DCIT, CC - 3(4), Kolkata , Kolkata V. M/s. UAL Industries Ltd., Kolkata

ITSSA 31/KOL/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2033 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 16-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 09-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RADHEY SHAYM
• Assessee Lawyers: A K TULSIYAN; SIKHA AGARWAL ACA
• Keywords: Search and seizure; Opportunity of being heard; Block assessment
• Section: 143(3); 133A; 153A; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA A BENCH, KOLKATA [BEFORE SRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER & SRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER] I.T.(SS)A. NO. 30/KOL/2017 ASSESSMENT YEAR: 2009-10 & I.T.(SS)A. NO. 31/KOL/2017 ASSESSMENT YEAR: 2010-11 DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(4), KOLKATA.........APPELLANT M/S. UAL INDUSTRIES LTD..............................RESPONDENT MANI UDAY16 MAY FAIR ROAD KOLKATA 700 019 [PAN : AAACU 3497 L] APPEARANCES BY: SHRI A.K. TULSIYAN & SMT. SIKHA AGARWAL, ACA, APPEARED ON BEHALF OF THE ASSESSEE. SHRI RADHEY SHAYM, CIT, D/R, APPEARING ON BEHALF OF THE REVENUE. DATE OF CONCLUDING THE HEARING : OCTOBER 24 TH , 2018 DATE OF PRONOUNCING THE ORDER : NOVEMBER 16 TH , 2018 O R D E R PER J. SUDHAKAR REDDY :- BOTH THESE APPEALS ARE FILED BY THE REVENUE AND ARE DIRECTED AGAINST THE SEPARATE BUT IDENTICAL ORDERS OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-21, KOLKATA, (HEREINAFTER THE LD. CIT(A)), DT. 24/03/2017, PASSED U/S 250 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT), RELATING TO ASSESSMENT YEARS 2009-10 & 2010-11 2. AS THE ISSUES ARISING IN BOTH THESE APPEALS ARE COMMON, FOR THE SAKE OF CONVENIENCE, THEY ARE HEARD TOGETHER AND DISPOSED OFF BY WAY OF THIS COMMON ORDER. 3. THERE IS A DELAY OF 4 DAYS IN FILING OF BOTH THESE APPEALS. AFTER PERUSING THE PETITION FOR CONDONATION, WE ARE CONVINCED THAT THE DEPARTMENT WAS PREVENTED BY SUFFICIENT CAUSE FROM FILING THIS APPEAL ON TIME. HENCE THE DELAY IS CONDONED AND APPEAL ADMITTED. 4. THE ASSESSEE IS A COMPANY AND IS IN THE BUSINESS OF MANUFACTURING OF ASBESTOS MATERIAL. THERE WAS A SEARCH AND SEIZURE OPERATION IN THE OFFICE PREMISES OF THE ASSESSEE 2 I.T.(SS)A. NO. 30/KOL/2017 ASSESSMENT YEAR: 2009-10 & I.T.(SS)A. NO. 31/KOL/2017 ASSESSMENT YEAR: 2010-11 M/S. UAL INDUSTRIES LTD AND AT THE RESIDENTIAL PREMISES OF SHRI ARUN KUMAR SARAF, DIRECTOR, ON 24/01/2012. THE ASSESSMENT WAS COMPLETED U/S 153A OF THE ACT. NOTICE U/S 153A WAS ISSUE ON 29/04/2013, FOR BOTH THE ASSESSMENT YEAR AND THIS WAS SERVED ON THE ASSESSEE ON 02/05/2013. IN RESPONSE THE ASSESSEE SUBMITTED ITS RETURN ON 11/07/2013, DISCLOSING TOTAL INCOME OF RS.6,81,29,016/-, FOR THE ASSESSMENT YEAR 2009-10 AND RS.39,86,28,211/-, FOR THE ASSESSMENT YEAR 2010-11. THEREAFTER THE ASSESSING OFFICER COMPLETED THE ASSESSMENT U/S 153A R.W.S 143(3) OF THE ACT, ON 31/03/2014, DETERMINING THE TOTAL INCOME OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2009-10 