Kinjalben R.Thakkar, Ahmedabad V. The Dy.CIT.,Cent.Circle-1(1), Ahmedabad

ITSSA 328/AHD/2011

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 2990 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 10 month(s) 3 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 15-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 13-02-2017
• Assessment Year: 1999-2000
• Appeal Filed On: 11-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Gift; Question of law; Tax effect
• Section: 153A; 147; 68; 132; 15

Judgement Text

, D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH ACCOUNTANT MEMBER ./ IT(SS)A.NO.328,329,331 TO 333/AHD/2011 / ASSTT. YEAR: 1999-2000,2000-2001, 2002-2003, 2003-2004 AND 2004- 2005 KINJALBEN R. THAKKAR, 1, RUKSHMANI VALLABH SOCIETY, MANEKBAG HALL ROAD, SATELLITE, AHMEDABAD PAN AASPT 6710C VS DY. COMM. OF INCOME TAX, CENTRAL CIRCLE-1(1). ITA NO.1037/AHD/2011 ASSTT.YEAR 2004-2005 ITO, WARD - 7(2) AHMEDABAD. VS KINJALBEN R. THAKKAR, 1, RUKSHMANI VALLABH SOCIETY, MANEKBAG HALL ROAD, SATELLITE, AHMEDABAD PAN AASPT 6710C ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI ASEEM THAKKAR, AR REVENUE BY : SHRI SANJAY AGARWAL , CIT, DR / DATE OF HEARING : 13/02/2017 / DATE OF PRONOUNCEMENT: 15/02/2017 $%/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: IN THIS BUNCH OF SIX APPEALS, FIVE APPEALS ARE DIRE CTED AT THE INSTANCE OF ASSESSEE AGAINST SEPARATE ORDERS OF EVE N DATE I.E 25/01/2011 KINJALBEN R. THAKKAR VS. DCIT (6 APPEALS) 2 PASSED BY LD.CIT(A) I, AHMEDABAD ON THE RESPECTIV E APPEALS OF THE ASSESSEE FOR A.Y. 1999-2000 & 2000-2001 AND 2002-03 TO 2004-2005 . 2. REVENUE IS IN CROSS APPEAL IN A.Y. 2004-05. COMM ON ISSUES ARE INVOLVED IN ALL THESE APPEALS THEREFORE WE HEARD TH EM TOGETHER AND DEEMED IT APPROPRIATE TO DISPOSED OF THEM THROUGH T HIS COMMON ORDER. 3. FIRST WE TAKE THE APPEAL OF THE REVENUE IN A.Y. 2004-05. THE SOLITARY SUBSTANTIAL GRIEVANCE OF THE REVENUE IS TH AT LD.CIT(A) HAS ERRED IN DIRECTING THE ASSESSING OFFICER TO VERIFY THE IS SUE WITH REGARD TO ADDITION OF RS.25,15,816/- WHICH WAS MADE BY THE AS SESSING OFFICER WITH THE AID OF SECTION 68 OF THE INCOME TAX ACT, 1 961 ON ACCOUNT OF UN EXPLAINED CASH DEPOSITS BY THE ASSESSEE IN MAHILA V IKAS CO-OPERATIVE BANK. 4. WITH THE ASSISTANT OF LD. REPRESENTATIVES WE HAV E GONE THROUGH THE RECORD CAREFULLY: WE FIND THAT THE APPEAL OF THE REVENUE WAS PRESENTE D ON 08.04.2011. ON 10.12.2015 THE CBDT HAS ISSUED INST RUCTIONS BEARING NO. 21/2015 PROHIBITING ITS SUBORDINATE AUTHORITIES FROM FILING OF THE APPEAL TO THE TRIBUNAL AGAINST THE ORDER OF THE CIT (A) WHERE THE TAX EFFECT BY VIRTUE OF THE RELIEF GIVEN BY THE CIT(A) IS LESS THAN RS.10 LAKHS. THE INSTRUCTIONS HAVE BEEN MADE APPLICABLE WITH RET ROSPECTIVE EFFECT, MEANING THEREBY, THESE INSTRUCTIONS ARE APPLICABLE ON PENDING APPEALS ALSO. IN THE PRESENT CASE, TOTAL PENALTY ADDITION BY THE LD.CIT(A) IS OF RS.25,15,816/- WHICH WAS CHALLENGED BY THE REVENUE IN THE PRESENT APPEAL. IN ACCORDANCE WITH THE ABOVE CBDT CIRCULAR