Basudha Udyog Pvt Ltd, Kolkata V. DCIT CENTRAL CIRCLE, Dhanbad

ITSSA 6/RAN/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9679 (ITAT-RANCHI)
• Duration Of Justice: 2 year(s) 3 month(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 05-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 04-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: INDERJIT SINGH J
• Keywords: Unexplained cash credit; Bogus Share capital; Unexplained investment; Depreciation; Search and seizure; Opportunity of being heard; Principle of natural justice; Assessment record; Revised return
• Section: 143(3); 153A; 14A; 143(1); 68; 148; 263; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI BENCH, RANCHI BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER IT (SS) A NO. 06 &07 / RAN / 2017 ASSESSMENT YEAR :2012-13 & 2011-12 IT(SS)A NO.15/RAN/2016 ASSESSMENT YEAR: 2009-10 BASUDHA UDYOG PVT. LTD. CHHAPARIA & ASSOCIATES, CHARTERED ACCOUNTANTS, 8, CAMAC STREET, SHANTINIKETAN BUILDING, 5 TH FLOOR, ROOM NO.2, KOLKATA-17 [ PAN NO.AABCB 9461 G ] V/S . DCIT, CENTRAL CIRCLE, AAYAKAR BHAWAN, L.C. ROAD,3 RD FLOOR, ROOM NO.405-8, DHANBAD- 826001 /APPELLANT .. / RESPONDENT /BY ASSESSEE SHRI DEVESH PODDAR, ADVOCATE /BY REVENUE SHRI INDERJIT SINGH, JCIT-DR /DATE OF HEARING 08-01-2019 /DATE OF PRONOUNCEMENT 15-02-2019 / O R D E R PER BENCH:- THESE THREE ASSESSEES APPEALS FOR ASSESSMENT YEAR (S) 2012-13, 2011- 12 & 2009-10 ARISE AGAINST THE COMMISSIONER OF INC OME TAX (APPEALS)-3 PATNAS SEPARATE ORDERS DATED 19.10.2016 & 30.03.20 16 PASSED IN CASE NOS.123 & 124 AND 122/CIT(A)-3/PAT/14-15, INVOLVING PROCEEDINGS U/S 153A R.W.S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. IT(SS)A NO.06-07/RAN/2017 & IT(SS)A NO.15/RAN/2016 A.YS. 12-13, 11-12 & 09-10 BASUDHA UDYOG PVT. LTD VS. DCIT CC-DHANBAD PAGE 2 HEARD BOTH THE LEARNED REPRESENTATIVES. CASE FILES PERUSED. WE PROCEED ASSESSMENT YEAR-WISE FOR THE SAKE OF CONVEN IENCE AND BREVITY [ ASSESSMENT YEAR 2009-10 ]. ASSESSEES APPEAL IT(SS)A NO.15/RAN/2016 . 2. THE ASSESSEES SOLE SUBSTANTIVE GROUND RAISED IN THE INSTANT APPEAL CHALLENGES BOTH THE LOWER AUTHORITIES ACTION ADDIN G RS.1,15,77,200/- AS UNDISCLOSED UNEXPLAINED INVESTMENT ON LAND PURCHASE D OVER AND ABOVE ITS CHEQUE PAYMENTS. SUFFICE TO SAY, BOTH THE LOWER AUT HORITIES HAVE TAKEN NOTE OF THE FACT THAT DEPARTMENT HAD CONDUCTED THE IMPUG NED SEARCH ON 20.6.2011 IN THE BUSINESS AND RESIDENTIAL PREMISES OF M/S POD DAR GROUP. THIS SEARCH COVERED BOTH THE ASSESSEE AS WELL AS ITS DIRECTOR, SHRI SANJOY PODDAR. THIS DIRECTOR HAD GOT RECORDED HIS SEARCH STATEMENT AS W ELL. THE DEPARTMENT SEIZED VITAL VRS DOCUMENT DURING THE COURSE OF SA ID SEARCH FROM SHRI PODDAR. THESE SEIZED DOCUMENT FORM PART OF RECORD B EFORE US AT PAGE 1 OF THE ASSESSEES PAPER BOOK. THE CRUCIAL ENTRY THEREIN NO WHERE MENTIONS ASSESSEES NAME FIRST OF ALL. WHAT IT REVEALS IS TH AT CERTAIN AMOUNT HAD BEEN KEPT AGAINST 34.07 ACRES(S). SOME TOTAL OF SAID FIGUR ES COMES TO RS.1,15,77,200/-. THE CLINCHING EXPRESSED PAID OR GIVEN IS CLEARLY GONE MISSING FROM THE SEIZED DOCUMENT THEREFORE. 3. IT IS VEHEMENTLY CONTENDED AT THE REVENUES BEHE ST THAT THE ABOVE STATED SEARCH DOCUMENT HAD BEEN SEIZED FROM ASSESSE ES DIRECTORS PREMISES AND THEREFORE, IT HAS TO BE PRESUMED TO BE CORRECT U/S. 292C OF THE ACT. WE FIND NO MERIT IN REVENUES INSTANT ARGUMENTS. SEC. 292C CONTAINS THE MOST VITAL EXPRESSION. IT MEANS THAT THE SAID SEARCH PER SON IS TO BE TAKEN AS A SEIZED ASSESSEE RATHER A THIRD PARTY. WE MAKE IT CL EAR THAT WE ARE DEALING WITH SEARCH PROVISION IN THE ACT WHICH HAS TO BE STRIC TLY INTERPRETED. WE THEREFORE HOLD THAT BOTH THE LOWER AUTHORITIES HAVE ERRED ON FACTS PARTICULARLY IN ADDING THE IMPUGNED ALLEGED UNDISCLOSED CASH SUM OF RS.1,1 5,77,200/- IN ASSESSEES HANDS. THE SAME IS DIRECTED TO BE DELETE D. MR. SINGH AT THIS STAGE STRENUOUSLY POINTS OUT THAT BOTH THE LOWER AUTHORIT IES AND MORE PARTICULARLY THE CIT(A)S APPEAL HAS DISCUSSED AT LENGTH THE ASSESSE ES MODUS OPERANDI IN IT(SS)A NO.06-07/RAN/2017 & IT(SS)A NO.15/RAN/2016 A.YS. 12-13, 11-12 & 09-10 BASUDHA UDYOG PVT. LTD VS. DCIT CC-DHANBAD PAGE 3 MAKING CASH PAYMENT. WE FIND THIS CONTENTION HAS TO BE DEVOID OF MERIT SINCE THE IMPUGNED ADDITION IS STATED TO BE BASED ON THE ABOVE STATED LOOSE SHEET THAN ANY OTHER DETAILED DISCUSSION. WE REITERATE TH E SEARCH ASSESSMENT YEAR CULMINATE ANY ADDITION HAS TO BE BASED ON MATERIAL FOUND OR SEIZED DURING THE COURSE OF SEARCH THAN ANY PREFECT IMPRESSION. WE TH EREFORE DECLINE REVENUES INSTANT ARGUMENTS IN SUPPORT OF THE IMPUG NED ADDITION. THE ASSESSEES FIRST APPEAL IT(SS)A NO.15/RAN/2016 IS A LLOWED THEREFORE. WE NEXT COME TO ASSESSEES LATTER TWO APPEAL(S) IT( SS)A NO. 6 & 7/RAN/2017 FOR ASSESSMENT YEARS 2012-13 & 2011-12 CHALLENGING CORRECTNESS OF BOTH THE LOWER AUTHORITIES ADDITION TO ITS SHARE CAPITAL SUM S OF RS.25 LAC. AND RS.9.05 