AT RS.10,13,19,020/- AND RS.42,31,28,210/-, FOR THE ASSESSMENT YEAR 2010-11. FOR BOTH THE ASSESSMENT YEARS, ADDITION WAS MADE U/S 68 OF THE ACT. 4.1. ON APPEAL, THE LD. FIRST APPELLATE AUTHORITY DELETED THE ADDITION BY APPLYING THE PROPOSITION OF LAW LAID DOWN IN THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA 380 ITR 573 AND THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. VEERAPRABHU MARKETING LTD. [2016] 388 ITR 574, ON THE GROUND THAT THE ADDITIONS IN CASE OF THESE SEARCH ASSESSMENTS U/S 153A R.W.S. 143(3) OF THE ACT, HAVE BEEN MADE WITHOUT ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. HE HELD THAT THE ASSESSMENTS FOR THE BOTH THE YEARS HAVE NOT ABATED. 5. AGGRIEVED, THE REVENUE HAS FILED BOTH THESE APPEAL ON THE FOLLOWING REVISED GROUNDS OF APPEAL:- ASSESSMENT YEAR 2009-10 1. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN LAW, THE LD. CIT (A) IS NOT JUSTIFIED TO HOLD THAT THE ADDITIONS MADE IN THE ASSESSMENT ORDER OR NOT BASED ON ANY INCRIMINATING DOCUMENTS OR PAPERS WITHOUT EXAMINING THE RECORDS TO FIND OUT EXISTENCE OF SEIZED MATERIAL IN THE CASE AND IN MERELY TAKING THE DECISION ON THE BASIS OF SUBMISSION OF THE ASSESSEE. 2. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) IS NOT JUSTIFIED IN ADJUDICATING APPEAL WITHOUT GOING INTO THE OTHER GROUNDS ON MERIT. 3. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) IS NOT JUSTIFIED IN DELETING ADDITION OF RS. 3,31,90,000/- MADE BY THE AO 3 I.T.(SS)A. NO. 30/KOL/2017 ASSESSMENT YEAR: 2009-10 & I.T.(SS)A. NO. 31/KOL/2017 ASSESSMENT YEAR: 2010-11 M/S. UAL INDUSTRIES LTD U/S 68 OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF SHARE APPLICATION MONEY WITHOUT GOING INTO THE MERITS OF THE CASE. 4. THAT, THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ANY GROUND OR GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. ASSESSMENT YEAR 2010-11 1.THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN LAW, THE LD. CIT (A) IS NOT JUSTIFIED TO HOLD THAT THE ADDITIONS MADE IN THE ASSESSMENT ORDER OR NOT BASED ON ANY INCRIMINATING DOCUMENTS OR PAPERS WITHOUT EXAMINING THE RECORDS TO FIND OUT EXISTENCE OF SEIZED MATERIAL IN THE CASE AND IN MERELY TAKING THE DECISION ON THE BASIS OF SUBMISSION OF THE ASSESSEE. 2. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) IS NOT JUSTIFIED IN ADJUDICATING APPEAL WITHOUT GOING INTO THE OTHER GROUNDS ON MERIT. 3. THAT, ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) IS NOT JUSTIFIED IN DELETING ADDITION OF RS. 2,45,00,000/- MADE BY THE AO U/S 68 OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF SHARE APPLICATION MONEY WITHOUT GOING INTO THE MERITS OF THE CASE. 4. THAT, THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR WITHDRAW ANY GROUND OR GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 6. THE LD. D/R, SUBMITTED THAT THE LD. CIT(A) HAS WRONGLY DELETED THE ADDITION MADE ON THE GROUND THAT THERE IS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. HE REFERRED TO PAGE 38 OF THE