Sri Shailendra Saraogi , Kolkata V. ACIT, Central Circle - 3(4), Kolkata , Kolkata

ITSSA 49/KOL/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3062 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s) 14 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 27-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 28-01-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 13-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C J SINGH J
• Assessee Lawyers: S M SURANA
• Keywords: Unexplained cash credit; Unexplained expenditure; Search and seizure; Salary income; Principle of natural justice; Question of law
• Section: 69C; 143(3); 133A; 153A; 14A; 143(1); 250; 131; 68; 69; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, KOLKATA BEFORE SRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER & SRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T(SS)A NO.49/KOL/2018 ASSESSMENT YEAR: 2013-14 SHRI SHAILENDRA SARAOGI...............................................APPELLANT [PAN :ALSPS 5277 J] ACIT, CENTRAL CIRCLE-3(4), KOLKATA................................................................RESPONDENT APPEARANCES BY: SHRI S.M. SURANA, ADVOCATE, APPEARING ON BEHALF OF THE APPELLANT. SHRI A. K. SINGH, CIT-DR & SRI C. J. SINGH, JCIT, SR. DR, APPEARING ON BEHALF OF THE RESPONDENT. DATE OF CONCLUDING THE HEARING : JANUARY 28 TH , 2019 DATE OF PRONOUNCING THE ORDER : FEBRUARY 27 TH , 2019 O R D E R PER J. SUDHAKAR REDDY :- THIS APPEAL IS FILED BY THE ASSESSEE AND IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) -21, KOLKATA (HEREINAFTER THE LD. CIT (A)), PASSED U/S 250 OF THE INCOME TAX ACT, 1961 (THE ACT), DATED 25/05/2018. 2. THE ASSESSEE IS AN INDIVIDUAL AND DERIVES INCOME FROM SALARY AND INTEREST. A SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT WAS UNDERTAKEN IN THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 15.12.2015. SUBSEQUENTLY, NOTICE U/S 153A WAS ISSUED ON 09.09.2016 AND SERVED UPON THE ASSESSEE ON 14.09.2016. THE ASSESSEE FILED RETURN OF INCOME IN RESPONSE TO THE NOTICE U/S 153A ON 24.09.2016 DECLARING TOTAL INCOME OF RS.4,46,620/-. THE ASSESSMENT WAS COMPLETED U/S 153A R.W.S. 143(3) BY DETERMINING THE ASSESSED INCOME AT RS.69,10,140/- INTER ALIA MAKING AN ADDITION BY TREATING LONG- TERM CAPITAL GAINS CLAIMED BY THE ASSESSEE ON SALE AND PURCHASE OF SHARES OF TUNI TEXTILE AS UNEXPLAINED CASH CREDIT AND FURTHER ADDING AN AMOUNT OF 5% OF THE PROFITS ON SALE OF THESE STOCKS AS UNEXPLAINED EXPENDITURE TOWARDS COMMISSION. 3. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER ON APPEAL WITHOUT SUCCESS. 4. FURTHER, AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE US. 2 SHRI SHAILENDRA SARAOGI I.T(SS)A NO.49/KOL/2018 ASSESSMENT YEAR: 2013-14 4.1 THE ASSESSEE RAISED NINE GROUNDS OF APPEAL. HE EFFECTIVELY ARGUED TWO GROUNDS WHICH ARE AS FOLLOWS: (A) THAT THE EXEMPTED CAPITAL GAIN INCOME FROM PURCHASE AND SALE OF SHARES CANNOT BE ADDED AS UNEXPLAINED INCOME, IN AN ASSESSMENT FRAMED U/S 153A R.W.S. 143(3) OF THE ACT WHEN NO INCRIMINATING MATERIAL WAS FOUND DURING THE SEARCH AND WHEN THE ASSESSMENT HAS NOT ABATED. (B) THAT THE ASSESSEE HAD GENUINELY EARNED THE LONG-TERM CAPITAL GAIN FROM PURCHASE AND SALE OF SHARES AND THAT THE ASSESSING OFFICER AS WELL AS THE LD. CIT(A) WRONG IN TREATING THIS RECEIPT AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. 