DCIT, CC-V, Kolkata, Kolkata V. Manish Mimani, Kolkata

ITSSA 70/KOL/2011

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 0445 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 5 month(s) 29 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 17-10-2014
• Appeal Filed By: Department
• Bench Allotted: A
• Assessment Year: 2002-2003
• Appeal Filed On: 18-04-2011
• Court: TRIBUNAL
• Department Lawyers: DR SWETABH SUMAN
• Assessee Lawyers: S K TULSIYAN
• Keywords: Gift; Revision of order; Search and seizure; Question of law; Corroborative evidences; Deemed dividend; Revised return; Reassessment proceedings
• Section: 143(3); 153A; 139(5); 27; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER IT(SS)A NOS.57 & 58/KOL/2011 ASSESSMENT YEARS: 2006-07 & 2007-08 MR. MANISH MIMANI, [PAN: AETPM1173K] / V/S . DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-V KOLKATA /APPELLANT .. /RESPONDENT IT(SS)A NOS.70 & 71/KOL/2011 ASSESSMENT YEARS: 2002-03 & 2003-04 & IT(SS)A NO.72/KOL/2011 ASSESSMENT YEAR: 2005-06 DCIT, CENTRAL CIRCLE-V, KOLKATA / V/S . MR. MANISH MIMANI /APPELLANT .. /RESPONDENT /BY ASSESSEE SHRI S.K.TULSIYAN, ADVOCATE /BY REVENUE DR. SWETABH SUMAN, CIT-DR /DATE OF HEARING 27-08-2014 ! /DATE OF PRONOUNCEMENT 17-10-2014 ' ' ' ' /O R D E R PER BENCH:- THESE TWO APPEALS BY ASSESSEE ARE ARISING OUT OF S EPARATE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS), CENTRAL-I, KO LKATA IN APPEALS NOS.377 & IT(SS)A NO.57-58 & 70-72/KOL/2011 A.YS.06-07 TO 07- 08 AND 02-03, 03-04&05-06 MR.MANISH MIMANI. V. DCIT, CC-V, KOL PAGE 2 378/CIT(A),C-I/CC-V/09-10 BY DIFFERENT DATES I.E. 0 5-01-2011 & 06.01.2011 RESPECTIVELY. ALL THESE THREE APPEALS BY REVENUE AR E ARISING OUT OF SEPARATE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS), CENTRAL-I, KO LKATA IN APPEALS NOS.361, 360 & 376/CIT(A),C-I/CC-V/09-10 DATED 03-01-2011 AND 04.0 1.2011. ASSESSMENTS WERE FRAMED BY DCIT, CC-V, KOLKATA U/S. 143(3)/153A OF T HE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS SEP ARATE ORDERS ALL DATES 31-12-2009. FIRST WE TAKE UP ASSESSEES APPEALS IN IT(SS)A NOS. 57 & 58/KOL/2011. 2. THE FIRST COMMON ISSUE IN IT(SS)A NOS. 57 & 58/K OL/2011 OF ASSESSEE IS AGAINST THE ORDER OF CIT(A) CONFIRMING THE ADDITION MADE BY ASSESSING OFFICER ON ACCOUNT OF DEEMED DIVIDEND. FOR THE SAKE OF CONVEN IENCE, WE REPRODUCE FOLLOWING GROUND NOS. 2 AND 3 OF IT(SS)A NO. 57/KOL/2011:- 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF AN AMOUNT OF RS.2,06,214 /- ON ACCOUNT OF ALLEGED ADVANCE TAKEN FROM M/S. MIMA FLOUR MILLS (P) LTD., AS DEEM ED DIVIDEND U/S. 2(22)(E) OF THE INCOME TAX ACT, 1961. 