LD. CIT(A)S ORDER AND SUBMITTED THAT THE LD. CIT(A) SHOULD HAVE DIRECTED THE ASSESSING OFFICER TO PRODUCE THE INCRIMINATING MATERIAL BASED ON WHICH THE ASSESSING OFFICER HAS MADE THE ADDITION IN THIS CASE. HE SUBMITTED THAT AS THIS WAS NOT DONE, THE MATTER SHOULD BE REMANDED BACK TO THE LD. CIT(A) FOR GIVING THE ASSESSING OFFICER ADEQUATE OPPORTUNITY OF BEING HEARD AND PRODUCING THE INCRIMINATING MATERIAL/DOCUMENTS FOUND DURING THE COURSE OF SEARCH BASED ON WHICH THE ADDITION WAS MADE. HE FURTHER SUBMITTED THAT THE DIRECTOR OF THE ASSESSEE COMPANY SHRI SURAJ SARAF HAS GIVEN A STATEMENT AND THAT THIS WAS EXTRACTED IN THE ASSESSMENT ORDER ITSELF. HE FILED A COPY OF THE LETTER WRITTEN BY SHRI SURAJ KUMAR SARAF TO THE DCIT, CENTRAL CIRCLE-23, KOLKATA, ON 24/06/2014 AND POINTED OUT IN THIS LETTER THAT HE HAS STATED THAT HE HAS NO 4 I.T.(SS)A. NO. 30/KOL/2017 ASSESSMENT YEAR: 2009-10 & I.T.(SS)A. NO. 31/KOL/2017 ASSESSMENT YEAR: 2010-11 M/S. UAL INDUSTRIES LTD PERSONAL FUNDS TO INVEST SUCH HUGE AMOUNT OF MONEY IN UAI INDUSTRIES LTD. ON A QUERY FROM THE BENCH, HE COULD NOT POINT OUT AS TO WHAT WAS THE INCRIMINATING MATERIAL/DOCUMENT FOUND DURING THE COURSE OF SEARCH, BASED ON WHICH THE ADDITION WAS MADE BY THE ASSESSING OFFICER. HE FILED A COPY OF A COMMUNICATION TO THE PR. CIT, CENTRAL- 1, FROM CBDT DT. 07/02/2017, WHEREIN IT IS STATED THAT THE CBDT HAS NOT APPROVED THE PROPOSAL TO FILE SLP AGAINST THE JUDGEMENT OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF VEERAPRABHU MARKETING LIMITED (SUPRA) . HE RELIED ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. S AJIT KUMAR; [2018] 93 TAXMANN.COM 294 SC, FOR THE PROPOSITION THAT THE ASSESSING OFFICER CAN CONSIDER SUCH OTHER MATERIAL AND INFORMATION THAT IS AVAILABLE WITH HIM DURING THE COURSE OF BLOCK ASSESSMENT U/S 153A OF THE ACT, FOR THE PURPOSE OF MAKING ADDITION. HE SUBMITTED THAT THE HONBLE SUPREME COURT HAS HELD THAT THE MATERIAL FOUND DURING THE COURSE OF SURVEY U/S 133A OF THE ACT, FALLS WITHIN THIS CATEGORY AND THE ASSESSING OFFICER WAS JUSTIFIED IN TAKING THE ADVERSE MATERIAL COLLECTED OR FOUND DURING THE COURSE OF SURVEY FOR MAKING ADDITIONS IN A BLOCK ASSESSMENT. HE PRAYED THAT THE ORDER OF THE ASSESSING OFFICER BE UPHELD AND THE ORDER OF THE LD. CIT(A) BE REVERSED. 7. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, SUBMITTED THAT FOR THE ASSESSMENT YEAR 2009-10 ASSESSMENT WAS MADE ORIGINALLY U/S 143(3) ON 20/12/2011 AND WHEREAS THE SEARCH AND SEIZURE OPERATION WAS CONDUCTED ON 24/01/2012. HENCE HE SUBMITTED THAT THE ASSESSMENT HAS NOT ABATED FOR THE ASSESSMENT YEAR 2009-10. FOR THE ASSESSMENT YEAR 2010-11, HE SUBMITTED THAT THE RETURN OF INCOME WAS FILED ON 23/09/2010 AND THE TIME LIMIT FOR ISSUAL OF NOTICE U/S 143(2) OF THE ACT, IS ON 30/09/2011 AND AS THE DATE OF SEARCH AND SEIZURE WAS 24/01/2012, THAT THE ASSESSMENT HAD NOT ABATED. HE TOOK THIS BENCH THROUGH THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT ADMITTEDLY THE REVENUE HAS NOT FOUND ANY INCRIMINATING MATERIAL DURING THE SEARCH AND SEIZURE OPERATION AND THAT THE ADDITIONS IN QUESTION WERE NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH AND SEIZURE. HE POINTED OUT THAT SHRI SURAJ KUMAR SARAF HAS RETRACTED FROM THE STATEMENT RECORDED FROM HIM BY THE REVENUE BY WAY OF FILING AFFIDAVIT. HE RELIED ON CERTAIN CASE LAW FOR THE PROPOSITION THAT, WHEN A STATEMENT HAS BEEN RETRACTED, THEN IT IS NOT EVIDENCE AND THE REVENUE HAS TO BASE 5 I.T.