M/s. T.N. Fabrics, Surat V. The ACIT.,Cent.Circle-4, Surat

ITSSA 45/AHD/2013

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 1812 (ITAT-SURAT)
• Duration Of Justice: 5 year(s) 8 month(s) 9 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 08-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 06-09-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 30-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SRINIVAS T BIDARI
• Keywords: Unexplained expenditure; Revised return; Documents seized; Set aside
• Section: 15; 153A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT , , BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . / IT(SS)A NOS.127/AHD/2010/SRT, 156/AHD/2011/SRT & 45/AHD/2013/SRT / ASSESSMENT YEARS: 2005-06 & 2003-04 M/S. T.N. FABRICS, 3/1810, GHAMLAWAD, SHERI NO.1, SALABATPURA, SURAT. [PAN: AABFT 4790 R] VS. ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-4, SURAT. ( # / APPELLANT) ( $%# /RESPONDENT) / ASSESSEE BY : SHRI RAJESH SHAH, C.A /REVENUE BY : SHRI SRINIVAS T. BIDARI, CIT-DR /DATE OF HEARING : 03-08-2018 / DATE OF PRONOUNCEMENT : 08-10-2018 / ORDER PER C.M.GARG, JUDICIAL MEMBER: THESE THREE APPEALS HAVE BEEN FILED BY THE ASSESSE E AGAINST THE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS), AHM EDABAD (CIT(A) FOR SHORT) DATED 27.11.2009, 13.12.2010 & 27.11.201 2 RESPECTIVELY FOR THE ASSESSMENT YEARS (A.YS) 2005-06 & 2003-04. 2 IT(SS)A NOS.127/AHD/2010/SRT, 156/AHD/2011/SRT & 45 /AHD/2013/SRT M/S. T.N. FABRICS (A.Y: 2005-06 & 2003-04) 2. THE GROUNDS RAISED BY THE ASSESSEE READ AS FOLLO WS: 1. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A)-II, HAS ERRED IN CONFIRMING THE ADDITIONS MA DE BY THE LEARNED AO ON ACCOUNT OF UNEXPLAINED EXPENDITURE OF RS. 28,44,000/- WHICH WAS - - MERELY BASED ON CONJECTURES, SURMISES, AND PREPONDERANCE OF POSSIBILITIES AND - WITHOUT APPRECIATING THE SUBMISSIONS ALONG WITH DOCUMENTARY EVIDENCES SUBMITTED BY THE APPELLANT AN D - WITHOUT BRINGING ANY COGENT, CORROBORATIVE AND CLIN CHING EVIDENCE ON RECORD 2. THAT ON THE FACTS AND CIRCUMSTANCES THE CIT(A)-I I HAS ERRED IN SUSTAINING THE ACT OF THE AO OF NOT DOING TELESC OPING IN THE APPELLANT'S CASE - OF THE DISCREPANCY IF ANY REMAINING UNIDENTIFIED IN THE HANDS OF SHRI NAGINBHAI KAPADIA AND / OR SHRI ASHOK BHAI JARIWALA AS CATEGORICALLY MENTIONED BY THEM IN NOTE S FILED WITH THEIR REVISED RETURN U/S. 153A STATING T HAT - THE CONDITIONAL DISCLOSURE MADE THEREIN IS A FIRST HAND APPROXIMATION WHICH MAY VARY WITHIN THE OVERALL AMO UNT DECLARED AT THE TIME OF ASSESSMENT PROCEEDINGS OR APPELLATE OR REVISION PROCEEDINGS