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CITA) ERRED IN CONFIRMING THE ADDITION OF AN AMOUNT OF RS.5,21,010/- ON ACCOU NT OF ALLEGED ADVANCE TAKEN FROM M/S. GANESH WHEAT PRODUCTS LTD., AS DEEMED DIVIDEN D U/S. 2(22)(E) OF THE INCOME- TAX ACT, 1961. 3. BRIEFLY STATED FACTS ARE THAT THERE WAS A SEARCH AND SEIZURE OPERATION CARRIED OUT ON THE BUSINESS AND RESIDENTIAL PREMISES OF THE ASS ESSEE ON 04-10-2007 ALONG WITH THE MEMANI GROUP OF CASES. ACCORDINGLY, NOTICE U/S 153A OF THE ACT WAS ISSUED AND IN RESPONSE TO THE SAME, ASSESSEE FILED RETURN OF INCO ME. THE AO WHILE FRAMING THE ASSESSMENT MADE ADDITIONS OF DEEMED DIVIDEND OF RS. 2,06,214/- AND RS.5,21,010/- FOR AY 2006-07 AND RS.15,36,377/- FOR AY 2007-08. THE C ONTENTION OF THE ASSESSEE WAS THAT THIS HAS ALREADY BEEN CONSIDERED IN THE ORIGIN AL ASSESSMENT FRAMED U/S 143(3) OF THE ACT AND NO NEW FACTS CAME TO THE KNOWLEDGE OF T HE REVENUE OR ANY INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH WHIC H SUGGESTS THAT ASSESSEE HAS NOT DISCLOSED THE INCOME. THE CIT(A) CONFIRMED THE ADDI TION BY HOLDING THAT THE AO ISSUED SHOW CAUSE NOTICE TO THE ASSESSEE TO EXPLAIN WHY THE LOAN AMOUNT IN QUESTION IT(SS)A NO.57-58 & 70-72/KOL/2011 A.YS.06-07 TO 07- 08 AND 02-03, 03-04&05-06 MR.MANISH MIMANI. V. DCIT, CC-V, KOL PAGE 3 SHOULD NOT BE TREATED AS DEEMED DIVIDEND AS PER PRO VISION OF SECTION 2(22)(E) OF THE ACT. HOWEVER, NO EXPLANATION TO THE SHOW CAUSE WAS OFFERED. HENCE, CONSIDERING THE FACT OF THE CASE AND THE PROVISION OF THE ACT THE A DDITIONS WERE CONFIRMED. THE CIT(A) IN PARA-4 OF HIS ORDER IN AY 2006-07 HAS OBSERVED A S UNDER:- 4. GROUND NO 3 TAKEN BY THE APPELLANT IS THAT THE A.O. ERRED IN ADDING BACK AN AMOUNT OF RS.2,06,214/- ON ACCOUNT OF ALLEGED ADVAN CE TAKEN FROM M/S MIMA FLOUR MILLS (P) LTD., AS DEEMED DIVIDEND U/S 2(22)(E) OF THE INCOME-TAX ACT, 1961 AND GROUND NO 4 TAKEN BY THE APPELLANT IS THAT THE A.O. ERRED IN ADDNG BACK AN AMOUNT OF RS.5,21,010/- ON ACCOUNT OF ALLEGED ADVANCE TAKEN F ROM M./S GANESH WHEAT PRODUCTS LTD., AS DEEMED DIVIDEND U/.S2(22)(E) OF THE INCOME -TAX ACT, 1961. THE ASSESSING OFFICER IN PARA 4 OF THE ORDER HAS DISCUSSED IN DET AL THE REASON FOR MAKING ADDITION ON ACCOUNT OF DEEMED DIVIDEND UNDER SECTION 2(22)(E ) OF THE ACT . FURTHER THE ABOVE ADDITION HAS BEEN MADE BY THE A.O AFTER GIVING SHOW CAUSE TO THE ASSESSEE TO EXPLAN WHY THE LOAN AMOUNT IN QUESTION SHOULD NOT BE TREAT ED AS DEEMED DIVIDEND AS PER PROVISION OF SECTION 2(22)(E) OF THE ACT. HOWEVER N O EXPLANATION TO THE SHOW CAUSE WAS OFFERED. HENCE CONSIDERNG THE FACT OF THE CASE AND THE PROVISION OF THE ACT , THE ADDTION. OF RS. 2,06,214/ AND RS.5,21,010/ MADE BY THE A.O UNDER SECTION 2(22)(E) IS CONFIRMED. ACCORDINGLY GROUND NO 3 AND 4 TAKEN BY THE APPELLANT S DISMISSED. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND FROM THE FACTS NARRATED ABOVE AS WELL AS ARGUED BY BOTH THE SIDES, THAT THE FACTS ARE EXACTLY IDENTICAL TO THE CASE OF MR. PURUSHOTTAM DAS MIMANI IN IT(SS)A NO. 60 TO 62/KOL/2011, WHICH WE HAVE NOW AD JUDICATED (WHICH IS A GROUP CASE). THE ISSUE BEING EXACTLY IDENTICAL AND WE HA VE CONSIDERED THE ISSUE IN PARA 4 AND 5 OF OUR ORDER OF EVEN DATE IN THE CASE OF MR. PURUSHOTTAM DAS MIMANI, WHICH READS AS UNDER: 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUG H FACTS AND CIRCUMSTANCES OF THE CASE. WE HAVE GONE THROUGH THE FACTS OF THE CASE AND FOUND FROM THE PERUSAL OF LEDGER ACCOUNT OF ASSESSEE IN T HE BOOKS OF ACCOUNT OF GANESH WHEAT PRODUCTS (P) LTD., THE LENDER COMPANY, IT IS SEEN THAT AS ON THE FIRST DAY OF THE RELEVANT ACCOUNTING YEAR 2005- 06 (A.Y. 2006-07 ) OPENING BALANCE IS AT RS.28,07,584/-. THEREAFTER, ON SEVERAL DATES DURING THE ENTIRE FINANCIAL YEAR THERE WERE SEVERAL TRANSACTIONS THROUGH CHEQUES AND SOME IN CASH BY EITHER PARTIES, I.E. THE ASSESSEE AND THE LOAN GIVING COMPANY, RESULTING IN SHIFTING BALANCES. ON MANY OCCASIONS THE BALANCE WAS IN FAVOUR OF THE ASSESSEE AND ON SOME OTHER OCCASIONS THE BALANCE WAS IN FAVOUR OF GANESH WHEAT PRODUCTS (P) LTD. THE LEDGER OF THE ASSESSEE FURTHER REVEALS THAT NO PAYMENT BY LOAN CR EDITOR IS FOLLOWED BY A REPAYMENT BY THE LOAN DEBTOR AND, IN FACT, THE PAYM ENTS BY THE ASSESSEE AND GANESH WHEAT PRODUCTS (P) LTD. ARE INDEPENDENT OF O NE ANOTHER. NO INTEREST WAS CHARGED BY EITHER SIDE FOR ADVANCING MONEY ON MUTUA LITY INASMUCH AS THE LOAN ACCOUNT WAS A CURRENT ACCOUNT IN NATURE. IT IS THUS EVIDENT THAT THERE WERE IT(SS)A NO.57-58 & 70-72/KOL/2011 A.YS.06-07 TO 07- 08 AND 02-03, 03-04&05-06 MR.MANISH MIMANI. V. DCIT, CC-V, KOL PAGE 4 RECIPROCAL DEMANDS BETWEEN THE PARTIES AND THUS MUT UAL IN CHARACTERISTIC. AT THE CLOSE OF ACCOUNTING YEAR AS ON 31-03-2006, DEBIT BA LANCE STOOD AT A SUM OF RS.18,87,522/- WHICH WAS DULY REFLECTED IN THE BALA NCE SHEET UNDER THE HEAD LOANS & ADVANCES. SIMILARLY, IN RESPECT OF MIMA FLO UR MILLS OPENING BALANCE WAS NIL AND THERE WERE SEVERAL SHIFTING OF BALANCE AND THE RESULTANT DEBIT BALANCE WAS RS.5,00,833/-. FOR A.Y. 2007-08, IN RESPECT OF MIMA FLOUR MILLS, OPENING BALANCE WAS RS.5,00,833/- AND AFTER SHIFTING BALANC E, THE DEBIT BALANCE CAME TO NIL. IN RESPECT OF GANESH WHEAT PRODUCTS, OPENING B ALANCE WAS RS.18,87,522/- AND AFTER SHIFTING BALANCE THE CREDIT BALANCE CAME TO RS.9 LAKHS. ON PERUSAL OF THE LEDGER ACCOUNT OF THE ASSESSEE IN THE BOOKS OF M/S. MIMA FLOUR MILLS (P) LTD. IT IS SEEN THAT ON SEVERAL DATES THERE WERE SHIFTING BALA NCES. ON MANY