THE TAX EFFECT ON KINJALBEN R. THAKKAR VS. DCIT (6 APPEALS) 3 THE IMPUGNED ADDITIONS WOULD BE LESS THAN RS.10 LAK HS, AND THEREFORE, THE PRESENT APPEAL OF THE REVENUE DESERVES TO BE DI SMISSED BEING TREATED TO BE FILED IN VIOLATION OF CBDT INSTRUCTIONS. FUR THER, THE CASE DOES NOT FALL WITHIN THE AMBIT OF EXCEPTIONS PROVIDED IN THE INSTRUCTIONS. IT IS FURTHER OBSERVED THAT SINCE, WHILE HEARING THE APPE ALS, SUCH FACTORS COULD NOT BE CROSS-VERIFIED, THEREFORE, IN CASE, ON RE-V ERIFICATION AT THE END OF THE AO, IT CAME TO THE NOTICE THAT THE TAX EFFECT I S MORE OR IT FALLS WITHIN THE AMBIT OF EXCEPTIONS PROVIDED IN THE INSTRUCTION , THEN THE DEPARTMENT WILL BE AT LIBERTY TO APPROACH THE TRIBUNAL FOR REC ALL OF THIS ORDER. SUCH APPLICATION SHOULD BE FILED WITHIN TIME LIMIT. IN VIEW OF THE ABOVE, THE APPEAL OF THE REVENUE IS DISMISSED. 5. NOW WE TAKE THE APPEALS FILED BY THE ASSESSEE. T HE FACTS ON ALL VITAL POINTS ARE COMMON IN ALL THESE ASSESSMENT YEA RS, THEREFORE, FOR THE FACILITY OF REFERENCE, WE ARE TAKING UP THE FACTS MAINLY FROM ASSESSMENT YEAR 1999-2000. 6. THE ASSESSEE HAS TAKEN NOS. OF GROUNDS IN ALL TH ESE ASSESSMENT YEARS BUT AT THE VERY OUTSET LD. COUNSEL, FOR THE A SSESSEE CONTENDED THAT IN VIEW OF HONBLE GUJARAT HIGH COURTS DECISION I N THE CASE OF PRINCIPAL COMMISSIONER OF INCOME TAX V/S SAUMYA CON STRUCTION PVT. LTD. THE ADDITIONS ARE NOT SUSTAINABLE IN THE EYES OF LAW, BECAUSE DURING THE COURSE OF SEARCH NO INCRIMINATING MATERIAL WAS FOUND WHICH CAN AUTHORIZED ASSESSING OFFICER TO MAKE ADDITIONS IN THESE ASSESSMENT YEARS. HE PLACED ON RECORD COPY OF HONBLE HIGH COU RTS DECISION RENDERED IN TAX APPEAL NO. 21 OF 2016. KINJALBEN R. THAKKAR VS. DCIT (6 APPEALS) 4 7. BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SE IZURE OPERATION WAS CONDUCTED AT THE RESIDENTIAL PREMISES OF THE ASSESS EE ALONG WITH DHARAMDEV BUILDERS GROUP OF CASES ON 09/02/2005. IN ORDER TO GIVE LOGICAL END TO THE PROCEEDINGS A NOTICE UNDER SECTI ON 153A OF THE I.T. ACT WAS ISSUED ON 28/10/2006. IN RESPONSE TO THE NO TICE, ASSESSEE HAS FILED HER RETURN OF INCOME ON 13/07/2006 DISCLOSING TOTAL INCOME AT RS.63,650/- SIMILARLY, INCOME OF RS.66,960/- WAS DI SCLOSED BY THE ASSESSEE IN A.Y. 2000-01, RS.83,680/- IN A.Y. 2002- 03, RS.2,30,050/- IN A.Y. 2003-2004 AND 2,31,000/- IN A.Y.2004-05. THE R ETURN FOR A.Y. 2004-05 WAS FILED ON 14/08/2006. THE LD. ASSESSING OFFICER HAS PASSED ASSESSMENT ORDERS ON 29/12/2006. HE DETERMINED TAXA BLE INCOME OF THE ASSESSEE AT RS,3,42,650/- AS AGAINST RETURN OF INCO ME OF RS.63,650/- IN A.Y. 1999-2000. IN A.Y. 2000-01 HE DETERMINED TAXAB LE INCOME AT RS.21,93,277/- . THE LD. FIRST APPELLANT AUTHORITY HAS SUMMARIZED THE ADDITION IN PARAGRAPH NO.2 OF HER ORDER IN EACH ASS ESSMENT YEAR. THE ADDITIONS MADE BY THE ASSESSING OFFICER AND THE NOT ED BY THE CIT(A) IN EACH YEAR READ AS UNDER. ASSESSMENT YEAR 1999-2000 1. UNEXPLAINED CASH CREDITS INTRODUCED AS GIFTS IN CAPITAL ACCOUNT RS.2,30,000/- 2. DEPOSITS RS. 49,000/- TOTAL RS.2,70,000/- ASSESSMENT