4.2 THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT NO INCRIMINATING MATERIALS WHATSOEVER WERE FOUND DURING THE COURSE OF SEARCH, BASED ON WHICH THE ABOVE ADDITION WAS MADE IN AN ASSESSMENT U/S 153A R.W.S 143(3) OF THE ACT WAS COMPLETED. HE SUBMITTED THAT THE ASSESSEE FILED HIS RETURN OF INCOME ORIGINALLY ON 8 TH OCTOBER 2013 FOR THE ASSESSMENT YEAR 2012-13 AND THAT NO NOTICE U/S 143(2) OF THE ACT WAS ISSUED WITHIN THE TIME PERMITTED UNDER THE STATUTE I.E. 31/10/2014 AND THAT SEARCH AND SEIZURE OPERATION WAS CONDUCTED ON 15.12.2015 AND HENCE THE ASSESSMENT HAS NOT ABATED. HE FURTHER SUBMITTED THAT IN THE STATEMENT RECORDED FROM THE PERSONS SEARCHED U/S 132(4) OF THE ACT, THE PERSONS SEARCHED I.E. MRS. URMILA SARAOGI, SRI ROBIN SARAOGI, DEVESH UPADHYAY, NARENDRA SARAOGI AND OTHERS HAD REPLIED TO SPECIFIC QUESTIONS THAT THE LONG- TERM CAPITAL GAIN WAS A GENUINE TRANSACTIONS. HE FURTHER SUBMITTED THAT EVEN IN THE STATEMENTS RECORDED BY THE REVENUE FROM THE THIRD PARTIES, THE ASSESSEES NAME WAS NOT MENTIONED. HE RELIED ON THE NUMBER OF CASE LAW FOR THE PROPOSITION THAT UNDER SUCH CIRCUMSTANCES, NO ADDITION CAN BE MADE IN AN ASSESSMENT FRAMED U/S 153A R.W.S 143(3) OF THE ACT IN THE ABSENCE OF ANY INCRIMINATING MATERIAL. ON MERITS, HE SUBMITTED THAT THE ASSESSEE HAS FURNISHED ALL POSSIBLE EVIDENCES BEFORE THE ASSESSING OFFICER IN THE FORM OF EVIDENCE OF PURCHASE OF SHARES, PAYMENT TO CROSS-CHEQUES, DEMAT ACCOUNTS, BROKER NOTES, DETAILS OF SALES THROUGH STOCK EXCHANGE, DETAILS OF RECEIPTS OF SALE CONSIDERATION THROUGH CROSS-CHEQUES ETC. HE RELIED ON NUMBER OF CASE LAWS IN SUPPORT OF THE CONTENTIONS THAT IN SIMILAR CIRCUMSTANCES, THE ADDITIONS MADE BY THE REVENUE/DEPARTMENT 3 SHRI SHAILENDRA SARAOGI I.T(SS)A NO.49/KOL/2018 ASSESSMENT YEAR: 2013-14 HAS TO BE DELETED. HE FURTHER SUBMITTED THAT IN THE CASE OF THE OTHER PERSONS WHO WERE SEARCHED, THIS BENCH OF THE TRIBUNAL HAD ADJUDICATED SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE ON THE SAME FACTS AND HAS STATED THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE. HE FURTHER SUBMITTED THAT IN THE CASE OF M/S ANUSHREE TEXTILES PVT. LTD. VS. DCIT IN IT(SS)A NO.48/KOL/2018 ORDER DATED 05.09.2018, THE TRIBUNAL HAS CLEARLY HELD THAT WHEN NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH NO ADDITION CAN BE MADE. 4.3 THE LD. CIT-DR, MR. A. K. SINGH, ON THE OTHER HAND, SUBMITTED THAT HE HAS NO DISPUTE WITH THE CLAIM OF THE ASSESSEE THAT NO INCRIMINATING MATERIAL WHATSOEVER WAS FOUND DURING THE COURSE OF SEARCH BASED ON WHICH THE ADDITION IN QUESTION WAS MADE. HE RELIED ON THE STATEMENTS RECORDED FROM PERSONS WHO HAVE BEEN SEARCHED AS WELL AS STATEMENTS FROM THIRD PARTIES WHICH WERE RECORDED IN SURVEY PROCEEDINGS U/S 133A AND WELL AS SOME OTHER SEARCH PROCEEDINGS AND SUBMITTED THAT THESE STATEMENTS WOULD CONSTITUTE INCRIMINATING MATERIAL. HE RELIED ON THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. EASTERN COMMERCIAL ENTERPRISES [1994] 210 ITR 103 (CAL.) FOR THE PROPOSITION THAT IF CROSS-EXAMINATION HAD NOT BEEN PROVIDED TO THE ASSESSEE, THE ASSESSMENT IS TO BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR GRANT OF SUCH OPPORTUNITY. HE REFERRED TO THE PAPER BOOK FILED BY HIM AND POINTED OUT TO COPIES OF STATEMENTS RECORDED DURING THE COURSE OF SEARCH IN THE CASE OF SHRI SAILENDRA SARAOGI RECORDED U/S 132(4) AND AS WELL AS TEN OTHER PERSONS AND RELIED ON THE SAME. ON QUERY FROM THE BENCH, THE LD. DR COULD NOT POINT OUT ANY SPECIFIC QUESTIONS AND ANSWER, WHICH CAN BE TREATED AS EVIDENCE OF INCRIMINATING MATERIAL AGAINST THE ASSESSEE. ON MERITS, HE SUBMITTED THAT THE RULES OF SUSPICIOUS TRANSACTIONS COME INTO PLAY AND THAT THE ENTIRE TRANSACTION WAS PRE-PLANNED AND PREPONDERANCE OF HUMAN PROBABILITIES TAKES US TO A CONCLUSION THAT THIS TRANSACTION IS BOGUS. HE RELIED ON THE ORDER OF THE LD. CIT(A) AS WELL AS THE ASSESSING OFFICER AND SUBMITTED THAT CIRCUMSTANTIAL EVIDENCE AND HUMAN BEHAVIOR HAVE TO BE BORNE IN MIND. HE PRAYED THAT THE ORDER OF THE LD. CIT(A) BE UPHELD. 5. RIVAL SUBMISSIONS HEARD. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, PERUSING THE PAPERS ON RECORD AND ORDERS OF THE AUTHORITIES BELOW, WE NOTE THAT THE ASSESSEE IN THIS CASE FILED HIS ORIGINAL RETURN OF INCOME ON 4 SHRI SHAILENDRA SARAOGI I.T(SS)A NO.49/KOL/2018 ASSESSMENT YEAR: 2013-14 08.12.2013. THE STATUTORY TIME LIMIT FOR ISSUAL OF NOTICE U/S 143(2) OF THE ACT EXPIRED ON 31.12.2014 AND NO NOTICE U/S 143(2) OF THE ACT WAS ISSUED TO THE ASSESSEE. A SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT WAS CONDUCTED ON 15.12.2015. HENCE, THE ASSESSMENT FOR THE ASSESSMENT YEAR 2013-14 HAS NOT ABATED. THE UNDISPUTED FACT IS THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH OR DURING THE COURSE OF POST SEARCH OPERATIONS. EVEN IN THE STATEMENTS RECORDED FROM THE PERSONS SEARCHED, THERE IS NO ADMISSION THAT THE TRANSACTIONS IN QUESTION ARE BOGUS TRANSACTIONS. ON THE OTHER HAND, THE ASSESSEE IN HIS STATEMENT RECORDED U/S 132(4) HAS STATED THAT THE TRANSACTIONS IN QUESTION ARE GENUINE IN NATURE AND THAT HE WOULD BE ABLE TO SUBSTANTIATE THE SAME. EVEN IN THE STATEMENTS RECORDED FROM THE THIRD PARTIES IN CERTAIN OTHER OPERATIONS, THE ASSESSEES INCOME DOES NOT FIGURE. THERE IS NO MATERIAL THAT IS FOUND BASED ON WHICH THIS ADDITION WAS MADE. THIS TRIBUNAL UNDER SIMILAR CIRCUMSTANCE IN THE CASE OF M/S. ORISSA KHANIJ PRIVATE LTD.; IT(SS)A NO.77/KOL/2017 HELD AS FOLLOWS: THE KOLKATA B BENCH OF THE TRIBUNAL IN THE CASE OF DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2(2), KOLKATA V. M/S. ROSEMARY SPONGE & ISPAT PVT. LTD; I.T(SS).A NO. 75/KOL/2017 ASSESSMENT YEAR: 2009-10; I.T(SS).A NO. 76/KOL/2017; ASSESSMENT YEAR: 2010-11; ORDER DT. 30/11/2018, WHEREIN UNDER SIMILAR CIRCUMSTANCES IT WAS HELD AS FOLLOWS:- 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:- 8.1. WE FIRST CONSIDER THE LEGAL POSITION AS TO WHETHER, AN ADDITION CAN BE MADE IN AN ASSESSMENT U/S 153A R.W.S. 143(3) OF THE ACT, WHICH IS NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH AND SEIZURE, WHEN THE ASSESSMENT FOR THE ASSESSMENT YEAR IN QUESTION HAS NOT ABATED. IN THE CASE ON HAND, THE ASSESSEE FILED ITS ORIGINAL RETURN OF INCOME ON 03/09/2009 FOR THE ASSESSMENT YEAR 2009-10 AND ON 09/09/2010 FOR THE ASSESSMENT YEAR 2010-11. THE TIME LIMIT FOR ISSUAL OF NOTICE U/S 143(2) OF THE ACT, WAS 30/09/2010 AND 30/09/2011 RESPECTIVELY FOR ASSESSMENT YEAR 2009-10 & 2010-11. THE SEARCH AND SEIZURE OPERATION WAS CONDUCTED IN THIS CASE ON 18/02/2013. THE STATUTORY PERIOD FOR ISSUAL OF NOTICE U/S 143(2) OF THE ACT, IN THE CASE OF BOTH THE ASSESSMENT YEARS HAD EXPIRED PRIOR TO THE DATE OF SEARCH OPERATION. HENCE THE ASSESSMENT FOR THE IMPUGNED ASSESSMENT YEARS HAVE NOT ABATED. THE ASSESSING OFFICER MADE THE ADDITION IN QUESTION BY OBSERVING AS UNDER AT PARA 4.34, PAGE 24 OF THE ASSESSMENT ORDER:- I) NAMES OF THE COMPANIES APPEALING M STATEMENTS OF THE ENTRY PROVIDERS GIVEN TO INVESTIGATION WING FIGURE AS APPLICANTS TO SHARES IN THE ASSESSEE COMPANY. II) PERUSAL OF THE OPERATING BANK A/C SHOWS THAT THE A/C OF MOST OF THE INVESTING COMPANIES IS IN THE SAME BANK AS THAT OF THE ASSESSEE COMPANY. 5 SHRI SHAILENDRA SARAOGI I.T(SS)A NO.49/KOL/2018 ASSESSMENT YEAR: 2013-14 III) THERE IS NO JUSTIFICATION ON RECORD WHATSOEVER AS TO WHETHER THE COMPANY'S CREDENTIALS COMMANDED A HUGE SHARE PREMIUM, PARTICULARLY WHEN THE SAME IS BEING PAID BY STRANGERS. IV) SUMMONS U/S 131 TO SUCH PERSONS I COMPANY HAVE NOT BEEN ADEQUATELY RESPONDED AND THE ASSESSEE HAS FAILED TO PRODUCE THEM IN RESPONSE TO THE SHOW- CAUSE NOTICE. V) THE FINDINGS THAT THE INVESTING COMPANIES WHICH SUBSCRIBED TO THE SHARES WERE BORNE ON THE FILE OF THE ROC AND THAT THE MONIES HAVE COME THROUGH A/C PAYEE CHEQUES IS AT BEST, NEUTRAL. MERE PAYMENT BY CHEQUES IS NOT SACROSANCT AS WOULD NOT, MAKE A NON-GENUINE