED BOTH IN CIT V. ANIL KUMAR BHATIA (SUPRA) AND CIT V. CHETAN DAS LACHMAN DAS (SUPRA). INCIDENTALLY, BOTH THESE 'DECISIONS WERE DISCUSSED THREADBARE IN THE DECISION OF THIS COURT IN KABUL CHAWLA (SUPRA). AS FAR AS CIT V. ANIL KUMAR BHATIA (SUPRA) WAS CONCERNED, THE COURT IN PARAGRAPH 24 OF THAT DECISION NOTED, THAT 'WE ARE NOT CONCERNED WITH A CASE WHERE NO INCRIMINATING MATERIAL WAS FOUND DURING THE SEARCH CONDUCTED UNDER SECTION 132 OF THE ACT. WE THEREFORE EXPRESS NO OPINION AS TO WHETHER SECTION 153A CAN BE INVOK ED EVEN UNDER SUCH SITUATION'. THAT QUESTION WAS, THEREFORE, LEFT OPEN. AS FAR AS CIT V CHETAN DAS LACHMAN DAS (SUPRA) IS CONCERNED, IN PARA 11 OF THE DECISION IT WAS OBSERVED: '11. SECTION 153A (1) (B) PROVIDES FOR THE ASSESSMENT OR REASSESSMENT OF THE T OTAL INCOME OF THE SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE - ASSESSMENT YEAR, RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH TOOK PLACE. TO REPEAT, THERE IS NO CONDITION IN THIS SECTION THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDEN CE FOUND IN THE COURSE OF THE SEARCH OR OTHER POST - SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE ASSESSING OFFICER WHICH CAN BE RELATED TO THE EVIDENCE FOUND. THIS, HOWEVER, DOES NOT MEAN THAT THE ASSESSMENT UNDER SECTION 153A CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL.' 58. IN KABUL CHAWLA (SUPRA), THE COURT DISCUSSED THE DECISION IN FILATEX INDIA LTD. V. CIT (SUPRA) A S WELL AS THE ABOVE TWO DECISIONS AND OBSERVED AS UNDER: '31. WHAT DISTINGUISHES THE DECISIONS BOTH IN CIT V. CHETAN DAS LACHMAN DAS (SUPRA), AND FILATEX INDIA LTD. V. CIT - IV (SUPRA) IN THEIR APPLICATION TO THE PRESENT CASE IS THAT IN BOTH THE SAID CA SES THERE WAS IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 12 SOME MATERIAL UNEARTHED DURING THE SEARCH, WHEREAS IN THE PRESENT CASE THERE ADMITTEDLY WAS NONE. SECONDLY, IT IS PLAIN FROM A C AREFUL READING OF THE SAID TWO DECISIONS THAT THEY DO NOT HOLD THAT ADDITIONS CAN BE VALIDLY MADE TO INCOME FORMIN G THE SUBJECT MATTER OF COMPLETED ASSESSMENTS PRIOR TO THE SEARCH EVEN IF NO INCRIMINATING MATERIAL WHATSOEVER WAS UNEARTHED DURING THE SEARCH. 32. RECENTLY BY ITS ORDER DATED 6TH JULY 2015 IN ITA NO. 369 OF 2015 (PR. COMMISSIONER OF INCOME TAX V. KURELE PAPER MILLS P. LTD.), THIS COURT DECLINED TO FRAME A QUESTION OF LAW IN A CASE WHERE, IN THE ABSENCE OF ANY INCRIMINATING MATERIAL BEING FOUND DURING THE SEARCH UNDER SECTION 132 OF THE ACT, THE REVENUE SOUGHT TO JUSTIFY INITIATION OF PROCEEDINGS UNDER SEC TION 153A OF THE ACT AND MAKE AN ADDITION UNDER SECTION 68 OF THE ACT ON BOGUS SHARE CAPITAL GAIN. THE ORDER OF THE CIT(A), AFFIRMED BY THE ITAT, DELETING THE ADDITION, WAS NOT INTERFERED WITH.' 59. IN KABUL CHAWLA (SUPRA), THE COURT REFERRED TO THE DECIS ION OF THE RAJASTHAN HIGH COURT IN JAI STEEL (INDIA), JODHPUR V. ACIT (2013) 36 TAXMAN 523 (RAJ). THE SAID PART OF THE DECISION IN KABUL CHAWLA (SUPRA) IN PARAS 33 AND 34 READS AS UNDER: '33. THE DECISION OF THE RAJASTHAN HIGH COURT IN JAI STEEL (INDIA), JODHPUR V. ACIT (SUPRA) INVOLVED A CASE WHERE CERTAIN BOOKS OF ACCOUNTS AND OTHER DOCUMENTS THAT HAD NOT BEEN PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT WERE FOUND IN THE COURSE OF SEARCH. IT WAS - FIELD WHERE UNDISCLOSED INCOME OR UNDISCLOSED PROPERTY H AS BEEN FOUND AS A CONSEQUENCE OF THE SEARCH, THE SAME WOULD ALSO BE TAKEN INTO CONSIDERATION WHILE COMPUTING THE TOTAL INCOME UNDER SECTION 153A OF THE ACT. THE COURT THEN EXPLAINED AS UNDER: '22. IN THE FIRM OPINION OF THIS COURT FROM A PLAIN READING OF THE PROVISION ALONG WITH THE PURPOSE AND PURPORT OF THE SAID PROVISION, WHICH IS INTRICATELY LINKED WITH SEARCH AND REQUISITION UNDER SECTIONS 132 AND 132A OF THE ACT, IT IS APPARENT THAT: (A) THE ASSESSMENTS OR REASSESSMENTS, WHICH STAND ABATED IN TERM S OF II PROVISO TO SECTION 153A OF THE ACT, THE AO ACTS UNDER HIS ORIGINAL JURISDICTION, FOR WHICH, ASSESSMENTS HAVE TO BE MADE; (B) REGARDING OTHER CASES, THE ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT WILL BE M ADE ON THE BASIS OF INCRIMINATING MATERIAL; AND (C) IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE.' 34. THE ARGUMENT OF THE REVENUE THAT THE AO WAS FREE TO DISTU RB INCOME DE HORS THE INCRIMINATING MATERIAL WHILE MAKING ASSESSMENT UNDER SECTION 153A OF THE ACT WAS SPECIFICALLY REJECTED BY THE COURT ON THE IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 13 GROUND THAT IT WAS 'NOT BORNE OUT FROM THE SCHEME OF THE SAID PROVISION' WHICH WAS IN THE CONTEXT OF SEARCH AND /OR REQUISITION. THE COURT ALSO EXPLAINED THE PURPORT OF THE WORDS 'ASSESS' AND 'REASSESS', WHICH HAVE BEEN FOUND AT MORE THAN ONE PLACE IN SECTION 153A OF THE ACT AS UNDER: '26. THE PLEA RAISED ON BEHALF OF THE ASSESSEE THAT AS THE FIRST PROVISO PROVIDES FOR ASSESSMENT OR REASSESSMENT OF THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSESSMENT YEARS, IS MERELY READING THE SAID PROVISION IN ISOLATION AND NOT IN THE CONTEXT OF THE ENTIRE SECTION. THE WORDS 'ASSESS' OR 'REASSESS' - HAVE BEEN USED AT MORE THAN ONE PLACE IN THE SECTION AND A HARMONIOUS CONSTRUCTION OF THE ENTIRE PROVISION WOULD LEAD TO AN IRRESISTIBLE CONCLUSION THAT THE WORD ASSESS HAS BEEN USED IN THE CONTEXT OF AN ABATED.PROCEEDINGS AND REASSESS HAS BEEN USED FOR C OMPLETED ASSESSMENT PROCEEDINGS, WHICH WOULD NOT ABATE AS THEY ARE NOT PENDING ON THE DATE OF INITIATION OF THE SEARCH OR MAKING OF REQUISITION AND WHICH WOULD ALSO NECESSARILY SUPPORT THE INTERPRETATION THAT FOR THE COMPLETED ASSESSMENTS, THE SAME CAN BE TINKERED ONLY BASED ON THE INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS.' 60. IN KABUL CHAWLA (SUPRA), THE COURT ALSO TOOK NOTE OF THE DECISION OF THE BOMBAY HIGH COURT IN COMMISSIONER OF INCOME TAX V.CONTINENTAL W AREHOUSING CORPORATION (NHAVA SHEVA) LTD. [2015] 58 TAXMANN.COM 78 (BOM) WHICH ACCEPTED THE PLEA THAT IF NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH IN RESPECT OF AN ISSUE, THEN NO ADDITIONS