(SS)A. NO. 30/KOL/2017 ASSESSMENT YEAR: 2009-10 & I.T.(SS)A. NO. 31/KOL/2017 ASSESSMENT YEAR: 2010-11 M/S. UAL INDUSTRIES LTD ITS CONCLUSION ON ANY INCRIMINATING MATERIAL FOUND. HE POINTED OUT THAT THE ENTIRE SHARE APPLICATION MONEY WAS RECEIVED BY THE ASSESSEE COMPANY FROM GROUP CONCERNS AND THESE WERE PART OF THE REGULAR TRANSACTIONS RECORDED IN THE BOOKS OF ACCOUNTS AND CONSIDERED DURING THE COURSE OF REGULAR ASSESSMENT. THUS, HE SUBMITS THAT THE PROPOSITIONS OF LAW LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF VEERAPRABHU MARKETING PVT. LTD. (SUPRA) , WHICH IN TURN FOLLOWED THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE KABUL CHAWLA (SUPRA) ARE APPLICABLE. HE FURTHER RELIED ON THE DECISION OF THE CO- ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. M/S. B.R. INFRAPROJECTS PVT. LTD., IT(SS)A NO. 11/KOL/2017; FOR THE ASSESSMENT YEAR 2012-13 AND SUBMITTED THAT THE BENCH HAS CONSIDERED THE ENTIRE LAW ON THIS ISSUE. HE POINTED OUT THAT THERE IS NO OTHER MATERIAL WAS COLLECTED DURING THE COURSE OF SURVEY, BASED ON WHICH THE ASSESSING OFFICER HAD MADE THE ASSESSMENT AND HENCE THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF S. AJIT KUMAR (SUPRA)., DOES NOT APPLY TO THE FACTS OF THIS CASE. 8. WE HAVE HEARD RIVAL CONTENTIONS. ON CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSAL OF THE PAPERS ON RECORD, ORDERS OF THE AUTHORITIES BELOW AS WELL AS CASE LAW CITED, WE HOLD AS FOLLOWS:- 9. A PERUSAL OF THE ASSESSMENT ORDER DEMONSTRATES THAT THE ENTIRE ADDITION IN QUESTION FOR BOTH THE ASSESSMENT YEARS, IS NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH AND SEIZURE OPERATIONS ON THE ASSESSEE ON 24/01/2012 OR ON MATERIAL FOUND DURING SURVEY OR AND OTHER PROCEEDINGS UNDER THE ACT. IT IS NOT IN DISPUTE THAT THE ASSESSMENTS FOR THE BOTH THE ASSESSMENT YEARS HAVE NOT ABATED. THE LD. D/R, COULD NOT POINT OUT AS TO WHAT WAS THE INCRIMINATING MATERIAL/DOCUMENTS FOUND DURING THE COURSE OF SEARCH, BASED ON WHICH THE ADDITION IN QUESTION WAS MADE FOR BOTH THE ASSESSMENT YEARS. THE QUESTION BEFORE US IS, WHETHER THE ADDITION MADE, WHICH IS ADMITTEDLY NOT BASED ON ANY MATERIAL FOUND DURING THE COURSE OF SEARCH, IN A SEARCH ASSESSMENT MADE U/S 153A OF THE ACT, R.W.S. 143(3) OF THE ACT, HAS BEEN RIGHTLY DELETED BY THE LD. CIT(A). THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF VEERAPRABHU MARKETING PVT.LTD. (SUPRA) HELD AS FOLLOWS:- 6 I.T.(SS)A. NO. 30/KOL/2017 ASSESSMENT YEAR: 2009-10 & I.T.