AND - THE AMOUNT OF CONDITIONAL DISCLOSURE REMAINING SPECIFICALLY UNIDENTIFIED MAY BE TELESCOPED AGAINST ANY ADDITION OR DISALLOWANCES OF ANY EXPENSES OR DEDUCT ION OR OTHERWISE MADE DURING THE COURSE OF ASSESSMENT PROCEEDINGS OR APPELLATE OR REVISION PROCEEDINGS IN THE HANDS OF FAMILY MEMBERS OR ANY GROUP CONCERNS FOR T HE PERIOD COVERED UNDER THE NOTICE ISSUED U/S. 1 53A/1 53C OF THE ACT. 3. THAT THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E AO BE DIRECTED TO CARRY OUT APPEAL EFFECTS CONSEQUENT TO THE PRESENT APPEAL ALSO IN THE CASE OF SHRI ASHOKBHAI J ARIWALA AND SHRI NAGINBHAI KAPADIA ON THE MATTER BEING FINA LLY SETTLED. 4. ALL THE AFORESAID GROUNDS ARE INDEPENDENT TO EAC H OTHER REQUIRING SEPARATE ADJUDICATION BY YOUR HONOUR. 3. THE APPLICATIONS OF ASSESSEE FOR ADMISSION OF AD DITIONAL GROUND IN BOTH THE ASSESSMENT YEARS: APROPOS THIS APPLICATION, WE HAVE HEARD THE ARGUMEN TS OF BOTH SIDES AND CAREFULLY PERUSED THE RELEVANT MATERIAL P LACED ON THE RECORD OF 3 IT(SS)A NOS.127/AHD/2010/SRT, 156/AHD/2011/SRT & 45 /AHD/2013/SRT M/S. T.N. FABRICS (A.Y: 2005-06 & 2003-04) THE TRIBUNAL. THE LD.AR SUBMITTED THAT THE ASSESSE E WANTS TO RAISE ADDITIONAL GROUND IN THIS APPEAL WHICH IS PURELY A LEGAL GROUND CHALLENGING THE ASSUMPTION OF JURISDICTION BY THE AO FOR ISSUIN G NOTICE U/S.153C OF THE ACT, THEREFORE, IN VIEW OF DECISION OF HON'BLE SUPR EME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD., VS. CIT [1998] 229 ITR 383 (SC), THE ADDITIONAL GROUND MAY KINDLY BE ADMITTED FOR CONSID ERATION AND ADJUDICATION. 4. REPLYING TO THE ABOVE, THE LD.CIT-DR REITERATED WRITTEN SUBMISSIONS DATED 08.12.2017 FILED ON 11.12.2017 AND SUBMITTED THAT THE ASSESSEE HAS NEVER RAISED THIS ISSUE / GROUND NEITHER BEFORE THE ASSESSING OFFICER NOR BEFORE THE LD.CIT(A) AND HE IS SEEKING TO RAISE THIS GROUND AS ADDITIONAL GROUND AFTER LAPSE OF MORE THAN SEVEN YE ARS WITHOUT ANY REASON AND JUSTIFICATION, THEREFORE, THE SAME MAY K INDLY BE DISMISSED. THE LD.DR ALSO SUBMITTED THAT THE ASSESSEE HAS NOT FILED ANY AFFIDAVIT AS PER REQUIREMENT OF RULE 10 OF ITAT RULES 1963, THER EFORE, APPLICATION MAY KINDLY BE DISMISSED. THE LD.CIT-DR ALSO SUBMITT ED THAT THE ASSESSEE HAS FAILED TO DEMONSTRATE THAT WHAT WAS THE CHANGE IN THE CIRCUMSTANCES IN RELATION TO THE FACTS AND LAW WHICH COMPELLED TH E ASSESSEE TO FILE ADDITIONAL GROUND. 