IN .RESPECT OF ANY ISSUE CAN BE MADE TO THE ASSESSMENT UNDER SECTION 153A AND 153C OF THE ACT. THE LEGAL POSITION WAS THEREAFTER SUMMARIZED IN KABUL CHAWLA (SUPRA) AS UNDER: '37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN THE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UNDER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153 A (1) WILL HAVE TO BE MANDATORILY ISS UED 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 INC OME 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 REASSE SS 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'. IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 14 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 REASSESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATABLE TO ABATED PROCEEDINGS (I.E. THOS E 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 ON E 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 W HILE 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 K NOWN IN THE COURSE OF ORIGINAL ASSESSMENT.' 61. IT APPEARS THAT A NUMBER OF HIGH COURTS HAVE CONCURRED WITH THE DECISION OF THIS COURT IN KABUL CHAWLA (SUPRA) BEGINNING WITH THE GUJARAT HIGH COURT IN PRINCIPAL COMMISSIONER OF INCOME TAX V. SAUMYA CONSTRUC TION PVT. LTD. (SUPRA). THERE, A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT ON 7TH OCTOBER, 2009 AND AN ASSESSMENT CAME TO BE FRAMED UNDER SECTION 143(3) READ WITH SECTION 153A( 1 )(B) IN DETERMINING THE TOTAL INCOME OF THE ASSESSEE OF RS. 14.5 CRORES'AGAI NST DECLARED INCOME OF RS. 3.44 CRORES. THE ITAT DELETED THE ADDITIONS ON THE GROUND THAT IT WAS NOT BASED ON ARTY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF THE SEARCH IN RESPECT OF AYS UNDER CONSIDERATION I.E., AY 2006 - 07. THE GUJARAT HIGH COURT R EFERRED TO THE DECISION IN KABUL CHAWLA (SUPRA), OF THE RAJASTHAN HIGH COURT IN JAI STEEL (INDIA), JODHPUR V. ACIT (SUPRA) AND ONE EARLIER DECISION OF THE GUJARAT HIGH COURT ITSELF. IT EXPLAINED IN PARA 15 AND 16 AS UNDER: '15. ON A PLAIN READING OF SECTI ON 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 I SSUE 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 S UCH SEARCH IS CONDUCTED OR IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 15 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 ASSESS ED, 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 FALLI NG 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 O N THE DATE OF INITIATION OF SEARCH UNDER SECTION 132 OR REQUISITION UNDER SECTION 132A, AS 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 - S ECTION (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 U NDER 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 A NY OTHER PROCEEDING. 16. SECTION 153A BEARS THE HEADING 'ASSESSMENT IN CASE OF SEARCH OR REQUISITION'. IT IS 'WELL SETTLED AS HELD BY THE SUPREME COURT IN A CATENA OF DECISIONS THAT THE HEADING OR THE SECTION CAN BE REGARDED AS A KEY TO THE INTERPRETATION OF THE OPERATIVE PORTION OF THE 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, V IZ., 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, I N OTHER WORDS, THE ASSESSMENT SHOULD CONNECTED WITH SOMETHING ROUND 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 C ASE 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 REQUI SITION IS MADE, ANY IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 16 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 J'AI STEEI (INDIA) V. ASST. C IT (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 INCOM E 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 A ND AMBIT OF THE ASSESSMENT WOULD INCLUDE ANY ORDER WHICH THE ASSESSING 'OFFICER COULD HAVE PASSED UNDER SECTION 147 OF THE ACT AS WELL AS UNDER SECTION 153A OF THE ACT. XXX 19. ON BEHALF OF THE APPELLANT, IT HAS BEEN CONTENDED THAT IF ANY INCRIMINATING MAT ERIAL IS FOUND, NOTWITHSTANDING THAT IN RELATION TO THE YEAR UNDER CONSIDERATION, NO INCRIMINATING MATERIAL IS FOUND, IT WOULD BE PERMISSIBLE TO MAKE ADDITIONS AND DISALLOWANCE IN RESPECT OF AN THE SIX ASSESSMENT YEARS. IN THE OPINION OF THIS COURT, THE SA ID CONTENTION DOES NOT MERIT ACCEPTANCE, INASMUCH AS. THE ASSESSMENT IN RESPECT OF EACH OF THE SIX ASSESSMENT YEARS IS A SEPARATE AND DISTINCT ASSESSMENT. UNDER SECTION 153A OF THE ACT, ASSESSMENT HAS TO BE MADE IN RELATION TO THE SEARCH OR REQUISITION, N AMELY, IN RELATION TO MATERIAL DISCLOSED DURING THE SEARCH OR REQUISITION. IF IN RELATION TO ANY ASSESSMENT YEAR, NO INCRIMINATING MATERIAL IS FOUND, NO ADDITION OR DISALLOWANCE CAN BE MADE IN RELATION TO THAT ASSESSMENT YEAR IN EXERCISE OF POWERS UNDER SE CTION 153A OF THE ACT AND THE EARLIER ASSESSMENT SHALL HAVE TO BE REITERATED. IN THIS REGARD, THIS COURT IS IN COMPLETE AGREEMENT WITH THE VIEW ADOPTED BY THE RAJASTHAN HIGH COURT IN THE CASE OF JAI STEEL (INDIA) V. ASST. CIT (SUPRA). BESIDES, AS RIGHTLY P OINTED OUT BY THE LEARNED COUNSEL FOR THE RESPONDENT, THE CONTROVERSY INVOLVED IN THE PRESENT CASE STANDS CONCLUDED BY THE DECISION OF THIS COURT IN THE CASE OF CIT V. JAYABEN RATILAL SORATHIA (SUPRA) WHEREIN IT HAS BEEN HELD THAT WHILE IT CANNOT BE DISPUT ED THAT CONSIDERING SECTION 153A OF THE ACT, THE ASSESSING OFFICER CAN REOPEN AND/OR ASSESS THE RETURN WITH RESPECT TO SIX PRECEDING YEARS 1 '; HOWEVER, THERE MUST BE SOME INCRIMINATING MATERIAL AVAILABLE WITH THE ASSESSING OFFICER WITH RESPECT TO THE SALE T RANSACTIONS IN THE PARTICULAR ASSESSMENT YEAR.' 62. SUBSEQUENTLY, IN PRINCIPAL COMMISSIONER OF INCOME TAX - 1 V. DEVANGI ALIAS RUPA (SUPRA), ANOTHER BENCH OF THE GUJARAT HIGH COURT REITERATED THE ABOVE LEGAL POSITION FOLLOWING ITS EARLIER DECISION IN PR INCIPAL COMMISSIONER OF INCOME TAX V. SAUMYA CONSTRUCTION P. LTD. (SUPRA) AND OF THIS COURT IN KABUL CHAWLA (SUPRA). AS FAR AS KAMATAKA HIGH COURT IS CONCERNED, IT HAS IN CIT V. IBC KNOWLEDGE PARK P. LTD. (SUPRA) FOLLOWED THE DECISION OF THIS COURT IN KABU L CHAWLA (SUPRA) AND HELD THAT THERE HAD TO BE INCRIMINATING MATERIAL QUA EACH OF THE AYS IN WHICH ADDITIONS WERE SOUGHT TO BE MADE PURSUANT TO SEARCH AND SEIZURE IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 17 OPERATION. THE CALCUTTA HIGH COURT IN CIT - 2 V. SALASAR STOCK BROKING LTD. (SUPRA), TOO, FOLLO WED THE DECISION OF THIS COURT IN KABUL CHAWLA (SUPRA). IN CIT V. GURINDER SINGH BAWA (SUPRA), THE BOMBAY HIGH COURT HELD THAT: '6...ONCE AN ASSESSMENT HAS ATTAINED FINALITY FOR A PARTICULAR YEAR, I.E., IT IS NOT PENDING THEN THE SAME CANNOT BE SUBJECT TO TAX IN PROCEEDINGS UNDER SECTION, 153A OF THE ACT. THIS OF COURSE WOULD NOT APPLY IF INCRIMINATING MATERIALS ARE GATHERED IN THE COURSE OF SEARCH OR DURING PROCEEDINGS UNDER SECTION 153A OF THE ACT WHICH ARE CONTRARY TO AND/OR NOT DISCLOSED DURING THE REG ULAR ASSESSMENT PROCEEDINGS.' 