(SS)A. NO. 31/KOL/2017 ASSESSMENT YEAR: 2010-11 M/S. UAL INDUSTRIES LTD 7. WITH RESPECT TO THE SECOND SUBMISSION ADVANCED BY MR. JAIN, WE CALLED UPON MR. NIZAMUDDIN IN VAIN TO SHOW US THE INCRIMINATING MATERIAL, IF ANY, FOUND EITHER DURING THE SEARCH OR DURING THE REQUISITION OR EVEN DURING THE SURVEY WHICH IS OR MAY BE RELATABLE TO THE ASSESSEE. MR.NIZAMUDDIN AS UNABLE TO SHOW THAT ANY SUCH INCRIMINATING MATERIAL WAS UNEARTHED AT ANY OF THE THREE STAGES PERTAINING TO THE ASSESSEE. 8. WE ARE IN AGREEMENT WITH THE VIEWS EXPRESSED BY THE KARNATAKA HIGH COURT THAT INCRIMINATING MATERIAL IS A PRE-REQUISITE BEFORE POWER COULD HAVE BEEN EXERCISED UNDER SECTION 153C READ WITH SECTION 153A. 9. 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. THIS BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. M/S. B.R. INFRAPROJECTS PVT. LTD., IT(SS)A NO. 11/KOL/2017; FOR THE ASSESSMENT YEAR 2012-13; HELD AS FOLLOWS:- 8.3. WE ALSO FIND THAT RECENTLY THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS KABUL CHAWLA REPORTED IN (2016) 380 ITR 573 (DEL) HELD 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 153A(1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. (II) ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO BE COMPUTED BY THE LD. AOS AS A FRESH EXERCISE. (III) THE LD. AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAKES PLACE. THE LD. AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX'. (IV) ALTHOUGH SECTION 153A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH, OR OTHER POST-SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE LD. 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. 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 THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT 7 I.T.(SS)A. NO. 30/KOL/2017 ASSESSMENT YEAR: 2009-10 & I.T.(SS)A. NO. 31/KOL/2017 ASSESSMENT YEAR: 2010-11 M/S. UAL INDUSTRIES LTD 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 LD. AO. (VII) COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE LD. AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT.' 38. THE PRESENT APPEALS CONCERN AYS 2002-03, 2005-06 AND 2006-07, ON THE DATE OF THE SEARCH THE SAID ASSESSMENTS ALREADY STOOD COMPLETED. SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEARCH, NO ADDITIONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. 8.4. WE FIND THAT THE DECISION RELIED UPON BY THE LD DR IN THE CASE OF CIT VS ANIL KUMAR BHATIA REPORTED IN (2013) 352 ITR 493 (DEL) DOES NOT IN ANY MANNER ADVANCE THE CASE OF THE REVENUE AS ADMITTEDLY THE HON'BLE DELHI HIGH COURT IN PARA 24 OF ITS ORDER HAD HELD AS UNDER:- '24. WE ARE NOT CONCERNED WITH A CASE WHERE NO INCRIMINATING MATERIAL WAS FOUND DURING THE SEARCH CONDUCTED UNDER SECTION 132 OF THE ACT. WE, THEREFORE, EXPRESS NO OPINION AS TO WHETHER SECTION 153A CAN BE INVOKED EVEN IN SUCH A SITUATION. THAT QUESTION IS THEREFORE LEFT OPEN.' 8.5. THE LD DR ALSO RELIED ON THE RECENT DECISION OF THE HON'BLE KERALA HIGH COURT IN THE CASE OF E.N.GOPAKUMAR VS CIT REPORTED IN (2016) 75 TAXMANN.COM 215 (KERALA) IN SUPPORT OF HIS CONTENTIONS. WE