5. THE LD.CIT-DR PLACED RELIANCE ON THE VARIOUS JUD GMENTS INCLUDING DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF MARUTI UDYOG LIMITED 4 IT(SS)A NOS.127/AHD/2010/SRT, 156/AHD/2011/SRT & 45 /AHD/2013/SRT M/S. T.N. FABRICS (A.Y: 2005-06 & 2003-04) VS. ITAT [2000] 244 ITR 303 (DEL) AND SUBMITTED THAT WHILE ADMITTING ADDITIONAL GROUND THE TRIBUNAL MUST RECORD REASON F OR ADMITTING THE ADDITIONAL GROUND. THE LD. CIT-DR FINALLY SUBMITTE D THAT THE ADDITIONAL GROUND MAY KINDLY BE DISMISSED IN LIMINE WITHOUT ADMISSION. 6. ON CAREFUL CONSIDERATION OF ABOVE SUBMISSIONS, W E MAY POINT OUT THAT THE ASSESSEE WANTS TO RAISE A LEGAL GROUND AS ADDITIONAL GROUND CHALLENGING THE VALIDITY OF ASSUMPTION OF JURISDICT ION BY THE AO WHILE ISSUING NOTICE U/S.153C OF THE ACT, WHICH READS AS FOLLOWS : THE LD.AO HAS ERRED IN ISSUE OF NOTICE U/S 153C OF THE ACT, WITHOUT DRAWING PROPER SATISFACTION NOTE AS REQUIRED U/S 15 3C OF THE ACT AND ACCORDINGLY THE ASSESSMENT FRAMED U/S 153C OF THE A CT IS BAD IN LAW AND HAS TO BE SET ASIDE. 7. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISSI ONS, FIRST OF ALL, WE MAY POINT OUT THAT FROM THE CONSTRUCTION OF LANGUAG E USED IN THE ADDITIONAL GROUND CLEARLY SHOWS THAT IT IS A PURE L EGAL GROUND WHICH CAN BE DECIDED ON THE BASIS OF DOCUMENTS AND MATERIAL ALRE ADY ON THE RECORD WITHOUT ANY FURTHER REQUIREMENT OF ANY VERIFICATION OR EXAMINATION OF ANY OTHER RECORD OR DOCUMENTS WHICH ARE NOT PART OF REC ORD OF THE TRIBUNAL. IN THE CASE OF NATIONAL THERMAL POWER CO. LTD ., (SUPRA) IT WAS HELD THAT IF, AS A RESULT OF A JUDICIAL DECISION GIVEN WHILE THE APP EAL IS PENDING BEFORE THE TRIBUNAL, IT IS FOUND THAT A NON-TAXABLE ITEM IS TA XED OR A PERMISSIBLE DEDUCTION IS DENIED, THERE IS NO REASON WHY THE ASS ESSEE SHOULD BE PREVENTED FROM RAISING THAT QUESTION BEFORE THE TRI BUNAL FOR THE FIRST TIME, 5 IT(SS)A NOS.127/AHD/2010/SRT, 156/AHD/2011/SRT & 45 /AHD/2013/SRT M/S. T.N. FABRICS (A.Y: 2005-06 & 2003-04) SO LONG AS THE RELEVANT FACTS ARE ON RECORD IN RESP ECT OF THAT ITEM. IN THE CASE OF CIT VS. SINHGAD TECHNICAL EDUCATION SOCIETY JUDGMEN T DATED 29.08.2017 IN CIVIL APPEAL NO.11080/2017 , AS VEHEMENTLY RELIED BY THE LD. AR, IN PARA 16 TO 19 THEIR LORDSHIP SPEAKING FO R THE APEX COURT HELD THAT THE TRIBUNAL RIGHTLY PERMITTED ADDITION GROUND , WHICH WAS NOT RAISED BEFORE THE AUTHORITIES BELOW, FIRST TIME BEFORE IT AND CORRECTLY DEALT WITH THE SAME GROUND BEING LEGAL. 8. IN THE PRESENT CASE, THE BONE OF LEGAL CONTENTIO N OF ASSESSEE HAS BEEN BASED ON THE DECISION OF HON'BLE HIGH COURT OF DELHI DATED 14.08.2014 IN THE CASE OF PEPSICO INDIA HOLDINGS PVT. LTD. VS. ACIT, WHEREIN PARA 14 IT WAS HELD THAT UNTIL AND UNLESS I T IS ESTABLISHED THAT THE DOCUMENT DO NOT BELONG TO THE SEARCHED PERSON, THE PROVISIONS OF SECTION 153C OF THE SAID ACT DO NOT GET ATTRACTED BECAUSE