63. EVEN THIS COURT HAS IN CIT V MAHESH KUMAR GUPTA (SUPRA) AND THE PR.COMMISSIONER OF INCOME TAX - 9 V. RAM AVTAR VERMA (SUPRA) FOLLOWED THE DECISION IN KABUL CHAWLA (SUPRA). THE DECISION OF THIS COURT IN PR. COMMISSIONER OF INCOME TAX V. KURELE PAPER MILLS P. LTD. (SUPRA) WHICH WAS REFERRED TO IN KABUL CHAWLA (SUPRA) HAS BEEN AFFIRMED BY THE SUPREME COURT BY THE DISMISSAL OF THE REVENUE'S SLP ON 7TH DECEMBER, 2015. THE DECISION IN DAYAWANTI GUPTA 64. THAT BRINGS US TO THE DECISION IN DAYAWANTI GUPTA (SUPRA). AS RIGHTLY POINTED OUT BY MR. KAUSHIK, LEARNED COUNSEL APPEARING FOR THE RESPONDENT, THAT THERE ARE SEVERAL DISTINGUISHING FEATURES IN THAT CASE WHICH MAKES ITS RATIO INAPPLICABLE TO THE FACTS OF THE PRESENT CASE. IN TH E FIRST PLACE, THE ASSESSEES THERE WERE ENGAGED IN THE BUSINESS OF PAN MASALA AND GUTKHA ETC. THE ANSWERS GIVEN TO QUESTIONS POSED TO THE ASSESSEE IN THE COURSE OF SEARCH AND SURVEY PROCEEDINGS IN THAT CASE BRING OUT THE POINTS OF DISTINCTION. IN THE FIRST PLACE, IT WAS STATED THAT THE STATEMENT RECORDED WAS UNDER SECTION 132(4) AND NOT UNDER SECTION 133A . IT WAS A STATEMENT BY THE ASSESSEE HIMSELF. IN RESPONSE TO QUESTION NO. 7 WHETHER ALL THE PURCHASES MADE BY THE FAMILY FIRMS, WERE ENTERED IN THE REGULAR BOOKS OF ACCOUNT, THE ANSWER WAS: 'WE AND OUR FAMILY FIRMS NAMELY M/S ASSAM SUPARI TRADERS AND M/S BALAJI PERFUMES GENERALLY TRY TO RECORD THE TRANSACTIONS MADE IN RESPECT OF PURCHASE, MANUFACTURING AND SALES IN OUR REGULAR BOOKS OF ACCOUNTS BUT IT IS AL SO FACT THAT SOME TIME DUE TO SOME FACTORS LIKE INABILITY OF ACCOUNTANT, OUR BUSY SCHEDULE AND SOME FAMILY PROBLEMS, VARIOUS PURCHASES AND SALES OF SUPARI, GUTKA AND OTHER ITEMS DEALT BY OUR FIRMS IS NOT ENTERED AND SHOWN IN THE REGULAR BOOKS OF ACCOUNTS M AINTAINED BY OUR FIRMS.' 65. THEREFORE, THERE WAS A CLEAR ADMISSION BY THE ASSESSEES IN DAYAWANTI GUPTA (SUPRA) THERE THAT THEY WERE NOT MAINTAINING REGULAR BOOKS OF ACCOUNTS AND THE TRANSACTIONS WERE NOT RECORDED THEREIN. IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 18 66. FURTHER, IN ANSWER TO QU ESTION NO. 11, THE ASSESSEE IN DAYAWANTI GUPTA (SUPRA) WAS CONFRONTED WITH CERTAIN DOCUMENTS SEIZED DURING THE SEARCH. THE ANSWER WAS CATEGORICAL AND READS THUS: 'ANS: - I HEREBY ADMIT THAT THESE PAPERS ALSO CONTEND DETAILS OF VARIOUS TRANSACTIONS INCLUDE PURCHASE/ SALES/ MANUFACTURING TRADING OF GUTKHA, SUPARI MADE IN CASH OUTSIDE BOOKS OF ACCOUNTS AND THESE ARE ACTUALLY UNACCOUNTED TRANSACTIONS MADE BY OUR TWO FIRMS NAMELY M/S ASOM TRADING AND M/S. BALAJI PERFUMES.' 67. BY CONTRAST, THERE IS NO SUCH STATEMENT IN THE PRESENT CASE WHICH CAN BE SAID TO CONSTITUTE AN ADMISSION BY THE ASSESSEE OF A FAILURE TO RECORD ANY TRANSACTION IN THE ACCOUNTS OF THE ASSESSEE FOR THE AYS IN QUESTION. ON THE CONTRARY, THE ASSESSEE HEREIN STATED THAT, HE IS R EGULARLY MAINTAINING THE BOOKS OF ACCOUNTS. THE DISCLOSURE MADE IN THE SUM OF RS. 1.10 CRORES WAS ONLY FOR THE YEAR OF SEARCH AND NOT FOR THE EARLIER YEARS. AS ALREADY NOTICED, THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE IN THE PRESENT CASE HAVE BEEN ACCEPTED BY THE AO. IN RESPONSE TO QUESTION NO. 16 POSED TO MR. PAWAN GADIA, HE STATED THAT THERE WAS NO POSSIBILITY OF MANIPULATION OF THE ACCOUNTS. IN DAYAWANTI GUPTA (SUPRA), BY CONTRAST, THERE WAS A CHART PREPARED CONFIRMING THAT THERE HAD BEEN A YEAR - WISE NON - RECORDING OF TRANSACTIONS. IN DAYAWANTI GUPTA (SUPRA), ON*THE BASIS OF MATERIAL RECOVERED DURING SEARCH, THE ADDITIONS WHICH WERE MADE FOR ALL THE YEARS WHEREAS ADDITIONS IN THE PRESENT CASE WERE MADE BY THE AO ONLY FOR AY 2004 - 05 AND NOT ANY OF T HE OTHER YEARS. EVEN THE ADDITIONS MADE FOR AYS 2004 - 05 WERE SUBSEQUENTLY DELETED BY THE CIT(A), WHICH ORDER WAS AFFIRMED BY THE ITAT. EVEN THE REVENUE HAS CHALLENGED ONLY TWO OF SUCH DELETIONS IN ITA NO. 306/2017. 68. IN PARA 23 OF THE DECISION IN DAYAWA NTI GUPTA (SUPRA), IT WAS OBSERVED AS UNDER: '23. THIS COURT IS OF OPINION THAT THE ITAT'S FINDINGS DO NOT REVEAL ANY FUNDAMENTAL ERROR, CALLING FOR CORRECTION. THE INFERENCES DRAWN IN RESPECT OF UNDECLARED INCOME WERE PREMISED ON THE MATERIALS FOUND AS W ELL AS THE STATEMENTS RECORDED BY THE ASSESSEES. THESE ADDITIONS THEREFORE WERE NOT BASELESS. GIVEN THAT THE ASSESSING AUTHORITIES IN SUCH CASES HAVE TO DRAW INFERENCES, BECAUSE OF THE NATURE OF THE MATERIALS - SINCE THEY COULD BE 'SCANTY (AS ONE HABITUALL Y CONCEALING INCOME OR INDULGING IN CLANDESTINE OPERATIONS CAN HARDLY BE EXPECTED TO MAINTAIN METICULOUS BOOKS OR RECORDS FOR LONG AND IN ALL PROBABILITY BE ANXIOUS TO DO AWAY WITH SUCH EVIDENCE AT THE SHORTEST POSSIBILITY) THE ELEMENT OF GUESS WORK IS TO HAVE SOME REASONABLE NEXUS WITH THE STATEMENTS RECORDED AND DOCUMENTS SEIZED. IN TILLS CASE, THE DIFFERENCES OF OPINION BETWEEN THE CIT (A) ON THE ONE HAND AND THE AO AND ITAT ON THE OTHER CANNOT BE THE SOLE BASIS FOR DISAGREEING WITH WHAT IS ESSENTIALLY A FACTUAL SURMISE THAT IS L OGICAL AND PLAUSIBLE. THESE FINDINGS DO NOT CALL FOR INTERFERENCE. THE SECOND QUESTION OF LAW IS ANSWERED AGAIN IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE.' IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 19 6 9. WHAT WEIGHED WITH THE COURT IN THE ABOVE - DECISION WAS THE 'HAB ITUAL CONCEALING OF INCOME AND INDULGING IN CLANDESTINE OPERATIONS' AND THAT A PERSON INDULGING IN SUCH ACTIVITIES 'CAN HARDLY BE ACCEPTED TO MAINTAIN METICULOUS BOOKS OR RECORDS FOR LONG.' THESE FACTORS ARE ABSENT IN THE PRESENT CASE. THERE WAS NO JUSTIFI CATION AT ALL FOR THE AO TO PROCEED ON SURMISES AND ESTIMATES WITHOUT THERE BEING ANY INCRIMINATING MATERIAL QUA THE AY FOR WHICH HE SOUGHT TO MAKE ADDITIONS OF FRANCHISEE COMMISSION. 