OCCASIONS THE BALANCE WAS IN FAVOUR OF THE ASSESSEE AND ON SOME O THER OCCASIONS THE BALANCE WAS IN FAVOUR OF GANESH WHEAT PRODUCTS (P) LTD. IT IS THUS EVIDENT THAT THERE WERE RECIPROCAL DEMANDS BETWEEN THE PARTIES AND THUS MUT UAL IN CHARACTERISTIC. THE ACCOUNT SO MAINTAINED IN RESPECT OF SUCH MUTUAL TRA NSFER OF AMOUNT BY WAY OF GIVING AND TAKING FINANCIAL ASSISTANCE IS, THEREFOR E, A CURRENT ACCOUNT AND THIS CURRENT ACCOUNT IS DIFFERENT FROM A LOAN ACCOUNT FO R THE SOLE REASON THAT FEATURE OF MUTUALITY IS NOT PRESENT IN A LOAN TRANSACTION. 5. HERE IN THE PRESENT CASE, FROM THE FACTS NARRATE D ABOVE, IT IS CLEAR THAT BOTH THE PARTIES ARE BENEFICIARY OF THE TRANSACTION BEING CURRENT ACCOUNT OF THE ABOVE TRANSACTIONS I.E. SHIFTING BALANCES. THIS IS SUE HAS BEEN ANSWERED BY HONBLE CALCUTTA HIGH COURT IN THE CASE OF PRADIP K UMAR MALHOTRA V. CIT 338 ITR 538 (CAL) WHEREIN HONBLE HIGH COURT HELD AS UN DER: THE PHRASE BY WAY OF ADVANCE OR LOAN APPEARING I N SUB-CLAUSE (E) OF SECTION 2(22) OF THE INCOME-TAX ACT, 1961, MUST BE CONSTRUED TO MEAN THOSE ADVANCES OR LOANS WHICH A SHAREHOLDER ENJOYS SIMPLY ON ACCOUNT OF BEING A PERSON WHO IS THE BENEFICIAL OWNER OF SHARES (NOT B EING SHARES ENTITLED TO A FIXED RATE OF DIVIDEND WHETHER WITH OR WITHOUT A RI GHT TO PARTICIPATE N PROFITS) HOLDING NOT LESS THAN TEN PER CENT. OF THE VOTING POWER; BUT IF SUCH LOAN OR ADVANCE IS GIVEN TO SUCH SHAREHOLDER AS A C ONSEQUENCE OF ANY FURTHER CONSDERATION WHICH IS BENEFICIAL TO THE CO MPANY RECEIVED FROM SUCH A SHARE-HOLDER, IN SUCH CASE, SUCH ADVANCE OR LOAN CANNOT BE SAID TO BE DEEMED DIVIDEND WITHN THE MEANING OF THE ACT. T HUS, GRATUITOUS LOAN OR ADVANCE GIVEN BY A COMPANY TO THOSE CLASSES OF SHAR EHOLDERS WOULD COME WITHIN THE PURVIEW OF SECTION 2(22) BUT NOT CASES W HERE THE LOAN OR ADVANCE IS GIVEN IN RETURN TO AN ADVANTAGE CONFERRED UPON T HE COMPANY BY SUCH SHAREHOLDER. FROM THE ABOVE FACTS AND LEGAL PROPOSITION DECIDED BY HONBLE JURISDICTIONAL HIGH COURT, IT IS CLEAR THAT SECTION 2(22)(E) OF TH E ACT WAS INSERTED TO BRING WITHIN THE PURVIEW OF TAXATION THOSE AMOUNTS WHICH ARE ACT UALLY A DISTRIBUTION OF PROFITS BUT ARE DISBURSED AS A LOAN SO THAT TAX THEREON CAN BE AVOIDED. IT IS PERTINENT TO NOTE HERE THAT WHEN DIVIDENDS ARE DECLARED BY A COM PANY, IT IS SOLELY THE SHAREHOLDERS WHO BENEFIT FROM THE TRANSACTION. NO B ENEFITS ACCRUE TO THE COMPANY BY WAY OF DIVIDEND DISTRIBUTION. THUS, SECTION 2(22 )(E) OF THE ACT COVERS ONLY SUCH SITUATIONS, WHERE THE SHAREHOLDER ALONE BENEFITS FR OM THE LOAN TRANSACTION, IT(SS)A NO.57-58 & 70-72/KOL/2011 A.YS.06-07 TO 07- 08 AND 02-03, 03-04&05-06 MR.MANISH MIMANI. V. DCIT, CC-V, KOL PAGE 5 BECAUSE IF THE COMPANY