LAC TO BE IN THE NATURE OF UNEXPLAINED CASH CREDITS U/S. 68 OF THE ACT. 4. IT EMERGES FROM A COMBINE PERUSAL OF THESE LATTE R TWO CASE FILES THAT THE ASSESSEE HAS RAISED HIS LEGAL GROUND FIRST OF ALL C HALLENGING VALIDITY OF SEC. 153A PROCEEDINGS FOR THE REASON THAT THE DEPARTMENT HAD NOT COME ACROSS ANY INCRIMINATING MATERIAL IN THE TWO ASSESSMENT YE ARS. LEARNED CIT-DRS CASE ON THE OTHER HAND IS THAT THE LOWER AUTHORITIE S HAVE RIGHTLY INITIATED THE IMPUGNED PROCEEDINGS AGAINST THE ASSESSEE IN THESE TWO ASSESSMENT YEARS AS IT FAILED TO PROVE GENUINENESS AND CREDITWORTHIN ESS OF THE SHARE CAPITAL / PREMIUM IN ISSUE. WE FIND NO SUBSTANCE IN REVENUES INSTANT ARGUMENTS. THE CLINCHING FACT IS THAT REMAINS UNREBUTTED FROM THE REVENUE SIDE THAT ASSESSEES BALANCE-SHEET FOR THE IMPUGNED TWO ASSES SMENT YEARS HAD ALREADY DISCLOSED THE RELEVANT SHARE CAPITAL / PREM IUM SUMS AND THEREFORE, IT CANNOT BE HELD THAT THE SAME SAW LIGHT OF THE DAY I N THE COURSE OF SEARCH ONLY. THIS TRIBUNALS CO-ORDINATE BENCHS DECISION IN M/S GARG BROTHERS PVT.LTD. VS. DCIT CC-3(2), KOLKATA DECIDED ON 18.04.2018 DELETIN G IDENTICAL ADDITION READS AS UNDER:- 50. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD, WE NOTE THAT THERE WAS A SEARCH U/S 132(1) OF THE A CT WHICH WAS CONDUCTED AGAINST THE ASSESSEE COMPANY ON 29.05.2012 (HEREINAFTER REF ERRED TO THE FIRST SEARCH) TRIGGERING SECTION 153A PROCEEDINGS AGAINST THE ASS ESSEE WHICH PROCEEDINGS CULMINATED IN THE AO FRAMING ORDER U/S 153A/143(3) PASSED ON 30.03.2015, WHICH ORDER OF THE AO HAS BEEN INTERFERED BY THE LD. PR. CIT EXERCISING HIS JURISDICTION U/S 263 OF THE ACT, WHICH ACTION OF THE LD. CIT IS UNDE R CHALLENGE BEFORE US. BEFORE THIS FIRST SEARCH, WE NOTE CERTAIN IMPORTANT FACTS WHICH ARE GERMANE TO DECIDE THE LIS BEFORE US. WE NOTE THAT THE ASSESSMENT YEAR UNDER C ONSIDERATION IS ASSESSMENT IT(SS)A NO.06-07/RAN/2017 & IT(SS)A NO.15/RAN/2016 A.YS. 12-13, 11-12 & 09-10 BASUDHA UDYOG PVT. LTD VS. DCIT CC-DHANBAD PAGE 4 YEAR 2009-10. IT IS AN UNDISPUTED FACT THAT THE ORI GINAL RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 25.09.2009 DECLARING TOTAL INCOME O F RS.4,28,560/- .THEREAFTER, THE RETURN OF INCOME WAS PROCESSED U/S 143(1) DATED 25. 11.2011. IT IS PERTINENT HERE TO NOTE THAT NO NOTICE U/S 143(2) WAS ISSUED AGAINST T HE ASSESSEE FOR SCRUTINY OF THE ASSESSMENT AND IT GOT EXPIRED ON 30.09.2010. THEREF ORE, WHEN THE FIRST SEARCH HAPPENED ON 29.05.2012, THERE WAS NO ASSESSMENT PRO CEEDING PENDING BEFORE THE ASSESSING OFFICER ON THE DATE OF ITA NO.2519/KOL/20 17 M/S. GARG BROTHERS PVT. LTD. ITA NO.2520/KOL/2017 M/S. CLIFF TREXIMPVT. LTD. ITA NO.2521/KOL/2017 M/S. SPAN FOUNDATION PVT. LTD. ASSESSMENT YEAR: 2009-10 36 FI RST SEARCH. THE ASSESSING OFFICER, THEREAFTER, COMPLETED THE ASSESSMENT U/S 1 53A READ WITH 143(3) AT RS.7,73,640/- ON 30.03.2015 BY MAKING ADDITIONS OF RS.3,41,973/- U/S 14A AND OTHER ADDITIONS OF RS.2812 & RS.499 TO THE RETURNED INCOM E BY THE ASSESSEE TO THE TUNE OF RS.4,28,560/-. 51. WE NOTE THAT ON 02.03.2016 ANOTH ER SEARCH AND SEIZURE OPERATION WAS CONDUCTED ON ASSESSEE (HEREINAFTER TERMED AS S ECOND SEARCH). THEREAFTER, IMPUGNED ACTION OF PR. CIT STARTED BY ISSUANCE OF A SHOW-CAUSE NOTICE DATED 04/09.11.2016 CALLING UPON THE ASSESSEE AS TO WHY T HE ORDER PASSED BY THE ASSESSING OFFICER DATED 30.03.2015 U/S 153A/143(3) SHOULD NOT BE INTERFERED BY INVOKING HIS REVISIONAL JURISDICTION U/S 263 OF THE ACT. ACCORDING TO THE LD. PRINCIPAL CIT, THE ORDER PASSED BY THE ASSESSING OFFICER DATE D 30.03.2015 (WHICH IS THE ASSESSMENT FRAMED U/S 153A/143(3) AS A FALLOUT OF F IRST SEARCH) IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE BECAUSE THE ASSESSING OFFICER HAS NOT CONDUCTED PROPER INVESTIGATION IN RESPECT OF SHARE CAPITAL AND PREMIUM TO THE TUNE OF RS.10.40 CRORES. IN THE SCN THE LD. PRINCIPAL CIT, HAS MENTIONED ABOUT CERTAIN STATEMENT RECORDED BY THE INVESTIGATION WING DURING SEARCH AND SEIZURE DATED 02.03.2016 (SECOND SEARCH) WHEREIN THE STATEMENT OF CERTAIN PURPORTED ENTRY OPERATORS WERE RECORDED AGAINST THE ASSESSEE COMPAN Y IN RESPECT OF THE SHARE CAPITAL INTRODUCED IN THE ASSESSMENT YEAR UNDER CON SIDERATION. BASED ON THE AFORESAID REASONING, THE LD. PRINCIPAL CIT FOUND FA ULT WITH THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 153A/143(3) PAS SED ON 30.03.2015. THE ASSESSEE COMPANY HAS CHALLENGED IN THE FIRST PLACE, THE VERY USURPATION OF JURISDICTION BY LD. PRINCIPAL CIT TO INVOKE HIS REV ISIONAL POWERS ENJOYED U/S 263 OF THE ACT. THEREFORE, FIRST WE HAVE TO SEE WHETHER THE RE QUISITE JURISDICTION NECESSARY TO ASSUME REVISIONAL JURISDICTION IS THERE EXISTING BE FORE THE PR. CIT TO EXERCISE HIS POWER. FOR THAT, WE HAVE TO EXAMINE AS TO WHETHER I N THE FIRST PLACE THE ORDER OF THE ASSESSING OFFICER ITA NO.2519/KOL/2017 M/S. GARG BR OTHERS PVT. LTD. ITA NO.2520/KOL/2017 M/S. CLIFF TREXIMPVT. LTD. ITA