70. THE ABOVE DISTINGUISHING FACTORS IN DAYAWANTI GUPTA (SUPRA), THE REFORE, DO NOT DETRACT FROM THE SETTLED LEGAL POSITION IN KABUL CHAWLA (SUPRA) WHICH HAS BEEN FOLLOWED NOT ONLY BY THIS COURT IN ITS SUBSEQUENT DECISIONS BUT ALSO BY SEVERAL OTHER HIGH COURTS. 71. FOR ALL OF THE AFOREMENTIONED REASONS, THE COURT IS OF TH E VIEW THAT THE ITAT WAS JUSTIFIED IN HOLDING THAT THE INVOCATION OF SECTION 153A BY THE REVENUE FOR THE AYS 2000 - 01 TO 2003 - 04 WAS WITHOUT ANY LEGAL BASIS AS THERE WAS NO INCRIMINATING MATERIAL QUA EACH OF THOSE AYS.' 4. IT IS FURTHER SUB MITTED THAT THE LEARNED CIT(A) HAS RELIED ON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF SMT. DAYAWANTI V. COMMISSIONER OF INCOME - TAX [2016] 75 TAXMANN.COM 308 (DELHI), WHICH IN SPECIAL LEAVE TO APPEAL (C) NOS. 20559/2017 VIDE ORDER DT.03.10.2017 (COPY ENCLOSED) HON'BLE SUPREME COURT HAS STAYED OPERATION OF THE SAID DECISION. 5. THAT DIFFERENT BENCHES OF HON'BLE ITAT FOLLOWED THE VIEW EXPRESSED BY HON'BLE DELHI HIGH COURT [380 ITR 573 (DELHI)] IN CASE OF CIT V. KABUL CHAWLA THAT NO ADDITION TO BE MADE IN ASSESSMENT FRAMED U/S,153A OF THE ACT IN ABSENCE OF ANY INCRIMINATING MATERIAL WHERE THE ASSESSMENTS WERE NOT ABATED. SOME OF SUCH DECISIONS OF HON'BLE ITAT ARE RELIED UPON AS UNDER: 1. HARDEV J ESGWABU V. ACIT IN ITA NO.369, 339,340 AND 341/AGRA./2012 ORDER DT. 31.5.2013 (ITAT AGRA) 2. SHRI ABHISHEK LODHA V. DCIT IN ITA NO.4910/MUM/2015 ORDER DT. 07/10/2016 (ITAT MUMBAI) 3. ITA NO.994/CHD/2017 DT.24.09.201 8 DCIT V. M/S. CHANDIGARH DEVELOPERS PVT. LTD. 4. ITA NO.832,863 & 864/DEL/2015 DT.20.11.2018 ACIT V. VARUN BEVERAGES LTD . 6. THAT IN THE PRESENT CASE, THERE IS NO INCRIMINATING MATERIAL, WHATSOEVER, WERE FOUND/SEIZED DURING THE COURSE O F SEARCH PERTAINING TO THE ASSESSMENT YEAR 2008 - 09 AND THEREFORE, THE ADDITION ON ESTIMATION OF NET PROFIT BASED ON MATERIAL RELATING/PERTAINING TO SUBSEQUENT YEARS I.E, 2012 - 13, 2013 - 14 AND 2014 - 15 IS ILLEGAL, IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 20 UNJUSTIFIED AND NOT TENABLE IN THE EYE OF LAW IN VIEW OF VARIOUS JUDICIAL PRO NOUNCEMENTS AS REFERRED TO IN T HE EARLIER PARAGRAPHS AND AS SUCH THE SAID ADDITION EVEN AS SUSTAINED BY THE LEARNED CIT(A) IS LIABLE TO BE DELETED. THE ASSESSEE PRAYS ACCORDINGLY. 7. THAT FURTHER IT IS HUMBLY SUBMITTED THAT THE ASSESSEE - FIRM CARRIES ON HOTEL BUSINESS. IT HAS MAINTAINED ALL RECEIPTS AND EXPENDITURE AND ON THE SAID BASIS FILED THE RETURN ALONGWITH THE STATEMENT OF INCOME INCLUDING INCOME AND EXPENDITURE ACCOUNT, PROFIT & LOSS ACCOUNT, CAPITAL AC COUNT, BALANCE SHEET AND DEPRECIATION CHART ETC. ALL SUCH ACCOUNTS WERE PRODUCED BEFORE THE LEARNED ASSESSING OFFICER AS WELL AS THE LEARNED CIT(A), WHO VERIFIED THE SAME AND FOUND NOTHING INCORRECT THEREIN. THERE IS NO INCRIMINATING MATERIAL PERTAINING TO THIS ASSESSMENT YEAR I.E., 2009 - 10 SO AS TO AFFECT THE PROFIT OF THE ASSESSEE WERE FOUND DURING THE SEARCH. HOWEVER, ALLEGING ABSENCE OF REGULAR BOOKS OF ACCOUNTS SUCH AS CASH BOOK, LEDGER AND SUPPORTING DOCUMENTS AND/OR EVIDENCE SHOWING THE BASIS FOR ARR IVING AT THE NET PROFIT, THE LEARNED ASSESSING OFFICER AS WELL AS THE LEARNED CIT(A) DID NOT ACCEPT THE NET PROFIT SHOWN BY THE ASSESSEE, WHICH LED TO ESTIMATION OF PROFIT ON THE GROSS RECEIPTS DISCLOSED BY THE ASSESSEE. 8. THAT WHEN THE A O AS WELL THE LEARNED CIT(A) HAVE ACCEPTED THE GROSS RECEIPTS, WHICH HAD BEEN WORKED OUT ON THE BASIS OF NOTES KEPT BY THE ASSESSEE, NON - ACCEPTANCE O F PROFIT DISCLOSED BY IT IS NOT ALL JUSTIFIED. THE FORUMS BELOW OUGHT TO HAVE EXAMINED ALL SUCH NOTES PRODU CED BEFORE THEM. 9. THAT IN RESPONSE TO NOTICE U/S. 1 53A OF THE ACT, THE ASSESSEE FILED ITS RETURNS OF INCOME. THE ASSESSEE ALSO FILED PROFIT & LOSS ACCOUNT, INCOME & EXPENDITURE ACCOUNT, CAPITAL ACCOUNT, BALANCE SHEET AND DEPRECIATION CHAR T ON THE BASIS OF NOTES AVAILABLE AND INFORMATION FROM ACCOUNTS OF OTHERS, WHICH CORRECTLY SHOWS THE STATE OF AFFAIRS OF THE ASSESSEE FIRM. IT IS PERTINENT TO MENTION HERE THAT THE AO LEVIED PENALTY U/S.271B OF THE I.T.ACT ALLEGING THE BOOKS OF ACCOUNTS WE RE NOT AUDITED U/S.44A OF THE ACT. IN APPEAL BEFORE THE LEARNED CIT(A) THE PLEA OF THE ASSESSEE THAT IT WAS NOT MAINTAINING, BOOKS OF ACCOUNTS AND THEREFORE SECTION 44A B IS NOT APPLICABLE, WAS TURNED DOWN BY THE LEARNED CIT(A) BY OBSERVING IN HIS ORDER DT. 23.04.2018 IN PARAGRAPH 4,4 WHICH READS AS UNDER. 4 .4. THE SUBMISSION OF THE APPELLANT THAT IT HAS NOT MAINTAINED THE BOOKS OF ACCOUNTS IS FACTUALLY INCORRECT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND ALSO DURING THE COU RSE OF APPEAL PROCEEDINGS, THE APPELLANT HAS FILED A COPY OF COMPUTATION OF TOTAL INCOME, PROFIT & LOSS ACCOUNT, BALANCE SHEET, DEPRECIATION CHART AND PARTNERS CAPITAL ACCOUNT AS APPEARING IN THE BALANCE SHEET. THE PROFIT AND LOSS ACCOUNT SHOWS GROSS RECEI PTS, EXPENSES, - DEPRECIATION, PROFIT, INTEREST AND SALARY TO PARTNERS, AND SHARE OF ALLOCATION OF SALARY, INTEREST AND PROFIT AMONG THE PARTNERS. FURTHER, LIABILITY SIDE OF THE BALANCE SHEET SHOWS PARTNERS CAPITAL', ACCOUNTS PAYABLE, UNSECURED LOANS AND SUNDRY CREDITORS. THE ASSET SIDE OF IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 21 BALANCESHEET SHOWS FIXED ASSETS, SUNDRY DEBTORS, ADVANCE TAX AND BANK BALANCE. THE DEPRECIATION CHART SHOWS OPENING BALANCE, ADDITION TO ASSETS, DEPRECIATION AND CLOSING BALANCE ON THE ASSETS NAMELY LAND, BUILDING, FURNITURE, PLANT AND MACHINERY* SCOOTERS, COLOUR TV, COMPUTER AND WORK IN PROGRESS OF THE ASSETS UNDER CONSTRUCTION. THESE