YEAR 2000-01 1. UNEXPLAINED CASH CREDITS INTRODUCED AS GIFTS IN CAPITAL ACCOUNT RS.2,00,00/- KINJALBEN R. THAKKAR VS. DCIT (6 APPEALS) 5 2. SALE OF JEWELLERY RS. 21,838/- 3. CASH CREDITS FROM GOPINATH INDUSTRIES RS.2,50,000/- 4. TOTAL DEPOSITS IN BANK A/C RS. 50,000/- RS.5,21,838/- 5. UNDISCLOSED INVESTMENT IN CONSTRUCTION OF RESIDENTIAL HOUSE RS.16,71,439/- TOTAL RS.21,93,277/- ASSESSMENT YEAR 2002-03 1. UNEXPLAINED CASH CREDITS INTRODUCED AS GIFTS IN CAPITAL ACCOUNT RS.1,00,00/- 2. CASH DEPOSIT IN BANK ACCOUNT RS.3,99,517/- RS.4,99,517/- 3. UNDISCLOSED INVESTMENT IN CONSTRUCTION OF RESIDENTIAL HOUSE RS. 1,933/- TOTAL RS.5,01,450/- ASSESSMENT YEAR 2003-2004 1. UNEXPLAINED CASH CREDITS INTRODUCED AS GIFTS IN CAPITAL ACCOUNT RS.3,00,00/- 2. CASH DEPOSIT IN BANK ACCOUNT A/C. NO.277 WITH MAHILA CO-OP BANK RS.1,32,500/- TOTAL RS.4,32,500/- ASSESSMENT YEAR 2004-05 1. SALE OF JEWELLERY RS. 24,867/- 2. CASH DEPOSIT IN BANK ACCOUNT A/C. NO.277 WITH MAHILA VIKASCO-OP BANK RS.25,15,816/- TOTAL RS.25,40,683/- KINJALBEN R. THAKKAR VS. DCIT (6 APPEALS) 6 8. THE LD. COUNSEL, FOR THE ASSESSEE TOOK US THROUG H THE ASSESSMENT ORDERS IN EACH ASSESSMENT YEARS AND CONTENDED THAT THESE ADDITIONS ARE MADE BY RE-APPRECIATING THE PROFIT AND LOSS ACCOUNT S, BALANCE SHEET AND CAPITAL ACCOUNTS. THE ADDITIONS ARE NOT BASED ON AN Y SEIZED MATERIAL. HE FURTHER CONTENDED THAT IN THESE ASSESSMENT YEAR, A SSESSMENT ORDERS WERE NOT PENDING, THEY WERE ALREADY FINALIZED AND NOTHIN G HAS BEEN ABATED . HONBLE GUJARAT HIGH COURT HAS CONSIDERED THIS ASPE CT AND HELD THAT ADDITIONS ARE TO BE CONFIRMED ON THE BASIS OF SEIZE D MATERIAL. OUR ATTENTION WAS DRAWN TOWARDS THE DECISION OF HONBLE DELHI HIGH COURT ALSO IN THE CASE OF CIT KABUL CHAWLA REPORTED IN 38 0 ITR PAGE 573. 9. ON THE OTHER HAND LD. CIT,DR, CONTENDED THAT ASS ESSEE HAS FILED AN ADJOURNMENT APPLICATION ON 24/10/2016 AND SOUGHT ADJOURNMENT IN THESE APPEALS WHEN THEY WERE FIXED ON 25/10/2016. THE ASSESSEE HAD PLEADED IN HER APPLICATION THAT SHE WANTED TO FILE PAPER BOOK BUT SHE DID NOT FILE ANY PAPER BOOK AND READY TO ARGUE THE APP EAL. IN ORDER TO FIND OUT WHETHER ADDITIONS ARE BASED ON SEIZED MATERIAL THE DEPARTMENT WOULD LIKE TO PERUSED THE RECORD. HENCE AN ADJOURNMENT BE GIVEN. 10. THE ASSESSEE HAS RAISED THIS GROUND BEFORE THE LD. CIT(A) ALSO BUT DID NOT PRESS THIS GROUNDS. THE LD. COUNSEL, FO R THE ASSESSEE ON THE OTHER HAND CONTENDED THAT ASSESSEE HAS NEVER WAIVED THIS GROUNDS OF APPEAL BEFORE LD. CIT(A) SHE DID NOT ADDRESS ANY AR GUMENT AND THEREFORE THIS GROUNDS WAS REJECTED. KINJALBEN R. THAKKAR VS. DCIT (6 APPEALS) 7 11. WE HAVE DULY CONSIDERED RIVAL CONTENTION AND G ONE THROUGH THE RECORD CAREFULLY. THESE APPEALS WERE FILED IN 2011 ALMOST MORE THAN SIX YEARS HAVE EXPIRED. THE DEPARTMENT COULD HAVE FILED THE PAPER BOOK WITHOUT WAITING FOR THE PAPER BOOK OF THE ASSESSEE, IF IT HAS TO BUTTRESS ITS ARGUMENTS ON THE BASIS OF SOME DOCUMENTARY EVID ENCE. THE DEPARTMENT DID NOT MAKE ANY EFFORTS IN THIS LONG PE RIOD OF SIX YEARS