T HE VERY EXPRESSION USED IN SECTION 153C OF THE SAID ACT IS THAT WHERE THE ASSESSING OFFICER IS SATISFIED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNT OR DOCUMENTS SEIZED OR RE QUISITIONED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED T O IN SECTION 153A OF THE ACT. THEIR LORDSHIP ALSO HELD THAT IT IS NECES SARY THAT BEFORE THE PROVISIONS OF SECTION 153C OF THE SAID ACT CAN BE I NVOKED, THE ASSESSING OFFICER OF THE SEARCHED PERSON MUST BE SATISFIED TH AT THE SEIZED MATERIAL (WHICH INCLUDES DOCUMENTS) DOES NOT BELONG TO THE P ERSON REFERRED TO IN 6 IT(SS)A NOS.127/AHD/2010/SRT, 156/AHD/2011/SRT & 45 /AHD/2013/SRT M/S. T.N. FABRICS (A.Y: 2005-06 & 2003-04) SECTION 153A (I.E., THE SEARCHED PERSON.). THE LD. AR HAS ALSO PLACED RELIANCE ON THE ORDER OF ITAT AHMEDABAD A BENCH I N THE CASE OF PARSHWA CONSTRUCTION VS. DCIT DATED 11.09.2015 TO SUBMIT THAT AS NO SATISFACTION NOTE HAS BEEN RECORDED BY THE AO OF TH E SUCH PERSON, THEREFORE, THE AO OF PRESENT ASSESSEE I.E. OTHER PE RSON DID NOT ASSUME VALID JURISDICTION TO ISSUE NOTICE U/S.153C OF THE ACT AND THIS RIGHT OF ASSESSEE HAS BEEN RENDERED BY THE VARIOUS DECISIONS OF HON'BLE SUPREME COURT, HON'BLE HIGH COURTS AND ORDERS OF TH E TRIBUNAL, THEREFORE, THE LEGAL GROUND MAY KINDLY BE ADMITTED FOR ADJUDICATION. 9. IN VIEW OF ABOVE, WE ARE OF THE CONSIDERED VIEW THAT EVEN WHEN THE ASSESSEE HAS NOT RAISED THIS LEGAL ISSUE / GROUND D URING ASSESSMENT AND FIRST APPELLATE PROCEEDINGS THEN ALSO, THE ASSESSEE HAS ALL RIGHTS TO AGITATE THE LEGAL ISSUE BEFORE TRIBUNAL WHICH IS EMERGING F ROM THE DECISIONS OF HON'BLE SUPREME COURT, HON'BLE HIGH COURTS AND ORDE RS OF THE TRIBUNAL. WE MAY ALSO POINT OUT THAT THIS GROUND OF ASSESSEE MAY BE DECIDED ON THE BASIS OF MATERIAL / DOCUMENTS ALREADY ON RECORD BEFORE US AND NO FURTHER DOCUMENT / MATERIAL OR VERIFICATION OR EXAM INATION IS REQUIRED FOR ADJUDICATION OF PROPOSED ADDITIONAL GROUND. ON CAR EFUL CONSIDERATION OF RATIO OF THE DECISIONS STATED IN THE WRITTEN SUBMIS SIONS OF THE DEPARTMENT, WE ARE OF THE VIEW THAT THE FACTS AND CIRCUMSTANCES OF THESE CASES ARE CLEARLY DISTINGUISHABLE AND DISTINCT FROM THE FACTS AND CIRCUMSTANCES OF 7 IT(SS)A NOS.127/AHD/2010/SRT, 156/AHD/2011/SRT & 45 /AHD/2013/SRT M/S. T.N. FABRICS (A.Y: 2005-06 & 2003-04) THE PRESENT CASE, THEREFORE, WE RESPECTFULLY HOLD T HAT BENEFIT OF THE RATIO OF THESE DECISIONS ARE NOT AVAILABLE FOR THE REVENUE I N THE PRESENT CASE. 10. ON THE BASIS OF FOLLOWING DISCUSSION, WE ARE OF THE VIEW THAT THE ADDITIONAL GROUND PROPOSED BY THE ASSESSEE DESERVES TO BE ADMITTED FOR CONSIDERATION AND