ALSO BENEFITS FROM THE SAID TRANSACTION, IT WILL TAKE THE CHARACTER OF A COMMERCIAL TRANSACTION AND HENCE WIL L NOT QUALIFY TO BE DIVIDEND. IN THE CASE OF THE ASSESSEE, BY GIVING AND TAKING F INANCIAL ASSISTANCE FROM EACH OTHER, BOTH THE ASSESSEE AND THE COMPANY WERE BENEF ITED AND SUCH TRANSACTIONS BETWEEN THEM WERE NOTHING BUT COMMERCIAL TRANSACTIO NS AND DIVIDEND ATTRIBUTABLE TO THE SHAREHOLDER IS NOTHING TO DO WI TH SUCH BUSINESS TRANSACTION. FROM THE ABOVE DISCUSSIONS IT CAN BE SAID THAT SEC. 2(22)(E) OF THE ACT COVERS ONLY THOSE TRANSACTIONS WHICH BENEFIT THE SHAREHOLDER AL ONE AND RESULTS IN NO BENEFIT TO THE COMPANY. ON THE OTHER HAND, IF THE TRANSACTION IS MUTUAL BY WHICH BOTH SIDES ARE BENEFITED, IT IS UNDOUBTEDLY OUTSIDE THE PURVIE W OF PROVISIONS OF SEC. 2(22)(E) OF THE ACT. FROM THE ABOVE, IT IS CLEAR THAT THE L OAN ACCOUNT DIFFERS FROM CURRENT ACCOUNT AND THE PROVISIONS OF SECTION 2(22)(E) OF T HE ACT, BEING A DEEMING SECTION, CANNOT BE APPLIED TO CURRENT ACCOUNT. IN SUCH CIRC UMSTANCES, WE DELETE THE ADDITION AND THIS COMMON ISSUE OF ASSESSEES APPEAL S IS ALLOWED. FROM THE ABOVE, IT IS CLEAR THAT THE ISSUE IS COVER ED AND HENCE, WE ALLOW THIS COMMON ISSUE OF ASSESSEES APPEALS. 5. THE NEXT ISSUE IN IT(SS)A NO.58/K/2011 OF ASSESS EE IS AGAINST THE ORDER OF CIT(A) CONFIRMING THE DISALLOWANCE ON ACCOUNT OF EX PENDITURE UNDER MISCELLANEOUS RECEIPTS. FOR THIS ASSESSEE HAS RAISED FOLLOWING G ROUND NO.2: 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF THE EXPENDITURE CLAI MED AT RS.50,000/- UNDER MISCELLANEOUS RECEIPTS. 6. BRIEFLY STATED FACTS ARE THAT THERE WAS A SEARCH AND SEIZURE OPERATION CARRIED OUT ON THE BUSINESS AND RESIDENTIAL PREMISES OF THE ASS ESSEE ON 04-10-2007 ALONG WITH THE MEMANI GROUP OF CASES. ACCORDINGLY, NOTICE U/S 153A OF THE ACT WAS ISSUED AND IN RESPONSE TO THE SAME, ASSESSEE FILED RETURN OF INCO ME. THE AO WHILE FRAMING THE ASSESSMENT MADE ADDITIONS OF ABOVE NOTED EXPENSES. THE CIT(A) ALSO CONFIRMED THE ADDITION. AGGRIEVED, NOW ASSESSEE CAME IN APPEAL B EFORE TRIBUNAL ON THE ABOVE ISSUE. 7. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE LOWER AUTHORITIES HAVE M ADE ADDITION ON THE BASIS THAT NO SUPPORTING EVIDENCE FOR CLAIM OF THIS EXPENDITURE W AS FILED EVEN THOUGH ENOUGH OPPORTUNITY WAS PROVIDED TO THE ASSESSEE. EVEN NOW BEFORE US THE ASSESSEE FAILED TO IT(SS)A NO.57-58 & 70-72/KOL/2011 A.YS.06-07 TO 07- 08 AND 02-03, 03-04&05-06 MR.MANISH MIMANI. V. DCIT, CC-V, KOL PAGE 6 PROVIDE ANY EVIDENCE OR MADE NO ARGUMENT. HENCE, TH IS ISSUE OF ASSESSEES APPEAL IS DISMISSED. 