TO FILE THE PAPER BOOK. THESE ARE THE APPEALS OF THE ASSESSEE, WE CANNOT FORCE TO FILE A PAPER BOOK. IT IS THE DISCRETION OF APPELLANT WHETHER TO FILE THE PAPER BOOKS OR PURSUE HEARING WITHOUT FILING A NY PAPER BOOK. 12. APART FROM ALL THESE THINGS SMALL ADDITIONS HAV E BEEN MADE AND THE APPEALS ARE LYING IN THE TRIBUNAL WITHOUT ANY P LAUSIBLE REASONS. THEY ARE ON THE BOARD SINCE 03/03/2015 AND HAVE BEEN ADJ OURNED ALMOST 10 TIMES IN THE PAST. 13. APART FROM THE ABOVE, HAD THERE BEEN ANY MENTI ON OF SEIZED MATERIAL IN THE ASSESSMENT ORDERS WE WOULD HAVE APP RECIATED THE STAND OF LD.CIT DR. IN PARAGRAPH FOUR OF THE ASSESSMENT ORDER, WHILE TAKING NOTE OF ADDITIONS REQUIRED TO BE MADE, LD. ASSESSIN G OFFICER HAS MADE REFERENCE TO PROFIT AND LOSS ACCOUNTS BALANCE SHEET AND CAPITAL ACCOUNT. HE HAS NOT MADE REFERENCE TO ANY MATERIAL FOUND DUR ING THE SEARCH. 14. IN THE CAPITAL ACCOUNT HE NOTICED THE CASH DEPO SITS MADE BY THE ASSESSEE WHICH WERE RECEIVED BY HER AS A GIFT. THE ADDITIONS HAVE BEEN MADE ON THE GROUNDS THAT ASSESSEE FAILED TO FULFILL THE CONDITIONS KINJALBEN R. THAKKAR VS. DCIT (6 APPEALS) 8 ENUMERATED IN SECTION 68 OF THE INCOME TAX ACT, 196 1. THEREFORE WE DID NOT GRANTED ADJOURNMENT TO THE LD. CIT,DR. 15. ADMITTEDLY THESE ARE SEARCH ASSESSMENT YEARS WHEREIN ASSESSMENT ORDERS HAVE BEEN FRAMED UNDER SECTION 153A OF THE INCOME TAX ACT AFTER THE SEARCH OPERATION ON THE ASSESSEE. BEFORE EMBARKING UPON AN INQUIRY ABOUT THE FACTS WHICH LEAD THE AO TO MAKE A DDITIONS IN DIFFERENT ASSESSMENT YEARS, WE DEEMED IT APPROPRIATE TO KEEP IN MIND THE AUTHORITATIVE PRONOUNCEMENT OF THE HONBLE JURISDI CTIONAL HIGH COURT EXPOUNDING SCOPE OF SECTION 153 A, THE RELEVANT DIS CUSSION IN THE JUDGMENT OF SOMAYA CONSTRUCTION PVT. LTD. READ AS U NDER 15. ON A PLAIN READING OF SECTION 153A OF THE ACT , IT IS EVIDENT THAT THE TRIGGER POINT FOR EXERCISE OF POWERS THERE UNDER IS A SEARCH UNDER SECTION 132 OR A REQUISITION UNDER SECTION 13 2A OF THE ACT. ONCE A SEARCH OR REQUISITION IS MADE, A MANDATE IS CAST UPON THE ASSESSING OFFICER TO ISSUE NOTICE UNDER SECTION 153 A OF THE ACT TO THE PERSON, REQUIRING HIM TO FURNISH THE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSME NT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE AND ASSESS OR REASSESS THE SAME. SINCE THE ASS ESSMENT UNDER SECTION 153A OF THE ACT IS LINKED WITH SEARCH AND R EQUISITION UNDER SECTIONS 132 AND 132A OF THE ACT, IT IS EVIDENT THA T THE OBJECT OF THE SECTION IS TO BRING TO TAX THE UNDISCLOSED INCOME W HICH IS FOUND DURING THE COURSE OF OR PURSUANT TO THE SEARCH OR R EQUISITION. HOWEVER, INSTEAD OF THE EARLIER REGIME OF BLOCK ASS ESSMENT WHEREBY, IT WAS ONLY THE UNDISCLOSED INCOME OF THE BLOCK PERIOD THAT WAS ASSESSED, SECTION 153A OF THE ACT SEEKS TO ASSESS THE TOTAL INCOME FOR THE ASSESSMENT YEAR, WHICH IS CLEAR FROM THE FIRST PROVISO THERETO WHICH PROVIDES THAT THE ASSESSING O FFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF E ACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS. THE