TRANSACTION AS GENUINE. VI) BONAFIDE AND GENUINENESS OF THE TRANSACTIONS IS THE MAIN ISSUE AND IN THIS REGARD, THE ASSESSEE COMPANY HAS FAILED MISERABLY. VII) SCRUTINY HAS REVEALED THE CAMOUFLAGE ADOPTED BY THE ASSESSEE AND EXPOSED THE TRUE NATURE OF THE TRANSACTIONS. VIII) ONUS IS ON THE ASSESSEE TO PROVE THE IDENTITY OF SHARE APPLICANTS, THEIR CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS APPEARING IN ITS BOOKS OF SALE WHICH IS NOT PROVED IN THIS CASE. IN FACT, GENUINENESS OF THE TRANSACTIONS HAS NOT BEEN ESTABLISHED IN SPITE OF REPEATED OPPORTUNITIES. IX) THERE IS ENOUGH MATERIAL ON RECORD TO DOUBT THE VERACITY OF THE TRANSACTIONS. A PERUSAL OF THE ABOVE DEMONSTRATES THAT THE ADDITIONS IN QUESTION ARE NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. 8.2. ON THE LEGAL POSITION, WE FIND THAT THE VARIOUS COURTS OF LAW UNDER SIMILAR CIRCUMSTANCES HAVE HELD AS FOLLOWS:- CIT,KOLKATA-III VS. VEERPRABHU MARKETING LIMITED [2016] 73 TAXMANN.COM 149 (CALCUTTA) : IN THIS CASE THE HONOURABLE CALCUTTA HIGH COURT EXPRESSED THE FOLLOWING VIEWS: WE ARE IN AGREEMENT WITH THE VIEWS OF THE KARNATAKA HIGH COURT THAT INCRIMINATING MATERIAL IS A PRE-REQUISITE BEFORE POWER COULD HAVE BEEN EXERCISED UNDER SECTION 153C 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. PCIT-2, KOLKATA VS. SALASAR STOCK BROKING LIMITED (ITAT NO. 264 OF 2016) DATED 24.08.2016 : (CALCUTTA) IN THIS CASE, THE HONORABLE JURISDICTIONAL HIGH COURT OBSERVED THAT THE LD. ITAT, KOLKATA WAS OF THE OPINION THAT THE ASSESSING OFFICER HAD NO JURISDICTION U/S 153A OF THE I.T. ACT TO REOPEN THE CONCLUDED CASES WHEN THE SEARCH & SEIZURE DID NOT DISCLOSE ANY INCRIMINATING MATERIAL. IN TAKING THE AFORESAID VIEW, THE LD. ITAT RELIED UPON THE JUDGMENTS OF DELHI HIGH COURT IN THE CASE OF CIT(A) VS. KABUL CHAWLA IN ITA NO. 707/2014 DATED 28.08.2014 . THE COURT ALSO OBSERVED THAT MORE OR LESS AN IDENTICAL VIEW HAS BEEN TAKEN BY THIS BENCH IN ITA NO. 661/2008 IN THE CASE OF CIT VS. VEERPRABHU MARKETING LIMITED. 6 SHRI SHAILENDRA SARAOGI I.T(SS)A NO.49/KOL/2018 ASSESSMENT YEAR: 2013-14 CONSIDERING THE ABOVE FACTS, THE HONORABLE HIGH COURT DID NOT ADMIT THE APPEAL FILED BY THE DEPARTMENT. IT HELD AS FOLLOWS:- SUBJECT MATTER OF CHALLENGE IS A JUDGEMENT AND ORDER DATED 18TH DECEMBER, 2015 BY WHICH THE LEARNED TRIBUNAL DISMISSED AN APPEAL PREFERRED BY THE REVENUE REGISTERED AS ITA NO.1775/KOL/2012 AND ALLOWED A CROSS-OBJECTION REGISTERED AS CO-30/KOL/2013 BOTH PERTAINING TO THE ASSESSMENT YEAR 2005-06. THE LEARNED TRIBUNAL WAS OF THE OPINION THAT THE ASSESSING OFFICER HAD NO JURISDICTION UNDER SECTION 153A OF THE INCOME TAX ACT TO REOPEN THE CONCLUDED CASES WHEN THE SEARCH AND SEIZURE DID NOT DISCLOSE ANY INCRIMINATING MATERIAL. IN TAKING THE AFORESAID VIEW, THE LEARNED TRIBUNAL RELIED UPON A JUDGEMENT OF DELHI HIGH COURT IN THE CASE OF CIT[A] VS. KABUL CHAWLA IN ITA NO.707/2014 DATED 28TH AUGUST, 2014. THE AGGRIEVED REVENUE HAS COME UP IN APPEAL. ....IN THAT VIEW OF THE MATTER, WE ARE UNABLE TO ADMIT THE APPEAL. THE APPEAL IS, THEREFORE, DISMISSED. THE A BENCH OF THE DELHI ITAT, RECENTLY IN THE CASE OF ANURAG DALMIA VS. DCIT IN ITA NOS. 5395 & 5396/DEL/2017; ASSESSMENT YEARS: 2006-07 & 2007-08, DT. 15/02/2018, HAS EXPLAINED THE LAW ON THIS ISSUE IN THE FOLLOWING MANNER:- 12. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE RELEVANT MATERIAL PLACED ON RECORD AND THE FINDING GIVEN IN THE IMPUGNED ORDER WITH RESPECT TO LEGAL ISSUE RAISED VIDE GROUND NO.5 BY THE ASSESSEE THAT THE ADDITIONS MADE IN THIS YEAR ARE BEYOND THE SCOPE OF ASSESSMENT U/S.153A, AS NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH FOR THE IMPUGNED ASSESSMENT YEAR; AND THE ASSESSMENT HAD ATTAINED FINALITY AND WAS NOT ABATED IN TERMS OF 2ND PROVISO TO SECTION 153A. AS STATED ABOVE, THE ORIGINAL RETURN OF INCOME WAS FILED IN JULY, 2006 AND SAID RETURN WAS DULY ACCEPTED AND PROCESSED U/S. 143(1) VIDE INTIMATION DATED 25.05.2007. SINCE NO NOTICE U/S. 143(2) WAS ISSUED THEREAFTER OR ANY OTHER PROCEEDINGS HAVE BEEN COMMENCED TO DISTURB SAID RETURN OF INCOME, ACCORDINGLY, IT HAD ATTAINED FINALITY MUCH PRIOR TO THE DATE OF SEARCH WHICH WAS ON 20.01.2012. HENCE IN TERMS OF 2ND PROVISO TO SECTION 153A THE ASSESSMENT FOR THE ASSESSMENT YEAR 2006-07 WAS NOT PENDING AND ACCORDINGLY, HAS TO BE RECKONED AS UNABATED ASSESSMENT. UNDER THE JURISDICTION OF HON'BLE DELHI HIGH COURT, THE LAW IS WELL SETTLED THAT IN CASE OF UNABATED ASSESSMENT, THE ADDITIONS WHICH CAN BE ROPED-IN, IN THE ASSESSMENTS FRAMED U/S.153A, WOULD ONLY BE WITH REGARD TO ANY INCRIMINATING MATERIAL OR EVIDENCE UNEARTHED OR FOUND DURING THE COURSE OF SEARCH. IF NO INCRIMINATING MATERIAL HAS BEEN FOUND DURING THE COURSE OF SEARCH, THEN NO ADDITION CAN BE MADE IN THE ASSESSMENT YEARS WHERE ASSESSMENTS HAD ATTAINED FINALITY. THE RELEVANT OBSERVATIONS AND THE RATIO LAID DOWN WOULD BE DISCUSSED IN THE LATER PART OF THIS ORDER. 15. NOW COMING TO THE RATIOS LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT, FIRST OF ALL, IN THE CASE OF KABUL CHAWALA (SUPRA), THE HON'BLE COURT AFTER DISCUSSING THE ISSUE THREADBARE AND ANALYSING THE VARIOUS JUDGMENTS OF DIFFERENT HIGH COURTS LAID DOWN THE FOLLOWING LEGAL PROPOSITION IN TERMS OF SCOPE OF ADDITION WHICH CAN BE MADE U/S. 153A(1) WHICH ARE 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 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 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 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 7 SHRI SHAILENDRA SARAOGI I.T(SS)A NO.49/KOL/2018 ASSESSMENT YEAR: 2013-14 OF EACH OF THE SIX AYS 'IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX'. 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. THOSE 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 ONE 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 WHILE 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 KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. THIS JUDGMENT OF THE HON'BLE DELHI HIGH COURT HAS BEEN FOLLOWED IN SEVERAL JUDGMENTS NOT ONLY BY THE HON'BLE DELHI HIGH COURT BUT ALSO BY OTHER HON'BLE HIGH COURT LIKE, PR. CIT VS. SOMAYA CONSTRUCTION PVT. LTD. 387 ITR 529 (GUJ), CIT VS. IBC KNOWLEDGE PARK PVT. LTD. 385 ITR 346 (KAR) AND CIT VS.GURINDER SINGH BAWA REPORTED IN 386 ITR 483. IN THE LATEST JUDGMENT THE HON'BLE DELHI HIGH COURT IN PR. CIT VS. MEETA GUTGUTIA, THEIR LORDSHIPS REITERATED THE SAME PRINCIPLE AFTER DISCUSSING AND ANALYZING CATENA OF DECISIONS INCLUDING THAT OF ANIL KUMAR BHATIA (SUPRA) AND DAYAWANTI GUPTA. THE HON'BLE HIGHCOURT OBSERVED AND HELD AS UNDER:- 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 PRINCIPAL COMMISSIONER OF INCOME TAX V. SAUMYA CONSTRUCTION P. LTD. {SUPRA) AND OF THIS COURT IN KABUL CHAWLA (SUPRA). AS FAR AS KARNATAKA HIGH COURT IS CONCERNED, IT HAS IN CIT V. IBC KNOWLEDGE PARK P. LTD. {SUPRA) FOLLOWED THE DECISION OF THIS COURT IN KABUL 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 OPERATION. THE CALCUTTA HIGH COURT IN CIT-2 V. SALASAR STOCK BROKING LTD. {SUPRA), TOO, FOLLOWED 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 REGULAR 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 7 TH DECEMBER, 2015. 