NO. 2521/KOL/2017 M/S. SPAN FOUNDATION PVT. LTD. ASSESSMENT YEAR: 2009-10 37 FO UND FAULT BY THE PRINCIPAL CIT IS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. FOR THAT, LET US TAKE THE GUIDANCE OF JUDICIAL PRECEDENCE LAID DOWN BY TH E HONBLE APEX COURT IN MALABAR INDUSTRIES LTD. VS. CIT [2000] 243 ITR 83(SC) WHERE IN THEIR LORDSHIP HAVE HELD THAT TWIN CONDITIONS NEEDS TO BE SATISFIED BEFORE EXERCI SING REVISIONAL JURISDICTION U/S 263 OF THE ACT BY THE CIT. THE TWIN CONDITIONS ARE THAT THE ORDER OF THE ASSESSING OFFICER MUST BE ERRONEOUS AND SO FAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN THE FOLLOWING CIRCUMSTANCES, THE ORDER OF THE AO CAN BE HELD TO BE ERRONEOUS ORDER, THAT IS (I) IF THE ASSESSING OFFICERS ORDER WAS PASSED ON INCORRECT ASSESSMENT OF FACT; OR (II) INCORRECT APPLICATION OF LAW; OR (III)ASSESSIN G OFFICERS ORDER IS IN VIOLATION OF THE PRINCIPLE OF NATURAL JUSTICE; OR (IV) IF THE ORDER IS PASSED BY THE ASSESSING OFFICER WITHOUT APPLICATION OF MIND; (V) IF THE AO HAS NOT INVESTIGATED THE ISSUE BEFORE HIM; THEN THE ORDER PASSED BY THE ASSESSING OFFICER CAN BE TERMED AS ERRONEOUS ORDER. COMING NEXT TO THE SECOND LIMB, WHICH IS REQUIRED T O BE EXAMINED AS TO WHETHER THE ACTIONS OF THE AO CAN BE TERMED AS PREJUDICIAL TO T HE INTEREST OF REVENUE. WHEN THIS ASPECT IS EXAMINED ONE HAS TO UNDERSTAND WHAT IS PR EJUDICIAL TO THE INTEREST OF THE REVENUE. THE HONBLE SUPREME COURT IN THE CASE OF M ALABAR INDUSTRIES (SUPRA) HELD THAT THIS PHRASE I.E. PREJUDICIAL TO THE INTEREST OF THE REVENUE HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE A SSESSING OFFICER. THEIR LORDSHIP IT(SS)A NO.06-07/RAN/2017 & IT(SS)A NO.15/RAN/2016 A.YS. 12-13, 11-12 & 09-10 BASUDHA UDYOG PVT. LTD VS. DCIT CC-DHANBAD PAGE 5 HELD THAT IT HAS TO BE REMEMBERED THAT EVERY LOSS O F REVENUE AS A CONSEQUENCE OF AN ORDER OF ASSESSING OFFICER CANNOT BE TREATED AS PRE JUDICIAL TO THE INTEREST OF THE REVENUE. WHEN THE ASSESSING OFFICER ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS TO THE REVENUE, OR WHER E TWO VIEWS ARE POSSIBLE AND THE ASSESSING OFFICER HAS TAKEN ONE VIEW WITH WHICH THE CIT DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE IN TEREST OF THE REVENUE UNLESS THE VIEW TAKEN BY THE ASSESSING OFFICER IS UNSUSTAINABL E IN LAW. TAKING NOTE OF THE AFORESAID DICTUM OF LAW LAID DOWN BY THE HONBLE AP EX COURT, LET US EXAMINE WHETHER THE ASSESSING OFFICER PASSED ORDER U/S 153A/143(3) DATED 30.03.2015 (ASSESSMENT FRAMED AFTER FIRST SEARCH) IS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. UNDISPUTEDLY, THE ASSESSMENT YEAR UNDER QU ESTION I.E. ASSESSMENT YEAR 2009-10 WHICH WAS NOT PENDING BEFORE THE ASSESSING OFFICER ON THE DATE OF SEARCH ON 29.05.2012 (FIRST SEARCH), THEREFORE, THE ASSESS MENT WHICH IS NOT PENDING BEFORE THE ASSESSING OFFICER IS AN UNABATED PROCEEDING AND THE ASSESSING OFFICER IS EMPOWERED TO MAKE ANY ADDITION ONLY BASED ON INCRIM INATING MATERIALS FOUND/UNEARTHED DURING SEARCH. THIS IS A SETTLED PO SITION OF LAW AND IS NO LONGER RES INTEGRA. THE FOLLOWING JUDGMENTS ARE GIVEN IN SUPPO RT OF THE ABOVE PROPOSITION OF LAW:- THE HONBLE DELHI HIGH COURT IN KABUL CHAWLA (SUPRA ) HAS LAID DOWN THE LAW WHICH SPELLS OUT THE POWER OF THE AO WHILE EXERCISING POWER U/S 153A AFTER SEARCH U/S 132 OF THE ACT WAS CONDUCTED BY THE REVENUE. THE SAME IS REPRODUCED AS UNDER: SUMMARY OF LEGAL POSITION 37.ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH PROVISIONS TH ERETO, 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 T HE ACT, NOTICE UNDER SECTION 153 A(1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERS ON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVI OUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND RE-ASSESSMENTS PENDING ON THE D ATE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO BE COMPU TED 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 TAK ES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE `TOTAL INCOME OF THE AF OREMENTIONED SIX YEARS IN SEPARATE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPE CT OF EACH OF THE SIX `AYS IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED ALTHOU GH 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 INFORM ATION AVAILABLE WITH 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 WI TH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONL Y ON THE BASIS OF SEIZED MATERIAL. V) IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE CO MPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMEN T CAN BE MADE. THE WORD `ASSESS IN SECTION 153 A IS RELATABLE TO ABATED PR OCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD `REASSESS TO COMP LETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTIO N 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 BROUG HT ON THE RECORD THE AO. VII. COMPLETED ASSESSMENT CAN BE INTERFERED WITH B Y THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF PROPERTY DISCOVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. IT(SS)A NO.06-07/RAN/2017 & IT(SS)A NO.15/RAN/2016 A.YS. 12-13, 11-12 & 09-10 BASUDHA UDYOG PVT. LTD VS. DCIT CC-DHANBAD PAGE 6 53. THE HONBLE JURISDICTIONAL CALCUTTA HIGH COURT IN VEERPRABHU MARKETING LTD THOUGH IN THE CONTEXT OF SECTION 153 OF THE ACT HAS HELD AS UNDER: WE AGREE WITH THE VIEW EXPRESSED BY THE DELHI HIGH COURT THAT INCRIMINATING MATERIAL IS PRE-REQUISITE BEFORE POWER COULD HAVE B EEN EXERCISE U/S 153(C) R.W. SECTION 153(A). IN THE CASE BEFORE US, THE AO HAS MADE A DISALLOWANCE OF THE EXPENDITURE, WHICH WAS HELD DISCLOSED, FOR O NE REASON OR THE ORDER, BUT SUCH DISALLOWANCES MADE BY THE AO WERE UPHELD BY TH E L.D.CIT (A) BUT THE LD. TRIBUNAL DELETED THESE DISALLOWANCE. WE FIND NO INFIRMITY IN THE AFORESAID ACT OF THE LD. TRIBUNAL. THE APPEAL IS THEREFORE, D ISMISSED. 54. THE HONBLE APEX COURT IN THE CASE OF CIT V. SI NHGAD TECHNICAL EDUCATION SOCIETY 397 ITR 344 IN THE CONTEXT OF SECTION 153 O F THE ACT HAS HELD AS UNDER: 18) IN THIS BEHALF, IT WAS NOTED BY THE ITAT THAT AS PER THE PROVISIONS OF SECTION 153C OF THE ACT, INCRIMINATING MATERIAL WHI CH WAS SEIZED HAD TO PERTAIN TO THE ASSESSMENT YEARS IN QUESTION AND IT IS AN UNDISPUTED FACT THAT THE DOCUMENTS WHICH WERE SEIZED DID NOT ESTABLISH A NY CO-RELATION, DOCUMENT-WISE, WITH THESE FOUR ASSESSMENT YEARS. SI NCE THIS REQUIREMENT UNDER SECTION 153C OF THE ACT IS ESSENTIAL FOR ASSE SSMENT UNDER THAT PROVISION, IT BECOMES A JURISDICTIONAL FACT. WE FIN D THIS REASONING TO BE LOGICAL AND VALID, HAVING REGARD TO THE PROVISIONS OF SECTI ON 153C OF THE ACT. PARA 9 OF THE ORDER OF THE ITAT REVEALS THAT THE ITAT HAD SCANNED THROUGH THE SATISFACTION NOTE AND THE MATERIAL WHICH WAS DISCLO SED THEREIN WAS CULLED OUT AND IT SHOWED THAT THE SAME BELONGS TO ASSESSMENT Y EAR 2004-05 OR THEREAFTER. AFTER TAKING NOTE OF THE MATERIAL IN PA RA 9 OF THE ORDER, THE POSITION THAT EMERGES THEREFROM IS DISCUSSED IN PARA 10. IT WAS SPECIFICALLY RECORDED THAT THE COUNSEL FOR THE DEPARTMENT COULD NOT POINT OUT TO THE CONTRARY. IT IS FOR THIS REASON THE HIGH COURT HAS ALSO GIVEN ITS IMPRI MATUR TO THE AFORESAID APPROACH OF THE TRIBUNAL. THAT APART, LEARNED SENIO R COUNSEL APPEARING FOR THE RESPONDENT, ARGUED THAT NOTICE IN RESPECT OF ASSESS MENT YEARS 2000-01 AND 2001-02 WAS EVEN TIME BARRED. SUPPORT, IS ALSO DRA WN FROM THE FOLLOWING JUDGMENTS: I) BISWANATH GARODIA VS. DCIT (2016) 76 TAXMANN.COM 81 II) CIT VS.CONTINENTAL WAREHOUSING (NHAVA SHEVA) L TD (2015 374 ITR 645). III) JAI STEEL (INDIA) JODHPUR VS. ACIT (2013) 259 CTR 281 IV) CIT VS. DEEPAK KUMAR AGGARWAL (2017) 398 ITR 5 86 V) PRINCIPAL CIT VS.DIPAK JASHVANTALA PANCHAL (201 7) 397 ITR 253. VI) PRINCIPAL VIT VS.LALIT JAIN (2017) 384 ITR 543 VII) PR.CIT VS. DVANGI ALIAS RUPA (2017 394 ITR 18 4 VIII) CHINTELS INDIA LTD VS. DCIT (2017) 397 ITR 4 16 IX) SMT. ANJLI PANDIT VS. ACIT (2017) 157 DTR (MUM ) (TRI.) 17 X) PR.CIT VS. MEETA GUTGUTIA (2016)395 ITR 526. 55 . IN VIEW OF THE AFORESAID RATIO DECIDENDI OF THE HON BLE HIGH COURT AS WELL AS HONBLE SUPREME COURTS DECISIONS CITED ABOVE, SINCE ASSESS MENT FOR ASSESSMENT YEAR 2009-10 WAS NOT PENDING BEFORE THE ASSESSING OFFICE R ON THE DATE OF SEARCH I.E. ON 29.05.2012 (FIRST SEARCH), NO ADDITION CAN BE MADE BY THE ASSESSING OFFICER WITHOUT THE AID OF INCRIMINATING MATERIAL UNEARTHED DURING THE SEARCH CONDUCTED ON 29.05.2012. THEREFORE, WE HAVE TO EXAMINE WHETHER T HERE WAS ANY INCRIMINATING MATERIALS UNEARTHED BY THE DEPARTMENT DURING SEARCH CONDUCTED ON 29.05.2012 (FIRST SEARCH). WE HAVE GONE THROUGH THE ASSESSMENT ORDER OF ASSESSING OFFICER IN ALL THE COUNTS BEFORE US AND WE FIND THAT THE ASSESSING OFF ICER HAS NOT MADE A WHISPER OF IT(SS)A NO.06-07/RAN/2017 & IT(SS)A NO.15/RAN/2016 A.YS. 12-13, 11-12 & 09-10 BASUDHA UDYOG PVT. LTD VS. DCIT CC-DHANBAD PAGE 7 ANY INCRIMINATING MATERIAL WHICH HAS BEEN UNEARTHED /SEIZED DURING FIRST SEARCH ON 29.05.2012. THE ASSESSING OFFICER HAVING NO INCRIMI NATING MATERIALS UNEARTHED DURING THE SEARCH ON 29.05.2012 AGAINST THE ASSESSE E COMPANY, DID NOT MAKE ANY ADDITIONS (WITH THE AID OF ANY INCRIMINATING MATERI AL) AGAINST THE ASSESSEES BEFORE US FOR ASSESSMENT YEAR 2009-10. 56. WE ARE AWARE OF TH E FACT THAT THE ASSESSING OFFICERS ROLE WHILE FRAMING AN ASSESSMENT IS NOT O NLY AN ADJUDICATOR. THE AO HAS A DUAL ROLE TO DISPENSE WITH I.E. HE IS AN INVESTIGAT OR AS WELL AS AN ADJUDICATOR; THEREFORE, IF HE FAILS IN ANY ONE OF THE ROLE AS AF ORE-STATED, HIS ORDER WILL BE TERMED AS ERRONEOUS. WE NOTE THAT IN THIS CASE SINCE THERE WA S NO INCRIMINATING MATERIAL UNEARTHED DURING THE FIRST SEARCH, THE ASSESSING OF FICER HAS NOT MADE ANY ADDITIONS IN HIS ASSESSMENT ORDER DATED 30.03.2015 BASED ON I NCRIMINATING MATERIAL SINCE THERE WAS NONE UNEARTHED. WE TAKE NOTE THAT IT IS N OT THE CASE OF LD. PRINCIPAL CIT THAT AO FAILED TO MADE ANY ADDITIONS/DISALLOWANCES BASED ON INCRIMINATING MATERIAL SEIZED/UNEARTHED DURING SEARCH. ON THIS FINDING OF FACT BY US, WE CANNOT TERM THE ASSESSMENT ORDER PASSED BY THE AO U/S 153A/143(3) D ATED 30.03.2015 AS ERRONEOUS. 