SECOND PROVISO MAKES THE INTENTION OF THE LEGISLATURE CLEAR AS THE SAME PROVIDES KINJALBEN R. THAKKAR VS. DCIT (6 APPEALS) 9 THAT ASSESSMENT OR REASSESSMENT, IF ANY, RELATING T O THE SIX ASSESSMENT YEARS REFERRED TO IN THE SUB-SECTION PEN DING ON THE DATE OF INITIATION OF SEARCH UNDER SECTION 132 OR REQUIS ITION UNDER SECTION 132A, AS THE CASE MAY BE, SHALL ABATE. SUB- SECTION (2) OF SECTION 153A OF THE ACT PROVIDES THAT IF ANY PROCEE DING OR ANY ORDER OF ASSESSMENT OR REASSESSMENT MADE UNDER SUB- SECTION (1) IS ANNULLED IN APPEAL OR ANY OTHER LEGAL PROVISION, TH EN THE ASSESSMENT OR REASSESSMENT RELATING TO ANY ASSESSME NT YEAR WHICH HAD ABATED UNDER THE SECOND PROVISO WOULD STAND REV IVED. THE PROVISO THERETO SAYS THAT SUCH REVIVAL SHALL CEASE TO HAVE EFFECT IF SUCH ORDER OF ANNULMENT IS SET ASIDE. THUS, ANY PRO CEEDING OF ASSESSMENT OR REASSESSMENT FALLING WITHIN THE SIX A SSESSMENT YEARS PRIOR TO THE SEARCH OR REQUISITION STANDS ABATED AN D THE TOTAL INCOME OF THE ASSESSEE IS REQUIRED TO BE DETERMINED UNDER SECTION 153A OF THE ACT. SIMILARLY, SUBSECTION (2) PROVIDES FOR REVIVAL OF ANY ASSESSMENT OR REASSESSMENT WHICH STOOD ABATED, IF ANY PROCEEDING OR ANY ORDER OF ASSESSMENT OR REASSESSME NT MADE UNDER SECTION 153A OF THE ACT IS ANNULLED IN APPEAL OR ANY OTHER PROCEEDING. 16. SECTION 153A BEARS THE HEADING ASSESSMENT IN C ASE OF SEARCH OR REQUISITION. IT IS WELL SETTLED AS HELD BY THE SUPREME COURT IN A CATENA OF DECISIONS THAT THE HEADING OF THE SECTION CAN BE REGARDED AS A KEY TO THE INTERPRETATION OF THE OPERATIVE POR TION 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 STRENGT HENS THAT MEANING. FROM THE HEADING OF SECTION 153, THE INTEN TION OF THE LEGISLATURE IS CLEAR VIZ., TO PROVIDE FOR ASSESSMEN T IN CASE OF SEARCH AND REQUISITION. WHEN THE VERY PURPOSE OF THE PROVI SION IS TO MAKE ASSESSMENT IN CASE OF SEARCH OR REQUISITION, IT GOE S WITHOUT SAYING THAT THE ASSESSMENT HAS TO HAVE RELATION TO THE SEA RCH OR REQUISITION. IN OTHER WORDS, THE ASSESSMENT SHOULD BE CONNECTED WITH SOMETHING FOUND DURING THE SEARCH OR REQUISITI ON, VIZ., INCRIMINATING MATERIAL WHICH REVEALS UNDISCLOSED IN COME. THUS, WHILE IN VIEW OF THE MANDATE OF SUB-SECTION (1) OF SECTION 153A OF THE ACT, IN EVERY CASE WHERE THERE IS A SEARCH OR R EQUISITION, THE ASSESSING OFFICER IS OBLIGED TO ISSUE NOTICE TO SUC H PERSON TO FURNISH RETURNS OF INCOME FOR THE SIX YEARS PRECEDI NG THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH THE SEARCH KINJALBEN R. THAKKAR VS. DCIT (6 APPEALS) 10 IS CONDUCTED OR REQUISITION IS MADE, ANY ADDITION O R DISALLOWANCE CAN BE MADE ONLY ON THE BASIS OF MATERIAL COLLECTED DURING THE SEARCH OR REQUISITION. IN CASE NO INCRIMINATING MAT ERIAL IS FOUND, AS HELD BY THE RAJASTHAN HIGH COURT IN THE CASE OF JAI STEEL (INDIA), JODHPUR V. ASSISTANT COMMISSIONER OF INCOM E TAX (SUPRA), THE EARLIER ASSESSMENT WOULD HAVE TO BE REITERATED. IN CASE WHERE PENDING ASSESSMENTS HAVE ABATED, THE ASSESSING OFFI CER CAN PASS ASSESSMENT ORDERS FOR EACH OF