FIND THAT THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS KABUL CHAWLA REPORTED IN (2016) 380 ITR 573 (DEL) HAD DULY CONSIDERED THE DECISIONS OF CIT VS ANIL KUMAR BHATIA REPORTED IN (2013) 352 ITR 493 (DEL) ; CIT VS CHETAN DAS LACHMAN DAS REPORTED IN (2012) 211 TAXMAN 61 (DEL HC) ; MADUGULA VENU VS DIT REPORTED IN (2013) 215 TAXMAN 298 (DEL HC) ; CANARA HOUSING DEVELOPMENT CO. VS DCIT REPORTED IN (2014) 49 TAXMANN.COM 98 (KAR HC) ; FILATEX INDIA LTD VS CIT REPORTED IN (2014) 229 TAXMAN 555 (DEL HC) ; JAI STEEL (INDIA) VS ACIT REPORTED IN (2013) 219 TAXMAN 223 (DEL HC) ; CIT VS MURLI AGRO PRODUCTS LTD REPORTED IN (2014) 49 TAXMANN.COM 172 (BOM HC) ; CIT VS CONTINENTAL WAREHOUSING CORPORATION (NHAVA SHEVA) LTD REPORTED IN (2015) 374 ITR 645 (BOM HC) AND ALL CARGO GLOBAL LOGISTICS LTD VS DCIT REPORTED IN (2012) 137 ITD 287 (MUM ITAT) (SB). WE ALSO FIND THAT AGAINST THE DECISION OF THE HON'BLE DELHI HIGH COURT IN 380 ITR 573 (DEL) , THE REVENUE PREFERRED SPECIAL LEAVE PETITION BEFORE THE HON'BLE SUPREME COURT AND THE SAME WAS DISMISSED BY THE APEX COURT WHICH IS REPORTED IN 380 ITR (ST.) 4 (SC). HENCE IT COULD BE SAFELY CONCLUDED THAT THE DECISION OF HON'BLE DELHI HC IN THE CASE OF KABUL CHAWLA SUPRA WOULD HAVE TO BE CONSIDERED ON THE IMPUGNED ISSUE AND IN ANY CASE, THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS VEGETABLE PRODUCTS LTD REPORTED IN 88 ITR 192 (SC) HAD HELD THAT IF TWO REASONABLE CONSTRUCTIONS OF A TAXING PROVISION ARE POSSIBLE, THAT CONSTRUCTION WHICH FAVOURS THE ASSESSEE MUST BE ADOPTED. 8.6. WE ALSO FIND THAT THE HON'BLE JURISDICTIONAL HIGH COURT RECENTLY IN THE CASE OF PRINCIPAL CIT VS M/S SALASAR STOCK BROKING LTD IN G.A.NO. 1929 OF 2016 ITAT NO. 264 OF 2016 DATED 24.8.2016 HAD ENDORSED THE AFORESAID VIEW OF HON'BLE DELHI HIGH COURT IN KABUL CHAWLA'S CASE AND ALSO PLACED RELIANCE ON ITS OWN DECISION IN THE CASE OF CIT VS VEERPRABHU MARKETING LTD REPORTED IN (2016) 73 TAXMANN.COM 149 (CAL HC). 8.7. WE FIND THAT THE PROVISIONS OF SECTION 132 OF THE ACT RELIED UPON BY THE LD DR WOULD BE RELEVANT ONLY FOR THE PURPOSE OF CONDUCTING THE SEARCH ACTION AND INITIATING PROCEEDINGS U/S 153 A OF THE ACT . ONCE THE PROCEEDINGS U/S 153 A OF THE ACT ARE INITIATED, WHICH ARE SPECIAL PROCEEDINGS, THE LEGISLATURE IN ITS WISDOM BIFURCATES DIFFERENTIAL TREATMENTS FOR ABATED ASSESSMENTS AND UNABATED ASSESSMENTS. AT THE COST OF REPETITION, WE STATE THAT IN RESPECT OF ABATED ASSESSMENTS (I.E PENDING PROCEEDINGS ON THE DATE OF SEARCH) , FRESH 8 I.T.(SS)A. NO. 30/KOL/2017 ASSESSMENT YEAR: 2009-10 & I.T.