57. HOWEVER, WE NOTE THAT THE LD. PRINCIPAL CIT WHI LE INVOKING THE JURISDICTION U/S 263 OF THE ACT, HAS TAKEN NOTE OF THE SECOND SEARCH WHI CH HAPPENED ON 02.03.2016 AND HAS REFERRED TO THE INVESTIGATION CARRIED OUT BY TH E INVESTIGATION WING AFTER THE SECOND SEARCH ON 02.03.2016. IN THIS CONTEXT, IT WO ULD BE APPROPRIATE TO REPRODUCE THE AGAIN THE SHOW-CAUSE NOTICE ISSUED BY THE PRINC IPAL CIT WHICH IS AS UNDER: OFFICE OF THE PR. COMMISSIONER OF INCOME TAX, CENTRAL, KOLKATA 2 42 AAYAKAR BHAWA POORVA, 110, SHANTIPALLY, E M BYE PASS, KOLKATA 700 107. F.NO. PR.CIT/CENTRAL II/KOL/263/2016-17/6186 DATED: 04/11/2016 TO THE PR INCIPAL OFFICER, M/S. CLIFF TREXIM (P) LTD. 57, BURTOLLA STREET, KOL KATA 700 007. SIR, SUB: SHOW CAUSE NOTICE U/S 263 OF THE I.T. ACT, 196 1 IN THE CASE OF M/S. CLIFF TREXIM (P) LTD..., (PAN-AABCC0961E) FOR THE A.Y 2009-10. PLEASE REFER TO THE ABOVE. ASSESSMENT FOR THE A.Y 2009-10 U/S 153A OF THE INCOME TAX ACT, 1961 IN THE CASE OF M/S. CLI FF TREXIM PVT. LTD. WHICH IS A PART OF BANKTESH GROUP WAS COMPLETED ON 30.03.2015 BY THE DCIT, CENTRAL CIRCLE 3(2), KOLKATA. ON ANALYSIS OF ASSESSMENT RECORDS, IT IS OBSERVED THAT IN THE YEAR UNDER CONS IDERATION, THE ASSESSEE RAISED SHARE CAPITAL AND PREMIUM TO THE TU NE OF RS.10.40 CRORE. DURING THE ASSESSMENT PROCEEDING, THE ASSESS EE FURNISHED THE LIST OF INVESTORS WHO SUBSCRIBED IN SHARES OF THE A SSESSEE COMPANY. THE ASSESSEE FURNISHED THE SUPPORTING DOCUMENTS REG ARDING SHARE TRANSACTIONS OF INVESTOR COMPANIES. BUT NO DETAILED INVESTIGATION WAS CARRIED OUT AT THE TIME OF ASSESSMENT REGARDING GEN UINENESS OF INTRODUCTION OF SHARE CAPITAL. MEANWHILE A SEARCH O PERATION AGAINST BANKTESH GROUP WAS ONCE AGAIN CONDUCTED ON 02.03.20 16 BY DDIT(LNV.), UNIT 2(2),KOL. DURING THE COURSE OF SEA RCH & POST SEARCH INVESTIGATION IT WAS FOUND THAT ACCOMMODATION ENTRI ES IN THE FORM OF BOGUS SHARE CAPITAL HAVE BEEN TAKEN BY DIFFERENT GR OUP OF COMPANIES BY THE SAID GROUP WITH THE HELP OF DIFFERENT KNOWN ACCOMMODATION ENTRY OPERATORS. THE ALLOTMENT OF SHARES MADE BY TH E ABOVE ASSESSEE AMOUNTING TO RS.10.40 CRORE. ON 31.09.2009 IS ONE O F THE TRANSACTIONS FOUND AS ACCOMMODATION ENTRY BY THE INVESTIGATION W ING. THE ALLOTTEE IT(SS)A NO.06-07/RAN/2017 & IT(SS)A NO.15/RAN/2016 A.YS. 12-13, 11-12 & 09-10 BASUDHA UDYOG PVT. LTD VS. DCIT CC-DHANBAD PAGE 8 COMPANIES WERE FOUND TO BE BOGUS AND NON-EXISTING. THE STATEMENTS OF ENTRY OPERATORS WERE ALSO RECORDED DURING THE SE ARCH & SEIZURE OPERATION WHICH CONFIRMED THE FINDINGS OF THE INVES TIGATION WING. THE ENTRY OPERATORS ADMITTED TO HAVE PROVIDED ACCOMMODA TION ENTRY IN THE FORM OF SHARE CAPITAL/PREMIUM TO THE BANKTESH GROUP OF COMPANIES IN LIEU OF COMMISSION. IN VIEW OF THE ABOVE DISCUSSION , THE ASSESSMENT COMPLETED ON 30.03.2015 MAY BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. YOU ARE , THEREFORE, REQUESTED TO SHOW CAUSE AS TO WHY THE ASSESSMENT ORDER PASSED ON 30.03.2015 U/S.153A BY THE DCIT, CENTRAL CIRCLE 3(2 ), KOLKATA SHOULD NOT BE TREATED AS ERRONEOUS IN SO FAR AS IT IS PREJ UDICIAL TO THE INTERESTS OF THE REVENUE AS PER THE PROVISIONS OF SEC.263 OF THE INCOME TAX ACT. YOU ARE GIVEN AN OPPORTUNITY OF BEING HEARD B EFORE THE UNDERSIGNED ON 22.11.2016 AT 3:00 P.M. AT MY OFFICE CHAMBER OF AAYAKAR BHAWAN POORVA, ROOM NO.301, 3RD FLOOR, 110, SHANTIPALLY, KOLKATA 700 107 TO FURNISH YOUR EXPLANATION IN TH E MATTER. YOURS FAITHFULLY, (ARVIND KUMAR, IRS) PR. COMMISSIONER OF INCOME TAX (CENTRAL 2), KOLKATA. 58. FROM A READING OF THE ABOVE SHOW-CAUSE NOTICE O F LD. PRINCIPAL CIT WHEN WE ANALYSE THE SAME, WHAT IS REVEALED IS THE FOLLOW ING: (I) THE ASSESSMENT U/S 153A/143(3) AGAINST THE ASSE SSEE BEING A PART OF BANKTESH GROUP FOR A.Y 2009-10 HAS BEEN C OMPLETED ON 30.03.2015 BY THE AO. (ITA NO.2519/KOL/2017 M/S. GARG BROTHERS PVT. LTD. ITA NO.2520/KOL/2017 M/S. CLIFF TREXIM PVT. LTD. ITA NO.2521/KOL/2017 M/S. SPAN FOUNDATION PVT. LTD. ASSESSMENT YEAR: 2009-10 COMMISSION THEY PROVIDED ACCOMMODATION ENTRY IN THE FORM OF SHARE CAPITAL/PR EMIUM TO THE BANKTESH GROUP OF COMPANIES (IX) IN VIEW OF THE AFORESAID FACTS, THE PR. CIT IS OF THE VIEW THAT ASSESSMENT C OMPLETED ON 30.03.2015 MAY BE ERRONEOUS IN SO FAR AS IT IS PREJ UDICIAL TO THE INTEREST OF THE REVENUE. 