THE SIX YEARS DETERMI NING THE TOTAL INCOME OF THE ASSESSEE WHICH WOULD INCLUDE INCOME D ECLARED IN THE RETURNS, IF ANY, FURNISHED BY THE ASSESSEE AS W ELL AS UNDISCLOSED INCOME, IF ANY, UNEARTHED DURING THE SEARCH OR REQU ISITION. IN CASE WHERE A PENDING REASSESSMENT UNDER SECTION 147 OF T HE ACT HAS ABATED, NEEDLESS TO STATE THAT THE SCOPE AND AMBIT OF THE ASSESSMENT WOULD INCLUDE ANY ORDER WHICH THE ASSESS ING OFFICER COULD HAVE PASSED UNDER SECTION 147 OF THE ACT AS W ELL AS UNDER SECTION 153A OF THE ACT. 17. IN THE FACTS OF THE PRESENT CASE, A SEARCH CAME TO BE CONDUCTED ON 07.10.2009 AND THE NOTICE WAS ISSUED TO THE ASSE SSEE UNDER SECTION 153A OF THE ACT FOR ASSESSMENT YEAR 2006-07 ON 04.08.2010. IN RESPONSE TO THE NOTICE, THE ASSESSEE FILED RETURN OF INCOME ON 18.11.2010. IN TERMS OF SECTION 153B, THE ASSESSMENT WAS REQUIRED TO BE COMPLETED WITHIN A PERIOD OF TWO YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE SEARCH C AME TO BE CARRIED OUT, NAMELY, ON OR BEFORE 31ST MARCH, 2012. HERE, INSOFAR AS THE IMPUGNED ADDITION IS CONCERNED, THE NOTICE I N RESPECT THEREOF CAME TO BE ISSUED ON 19.12.2011 SEEKING AN EXPLANATION FROM THE ASSESSEE. THE ASSESSEE GAVE ITS RESPONSE B Y REPLY DATED 21.12.2011 CALLING UPON THE ASSESSING OFFICER TO PR OVIDE COPIES OF STATEMENTS RECORDED ON OATH OF SHRI ROHIT P. MODI A ND SMT. PARESHABEN K. MODI DURING THE SEARCH AS WELL AS THE COPIES OF THE DOCUMENTS UPON WHICH THE DEPARTMENT PLACED RELIANCE FOR THE PURPOSE OF MAKING THE PROPOSED ADDITION AS WELL AS THE COPY OF THE EXPLANATION GIVEN BY SHRI ROHIT P. MODI AND SMT. PA RESHABEN K. MODI REGARDING THE ON-MONEY RECEIVED, COPIES OF THE ASSESSMENT ORDERS IN CASE OF SAID PERSONS AND ALSO REQUESTED T HE ASSESSING OFFICER TO PERMIT HIM TO CROSS-EXAMINE THE SAID PER SONS. THE ASSESSING OFFICER ISSUED SUMMONS TO THE SAID PERSON S, HOWEVER, THEY WERE OUT OF STATION AND IT WAS NOT KNOWN AS TO WHEN THEY KINJALBEN R. THAKKAR VS. DCIT (6 APPEALS) 11 WOULD RETURN. IN THIS BACKDROP, WITHOUT AFFORDING A NY OPPORTUNITY TO THE ASSESSEE TO CROSS-EXAMINE THE SAID PERSONS, THE ASSESSING OFFICER MADE THE ADDITION IN QUESTION. 18. IN THIS CASE, IT IS NOT THE CASE OF THE APPELLA NT THAT ANY INCRIMINATING MATERIAL IN RESPECT OF THE ASSESSMENT YEAR UNDER CONSIDERATION WAS FOUND DURING THE COURSE OF SEARCH . AT THE RELEVANT TIME WHEN THE NOTICE CAME TO BE ISSUED UND ER SECTION 153A OF THE ACT, THE ASSESSEE FILED ITS RETURN OF I NCOME. MUCH LATER, AT THE FAG END OF THE PERIOD WITHIN WHICH THE ORDER UNDER SECTION 153A OF THE ACT WAS TO BE MADE, IN OTHER WORDS, WHE N THE LIMIT FOR FRAMING THE ASSESSMENT AS PROVIDED UNDER SECTION 15 3 WAS ABOUT TO EXPIRE, THE NOTICE HAS BEEN ISSUED IN THE PRESEN T CASE SEEKING TO MAKE THE PROPOSED ADDITION OF RS.11,05,51,000/- ON THE BASIS OF THE MATERIAL WHICH WAS NOT FOUND DURING THE COURSE OF SEARCH, BUT ON THE BASIS OF A STATEMENT OF ANOTHER PERSON. IN T HE OPINION OF THIS COURT, IN A CASE LIKE THE PRESENT ONE, WHERE AN ASS ESSMENT HAS BEEN FRAMED EARLIER AND