8. THE NEXT COMMON ISSUE IN IT(SS)A NOS. 70 TO 72/K OL/2011 BY REVENUE IS AGAINST THE ORDER OF CIT(A) DELETING THE ADDITION M ADE BY ASSESSING OFFICER ON ACCOUNT OF DEEMED DIVIDEND. FOR THIS, REVENUE HAS RAISED SIMILAR GROUNDS IN ALL THE THREE APPEALS, EXCEPT VARIANCE IN AMOUNT. FOR THE SAKE OF CONVENIENCE, WE REPRODUCE GROUND NO. 3 IN IT(SS)A 70/KOL/2011, WHICH READS AS UNDER:- 3) THAT THE LD. CIT(A), CENTRAL-I, KOLKATA IS ERRE D IN DELETING THE ADDITION OF DEEMED DIVIDEND OF RS.55,000/- RELYING ON THE CASE LAW OF M/S. LMJ INTERNATIONAL 119 TTJ(KOL) 214. 9. WE FIND THAT THIS ISSUE IS NOW SQUARELY COVERED IN FAVOUR OF ASSESSEE AND AGAINST REVENUE BY THE DECISION OF HONBLE RAJASTHA N HIGH COURT IN THE CASE OF JAI STEEL (INDIA) VS. ACIT REPORTED IN (2013) 88 DTR (R AJ) 1, WHEREIN IT IS HELD AS UNDER:- THE PROVISIONS OF SECTIONS 153A TO 153C CANNOT BE INTERPRETED TO BE A FURTHER INNINGS FOR THE AO AND/OR ASSESSEE BEYOND PROVISION S OF SECTIONS 139 (RETURN OF INCOME), 139(5) (REVISED RETURN OF INCOME), 147 (IN COME ESCAPING ASSESSMENT) AND 263 (REVISION OF ORDERS) OF THE ACT. THE PLEA RAISED ON BEHALF OF THE ASSESSEE THAT AS T HE FIRST PROVISO PROVIDES FOR ASSESSMENT OR REASSESSMENT OF THE TOTAL INCOME IN R ESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSESSMENT YEARS, IS ME RELY READING THE SAID PROVISION IN ISOLATION AND NOT IN THE CONTEXT OF THE ENTIRE S ECTION. THE WORDS 'ASSESS' OR 'REASSESS' HAVE BEEN USED AT MORE THAN ONE PLACE IN THE SECTION AND A HARMONIOUS CONSTRUCTION OF THE ENTIRE PROVISION WOU LD LEAD TO AN IRRESISTIBLE CONCLUSION THAT THE WORD 'ASSESS' HAS BEEN USED IN THE CONTEXT OF AN ABATED PROCEEDINGS AND REASSESS HAS BEEN USED FOR COMPLETE D ASSESSMENT PROCEEDINGS, WHICH WOULD NOT ABATE AS THEY ARE NOT PENDING ON TH E DATE OF INITIATION OF THE SEARCH OR MAKING OF REQUISITION AND WHICH WOULD ALS O NECESSARILY SUPPORT THE INTERPRETATION THAT FOR THE COMPLETED ASSESSMENTS, THE SAME CAN BE TINKERED ONLY BASED ON THE INCRIMINATING MATERIAL FOUND DURING TH E COURSE OF SEARCH OR REQUISITION OF DOCUMENTS. THE ALLAHABAD HIGH COURT IN COMMISSIONER OF INCOME- TAX (CENTRAL, KANPUR V. SMT. SHAILA AGARWAL (SUPRA) HAS HELD AS UNDER:- 19. THE SECOND PROVISO TO SECTION 153A OF THE ACT, REFERS TO ABATEMENT OF THE PENDING ASSESSMENT OR REASSESSMENT PROCEEDINGS. THE WORD 'PENDING' DOES NOT OPERATE ANY SUCH INTERPRETATION, THAT WHEREVER THE APPEAL AGAINST SUCH ASSESSMENT OR REASSESSMENT IS PENDING, THE SAME ALO NGWITH ASSESSMENT OR REASSESSMENT PROCEEDINGS IS LIABLE TO BE ABATED. TH E PRINCIPLES OF INTERPRETATION IT(SS)A NO.57-58 & 70-72/KOL/2011 A.YS.06-07 TO 07- 08 AND 02-03, 03-04&05-06 MR.MANISH MIMANI. V. DCIT, CC-V, KOL PAGE 7 OF TAXING STATUTES DO NOT PERMIT THE COURT TO INTER PRET THE SECOND PROVISO TO SECTION 153A IN A MANNER THAT WHERE THE ASSESSMENT OR REASSESSMENT PROCEEDINGS ARE COMPLETE, AND THE MATTER IS PENDING IN APPEAL IN THE TRIBUNAL, THE ENTIRE PROCEEDINGS WILL ABATE. 