18. POST THE JUDGMENT OF MEETA GUTGUTIA (SUPRA), ALSO THE SAME PRINCIPLE HAVE BEEN REITERATED IN THE CASE OF PCIT VS. BEST INFRASTRUCTURE (INDIA) PVT. LTD. (SUPRA), WHEREIN THE HON'BLE HIGH COURT HELD THAT DURING THE COURSE OF SEARCH, STATEMENT RECORDED U/S. 132(4) BY THEMSELVES DOES NOT CONSTITUTE INCRIMINATING MATERIAL AND ASSUMPTION OF JURISDICTION BY THE ASSESSING OFFICER U/S.153A SOLELY BASED ON STATEMENT IS UNSUSTAINABLE WHEN THERE IS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. AGAIN IN THE CASE OF PCIT VS. DHARAMPAL PREMCHAND LTD., IN ITA NO.512 TO 514/206, THE HON'BLE DELHI HIGH COURT HELD THAT RATIO LAID DOWN IN THE CASE OF KABUL CHAWLA, 8 SHRI SHAILENDRA SARAOGI I.T(SS)A NO.49/KOL/2018 ASSESSMENT YEAR: 2013-14 MEETA GUTGUTIA, STILL HOLDS GROUND AND THE REVENUES CONTENTION THAT THE MATTER SHOULD BE REFERRED TO A LARGER BENCH WAS TURNED DOWN. APART FROM THESE JUDGMENTS, THERE ARE CATENA OF OTHER JUDGMENTS OF OTHER HIGH COURTS LAYING DOWN SIMILAR RATIO AND PROPOSITION. THE MAIN UNDERLYING PRINCIPLE PERMEATING IN ALL THE JUDICIAL PRECEDENTS IS THAT, IN THE CASE OF THE UNABATED ASSESSMENT WHICH HAD ATTAINED FINALITY ON THE DATE OF SEARCH, WHICH ARE RECKONED AS UNABATED ASSESSMENTS, NO ADDITION OVER AND ABOVE THE ORIGINALLY ASSESSED INCOME CAN BE MADE SANS ANY INCRIMINATING MATERIAL FOUND OR UNEARTHED DURING THE COURSE OF SEARCH. THE PRINCIPLE REITERATED TIME AND AGAIN IS THAT SOMETHING SHOULD BE FOUND AS A RESULT OF SEARCH WHICH IS INCRIMINATING IN NATURE SO AS TO IMPLICATE THE ASSESSEE AND ACQUIRE JURISDICTION TO MAKE THE ADDITION, BECAUSE FOR THE COMPLETED ASSESSMENT, OR IN OTHER WORDS, ASSESSMENT WHICH ARE NOT ABATED, THE ASSESSING OFFICER IS REQUIRED TO MAKE REASSESSMENT U/S.153A WHICH IS ONLY POSSIBLE WHEN ANY INCRIMINATING MATERIAL HAS BEEN FOUND DURING THE COURSE OF SEARCH. THE HONBLE DELHI HIGH COURT IN THE CASE OF PR. CIT VS. KURULE PAPER MILLS P. LTD. [2016] 380 ITR 571 (DELHI) HELD AS FOLLOWS:- 1. THE REVENUE HAS FILED THE APPEAL AGAINST AN ORDER DATED 14.11.2014 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL (ITAT) IN 3761/DEL/2011 PERTAINING TO THE ASSESSMENT YEAR 2002-03. THE QUESTION WAS WHETHER THE LEARNED CIT (APPEALS) HAD ERRED IN LAW AND ON THE FACTS IN DELETING THE ADDITION OF RS. 89 LACS MADE BY THE ASSESSING OFFICER UNDER SECTION 68 OF THE INCOME TAX ACT, 1961 ('ACT') ON BOGUS SHARE CAPITAL. BUT, THE ISSUE WAS WHETHER THERE WAS ANY INCRIMINATING MATERIAL WHATSOEVER FOUND DURING THE SEARCH TO JUSTIFY INITIATION OF PROCEEDINGS UNDER SECTION 153A OF THE ACT. 2. THE COURT FINDS THAT THE ORDER OF THE CIT(APPEALS) REVEALS THAT THERE IS A FACTUAL FINDING THAT 'NO INCRIMINATING EVIDENCE RELATED TO SHARE CAPITAL ISSUED WAS FOUND DURING THE COURSE OF SEARCH AS IS MANIFEST FROM THE ORDER OF THE AO.' CONSEQUENTLY, IT WAS HELD THAT THE AO WAS NOT JUSTIFIED IN INVOKING SECTION 68 OF THE ACT FOR THE PURPOSES OF MAKING ADDITIONS ON ACCOUNT OF SHARE CAPITAL. 3. AS FAR AS THE ABOVE FACTS ARE CONCERNED, THERE IS NOTHING SHOWN TO THE COURT TO PERSUADE AND HOLD THAT THE ABOVE FACTUAL DETERMINATION IS PERVERSE. CONSEQUENTLY, AFTER CONSIDERING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, THE COURT IS OF THE OPINION THAT NO SUBSTANTIAL QUESTION OF LAW ARISES IN THE IMPUGNED ORDER OF THE ITAT WHICH REQUIRES EXAMINATION. 4. THE APPEAL IS, ACCORDINGLY, DISMISSED. THE DEPARTMENT HAD FILED SPECIAL LEAVE PETITION BEFORE THE HONBLE APEX COURT AGAINST THE ABOVE JUDGMENT OF THE DELHI HIGH COURT . (PR CIT V KURULE PAPER MILLS P. LTD: S.L.P (C) NO-34554 OF 2015[ 2016] 380ITR (ST) 64-ED).. THE HONBLE APEX COURT DISMISSED THE SPECIAL LEAVE PETITION FILED BY THE DEPARTMENT. THE RELEVANT PARA AS MENTIONED IN THE ITR IS REPRODUCED AS UNDER. THEIR LORDSHIPS MADAN B.LOKUR AND S.A.BOBDE JJ DISMISSED THE DEPARTMENTS SPECIAL LEAVE PETITION AGAINST THE JUDGMENT DATED JULY 06,2015 OF THE DELHI HIGH COURT IN I.T.A NO 369 OF 2015, WHEREBY THE HIGH COURT HELD THAT NO SUBSTANTIAL QUESTION OF LAW AROSE SINCE THERE WAS A FACTUAL FINDING THAT NO INCRIMINATING