NO ASSESSMENT OR REASSESSMENT WA S PENDING ON THE DATE OF INITIATION OF SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A, WHILE COMPUTING THE TOTAL INCOME OF THE ASSESSEE UNDER SECTION 153A OF THE ACT, ADDI TIONS OR DISALLOWANCES CAN BE MADE ONLY ON THE BASIS OF THE INCRIMINATING MATERIAL FOUND DURING THE SEARCH OR REQUISITION. IN THE PRESENT CASE, IT IS AN ADMITTED POSITION THAT NO INCRIMINAT ING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH, HOWEVER, IT IS O N THE BASIS OF SOME MATERIAL COLLECTED BY THE ASSESSING OFFICER MU CH SUBSEQUENT TO THE SEARCH, THAT THE IMPUGNED ADDITIONS CAME TO BE MADE. 19. ON BEHALF OF THE APPELLANT, IT HAS BEEN CONTEND ED THAT IF ANY INCRIMINATING MATERIAL IS FOUND, NOTWITHSTANDING TH AT IN RELATION TO THE YEAR UNDER CONSIDERATION, NO INCRIMINATING MATE RIAL IS FOUND, IT WOULD BE PERMISSIBLE TO MAKE ADDITIONS AND DISAL LOWANCE IN RESPECT OF ALL THE SIX ASSESSMENT YEARS. IN THE OPI NION OF THIS COURT, THE SAID CONTENTION DOES NOT MERIT ACCEPTANCE, INAS MUCH AS, THE ASSESSMENT IN RESPECT OF EACH OF THE SIX ASSESSMENT YEARS IS A SEPARATE AND DISTINCT ASSESSMENT. UNDER SECTION 153 A OF THE ACT, AN ASSESSMENT HAS TO BE MADE IN RELATION TO THE SEA RCH OR REQUISITION, NAMELY, IN RELATION TO MATERIAL DISCLO SED DURING THE SEARCH OR REQUISITION. IF IN RELATION TO ANY ASSESS MENT YEAR, NO KINJALBEN R. THAKKAR VS. DCIT (6 APPEALS) 12 INCRIMINATING MATERIAL IS FOUND, NO ADDITION OR DIS ALLOWANCE CAN BE MADE IN RELATION TO THAT ASSESSMENT YEAR IN EXER CISE OF POWERS UNDER SECTION 153A OF THE ACT AND THE EARLIER ASSES SMENT SHALL HAVE TO BE REITERATED. IN THIS REGARD, THIS COURT I S IN COMPLETE AGREEMENT WITH THE VIEW ADOPTED BY THE RAJASTHAN HI GH COURT IN THE CASE OF JAI STEEL (INDIA), JODHPUR V. ASSISTANT COMMISSIONER OF INCOME TAX (SUPRA). BESIDES, AS RIGHTLY POINTED OUT BY THE LEARNED COUNSEL FOR THE RESPONDENT, THE CONTROVERSY INVOLVE D IN THE PRESENT CASE STANDS CONCLUDED BY THE DECISION OF THIS COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX-1 V. JAYABEN RATILAL SOR ATHIA (SUPRA) WHEREIN IT HAS BEEN HELD THAT WHILE IT CANNOT BE DI SPUTED THAT CONSIDERING SECTION 153A OF THE ACT, THE ASSESSING OFFICER CAN REOPEN AND/OR ASSESS THE RETURN WITH RESPECT TO SIX PRECEDING YEARS; HOWEVER, THERE MUST BE SOME INCRIMINATING MA TERIAL AVAILABLE WITH THE ASSESSING OFFICER WITH RESPECT T O THE SALE TRANSACTIONS IN THE PARTICULAR ASSESSMENT YEAR. 20. FOR THE FOREGOING REASONS, IT IS NOT POSSIBLE T O STATE THAT THE IMPUGNED ORDER PASSED BY THE TRIBUNAL SUFFERS FROM ANY LEGAL INFIRMITY SO AS TO GIVE RISE TO A QUESTION OF LAW, MUCH LESS, A SUBSTANTIAL QUESTION OF LAW, WARRANTING INTERFERENC E. THE APPEAL, THEREFORE, FAILS AND IS, ACCORDINGLY, DISMISSED. 