(SS)A. NO. 31/KOL/2017 ASSESSMENT YEAR: 2010-11 M/S. UAL INDUSTRIES LTD ASSESSMENTS ARE TO BE FRAMED BY THE LD AO U/S 153 A OF THE ACT WHICH WOULD HAVE A BEARING ON THE DETERMINATION OF TOTAL INCOME BY CONSIDERING ALL THE ASPECTS, WHEREIN THE EXISTENCE OF INCRIMINATING MATERIALS DOES NOT HAVE ANY RELEVANCE. HOWEVER, IN RESPECT OF UNABATED ASSESSMENTS, THE LEGISLATURE HAD CONFERRED POWERS ON THE LD AO TO JUST FOLLOW THE ASSESSMENTS ALREADY CONCLUDED UNLESS THERE IS AN INCRIMINATING MATERIAL FOUND IN THE SEARCH TO DISTURB THE SAID CONCLUDED ASSESSMENT. IN OUR CONSIDERED OPINION, THIS WOULD BE THE CORRECT UNDERSTANDING OF THE PROVISIONS OF SECTION 153A OF THE ACT , AS OTHERWISE, THE NECESSITY OF BIFURCATION OF ABATED AND UNABATED ASSESSMENTS IN SECTION 153A OF THE ACT WOULD BECOME REDUNDANT AND WOULD LOSE ITS RELEVANCE. HENCE THE ARGUMENTS ADVANCED BY THE LD DR IN THIS REGARD DESERVES TO BE DISMISSED. 8.8. IN VIEW OF THE AFORESAID FINDINGS AND RESPECTFULLY FOLLOWING THE JUDICIAL PRECEDENTS RELIED UPON HEREINABOVE, WE HOLD THAT THE ASSESSMENT FRAMED U/S 143(1) OF THE ACT FOR THE ASST YEAR 2012-13, WHICH WAS UNABATED / CONCLUDED ASSESSMENT, ON THE DATE OF SEARCH, DESERVES TO BE UNDISTURBED IN THE ABSENCE OF ANY INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH AND ACCORDINGLY THE ADDITION MADE ON ACCOUNT OF SHARE APPLICATION MONEY AND SHARE PREMIUM U/S 68 OF THE ACT IS HEREBY DIRECTED TO BE DELETED. IT IS NOT IN DISPUTE THAT THERE WAS ABSOLUTELY NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH IN THE INSTANT CASE WITH REGARD TO THE ISSUE OF SHARE CAPITAL, SHARE PREMIUM AND THE LD AO HAD ONLY TRIED TO EXPLAIN THE VARIOUS LAYERS THROUGH WHICH THE MONIES ULTIMATELY REACHED THE ASSESSEE COMPANY. THE OTHER ADDITION OF COMMISSION OF RS 72,500/- IS ONLY CONSEQUENTIAL TO THE FIRST ADDITION. SINCE THE ISSUE IS ADDRESSED ON PRELIMINARY GROUND OF ABSENCE OF INCRIMINATING MATERIALS, WE REFRAIN TO GIVE OUR FINDINGS ON THE MERITS OF THE ADDITION U/S 68 OF THE ACT FOR THE ASST YEAR 2012-13 AND THE COMMISSION OF RS 72,500/-. ACCORDINGLY THE GROUNDS RAISED BY THE REVENUE IN THIS REGARD ARE DISMISSED. 10. RESPECTFULLY FOLLOWING THE PROPOSITIONS OF LAW LAID DOWN IN THESE CASE-LAW, TO THE FACTS OF THE CASE ON HAND, WE FIND THAT THE LD. CIT(A) HAS RIGHTLY DELETED THE ADDITIONS IN QUESTION ON THE GROUND THAT THE ADDITIONS IN QUESTION WERE BASED ON INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH AND SEIZURE OR ANY OTHER PROCEEDINGS THEREAFTER. THE RATIO OF THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF S. AJIT KUMAR (SUPRA) IS NOT APPLICABLE AS THE ADDITION WAS NOT BASED ON OTHER MATERIAL FOUND IN SURVEY OR OTHER OPERATIONS. IN THE RESULT, WE UPHOLD THE ORDER OF THE LD. FIRST APPELLATE AUTHORITY AND DISMISS THESE APPEALS OF THE REVENUE. 11. IN THE RESULT, BOTH THESE APPEALS OF THE REVENUE ARE DISMISSED. KOLKATA, THE 16 TH DAY OF NOVEMBER, 2018. SD/- SD/- [S.S. VISWANETHRA RAVI] [ J. SUDHAKARREDDY ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 16.11.2018 {SC SPS} 9 I.T.(SS)A. NO. 30/KOL/2017 ASSESSMENT YEAR: 2009-10 & I.T.(SS)A. NO. 31/KOL/2017 ASSESSMENT YEAR: 2010-11 M/S. UAL INDUSTRIES LTD COPY OF THE ORDER FORWARDED TO: 1. M/S. UAL INDUSTRIES LTD MANI UDAY16 MAY FAIR ROAD KOLKATA 700 019 2. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-3(4), KOLKATA 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSISTANT REGISTRAR HEAD OF OFFICE/ D.D.O. ITAT, KOLKATA BENCHES