59. FURTHER, WE NOTE THAT PURSUANT TO THE AFORESAID SCN, THE ASSESSEES REPLIED TO THE PR. CIT, EXTRACTS OF WHICH HAS BEEN REPRODUCED BY THE PRINCIPAL CIT IN THE IMPUGNED ORDER BEFORE US. IN THE IMPUGNE D ORDER, WE NOTE THAT THE PRINCIPAL CIT HAS ADDED ONLY THE LIST OF SHAREHOLDE RS TO WHOM THE SHARES WERE ALLOTTED. IN OTHER WORDS, OTHER THAN THE FACTUAL CO NTENTS GIVEN IN THE SCN ISSUED BY HIM (SUPRA), ONLY THE LIST OF SHAREHOLDER S ARE REPRODUCED BY THE PRINCIPAL CIT IN HIS ORDER. IN THE IMPUGNED ORDER O F PRINCIPAL CIT, AFTER REPRODUCING CERTAIN EXTRACTS OF THE REPLY OF THE AS SESSEE AND JUDICIAL PRECEDENTS, WE NOTE THAT THE PRINCIPAL CIT WITHOUT GIVING ANY FACTUAL FINDING OR REASONING AS TO HOW THE ORDER OF THE AO CAN BE HELD TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE HAS SIMPLY WITHOUT ADDUCING ANY NEW FACTS OTHER THAN WHAT HAS BEEN STATED AND REPRO DUCED BY US IN SCN (SUPRA) HAS SIMPLY HELD THAT NO ENQUIRY OR EXAMINA TION AND VERIFICATION WAS DONE AT THE TIME ASSESSMENT REGARDING THE GENUINENE SS OF INTRODUCTION OF SHARE CAPITAL TO THE TUNE OF RS.10.40 CRORES. THERE FORE, THE ASSESSMENT MADE IS LACKING SUCH EXAMINATION/VERIFICATION WHICH IS N ECESSARY TO ASSESS THE IT(SS)A NO.06-07/RAN/2017 & IT(SS)A NO.15/RAN/2016 A.YS. 12-13, 11-12 & 09-10 BASUDHA UDYOG PVT. LTD VS. DCIT CC-DHANBAD PAGE 9 INCOME OF THE ASSESSEE AND SUCH OMISSION TO MAKE NE CESSARY ENQUIRY HAS MADE THE ORDER ERRONEOUS IN SO FAR AS PREJUDICIAL T O THE INTEREST OF THE REVENUE. SINCE, THERE IS NOTHING NEW IN THE IMPUGNED ORDER O THER THAN WHAT IS STATED IN SCN REPRODUCED ABOVE AND DETAILED ANALYSI S STATED IN PARA52 ABOVE, WE NOTE THAT FACTS STATED IN (I) TO ( V) ARE THAT WHICH IS RELEVANT TO ASSESSMENT FOR A.Y 2009-10 AFTER THE FI RST SEARCH ON 29.05.2012 WHICH IS REPRODUCED AGAIN FOR BETTER UND ERSTANDING: (I) THE ASSESSMENT U/S 153A/143(3) AGAINST THE ASSE SSEE BEING A PARTY OF BANKTESH GROUP FOR A.Y 2009-10 HAS BEEN COMPLETED ON 30.03.2015 BY THE AO. (II) THE PRIN. CIT DID AN ANALYSIS OF ASSESSMENT R ECORDS AND HE OBSERVED THAT IN THE YEAR UNDER CONSIDERATION, I.E A.Y 2009-10, THE ASSESSEE HAS RAISED SHARE CAPITAL AND PREMIUM T O THE TUNE OF RS.10.40 CRORES. (III) DURING THE ASSESSMENT PROCEEDINGS, THE ASSES SEE FURNISHED THE LIST OF INVESTORS WHO SUBSCRIBED IN SHARES OF T HE ASSESSEE COMPANY. (IV) THE ASSESSEE FURNISHED THE SUPPORTING DOCUMENT S REGARDING SHARE TRANSACTIONS OF INVESTORS COMPANIES (V) BUT NO DETAILED INVESTIGATION WAS CARRIED OUT A T THE TIME ASSESSMENT REGARDING GENUINENESS OF INTRODUCTION OF SHARE CAPITAL 60. FROM A PERUSAL OF THE ABOVE FACTS REVEA L THAT LD. PRINCIPAL CIT IS FINDING FAULT WITH THE AO IN NOT C ONDUCTING DETAILED ENQUIRY ABOUT THE SHARE CAPITAL INTRODUCED INTO THE ASSESSEE COMPANY. THOUGH IN THE SAME BREATH, THE PR INCIPAL CIT ADMITS THAT ASSESSEE HAS PRODUCED ALL RELEVANT DOCUMENTS BEFORE THE AO IN RESPECT TO THE SHARE CAP ITAL. HOWEVER, THE LD. PRINCIPAL CIT MISSED THE MOST IMPO RTANT FACT THAT A.Y 2009-10 WAS NOT PENDING BEFORE THE ASSESSI NG OFFICER ON THE DATE OF FIRST SEARCH ON 29.05.2012, SO IT IS AN UNABATED ASSESSMENT AND THE AO COULD HAVE ONLY REIT ERATED THE ASSESSMENT CRYSTALLIZED AS PER INTIMATION FORWA RDED BY THE DEPARTMENT U/S 143(1) DATED 25.11.2011 WHEREIN THE DEPARTMENT ACCEPTED THE RETURNED INCOME FILED BY TH E ASSESSEE ON 25.09.2009, BECAUSE THERE WAS NO INCRIM INATING MATERIAL UNEARTHED/SEIZED DURING SEARCH (FIRST) ON 29.05.2012. IT IS VERY IMPORTANT TO TAKE NOTE OF THE HONBLE DE LHI HIGH COURT IN KABUL CHAWLA CASE (SUPRA) WHEREIN ON A SIMILAR S ITUATION LAID THE LAW AS UNDER: V) IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE C OMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSM ENT OR REASSESSMENT CAN BE MADE. THE WORD `ASSESS IN SECT ION 153 A IS RELATABLE TO ABATED PROCEEDINGS (I.E. THOSE PE NDING ON THE DATE OF SEARCH) AND THE WORD `REASSESS TO COMPLETE D ASSESSMENT PROCEEDINGS. 61.SO FROM THE AFORESAID DICTUM OF LAW LAID BY THE HONBLE HIGH COURTIN THE ABSENCE OF ANY INCRIMINATING MATERIAL UNEARTHED DUR ING FIRST SEARCH ON IT(SS)A NO.06-07/RAN/2017 & IT(SS)A NO.15/RAN/2016 A.YS. 12-13, 11-12 & 09-10 BASUDHA UDYOG PVT. LTD VS. DCIT CC-DHANBAD PAGE 10 29.05.2012, WE HAVE NO HESITATIONS TO HOLD THAT FOR A.Y 2009-10, THE AO COULD HAVE ONLY REITERATED THE ASSESSMENT INTIMATED U/S 1 43(1) OF THE ACT, BECAUSE THE TIME FOR ISSUANCE OF SCRUTINY NOTICE U/S 143(2) EXPIRED ON 30.09.2010 AND THE ASSESSMENT FOR THIS RELEVANT ASSESSMENT YEAR, T HEREFORE, WAS NOT PENDING BEFORE THE AO ON THE DATE OF SEARCH ON 29.05.2012 A ND, THEREFORE, IS AN UNABATED ASSESSMENT. THEREFORE, AS PER THE LAW LAID DOWN BY THE HONBLE HIGH COURT, THE AO COULD NOT HAVE DISTURBED THE ASS ESSMENT ALREADY EXISTING WITHOUT THE AID OF INCRIMINATING MATERIALS SEIZED D URING SEARCH ON 29.05.2012 (FIRST SEARCH). THEREFORE, THE ORDER OF THE AO CANN OT BE HELD TO BE ERRONEOUS ORDER. THEREFORE, WITHOUT FINDING THE ORDER OF THE AO TO BE ERRONEOUS, THE LD. PRINCIPAL CIT LACKS JURISDICTION TO USURP THE REVIS IONAL JURISDICTION U/S 263 OF THE ACT. 62.FOR COMPLETENESS OF THE ADJUDICATION, W HEN WE LOOK AT THE SCN AND THE IMPUGNED ORDER OF LD. PRINCIPAL CIT, WE NOT E THAT THE FOLLOWING FACTS HAVE INFLUENCED HIM