DOCUMENTS AND THE DETAILS ABOVE CLEARLY SHOW THAT THE APPELLANT HAS MAINTAINED THE ACCOUNTS. THE SU BMISSION OF 'THE APPELLANT THAT IT HAS NOT MAINTAINED THE ACCOUNTS IS ONLY FOR THE PURPOSE OF ESCAPING FROM IMPOSITION OF PENALTY U/S.271B OF THE I.T.ACT,1961.' (COPY ENCLOSED HEREWITH) 10. THAT THE AUTHORITIES BELOW HAVE ADMITTED THE ASSES SEE TO HAVE MAINTAINED ACCOUNTS IN THE PENALTY PROCEEDINGS U/S.271B, WHEREAS HOLDING ABSENCE OF ACCOUNTS THEY ESTIMATED THE NET PROFIT WHICH IS NOT PROPER. IN FACT THE ASSESSEE HAS MAINTAINED ACCOUNTS KEEPING NOTES OF RECEIPTS AND EXPENDITURES, WHICH WERE PRODUCED BEFORE THE AUTHORITIES BELOW. WITHOUT FINDING ANY FAULT OR LAPSES IN THE SAID ACCOUNTS SO PRODUCED, THE FORUMS BELOW ARE NOT JUSTIFIED IN NOT GIVING CREDENCE TO SUCH ACCOUNTS. INSTEAD, THEY HAVE CHOSEN TO ADOPT THE PERCENTAGE OF PROFIT BY WORKING OUT THE PROFITS AS PER THE SEIZED LOOSE PAPER PERTAINING TO ASSESSMENT YEAR 2012 - 13, 2013 - 14 AND 2014 - 15, WHICH IS NOT AT ALL JUSTIFIED AND NOT TENABLE IN THE EYE OF LAW. IN VIEW OF THIS, MERELY ON THE FLIMSY GROUND OF ABSENCE OF REGULAR BOOKS OF ACCOUNTS, THE FORUMS BELOW ARE NOT JUSTIFIED IN NOT ACCEPTING THE EXPENSES CLAIMED IN THE PROFIT & LOSS ACCOUNT AND ALSO NOT JUSTIFIED IN RESORTING TO ESTIMATION OF NET PROFIT ON THE GROSS RECEIPTS DISCLOSED BY THE ASSESSEE. SINCE THE FORUMS BELOW HAVE ACCEPTED THE TOTAL RECEIPTS SHOWN BY THE ASSESSEE. IN ITS ACCOUNTS, THE EXPENSES AS CLAIMED BY THE ASSESSEE OUGHT TO HAVE BEEN ACCEPTED BY THEM. THEREFORE, IT IS PRAYED THAT THE RETURN OF INCOME MAY KINDLY BE ACCEPTED AND SO ALSO THE NET PROFIT DISCLOSED BY IT. 11. THAT EXCEPT GROUND NOS.2 AND 3, THE OTHER GROUNDS TAKEN IN THE GROUNDS APPEAL MAY KINDLY BE TREATED AS NOT PRESSED. 8. ON THE OTHER HAND, LD.DR RELIED ON THE ORDER OF CIT(A) AND SUBMITTED THAT AS PER DECISION S OF THE HONBLE KERALA AND HON BLE ALLAHABAD HIGH COURT, EVEN WITHOUT ANY INCRIMINATING MATERIAL BEING AVAILABLE AGAINST THE ASSESSEE, ASSESSMENT U/S.153A CAN BE CONCLUDED AGAINST THE INTEREST OF THE ASSESSEE, INCLUDING MAKING ADDITIONS. LD. DR FURTHER SUBMITTED THAT THERE IS NO BAR UP ON THE AO AS PER SECTION 153A IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 22 OF THE ACT FOR PASSING THE SEPARATE ORDER. THE AO HAS PASSED THE ORDER AFTER DEPTH EXAMINATION OF THE DOCUMENTS SUBMITTED BY THE ASSESSEE. 9. AFTER HEARING BOTH THE SIDES AND PERUSING THE ENTIRE MATERIAL AVAILABLE ON RECORD AL ONG WITH THE ORDERS OF AUTHORITIES BELOW, WE FIND THAT THE LD. AR OF THE ASSESSEE HAS CHALLENGED LEGAL ISSUE REGARDING NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH BY THE SEARCHED TEAM AND THE ADDITION IS NOT ON THE BASIS OF ANY INCRIMINATIN G MAT ERIAL . IT WAS ALSO AVERRED BY THE LD. AR OF THE ASSESSEE THAT THE CIT(A) HAS WRONGLY DISMISSED THE LEGAL GROUND CHALLENGED BEFORE HIM. ON CAREFUL PERUSAL OF THE ORDERS OF BOTH THE AUTHORITIES BELOW, WE OBSERVE THAT THERE IS NO REFERENCE OF ANY INCRIMI NATING MATERIAL ON RECORD. THERE IS NO ANY WHISPER IN THE ASSESSMENT ORDER THAT THERE WAS ANY UNDISCLOSED MATERIALS DISCOVERED BY THE SEARCH TEA M . WE ALSO OBSERVED THAT THE ASSESSEE HAD FILED RETURN OF INCOME U/S.139(1) OF THE ACT FOR BOTH THE ABOVE ASSESS MENT YEARS PRIOR TO THE SEARCH, THEREFORE, THESE TWO ASSESSMENT YEARS WILL BECOME UNABATED. THEREFORE, IT WOULD BE PRESUMED THAT THESE TWO ASSESSMENT YEARS WERE COMPLETED ASSESSMENTS, WHICH CAN BE INTERFERED ONLY WHEN THERE WOULD BE ANY INCRIMINATING MATER IAL FOUND DURING THE COURSE OF SEARCH. HOWEVER, THE CIT(A) RELYING UPON THE DECISIONS OF THE HONBLE HIGH COURT OF KERALA IN THE CASE OF E.N.GOPAKUMAR VS. CIT [2016] 75 TAXMANN.COM 215 (KERALA) AND THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE O F IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 23 CIT VS. RAJ KUMAR ARORA [2014] 52 TAXMANN.COM 172 (ALLAHABAD) HAS HELD THAT EVEN IF THERE IS NO INCRIMINATING MATERIAL, THE AO IS EMPOWERED TO MAKE ADDITIONS IN AN ASSESSMENT FRAMED U/S.153A OF THE ACT. W E FIND THAT NONE OF THE DECISION RELIED UPON BY E ITHER OF THE PARTIES ARE OF JURISDICTIONAL HIGH COURT. IT IS A WELL SETTLED POSITION OF LAW THAT WHEN THERE ARE CONFLICTING DECISIONS OF HIGH COURTS NONE OF WHICH IS THE JURISDICTIONAL HIGH COURT, THEN THE DECISION FAVOURING THE ASSESSEE SHOULD BE FOLLOWED . FOR THIS, WE DERIVE SUPPORT FROM THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. VEGETABLE PRODUCTS LTD . 88 ITR 192 (SC). THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE ADDITION MADE BY THE TAXING AUTHORITIES ARE WITHOUT CORRELATING TO ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH, CANNOT BE SUSTAINED . 10 . AS PER THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA, [2015] 61 TAXMANN.COM 412 (DELHI), COMPLE TED ASSESSMENTS CAN BE INTERFERED WITH BY THE ASSESSING OFFICER WHILE MAKING THE ASSESSMENT UNDER SECTION 153A OF THE ACT ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCO ME 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. IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 2 4 THE RELEVANT OBSERVATIONS OF THE HONBLE DELHI HIGH COURT ARE AS UNDER : - ON A CONSPECTUS OF SECTION 15 3A(1), READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN VARIOUS DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UNDER: (I) ONCE A SEARCH TAKES PLACE UNDER SECTION 132, NOTICE UNDER SECTION 153A(1) WILL HAVE TO BE MANDATORILY ISSU ED TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR IN WHICH THE SEARCH TAKES PLACE. (II) ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH ASSESSMENT YEARS WILL HAVE TO BE COMPUTED BY THE ASSESSING OFFICERS AS A FRESH EXERCISE. ( III ) THE ASSESSING OFFICER WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT ASSES SMENT YEAR IN WHICH THE SEARCH TAKES PLACE. THE ASSESSING OFFICER 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 ASSESSM ENT ORDER IN RESPECT OF EACH OF THE SIX ASSESSMENT YEARS '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 T HE