16. IN THE LIGHT OF ABOVE, LET US EXAMINE THE FACTS FROM THE ASSESSMENT ORDERS. IN A.Y. 1999-2000 LD. ASSESSING OFFICER HAS MADE FOLLOWING OBSERVATIONS: 4. UNEXPLAINED CREDITS IN CAPITAL A/C AND CASH CRE DITS: 4.1 ON PERUSAL OF THE COPIES OF PROFIT & LOSS ACCO UNT, BALANCE SHEET AND CAPITAL A/C, FILED ALONG WITH THE RETURN OF INCOME, IT IS NOTICED THAT DURING THE YEAR THE ASSESSEE HAS SHOWN THE FOLLOWING GIFTS AND DEPO SITS: GIFTS: 1. SONAL BHATT - RS.100000/- 2. K.L. THAKKAR - RS.30000/- 3. NILESH JOSHI - RS.100000/- DEPOSITS: 1. HEERABENISHWARLALTHAKKAR - RS.49000/- - GRAND TOTAL - RS.2,79,000/- KINJALBEN R. THAKKAR VS. DCIT (6 APPEALS) 13 4.2 IN THIS REGARD, THE ASSESSEE, DURING THE COURSE OF HEARING ON 20.11.2006, WAS REQUESTED TO JUSTIFY THE GENUINENESS OF GIFTS A ND DEPOSITS AND FURNISH THE NECESSARY DETAILS ON THENEXT DATE OF HEARINGI.E ON 23.11.2996. ON 23.11.2006 NOBODY ATTENDED. THEREFORE, ON 08.12.2006, A NOTICE U/S.142(1) WAS ISSUED REQUESTING THE ASSESSEE TO FURNISH NECESSARY DOCUME NTARY EVIDENCE TO PROVE THE GENUINENESS OF THE TRANSACTIONS. THE EXTRACTS OF TH E NOTICE DATED 08.12.2006 IS REPRODUCED BELOW: 17. IDENTICAL OBSERVATION HAVE BEEN MADE BY HIM AB OUT THE CREDITS SHOWN IN THE CAPITAL ACCOUNTS AS WELL AS DEPOSITS M ADE IN BANK A/C NO.277 WITH MAHILA VIKAS CO-OPERATIVE BANK IN OTHE R ASSESSMENT YEARS. THE EXPLANATION OF THE ASSESSEE IS COMMON IN ALL TH ESE YEARS WHICH HAS BEEN REPRODUCED BY THE ASSESSING OFFICER. SIMILARLY DISCUSSION MADE BY THE AO WITH REGARD TO THE REQUIREMENT OF SECTION 68 AND OTHER PROVISION IS VERBTIUM IN ALL THESE ASSESSMENT ORDERS. 18. ON PERUSAL OF THE ASSESSMENT ORDERS, WE FIND TH AT ADDITIONS HAVE NOT BEEN MADE WITH THE HELP OF ANY SEIZED MATERIAL, THEREFORE THIS JUDGMENT OF HONBLE HIGH COURT IN THE CASE OF SAUMY A CONSTRUCTIONS PVT. LTD IS SQUARELY APPLICABLE ON THE FACTS OF THE PRESENT APPEALS. THE ADDITIONS IN THE ABSENCE OF ANY SEIZED MATERIAL ARE NOT SUSTAINABLE. 19. ACCORDINGLY WE ALLOW THE APPEALS OF THE ASSESSE E AND DELETE ADDITIONS, IN ALL THESE ASSESSMENT YEARS. AS FAR AS A.Y. 2004-05 IS CONCERN, ONE OF THE GRIEVANCE OF ASSESSEE IS THAT LD. CIT(A) HAS RELEGATED THE MATTER TO THE ASSESSING OFFICER FOR V ERIFYING THE CASH BOOK IN ORDER TO ASCERTAIN THE SOURCE OF CASH DEPOSIT OF RS.25,15,816. THE LD.CIA(A) HAS NO SUCH POWER. THE LD. COUNSEL, FOR T HE ASSESSEE HAS POINTED THAT WHILE GIVING EFFECT TO ORDER OF LD.CIT (A) ASSESSING OFFICER KINJALBEN R. THAKKAR VS. DCIT (6 APPEALS) 14 DID NOT MAKE ANY ADDITIONS AND THEREFORE OTHERWISE THE ISSUE WOULD BECOME AN ACADEMIC ONE. CONSIDERING THIS DEVELOPMEN T, WE DO NOT DEEM IT NECESSARY TO UPSET THE ORDER OF CIT(A) IN A .Y. 2004-05. ON THIS ISSUE, OTHERWISE ALSO ADDITIONS ARE NOT BASED ON SE IZED MATERIAL AND THEY ARE NOT SUSTAINABLE. 20. ACCORDINGLY ALL THE APPEALS OF ASSESSEE ARE ALL OWED AND ADDITIONS ARE DELETED. APPEAL OF THE REVENUE IS DISMISSED AS NOT MAINTAINABLE. ORDER PRONOUNCED IN THE COURT ON 15 TH FEBRUARY, 2017 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER TRUE COPY AHMEDABAD; DATED 15/02/2017 $% & ''() *$)' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! / CONCERNED CIT 4. ! ( ) / THE CIT(A) 5. $%& '' , / DR, ITAT, 6. &)* + / GUARD FILE. $% + / BY ORDER, ,/ - ( ASSTT.REGISTRAR) , / ITAT, RAJKOT *MANISH