EVIDENCE RELATED TO SHARE CAPITAL ISSUED WAS FOUND DURING THE COURSE OF SEARCH AND THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN INVOKING SECTION 68 OF THE ACT FOR THE PURPOSE OF MAKING ADDITIONS ON ACCOUNT OF SHARE CAPITAL 9. APPLYING THE PROPOSITIONS OF LAW LAID DOWN IN THE ABOVE CASE-LAW TO THE FACTS OF THE CASE ON HAND, WE FIND THAT THE ONLY ADDITION MADE FOR THESE ASSESSMENT YEARS IS OF SHARE APPLICATION MONEY RECEIVED U/S 68 OF THE ACT AND ADDITION OF COMMISSION ALLEGEDLY PAID ON THE SHARE APPLICATION MONEY AND FINALLY A DISALLOWANCE U/S 14A OF THE ACT. NO INCRIMINATING MATERIAL HAS BEEN FOUND DURING THE COURSE OF SEARCH. THE ALLEGED STATEMENTS RECORDED FROM ENTRY OPERATORS HAVE BEEN ADMITTEDLY RETRACTED BY THEM AND THE ASSESSING OFFICER HAS 9 SHRI SHAILENDRA SARAOGI I.T(SS)A NO.49/KOL/2018 ASSESSMENT YEAR: 2013-14 NOT BASED THE ADDITIONS ON THESE STATEMENTS. EVEN OTHERWISE, WHEN COPIES OF THE ALLEGED STATEMENTS RECORDED BY THE REVENUE OFFICIALS HAVE NOT BEEN GIVEN TO THE ASSESSEE, NO ADDITION CAN BE MADE BASED ON SUCH EVIDENCE WHICH IS NOT CONFRONTED TO THE ASSESSEE. THE CONTENTS OF THE STATEMENTS ARE ALSO NOT BROUGHT OUT IN THE ASSESSMENT ORDER. ONLY A GENERAL REFERENCE IS MADE THAT THERE WERE CERTAIN STATEMENTS RECORDED FROM VARIOUS ENTRY OPERATORS BY THE INVESTIGATION WING. NO ADDITION CAN BE MADE ON SUCH GENERAL OBSERVATIONS. WE ALSO FIND THAT THE ASSESSEE HAS NOT BEEN GIVEN AN OPPORTUNITY TO CROSS-EXAMINE ANY OF THESE PERSONS, BASED ON WHOSE STATEMENTS, THE LD. D/R CLAIMS THAT THE ADDITIONS HAVE BEEN MADE. THE HONBLE SUPREME COURT IN THE CASE OF KISHINCHAND CHELLARAM VS. CIT, 125 ITR 713 (SC) HAD HELD THAT THE OPPORTUNITY OF CROSS-EXAMINATION MUST BE PROVIDED TO THE ASSESSEE. THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS EASTERN COMMERCIAL ENTERPRISES (1994) 210 ITR 103 (KOL HC) HELD AS FOLLOWS:- AS A MATTER OF FACT, THE RIGHT TO CROSS-EXAMINATION A WITNESS ADVERSE TO THE ASSESSEE IS AN INDISPENSABLE RIGHT AND THE OPPORTUNITY OF SUCH CROSS-EXAMINATION IS ONE OF THE CORNERSTONES OF NATURAL JUSTICE . 9.1. EVEN OTHERWISE, IT IS NOT CLEAR AS TO WHICH OF THESE STATEMENTS WERE RECORDED DURING THE COURSE OF SEARCH OPERATION U/S 132 OF THE ACT OR WHETHER THE STATEMENTS WERE RECORDED DURING THE COURSE OF ANY SURVEY OPERATIONS U/S 133A OF THE ACT. IT IS WELL SETTLED THAT A STATEMENT RECORDED DURING THE COURSE OF SURVEY OPERATION CANNOT BE USED AS AN EVIDENCE UNDER THE ACT. 10. COMING TO THE ALLEGED CASH TRAIL, NONE OF THE MATERIAL GATHERED BY THE ASSESSING OFFICER BY WAY OF BANK ACCOUNT COPIES OF VARIOUS COMPANIES SUPPOSED TO BE PART OF THE CHAIN OF COMPANIES WAS NOT CONFRONTED TO THE ASSESSEE. THE ALLEGED STATEMENTS THAT WERE RECORDED FROM DIRECTORS OF THESE COMPANIES WHICH FORMED THIS ALLEGED CHAIN WERE ALSO NOT BROUGHT ON RECORD. ONLY A GENERAL STATEMENT HAS BEEN MADE. THERE IS NO EVIDENCE WHATSOEVER THAT CASH HAS BEEN ROUTED FROM THE ASSESSEE COMPANY TO ANY OF THESE CHAIN OF COMPANIES. THERE IS NO EVIDENCE THAT ANY CASH WAS DEPOSITED BY THE ASSESSEE COMPANY. MOREOVER, THERE IS NO MATERIAL WHATSOEVER BROUGHT ON RECORD TO DEMONSTRATE THAT THE ALLEGED CASH DEPOSIT MADE IN THE BANK ACCOUNT OF A THIRD PARTY WAS FROM THE ASSESSEE COMPANY. NO OPPORTUNITY TO CROSS-EXAMINE ANY THESE PARTIES WAS PROVIDED TO THE ASSESSEE. THE BANK STATEMENTS BASED ON WHICH THE CASH TRAIL WAS PREPARED ARE PART OF THE DISCLOSED DOCUMENTS AND CANNOT BE HELD AS INCRIMINATING MATERIAL. 10.1 THE JUDGMENT OF THE HONBLE KERALA HIGH COURT IN THE CASE OF E.N. GOPAKUMAR VS. CIT (SUPRA) LAYS DOWN A PROPOSITION, CONTRARY TO THE PROPOSITIONS OF LAW LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. VEERPRABHU MARKETING LTD. (SUPRA) AND PCIT VS. SALASAR STOCK BROKING LIMITED (SUPRA). 