COURSE OF THE SEARCH, OR OTHER POST - SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE ASSESSING OFFICER 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 SE IZED 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 COMPLETE ASSESSMENT PROCEEDINGS. (VI) INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE JURISDICTION TO MAKE TH E ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH ASSESSMENT YEAR ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE AS SESSING OFFICER. (VII) COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE ASSESSING OFFICER WHILE MAKING THE ASSESSMENT UNDER SECTION 153A ONLY ON IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 25 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. [PARA 37] THE PRESENT APPEALS CONCERN ASSESSMENT YEARS 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. [PARA 38] THE REVENUE'S APPEALS ARE ACCORDINGLY DISM ISSED.[PARA 40] 11 . T HE AO HAS NOT REFERRED TO ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH IN THE ASSESSMENT ORDER. NOTHING IS FOUND CONTRARY TO THE STATED POSITION OF THE ASSESSEE , THEREFORE, THE ASSESSMENT FRAMED U/S.153A OF THE ACT IS NOT SUSTAINABLE. RESPECTFULLY, FOLLOWING THE RATIO OF DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA (SUPRA), WHICH CLEARLY APPLICABLE ON THE FACTS OF THE PRESENT CASE ALSO, AS ADMITTEDLY NO INCRIMINATING MATERIAL RELATING TO THESE A SSESSMENT YEARS OR AS A MATTER OF FACT FOR ANY OF THE ASSESSMENT YEARS WERE FOUND DURING THE COURSE OF SEARCH AND ACCORDINGLY, WE QUASH THE IMPUGNED ORDERS OF BOTH THE AUTHORITIES BELOW AND HELD THAT WITHOUT REFERRING ANY INCRIMINATING MATERIAL BY THE AO I N THE ASSESSMENT ORDER FOR THE YEARS UNDER CONSIDERATION , STATED TO BE UNEARTHED DURING THE COURSE OF SEARCH, FRAMING THE ASSESSMENT UNDER SECTION 153A OF THE ACT , IS VOID AB INITIO . THUS, THE LEGAL GRO UND RAISED BY THE ASSESSEE IN THE APPEALS FOR A.YS.2008 - 2009 IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 26 & 2009 - 2010 IN GROUND NOS.2 & 3 IS ALLOWED. THUS, APPEALS OF THE ASSESSEE IN IT(SS)A NOS.2 6 & 27 /CTK/2 018 ARE PARTLY ALLOWED . IT(SS)A NOS.28&29/CTK/2018 (AY: 2010 - 2011 & 2011 - 2012) 12. IN BOTH T HESE APPEALS, THERE ARE SIX COMMON GROUNDS HAVE BEEN RAISED BY THE ASSESSEE, OUT OF WHICH EXCEPT GROUND NOS.2 & 3, THE LD. AR DID NOT PRESS OTHER GROUNDS , WHICH IS CLEAR FROM PARA 11 AT PAGE 24 WRITTEN SUBMISSIONS FILED BY THE ASSESSEE . ACCORDINGLY, WE DIS MISS GROUND NOS.1,4,5&6 AS NOT PRESSED. GROUND NOS.2 & 3 READ AS UNDER : - 2. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) OUGHT TO HAVE ENTIRELY DELETED THE ADDITION MADE BY THE AO ON ESTIMATION OF PROFIT, AS THERE IS NO MATER IAL IN THIS RESPECT RELATING/PERTAINING TO THE ASSESSMENT YEAR UNDER CONSIDERATION WAS FOUND/SEIZED DURING THE COURSE OF SEARCH & SEIZURE OPERATION U/S.132 OF THE I.T.ACT,1961 CONDUCTED ON 21/22.08.2013. 3. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ADOPTION OF PROFIT RATE BY WORKING OUT FROM A LOOSE PAPER RELATING/PERTAINING TO OTHER ASSESSMENT YEAR, IS NOT PROPER AND ALSO UNJUSTIFIED, WHICH IS ALSO OTHERWISE HIGH AND EXCESSIVE AND WITHOUT ANY MATERIAL NEXUS OR BRINGING ANY COMPATIB LE CASES. THE LEARNED CIT(A) OUGHT TO HAVE ACCEPTED THE INCOME DISCLOSED BY THE ASSESSEE - APPELLANT IN ABSENCE OF ANY INCRIMINATING MATERIAL RELATING TO THE PRESENT YEAR FOUND/SEIZED DURING THE COURSE OF SEARCH OPERATION CONDUCTED ON 21/22.08.2013. 13. WIT H REGARD TO GROUND NO.2, THE ASSESSEE HAS AGITATED THAT THERE IS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH AND SEIZURE OPERATION, THEREFORE, LD. AR RELIED ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA, 380 ITR 57 3 (DELHI) AND SUBMITTED THAT NO ADDITION CAN BE MADE IN ASSESSMENT FRAMED U/S.153A OF THE ACT IN ABSENCE OF ANY INCRIMINATING MATERIAL WHERE THE ASSESSMENT WERE NOT ABATED. IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 27 14. WE OBSERVE FROM THE ASSESSMENT ORDER THAT THE ASSESSEE HAS NOT FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010 - 2011 U/S.139(1) OF THE ACT PRIOR TO THE SEARCH. DURING THE COURSE OF HEARING ALSO, LD. AR ADMITTED THAT NO RETURN WAS FILED FOR A.Y.2010 - 2011 PRIOR TO THE SEARCH. ON PERUSAL OF THE ASSESSMENT ORDER, WE NOTICED THAT THE A SSESSEE HAS FILED RETURN OF INCOME FOR THE SAID ASSESSMENT YEAR ON 28.08.2014, WHICH IS MUCH AFTER THE SEARCH. SIMILAR IS THE POSITION IN THE ASSESSMENT YEAR 2011 - 2012. THEREFORE, THE CONTENTION OF ASSESSEE IS NOT ACCEPTABLE THAT THERE WAS NO INCRIMINATIN G MATERIAL FOUND DURING THE COURSE OF SEARCH. FURTHER WE OBSERVE THAT THE ASSESSEE HAD FILED RETURN OF INCOME FOR A.Y.2011 - 2012 ON 28.03.2013 . IN THIS ASSESSMENT YEAR THE SELECTION FOR SCRUTINY PERIOD AND ISSUE OF NOTICE U/S.143(2) OF THE ACT WAS ALSO NO T EXPIRED ON THE DATE OF SEARCH I.E. 21.08.2013. THEREFORE, THESE TWO ASSESSMENT YEAR S ARE NOT TO BE TREATED AS UNABATED ASSESSMENT YEAR AS PER THE DECISION OF MANY COURTS. THEREFORE, THE CASE OF THE ASSESSEE SHALL BE MADE ON THE NORMAL COURSE OF THE PROV ISIONS AS PER SECTION 153A/143(3) OF THE ACT. ACCORDINGLY, THE CIT(A) HAS RIGHTLY HELD THAT THE ASSESSMENT HAS BEEN COMPLETED BY THE AO ON THE BASIS OF MATERIALS FOUND DURING THE COURSE OF SEARCH PROCEEDINGS. THUS, GROUND NO.2 RAISED IN BOTH THE APPEAL S IS DISMISSED. IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 28 15. WITH REGARD TO GROUND NO.3, WE FIND THAT THE AO DURING THE COURSE OF ASSESSMENT ASKED THE ASSESSEE TO FURNISH THE BASIS WITH DOCUMENTARY EVIDENCE REGARDING THE NET PROFIT ARRIVED AT AND DISCLOSED IN ITS RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S.142(1) OF THE ACT ALONG WITH THE RELEVANT BOOKS OF ACCOUNTS. HOWEVER, THE ASSESSEE SUBMITTED THAT IN ABSENCE OF BOOKS OF ACCOUNTS ESTIMATED THE PROFIT AND LOSS OF THE FIRM AND FILED THE RETURN OF INCOME. ACCORDINGLY, THE AO ESTIMATED THE PROF IT OF THE ASSESSEE FROM HOTEL BUSINESS @22% IN APPEAL, THE CIT(A) AGREED WITH THE AO. ON PERUSAL OF