TO INVOKE THE SECTION 263 JURIS DICTION WHICH ARE (VI) TO (IX) WHICH ARE AGAIN REPRODUCED FOR BETTER UNDERSTANDING . (VI).ON 02.03.2016 ANOTHER SEARCH WAS CONDUCTED AGAINST THE BANKTESH G ROUP BY DDIT(INVESTIGATION), UNIT-2, KOLKATA (VII).DURING T HE SEARCH (SECOND SEARCH) & POST SEARCH INVESTIGATION, IT WAS FOUND THAT ACCOMM ODATION ENTRIES IN THE FORM OF BOGUS SHARE CAPITAL HAVE BEEN TAKEN BY DIFFERENT GROUP OF COMPANIES BY THE SAID GROUP WITH THE HELP OF ACCOMMODATION ENTRY OPERATORS AND THAT THE ALLOTTEE COMPANIES ARE BOGUS AND NON-EXISTING. (VII I).THE STATEMENT OF ENTRY OPERATORS WERE ALSO RECORDED DURING SEARCH AND SEIZ URE OPERATION WHICH CONFIRMED THE FINDING OF THE INVESTIGATION WING THA T IN LIEU OF COMMISSION THEY PROVIDED ACCOMMODATION ENTRY IN THE FORM OF SHARE C APITAL/PREMIUM TO THE BANKTESH GROUP OF COMPANIES (IX).IN VIEW OF THE AFO RESAID FACTS, THE PR. CIT IS OF THE VIEW THAT ASSESSMENT COMPLETED ON 30.03.2 015 MAY BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. FROM THE READING OF THE AFORESAID FACTS TAKEN NOTE BY THE PRINCIPAL CIT , IT IS EVIDENT THAT THE SHEET ANCHOR ON WHICH THE PRINCIPAL CIT BASED HIS FOUNDAT ION TO FIND FAULT WITH THE ASSESSING OFFICER IS EMANATING FROM THE SECOND SEAR CH WHICH HAPPENED ON 02.03.2016 BASED ON WHICH INVESTIGATION REPORT HAS BEEN MADE WHEREIN THE SHARE CAPITAL RAISED BY THE ASSESSEE COMPANY FOR AS SESSMENT YEAR 2009-10 IS UNDER SUSPICION/CLOUD. SO, THE PRINCIPAL CIT REF ERS TO THE SECOND SEARCH WHICH HAPPENED ON 02.03.2016 AND THE INVESTIGATION REPORT THEREAFTER MADE BY THE INVESTIGATION WING WHICH IS SUBSEQUENT AND O BVIOUSLY A DEVELOPMENT AFTER FRAMING THE ASSESSMENT ORDER BY THE ASSESSING OFFICER DATED 30.03.2015. THE ASSESSING OFFICER CANNOT BE SAID TO BE A CLAIRVOYANT, WHO COULD HAVE FORECASTED OR FORESEEN THAT A SECOND SEA RCH WOULD TAKE PLACE ON 02.03.2016 AND THEREBY SOME MATERIAL/ORAL/EVIDENCE WOULD BE COLLECTED BY THE INVESTIGATION WING A YEAR BEFORE I.E. ON 30.03. 2015 WHEN THE ASSESSMENT ORDER WAS FRAMED BY AO AFTER THE FALLOUT OF FIRST S EARCH CONDUCTED ON 29.05.2012. FROM THE FACTS NARRATED ABOVE, WE NOTE THAT IT IS NOT THE CASE OF THE PRINCIPAL CIT THAT ASSESSING OFFICER FAILED TO TAKE INTO CONSIDERATION ANY INCRIMINATING MATERIAL UNEARTHED DURING FIRST SEARC H ON 29.05.2012 AND HAS FAILED TO MAKE ANY INVESTIGATION ON IT OR MAKE ANY ADDITIONS / DISALLOWANCES THEREON. THE CASE OF THE PRINCIPAL CIT IS SIMPLY TH AT DURING SECOND SEARCH ON 02.03.2016, THE INVESTIGATION WING HAS FOUND FAULT WITH THE SHARE CAPITAL RAISED BY THE ASSESSEE COMPANY FOR ASSESSMENT YEAR 2009-10. IT SHOULD BE NOTED THAT THE ASSESSING OFFICER HAS FRAMED ASSESSM ENT U/S 153A ON 30.03.2015 AS PER THE LAW LAID DOWN BY THE HONBLE DELHI HIGH COURT IN THE IT(SS)A NO.06-07/RAN/2017 & IT(SS)A NO.15/RAN/2016 A.YS. 12-13, 11-12 & 09-10 BASUDHA UDYOG PVT. LTD VS. DCIT CC-DHANBAD PAGE 11 CASE OF CIT VS. KABUL CHAWLA (SUPRA) AND OTHER HIGH COURTS/APEX COURT AS STATED ABOVE WHICH ACCORDING TO US IS THE CORRECT V IEW OR AT THE MOST CAN BE DEFINITELY TERMED AS A PLAUSIBLE VIEW. THEREFORE, T HE VIEW TAKEN BY THE ASSESSING OFFICER CANNOT BE HELD TO BE ERRONEOUS OR DER AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AS HELD BY THE HONBLE SUPR EME COURT IN THE CASE OF MALABAR INDUSTRIES VS. CIT (SUPRA). THE ASSESSING O FFICERS ORDER DATED 30.03.2015 AT ANY RATE CANNOT SAID TO BE UNSUSTAINA BLE IN LAW. 65. IN ANY EVENT, WE NOTE THAT THE ASSESSING OFFICE R HAS ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND EVEN IF IT HAS RESULTED IN L OSS TO THE REVENUE, THE SAID DECISION OF THE ASSESSING OFFICER CANNOT BE TREATED AS ERRONEOUS AN D PREJUDICIAL TO THE INTEREST OF THE REVENUE AS HELD BY HONBLE SUPREME COURT IN MALABAR INDUSTRIES LTD. VS. CIT (SUPRA). SINCE THE ORDER OF THE ASSESSING OFFICER CANNOT BE HELD T O BE ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE, IN THE FACTS AND CIRCU MSTANCES NARRATED ABOVE, THE USURPATION OF JURISDICTION EXERCISING REVISIONAL JURISDICTION BY THE PRINCIPAL CIT IS NULL IN THE EYES OF LAW AND, THEREFORE, WE ARE INCLINED TO QUASH THE VERY A SSUMPTION OF JURISDICTION TO INVOKE REVISIONAL JURISDICTION U/S 263 BY THE PRINCIPAL CI T. THEREFORE, WE QUASH ALL THE ORDERS OF THE PRINCIPAL CIT DATED 15.03.2017 BEING AB INITIO VOID . 66. BEFORE WE PART, WE WOULD LIKE TO ADDRESS THE CO NTENTION OF LD. CIT(DR), THAT SINCE INTIMATION U/S 143(1) WAS ONLY ISSUED BY THE DEPART MENT IN THIS CASE, IT CANNOT BE VIEWED THAT THE ASSESSMENT WAS UNABATED ON THE DATE OF SEA RCH. WE NOTE THAT THE VERY SAME ISSUE WAS BEFORE THE HONBLE DELHI HIGH COURT IN KABUL CH AWLA (SUPRA) WHEREIN ALSO THE ISSUE OF 143(1) INTIMATION AND THE EXPIRY OF TIME TO ISSUE 1 43(2) NOTICE BY ASSESSING OFFICER BEFORE THE DATE OF SEARCH WAS ALSO ADJUDICATED AND THEREAF TER ONLY THE LAW WAS LAID DOWN BY THE HONBLE HIGH COURT OF DELHI, SO THE ISSUE RAISED BY THE LD. CIT(DR) IS NO LONGER RES INTEGRA AND THEREFORE, HAS NO MERIT. THE HONBLE CALCUTTA H IGH COURTS ORDER IN TATA METALIKS LTD. IS DISTINGUISHABLE ON FACTS AND PERTAINED TO FILING OF REVISED RETURN OF INCOME IN CASES WHERE ASSESSEE RECEIVED INTIMATION U/S 143(1) OF THE ACT AND IS NOT IN CONFLICT WITH THE VIEW OF HONBLE DELHI HIGH COURT IN KABUL CHAWLA (SUPRA) WH ICH IS ON 153A PROCEEDINGS AFTER SEARCH IS CONDUCTED BY THE DEPARTMENT. 