ADJUDICATION BEING LEGAL GROUND, THEREFORE, APPLICATIONS OF ASSESSEE FOR ADMISSION OF ADDITIONAL GROUND FOR THE ASSESSMENT YEARS I.E., AY 2003-04 & 2005-06 ARE ALLOWED AND THE PROP OSED GROUND IS ADMITTED FOR HEARING. ADDITIONAL GROUND OF ASSESSEE FOR AY 2005-06 : 11. APROPOS ADDITIONAL GROUND OF ASSESSEE, WE HAVE HEARD ARGUMENTS OF BOTH THE SIDES AND CAREFULLY PERUSED THE MATERIA L AVAILABLE ON THE RECORD OF THE TRIBUNAL, THE LD.AR SUBMITTED THAT AS PER REPORT OF THE AO DATED 24.04.2018 NO SATISFACTION NOTE HAS BEEN RECO RDED BY THE AO OF THE SEARCHED PERSON, THEREFORE, THE AO OF OTHER PER SON I.E. PRESENT ASSESSEE DID NOT ASSUME VALID JURISDICTION TO ISSUE NOTICE U/S.153C OF THE ACT AND HENCE, THE INITIATION OF PROCEEDINGS AND AL L CONSEQUENT ORDERS ARE NOT VALID AND BAD IN LAW. THEREFORE, ENTIRE PROCEE DINGS MAY KINDLY BE QUASHED IN VIEW OF DECISION OF HON'BLE DELHI HIGH C OURT IN THE CASE OF PEPSICO INDIA HOLDINGS PVT. LTD . (SUPRA) AND ORDER OF ITAT AHMEDABAD IN THE CASE PARSHWA CONSTRUCTION (SUPRA). HE ALSO PLACED RELIANCE ON THE 8 IT(SS)A NOS.127/AHD/2010/SRT, 156/AHD/2011/SRT & 45 /AHD/2013/SRT M/S. T.N. FABRICS (A.Y: 2005-06 & 2003-04) DECISION OF HON'BLE SUPREME COURT IN THE CASE OF SINHGAD TECHNICAL EDUCATION SOCIETY [2017] 84 TAXMANN.COM 290 (SC). 12. REPLYING TO THE ABOVE, LD.CIT-DR SUBMITTED THAT AS PER REPORT OF THE AO DATED 24.04.2018 THERE IS NO SPECIFIC FORM PROVI DED BY THE ACT OR RULES FOR RECORDING OF SATISFACTION. THE DETAILS O F DOCUMENTS ARE ALSO MENTIONED IN THE NOTICE ISSUED U/S.153C OF THE I.T ACT. THIS CONSTITUTES ADEQUATE SATISFACTION AND STANDS AS SATISFACTORY NO TE. HE ALSO DREW OUR ATTENTION TOWARDS COPIES OF NOTICES DATED 16.08.200 7 SUBMITTED BY THE AO ALONG WITH SAID REPORT AND SUBMITTED THAT THIS IS S UFFICE TO RECORD A SATISFACTION, THEREFORE, CONTENTION OF THE ASSESSEE MAY KINDLY BE DISMISSED. 13. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISS IONS, WE MAY POINT OUT THAT THE AO HAS FURNISHED LETTER DATED 24.04.20 18 THROUGH THE CIT- DR, WHEREIN COPIES OF THE NOTICE DATED 16.08.2007 H AS BEEN ENCLOSED. AS PER REPORT OF THE AO, THERE IS NO SPECIFIC FORM PROVIDED BY THE ACT OR RULES FOR RECORDING SATISFACTION AND THE DETAILS OF DOCUMENTS ARE MENTIONED IN THE NOTICE ISSUED U/S. 153C OF THE ACT , THIS CONSTITUTE ADEQUATE SATISFACTION AND STANDS AS SATISFACTORY NO TE. BUT, WE ARE NOT CONVINCED WITH THIS EXPLANATION AND STAND OF AO AS THE BASIS REQUIREMENT OF ASSUMPTION OF VALID JURISDICTION U/S. 153C OF TH E ACT IS THAT PRIOR TO HANDING OVER SEIZED MATERIAL TO THE AO OF THE OTHER PERSON (THAN THE 9 IT(SS)A NOS.127/AHD/2010/SRT, 156/AHD/2011/SRT & 45 /AHD/2013/SRT M/S. T.N. FABRICS (A.Y: 2005-06 & 2003-04) PERSON SEARCHED) THE AO OF THE SEARCHED PERSON MUST RECORD REASONS SHOWING THAT THE SEIZED MATERIAL DOES NOT BELONG TO THE PERSONS SEARCHED AND THE SAME BELONGS TO OR BELONG TO SOME OTHER PER SON THAN THE PERSON SEARCHED. 