THE ORDERS OF AUTHORITIES BELOW, WE FIND THAT THE ASSESSEE - FIRM CARRIES ON HOTEL BUSINESS. IT WAS CONTENDED BY THE LD. AR THAT A LL SUCH ACCOUNTS WERE PRODUCED BEFORE THE AO AS WELL AS THE LEARNED CIT(A), WHO VERIFIED THE SAME AND FOUND NOTHING INCORRECT THEREIN, H OWEVER, ALLEGING ABSENCE OF REGULAR BOOKS OF ACCOUNTS THE LEARNED ASSESSING OFFICER AS WELL AS THE LEARNED CIT(A) DID NOT ACCEPT THE N ET PROFIT SHOWN BY THE ASSESSEE IN THE RETURN. WE ARE IN AGREEMENT WITH THE VIEWS TAKEN BY THE AUTHORITIES BELOW IN ESTIMATING THE NET PROFIT OF THE ASSESSEE IN ABSENCE OF PRODUCTION OF BOOKS OF ACCOUNTS, HOWEVER, WITH THE CONSENT OF BOTH THE PARTIES AND L OOKING TO THE BUSINESS OF THE ASSESSEE, IT WILL BE JUST AND PROPER TO ESTIMATE THE NET TAXABLE PROFIT @15% OF THE TOTAL GROSS RECEIPT BY THE ASSESSEE. ACCORDINGLY, WE DIRECT THE AO TO APPLY THE NET TAXABLE PROFIT @15% OF THE GROSS RECEIPT. WE FURTHER MAKE IT CLEAR THAT IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 29 AFTER CALCULATION OF NET TAXABLE PROFIT @15% BY THE AO , NO FURTHER ANY DEDUCTION OR DEPRECIATION, INTEREST ON CAPITAL AND SALARY TO PARTNERS OR TOWARDS ANY OTHER EXPENDITURE, SHALL BE ALLOWED AND THE NET TAXABLE PROFIT SHOULD NOT BE EXCEEDED TO THE ADDITION MADE BY THE AO . THIS GROUND OF APPEAL OF THE ASSESSEE RAISED IN BOTH THE APPEALS IS PARTLY ALLOWED. THUS, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. IT(SS)ANOS.30,31&95/CTK/2018 (AYS:2012 - 13,2013 - 14 & 2014 - 15) 16 . IN GROUND NO.1 R AISED IN IT(SS)A NOS.30&31/CTK/2018 FOR THE ASSESSMENT YEARS 2012 - 2013 & 2013 - 2014, THE ASSESSEE HAS CHALLENGED TO QUASH THE ASSESSMENT ORDER AS IT IS BARRED BY LIMITATION AS PROVIDED U/S.153B OF THE ACT. 17 . ON PERUSAL OF THE ASSESSMENT ORDER AS WELL AS A PPELLATE ORDER, WE FIND THAT THE ASSESSMENT ORDER WAS PASSED BY THE AO ON 31.03.2016 AND AS PER THE LD. AR OF THE ASSESSEE THE ASSESSMENT ORDER WAS SERVED ON THE ASSESSEE ON 05.04.2016 , ON THIS GROUND HE SUBMITTED THAT THE ASSESSMENT ORDER IS BARRED BY LIM ITATION. THE CIT(A) IN THE APPELLATE ORDER FOR THE ASSESSMENT YEAR 2012 - 2013 OBSERVED THAT THERE IS NO ALLEGATION AGAINST THE ASSESSING OFFICER THAT THE SAID ORDER WAS CHANGED OR MODIFIED DURING THE PERIOD FROM THE DATE OF ISSUE TO THE DATE OF SERVICE AFTE R OBSERVING AS UNDER : - 8.2 I HAVE CAREFULLY EXAMINED THE SUBMISSION OF THE APPELLANT. THE ASSESSING OFFICER WAS REQUIRED TO MAKE THE ORDER BY 31.03.2016 AND WAS NOT REQUIRED TO SERVE THE ORDER ON OR BEFORE 31.03.2016. THE TIME GAP IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 30 BETWEEN MAKING OF THE ORDER AND SERVICE OF THE ORDER IS ONLY 05 DAYS, WHICH IS REASONABLE. THE DECISION QUOTED BY THE APPELLANT IN THE CASE OF J.B. SHELLAT IS NOT APPLICABLE AS IT IS IN RELATION TO BOMBAY CIVIL SERVICE RULES. IN THE CASES OF DELHI FOOTWEAR AND CHANDRIKA SA O, THE DECISIONS ARE ON WORKING OF SALE TAX DEPARTMENT, IN WHICH THE ORDERS WERE SERVED ON THE APPELLANT AFTER 24 MONTHS ARE AND 06 MONTHS RESPECTIVELY. THESE ARE NOT THE FACTS OF THE CASE OF PRESENT APPELLANT.. I N THIS CASE, THE ORDER IS SERVED WITHIN 05 DAYS. THE DECISION IN THE CASE OF SHRI NARAYAN CHANDRIKA TURST IS ON THE ISSUE OF EXEMPTION U/S. 10 (22A) OF I.T ACT, 1961 AND NOT ON THE ISSUE OF INVALIDITY OF ORDER DUE TO LIMITATION OF TIME. THE APPELLANT HAS ALSO RELIED UPON THE DECISION IN THE CASE OF ORISSA STEVEDORES LTD. THIS JUDGMENT IS ALSO NOT ON INVALIDLY OF ORDER DUE TO LIMITATION OF TIME. CONSIDERING THESE ASPECTS, NONE OF THESE DECISIONS ARE APPLICABLE TO THE CASE OF THE APPELLANT. 8.3 THE APPELLANT HAS ALSO RELIED UPON THE DECISION IN THE C ASE OF KAPPUMALAI ESTATE. ACCORDING TO THE APPELLANT, IF THE ORDER ISSUED IS NOT BEYOND THE CONTROL OF AUTHORITY CONCERNED, FOR ANY POSSIBLE CHANGE OR MODIFICATION, IT WILL BE CONSIDERED THAT THE SAID ORDER IS BARRED BY LIMITATION OF TIME. IN THE PRESENT C ASE, THERE IS NO ALLEGATION AGAINST THE ASSESSING OFFICER THAT THE SAID ORDER WAS CHANGED AS MODIFIED DURING THE PERIOD FROM THE DATE OF ISSUE TO THE DATE OF SERVICE. UNDER THE PROVISIONS OF SECTION 153 (1) OF I.T ACT, 1961, THE ASSESSING OFFICER IS REQUIR ED TO MAKE THE ORDER BY DATE OF LIMITATION. HE IS NOT REQUIRED TO SERVE THE ORDER BY THE DATE OF LIMITATION. THIS VIEW HAS BEEN TAKEN BY HON'BLE HIGH COURT OF CALCUTTA IN THE CASE OF CIT VS BINANI INDUSTRIES LTD (2015) 59 T AXMANN.COM 389 CALCUTTA. THE RELEVANT PORTION IS REPRODUCED AS BELOW: - 'SECTION 143, READ WITH SECTION 153, OF THE INCOME - TAX ACT, 1961 - ASSESSMENT - GENERAL (ASSESSMENT BARRED BY LIMITATION) - ASSESSMENT YEAR 2002 - 03 - ASSESSING OFFICER PASSED ASSESSMEN T ORDER ON 31 - 3 - 2005 WHICH WAS RECEIVED BY ASSESSEE ON 13 - 4 - 2005 - ASSESSEE CONTENDED THAT SAME WAS BARRED BY LIMITATION AND AS SUCH PERVERSE - IT WAS FOUND THAT REPRESENTATIVE OF ASSESSEE, VISITED OFFICE OF DEPARTMENT AND FOUND ASSESSMENT ORDER WAS READY T O BE SERVED UPON HIM - THERE WAS ALSO NO INDICATION THAT ASSESSING OFFICER REVISED HIS ASSESSMENT ORDER - FURTHER, PROBABILITY OF ORDER BEING MADE AND READY TO BE COLLECTED BY REPRESENTATIVE OF ASSESSEE AS ON 1 - 04 - 2005, COULD NOT BE RULED OUT - WHETHER, TH EREFORE, ASSESSMENT ORDER COULD NOT BE TREATED AS BARRED BY LIMITATION - HELD, YES [PARA 9] [IN FAVOUR OF REVENUE]. ' SLP FILED BY THE ASSESSEE AGAINST THE ABOVE MENTIONED DECISION HAS BEEN REJECTED BY HON'BLE SUPREME COURT AS PER CITATION (2016) 73 TAXMANN.COM 191 (SC). CONSIDERING THE ABOVE, THE GROUND OF APPEAL IS DISMISSED. WE HAVE CAREFULLY GONE THROUGH THE ABOVE OBSERVATIONS OF THE CIT(A), TO WHICH LD. AR COULD NOT CONTROVERT THE SAME. ACCORDINGLY, WE DO NOT IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 31 SEE AN Y GOOD REASON TO INTERFERE WITH THE ABOVE OBSERVATIONS OF THE CIT(A) AND WE UPHOLD THE SAME. THUS, GROUND NO.1 RAISED IN BOTH THE APPEALS FOR A.Y,.2012 - 2013 & 2013 - 2014 [IT(SS)A NOS.30&31/CTK/2018 IS DISMISSED. 