10.2. THUS, NONE OF THESE MATERIAL GATHERED BY THE ASSESSING OFFICER CAN BE CATEGORIZED AS INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH OR FOUND DURING THE COURSE OF ANY OTHER OPERATION UNDER THE ACT. THUS, WE HOLD THAT THE ADDITIONS IN QUESTION ARE NOT BASED ON ANY INCRIMINATING MATERIAL. THE LD. CIT(A) ON PAGE 27 OF HIS ORDER HELD AS FOLLOWS:- I HAVE CONSIDERED THE FINDINGS OF THE AO IN THE ASSESSMENT ORDER, DIFFERENT CASE LAWS WAS BROUGHT ON RECORD AND APPEAL ORDERS PASSED BY MY PREDECESSORS ON THIS LEGAL ISSUE. I FIND FROM THE ASSESSMENT ORDER THAT DURING THE SEARCH & SEIZURE OPERATIONS CONDUCTED U/S 132 OF THE IT ACT, 1961, INCRIMINATING DOCUMENTS/PAPERS WERE NOT SEIZED. AT LEAST ADDITION MADE BY AO IN THE ASSESSMENT ORDER PASSED U/S 153A/143(3) ARE NOT BASED ON ANY INCRIMINATING DOCUMENTS/ PAPERS SEIZED DURING THE SEARCH OPERATION. IT WOULD ALSO NOT TO BE OUT OF CONTEXT TO MENTION HERE THAT IN THIS CASE, ON THE DATE OF SEARCH, NO ASSESSMENT FOR THIS YEAR WAS PENDING. THEREFORE, KEEPING IN VIW THE RATIO DECIDED BY THE JURISDICTIONAL BENCH OF KOLKATA TRIBUNAL IN CASE REFERRED ABOVE AND THE RATIO DECIDED BY THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF VEER PRABHU MARKETING LTD (SUPRA) IN THE LIGHT OF CBDTS DECISION OF NOT FILING SLP IN 10 SHRI SHAILENDRA SARAOGI I.T(SS)A NO.49/KOL/2018 ASSESSMENT YEAR: 2013-14 THIS CASE IN THE SUPREME COURT AND KEEPING IN VIEW THE APEX COURTS DECISION TO DISMISS SLP ON THE SIMILAR ISSUE IN THE CASE OF PR CIT VS KURELE PAPER MILLS PVT LTD: SLP (C) NO. 34554 OF 2015 DT.07.12.2015, I AM OF THIS VIEW THAT IN ORDER TO MAINTAIN JUDICIAL CONTINUITY ON THIS ISSUE AND RESPECTFULLY FOLLOWING THE RATIO DECIDED BY THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF VEER PRABHU MARKETING LTD (SUPRA), ASSESSEES APPEAL ON GROUND NO 1 IS ALLOWED AND AS SUCH I AM NOT INCLINED TO ADJUDICATE APPEAL ON GROUND NO. 2 ON MERIT. 11. WE FIND NOT INFIRMITY IN THIS ORDER OF THE LD. CIT(A) AND HENCE UPHOLD THE SAME. 12. IN THE RESULT BOTH THESE APPEALS OF THE REVENUE ARE DISMISSED. 6. APPLYING THE PROPOSITION OF LAW LAID DOWN BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. VEERPRABHU MARKETING LTD. (SUPRA) AND PCIT VS. SALASAR STOCK BROKING LIMITED AND OTHER JUDGMENTS OF THE TRIBUNAL AND THE HIGH COURTS, WE HAVE NO OTHER ALTERNATIVE BUT TO UPHOLD THE CONTENTIONS OF THE ASSESSEE THAT THE ADDITIONS IN QUESTION MADE U/S 68 & 69 OF THE ACT IN AN ASSESSMENT U/S 153 R.W.S 143(3) ARE BAD IN LAW AS THERE WAS NO INCRIMINATING MATERIAL FOUND DURING THE SEARCH BASED ON WHICH THESE ADDITION WAS MADE AND AS THE ASSESSMENT HAS NOT ABATED. 7. EVEN OTHERWISE, THIS TRIBUNAL IN THE CASE OF SANJAY MEHTA VS. ACIT, CIRCLE-36; ITA NO.1089/KOL/2018; ASSESSMENT YEAR : 2014-15; ORDER DT. 28-09-2018 , HAS DELETED THE ADDITION ON LONG-TERM CAPITAL GAINS ON MERITS ON THE SAME SET OF FACTS.THE ISSUE IN OUR VIEW IS COVERED IN FAVOUR OF THE ASSESSEE. HENCE, ON THIS GROUND ALSO, THE ADDITION IS BAD IN LAW. IN THE RESULT, THE ADDITIONS OF RS.61,55,733/- MADE U/S 68 OF THE ACT ON THE GROUND OF LONG-TERM CAPITAL GAIN IS DEEMED TO BE BOGUS AND PRE-ARRANGED, AS WELL AS ADDITIONS OF RS.3,07,787/- U/S 69C OF THE ACT ARE DELETED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. KOLKATA, THE 27 TH FEBRUARY, 2019. SD/- SD/- [ S.S. VISWANETHRA RAVI ] [J. SUDHAKAR REDDY] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 27.02.2019 (RS, SR. PS) 11 SHRI SHAILENDRA SARAOGI I.T(SS)A NO.49/KOL/2018 ASSESSMENT YEAR: 2013-14 COPY OF THE ORDER FORWARDED TO: 1. SHRI SHAILENDRA SARAOGI, BF-254, SALT LAKE, KOLKATA 700 064. 2. ACIT, CENTRAL CIRCLE-3(4), KOLKATA. 3. CIT(A)- 4. CIT- , 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, KOLKATA BENCHES