14. IN THE CASE OF PEPSICO INDIA HOLDINGS PVT. LTD. (SUPRA) HON'BLE DELHI HIGH COURT IN PARA 14 HELD THAT UNLESS AND UNTIL IT IS ESTABLISHED THAT THE DOCUMENTS DO NOT BELONG TO THE SEARCHED PERSON, THE PROVISION OF S. 153C OF THE ACT DO NOT GET ATTRACTED BECAUSE THE VE RY EXPRESSION USED IN S. 153C OF THE ACT IS THAT WHERE THE AO IS SATISFI ED THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG OR BOOKS OF ACCOUNTS OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRED TO IN S. 153A IN VIEW O F THIS PHRASE, IT CAN BE INVOKED, THE AO OF THE SEARCHED PERSON MUST BE SATI SFIED THAT THE SEIZED MATERIAL (WHICH INCLUDES DOCUMENTS) DOES NOT BELONG TO THE PERSON REFERRED TO IN S. 153A (I.E., THE SEARCHED PERSON). 15. IN THE PRESENT CASE, FIRST OF ALL, THE DEPARTME NT HAS NOT PLACED ANY SATISFACTION NOTE RECORDED BY THE AO OF THE PERSON SEARCHED AND EVEN IF THE REPORT OF THE AO DATED 24.04.2018 IS ANALYZED T HEN ALSO THE COPY OF THE NOTICE ISSUED BY THE AO OF THE PRESENT ASSESSEE I.E., THE OTHER PERSON CANNOT BE TAKEN AS THE SATISFACTION NOTE RECORDED B Y THE AO OF THE PERSON SEARCHED COMPLYING THE REQUIREMENT OF S. 153C OF TH E ACT AND RATIO OF THE 10 IT(SS)A NOS.127/AHD/2010/SRT, 156/AHD/2011/SRT & 45 /AHD/2013/SRT M/S. T.N. FABRICS (A.Y: 2005-06 & 2003-04) DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF PEPSICO INDIA HOLDINGS PVT. LTD. (SUPRA). HENCE, IN THE PRESENT CASE LEGAL GROUND/ ISSUE RAISED BY THE ASSESSEE IS COVERED BY THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF PEPSICO INDIA HOLDINGS PVT. LTD. (SUPRA) AND ALSO GETS SUPPORT FROM THE DECISION OF HON'BLE SUPREME COURT IN THE C ASE OF SINGHAD TECHNICAL EDUCATION SOCIETY (SUPRA). IN VIEW OF FOREGOING DISCUSSION, WE ARE INCLINED TO HOLD THAT THE AO OF THE ASSESSEE DI D NOT ASSUME VALID JURISDICTION TO ISSUE NOTICE U/S. 153C OF THE ACT A S PRIOR TO HANDING OVER SEIZED MATERIAL NO SATISFACTION NOTE HAS BEEN RECOR DED BY THE AO OF THE PERSON SEARCHED THEREFORE, ALL CONSEQUENT PROCEEDIN GS INCLUDING IMPUGNED ASSESSMENT AND FIRST APPELLATE ORDER IS BA D IN LAW AND UNSUSTAINABLE. ACCORDINGLY, ADDITIONAL GROUND OF T HE ASSESSEE IS ALLOWED AND ISSUANCE OF NOTICE U/S. 153C OF THE ACT, IMPUGN ED REASSESSMENT AND FIRST APPELLATE ORDERS ARE HEREBY QUASHED BEING BAD IN