18 . GROUND NO.1 RAISED IN APPEAL OF THE ASSES SEE FOR A.Y.2014 - 2015 HAS BEEN WITHDRAWN AND GROUND NO.4 IN APPEALS FOR A.Y.2012 - 2013 & 2013 - 2014 ALONG WITH GROUND NO.5 IN APPEAL FOR A.Y.2014 - 2015 HAVE NOT BEEN PRESSED , WHICH IS ALSO CLEAR FROM THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE FOR THE RESPE CTIVE ASSESSMENT YEARS . ACCORDINGLY, WE DISMISSED THE ABOVE GROUNDS AS WITHDRAWN AND NOT PRESSED. 19 . GROUND NO S .2 & 3 RAISED BY THE ASSESSEE IN APPEAL FOR A.Y.2014 - 2015 AND GROUND NO.2 RAISED IN APPEAL FOR A.Y.2012 - 2013 & 2013 - 2014, ARE WITH REGARD TO EST IMATION OF NET PROFIT. 20 . AS WE HAVE ALREADY DIRECTED THE AO TO APPLY NET TAXABLE PROFIT @15% WHILE CONSIDERING THE GROUND RAISED BY THE ASSESSEE FOR A.Y.2010 - 2011& 2011 - 2012 AND THE ISSUE RAISED FOR THE YEAR UNDER CONSIDERATION BEING SIMILAR TO THE AYS.2 010 - 2011 & 2011 - 2012, THEREFORE, OUR OBSERVATIONS MADE IN THE GROUND OF ABOVE APPEALS, SHALL APPLY MUTATIS MUTANDIS TO THESE GROUNDS AS STATED ABOVE. ACCORDINGLY, G ROUND NOS.2 & 3 RAISED BY THE ASSESSEE IN APPEAL FOR A.Y.2014 - 2015 AND GROUND NO.2 RAISED IN APPEAL FOR A.Y.2012 - 2013 & 2013 - 2014, ARE PARTLY ALLOWED. IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 32 21 . COMING TO THE GROUND NO.3 RAISED IN APPEAL FOR A.Y.2012 - 2013 & 2013 - 2014 AND GROUND NO.4 IN APPEAL FOR A.Y.2014 - 2015, WHICH RELATES TO CONFIRMATION OF ADDITION ON ACCOUNT OF DISALLOWANCE OF EXP ENSES UNDER THE HEAD BRAHMACHARI, LD. AR BEFORE US SUBMITTED THAT I T IS NOT DISPUTED THAT EXPENDITURE UNDER THE HEAD 'BRAHAMCHARI' HAS BEEN DEBITED IN THE ALLEGED PROFIT & LOSS ACCOUNT (HMB 3) AND FURTHER SUBMITTED THAT IT IS THE AMOUNT OF WITHDRAWAL OF BY THREE PARTNERS NAMELY SMT BIMLA SHARMA, SHRI PURANMAL SHARMA AND SHRI PRAKASH CHANDRA SHARMA. FURTHER THE LD. AR DRAWING OUR ATTENTION TO PAGE 22 TO 32 OF THE PAPER BOOK , SUBMITTED THAT SMT BIMLA SHARMA, SHRI PURANMAL SHARMA AND SHRI PRAKASH CHANDRA SH ARMA ARE THE PARTNERS OF THE ASSESSEE. A PARTNERSHIP FIRM NAMELY 'M/S.MAHARAJA FINANCE' RECONSTITUTED THE FIRM BY TAKING OTHER NEW PARTNERS VIDE DEED DT.01.04.2011 , WHEREIN THE PARTNERS MUTUALLY AGREED TO CONSTRUCT A HOUSE 'GANESH NIVAS' ON THE LAND MEASUR ING A 0.10 OUT OF PLOT NO.285 SITUATED IN VILLAGE BARAHMACHARI, WHICH SMT.BIMLA SHARMA CONTRIBUTED AS HER CAPITAL CONTRIBUTION TO THE PARTNERSHIP FIRM, BY CREDITING A SUM OF RS.3,11,000 TO HER CAPITAL ACCOUNT BY THE FIRM. AN AFFIDAVIT OF SMT. BIMALA SHARMA TO THIS EFFECT IS PLACED AT PAGES NO.33 TO 35 IN THE PAPER BOOK . IT WAS ALSO CONTENDED BY THE LD. AR THAT FOR THE PURPOSE OF CONSTRUCTION OF THE AFORESAID HOUSE NAMELY 'GANESH NIVAS', IN ORDER TO MAKE THEIR OWN CAPITAL CONTRIBUTION IN M/S.MAHARAJA FINANCE , SHRI IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 33 PRAKASH SHARMA, SHRI PURANMAL SHARMA AND SMT BIMLA SHARMA, MADE WITHDRAWALS FROM THEIR CAPITAL ACCOUNT IN THE ASSESSEE - FIRM M/S.HOTEL MAJARAJA . FURTHER, LD. AR SUBMITTED THAT THE LOOSE PAPER HMB - 3 FOUND DURING SEARCH IS NOTHING BUT A LOOSE UNSIGNED ROUGH PAPER. THE WITHDRAWALS OF THE PARTNERS MENTIONED ABOVE HAVE BEEN FOUND INDICATED IN THE LOOSE SEIZED PAPER AS 'BRAHMCHARI'. WITHDRAWAL FROM CAPITAL BY THE PARTNERS IS NOT REVENUE EXPENDITURE AND AS SUCH IT CANNOT BE DEBITED IN THE PROFIT & LOSS ACCOU NT. THEREFORE, THE ENTRIES FOUND IN THE SAID LOOSE PAPER CANNOT BE A MATERIAL FOR USING IT AGAINST THE ASSESSEE MERELY BASING ON THE STATEMENT RECORDED U/S. 132(4) OF THE ACT. MOREOVER, THE ASSESSEE HAS NOT CLAIMED TH E DISPUTED AMOUNT AS EXPENDITURE IN THE IR PROFIT & LOSS FILED ALONGWITH THE RETURN. 22 . ON THE OTHER HAND, LD. DR RELIED ON THE ORDER OF AUTHORITIES BELOW. 23 . HAVING HEARD BOTH THE PARTIES AND PERUSING THE IMPUGNED ORDERS AND CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES ALONG WITH VARIOUS DOCUMENTS, EVIDENCE PRODUCED BY THE ASSESSEE, WE FIND THAT THE WORD BRAHAMCHARI APPEARING IN THE LOOSE SHEET ALLEGED TO BE THE PROFIT & LOSS ACCOUNT HAS BEEN EXPLAINED RIGHT FROM THE BEGINNING THAT THE AMOUNT NOTED AGAINST BRAHAMCHARI ACTUAL LY RELATES TO WITHDRAWALS MADE BY THE PARTNERS - SMT BIMLA SHARMA, SHRI PURANMAL SHARMA AND SHRI PRAKASH CHANDRA SHARMA AND ALSO SHOWN IN THE COMPUTATION OF INCOME FILED BY THE ASSESSEE ALONG WITH THE RETURN S AND ALSO IN THE IR IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 34 PERSONAL ACCOUNTS THESE PARTNERS HAVE SH OWN THEIR ABOVE WITHDRAWALS FROM THE ASSESSEE - FIRM . ON CAREFUL PERUSAL OF THE PROFIT AND LOSS ACCOUNT FILED BY THE ASSESSEE, ALLEGED TO BE DISCOVERED AT THE TIME OF SEARCH, WE FIND THAT THE DISPUTED AMOUNT HAS BEEN WITHDRAWN BY THE ABOVE THREE PARTNERS OU T OF THEIR CAPITAL ACCOUNT AND THEY HAVE UTILIZED THE SAME WITHDRAWAL AMOUNT IN OTHER FIRM, WHO WERE ALSO THE PARTNERS. IN VIEW OF THE ABOVE, WE RESTORE THE ISSUE TO THE FILE OF AO FOR PROPER VERIFICATION OF THE PROFIT AND LOSS ACCOUNT AND WITHDRAWAL FROM THEIR CAPITAL ACCOUNT & UTILIZATION FOR BRAHMACHARI AND PASS ORDER ACCORDINGLY. NEEDLESS TO SAY, THE ASSESSEE SHALL BE GIVEN REASONABLE OPPORTUNITY OF HEARING. THE ASSESSEE IS ALSO DIRECTED TO COOPERATE WITH THE ASSESSEE FOR EARLY DISPOSAL OF THE CASE. TH IS GROUND RAISED IN ALL THE THREE APPEALS UNDER CONSIDERATION ARE ALLOWED FOR STATISTICAL PURPOSES. 24 . IN THE RESULT, THE APPEALS OF THE ASSESSEE IN IT(SS)A NOS.26 , 27, 28 & 29/CTK/2018 ARE PARTLY ALLOWED AND IT(SS)A NOS.30, 31 & 95/CTK/2018 ARE PARTLY ALL OWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 25/02 /20 20 . S D/ - ( C.M.GARG ) SD/ - (L.P.SAHU) / JUDICIAL MEMBER / ACCOUNTANT MEMBER CUTTACK; DATED 25/02 /20 20 PRAKASH KUMAR MISHRA, SR.P.S. IT (SS) A NO S . 26 - 31 /CTK/201 8 & ITA NO.95/CTK/2018 35 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, ( SENIOR PRIVATE SECRETARY ) ITAT CUTTACK BENCH, CUTTACK 1. / THE APPELLANT - M/S HOTEL MAHARAJA, WARD NO.10, NEAR GOVT. BUS STAND, BARGARH - 768028 2. / THE RESPONDENT - DCIT, CENTRAL CIRCLE, SAMBALPUR 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, CUTTACK 6. / GUARD FILE. //TRUE COPY//