67. MOREOVER, IT HAS TO BE REMEMBERED THAT PRINCIPA L CIT CANNOT DO INDIRECTLY WHAT HE COULD HAVE DONE DIRECTLY. THE SAID PROPOSITION OF LAW HAS BEEN LAID IN A SIMILAR CASE BY THIS TRIBUNAL IN THE CASE OF M/S UJJAL TRANSPORT AGENCY VS. CIT, CENTRAL-II IN IT(SS) NO.58/KOL/2013 ASSESSMENT YEAR 2007- 08 WHEREIN IT HAS HELD AS UNDER: 16. HAVING HELD THAT THE SCOPE OF THE PROCEEDINGS U/S.153A IN RESPE CT OF ASSESSMENT YEAR FOR WHICH ASSESSMENT HAVE ALREADY BEEN CONCLUDED AND WHICH DO NOT ABATE U/S.153A OF THE ACT, THAT THE ASSESSMENT WILL HAVE TO BE CONFINED TO ONLY INC RIMINATING MATERIAL FOUND AS A RESULT OF SEARCH, THE QUESTION TO BE DECIDED IS AS TO WHETHER THE PROCEEDINGS U/S.143(1) OF THE ACT CAN BE SAID TO BE ASSESSMENT PROCEEDINGS CONCLUDED THAT HAVE NOT ABATED U/S.153A OF THE ACT' SECTION L53A OF THE ACT, USES THE EXPRESSING ' PENDING ASSESSMENT OR REASSESSMENT'. WHEN A RETURN IS FILED AND ACKNOWLEDGEMENT OR INTIM ATION ISSUED U/S.143(1), THE PROCEEDINGS INITIATED BY FILING THE RETURN ARE CLOS ED, UNLESS A NOTICE U/S 143(2) OF THE ACT IS ISSUED. IN THE PRESENT CASE, THE PERIOD FOR ISSUING THE NOTICE U/S 143(2) ELAPSED. THEREFORE THE PROCESS HAS ATTAINED THE FINALITY WHICH CAN ONL Y BE ASSAILED U/S 148 OR 263 OF THE ACT. IT CAN THUS BE CONCLUDED THAT MAKING OF AN ADDITION IN AN ASSESSMENT UNDER SECTION 153A OF THE ACT, WITHOUT THE BACKING OF INCRIMINATING MATER IAL, IS UNSUSTAINABLE EVEN IN A CASE WHERE THE ORIGINAL ASSESSMENT ON THE DATE OF SEARCH STOOD COMPLETED UNDER SECTION 143(1) OF THE ACT, THEREBY RESULTING IN NON-ABATEMENT OF SUCH ASS ESSMENT IN TERMS OF THE SECOND PROVISO TO SECTION 153A(1) OF THE ACT. 17. IN THE LIGHT OF THE DISCUSSION ABOVE, OUR CONCLUSION IS THAT IN THE PRESENT CASE, THE ISSUE WITH REGARD TO ADDIT IONAL DEPRECIATION COULD NOT AND OUGHT NOT TO HAVE BEEN EXAMINED BY THE AO IN THE ASSESSMENT P ROCEEDINGS U/S.153A OF THE ACT AS THE SAID ISSUE STOOD CONCLUDED WITH THE ASSESSEE'S RETU RN OF INCOME BEING ACCEPTED U/S.143(1) IT(SS)A NO.06-07/RAN/2017 & IT(SS)A NO.15/RAN/2016 A.YS. 12-13, 11-12 & 09-10 BASUDHA UDYOG PVT. LTD VS. DCIT CC-DHANBAD PAGE 12 OF THE ACT PRIOR TO THE DATE OF SEARCH AND NO NOTIC E HAVING BEEN ISSUED U/S.143(2) OF THE ACT WITHIN THE TIME LIMIT LAID DOWN IN THAT SECTION WHI CH TIME LIMIT AS PER THE LAW PREVAILING ON THE DATE WHEN THE ASSESSEE FILED RETURN OF INCOME I.E., 30.10.2007, WOULD EXPIRE ON 31.12.2008. SUCH ASSESSMENT U/S.143(1) OF THE ACT DID NOT ABATE ON THE DATE OF SEARCH WHICH TOOK PLACE ON 15.1.2009.IN RESPECT OF ASSESSMENTS COMPLETED PR IOR TO THE DATE OF SEARCH THAT HAVE NOT ABATED, THE SCOPE OF PROCEEDINGS U/S.153A OF THE AC T HAS TO BE CONFINED ONLY TO MATERIAL FOUND IN THE COURSE OF SEARCH. SINCE NO MATERIAL WH ATSOEVER WAS FOUND IN THE COURSE OF SEARCH, THE QUESTION OF ALLOWING ADDITIONAL DEPRECI ATION OR NOT COULD NOT HAVE BEEN SUBJECT MATTER OF PROCEEDINGS U/.S.153A OF THE ACT. CONSEQU ENTLY, THE CIT IN EXERCISE OF HIS POWERS U/S 263 OF THE ACT OUGHT NOT TO HAVE OR COULD NOT H AVE DIRECTED EXAMINATION OF THE SAID ISSUE AFRESH BY THE ASSESSING OFFICER. THUS GROUND NO.1 R AISED BY THE ASSESSEE IS ALLOWED. THE PROCEEDINGS U/S 263 OF THE ACT IS ACCORDINGLY QUASH ED. IN VIEW OF THE ABOVE CONCLUSION, THE OTHER GROUND OF APPEAL RAISED BY THE ASSESSEE DOES NOT REQUIRE ANY CONSIDERATION. 18. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. 68. SINCE, WE HAVE QUASHED THE SECTION 263 PROCEEDI NGS; THEREFORE, WE ARE NOT ADJUDICATING THE OTHER ARGUMENTS OF THE LD. AR. 69. IN THE RESULT, THESE THREE APPEALS OF THE ASSES SEES ARE ALLOWED. WE ADOPT THE ABOVE DETAILED REASONING MUTATIS MUTANDIS TO HOLD THAT THE IMPUGNED PROCEEDINGS ITSELF INITIATED SEC. 153A ARE NOT SUSTAINABLE. THE SAME ARE QUASHED THEREFORE. 5. ALL THESE ASSESSEES APPEAL ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 1 5/02/2019 SD/- SD/- ( ) ($% ) (DR. A.L. SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) RANCHI, *DKP &- 15 / 02 /2019 RANCHI / COPY OF ORDER FORWARDED TO:- 1. /ASSESSEE-BASUDHA UDYOG PVT. LTD. CHHAPARIA & ASSOCIATE S, CHARTERED ACCOUNTANTS, 8 CA MAC ST. SHANTINIKETAN BUILDING, 5 TH FLOOR, ROOM NO.2, KOLKA TA-17 2. /REVENUE-DCIT, CENTRAL CIRCLE AAYAKAR BHAWAN, L.C. R OAD, 3 RD FLOOR, ROOM NO.405-8, DHABNBAD-826001 3. 2 4 / CONCERNED CIT RANCHI 4. 4- / CIT (A) RANCHI 5. 7 %%2, 2, / DR, ITAT, RANCHI 6. = / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR.PS, ITAT, RAN CHI