LAW AND UNSUSTAINABLE. ADDITIONAL GROUND OF THE ASSESSEE IN IT(SS)A NO.156 /AHD/2011/SRT FOR AY 2003-04: 16. SINCE, FACTS AND CIRCUMSTANCES OF AY 2003-04 & 2005-06 ARE QUITE SIMILAR AND IDENTICAL THEREFORE, OUR CONCLUSION DRA WN ON THE ADDITIONAL GROUND FOR AY 2005-06 WOULD APPLY MUTATIS MUTANDIS TO THE ADDITION GROUND OF THE ASSESSEE FOR AY 2003-04. CONSEQUENTL Y, THE ADDITIONAL 11 IT(SS)A NOS.127/AHD/2010/SRT, 156/AHD/2011/SRT & 45 /AHD/2013/SRT M/S. T.N. FABRICS (A.Y: 2005-06 & 2003-04) GROUND OF THE ASSESSEE FOR AY 2003-04 IS ALSO ALLOW ED AND NOTICE U/S. 153C OF THE ACT, IMPUGNED REASSESSMENT AND FIRST AP PELLATE ORDER ARE HEREBY QUASHED. GROUNDS OF THE ASSESSEE ON MERITS FOR BOTH THE YEAR S: 17. SINCE, BY THE EARLIER PART OF THIS ORDER, WE HA VE ALLOWED LEGAL GROUND OF THE ASSESSEE FOR BOTH THE YEARS AND HAVE QUASHED ALL PROCEEDINGS AND REASSESSMENT AND FIRST APPELLATE ORDER FOR BOTH THE YEARS THEREFORE, OTHER GROUNDS OF THE ASSESSEE ON MERITS FOR BOTH THE YEAR S BECOME ACADEMIC AND INFRUCTUOUS AND WE ARE NOT ADJUDICATION UPON TH EM AS HAVING BECOME INFRUCTUOUS. ITA NO.45/AHD/2013/SRT OF THE ASSESSEE FOR AY 2005- 06: 18. WE HAVE HEARD THE ARGUMENTS OF BOTH SIDES AND C AREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON THE RECORD OF THE T RIBUNAL. SINCE, BY THE EARLIER PART OF THIS ORDER, WE HAVE QUASHED IMPUGNE D REASSESSMENT AND FIRST APPELLATE ORDER FOR AY 2005-06, WHEREIN ADDIT ION OF RS. 28,44,000/- ON ACCOUNT OF AMOUNT OF INVESTMENT NOT FULLY DISCLO SED IN THE BOOKS OF ACCOUNTS WAS MADE. AFTER QUASHING OF REASSESSMENT AND FIRST APPELLATE ORDER, IT IS APPARENT THAT THE ADDITION, ON THE STR ENGTH OF WHICH PENALTY HAS BEEN LEVIED, HAS NOT REMAINED IN EXISTENCE THEREFOR E, THE PENALTY IMPOSED BY THE AO AND UPHELD BY THE LD. CIT(A) U/S. 271(1)( C) OF THE ACT CANNOT BE HELD AS SUSTAINABLE AND WE DEMOLISH THE SAME. ACCO RDINGLY, ALL THE 12 IT(SS)A NOS.127/AHD/2010/SRT, 156/AHD/2011/SRT & 45 /AHD/2013/SRT M/S. T.N. FABRICS (A.Y: 2005-06 & 2003-04) GROUNDS OF THE ASSESSEE IN THE PENALTY APPEAL ARE A LLOWED AND THE AO IS DIRECTED TO DELETE THE PENALTY. 19. IN THE RESULT, ALL THREE APPEALS OF THE ASSESSE E ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 0 8 TH OCTOBER, 2018. / SURAT ; DATED : 08 TH OCTOBER, 2018 EDN $ ' / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT ; 3. $ ( ) / THE CIT(A), AHMEDABAD; 4. PRL. CIT-2, AHMEDABAD; 5. , , / DR, ITAT, SURAT; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // * / ASSISTANT REGISTRAR , / ITAT, SURAT SD/- SD/- ( ) ( O.P.MEENA ) / ACCOUNTANT MEMBER ( ) (C.M.GARG) /JUDICIAL MEMBER