20. THERE IS ANOTHER ASPECT TO THE MATTER, NAMELY T HAT THE ABATEMENT OF ANY PROCEEDINGS HAS SERIOUS CAUSES AND EFFECT IN AS MUC H AS THE ABATEMENT OF THE PROCEEDINGS, TAKES AWAY ALL THE CONSEQUENCES THAT A RISE THEREAFTER. IN THE PRESENT CASE AFTER DEDUCTING BOGUS GIFTS IN THE REGULAR ASS ESSMENT PROCEEDINGS, THE PROCEEDINGS FOR PENALTY WERE DRAWN UNDER SECTION 27 1 (1)(C) OF THE ACT. THE MATERIAL FOUND IN THE SEARCH MAY BE A GROUND FOR NO TICE AND ASSESSMENT UNDER SECTION 153A OF THE ACT BUT THAT WOULD NOT EFFACE O R TERMINATE ALL THE CONSEQUENCE, WHICH HAS ARISEN OUT OF THE REGULAR AS SESSMENT OR REASSESSMENT RESULTING INTO THE DEMAND OR PROCEEDINGS OF PENALTY . (EMPHASIS SUPPLIED) THE SAID JUDGMENT WHICH ESSENTIALLY DEALS WITH SECO ND PROVISO TO SECTION 153A OF THE ACT ALSO SUPPORTS THE CONCLUSION, WHICH WE HAVE REACHED HEREINBEFORE. IT HAS BEEN OBSERVED BY THE HON'BLE SUPREME COURT IN K.P. VARGHESE V. INCOME TAX OFFICER : (1981) 131 ITR 597 THAT IT IS WELL R ECOGNIZED RULE OF CONSTRUCTION THAT A STATUTORY PROVISION MUST BE SO CONSTRUED, IF POSSIBLE THAT ABSURDITY AND MISCHIEF MAY BE AVOIDED. THE ARGUMENT OF THE COUNSEL FOR THE APPELLANT IF TA KEN TO ITS LOGICAL END WOULD MEAN THAT EVEN IN CASES WHERE THE APPEAL ARISING OU T OF THE COMPLETED ASSESSMENT HAS BEEN DECIDED BY THE CIT(A), ITAT AND THE HIGH C OURT, ON A NOTICE ISSUED UNDER SECTION 153A OF THE ACT, THE AO WOULD HAVE PO WER TO UNDO WHAT HAS BEEN CONCLUDED UPTO THE HIGH COURT. ANY INTERPRETATION W HICH LEADS TO SUCH CONCLUSION HAS TO BE REPELLED AND/OR AVOIDED AS HEL D BY THE HON'BLE SUPREME COURT IN THE CASE OF K.P. VARGHESE (SUPRA). CONSEQUENTLY, IT IS HELD THAT IT IS NOT OPEN FOR TH E ASSESSEE TO SEEK DEDUCTION OR CLAIM EXPENDITURE WHICH HAS NOT BEEN CLAIMED IN THE ORIGINAL ASSESSMENT, WHICH ASSESSMENT ALREADY STANDS COMPLETED, ONLY BECAUSE A ASSESSMENT UNDER SECTION 153A OF THE ACT IN PURSUANCE OF SEARCH OR REQUISITI ON IS REQUIRED TO BE MADE. IN VIEW OF THE ABOVE DISCUSSION, THE ANSWER TO THE SUBSTANTIAL QUESTION OF LAW (IV) ABOVE IS IN THE POSITIVE AND AGAINST THE APPELLANT ASSESSEE, THE OTHER THREE QUESTIONS CONSEQUENTLY DO NOT ARISE, AND, AS SUCH, THE APPEAL FAILS AND IS, THEREFORE, DISMISSED. NO COSTS. REGISTRY IS DIRECTED TO PLACE A COPY OF THIS JUDGME NT ON RECORD IN EACH CONNECTED FILE. ADMITTEDLY, THERE IS NO SEIZED INCRIMINATING MATERI ALS FOUND DURING THE COURSE OF SEARCH IN THIS CASE, AND WITHOUT ANY EVIDENCE THE A O HAS MADE ADDITION OF DEEMED IT(SS)A NO.57-58 & 70-72/KOL/2011 A.YS.06-07 TO 07- 08 AND 02-03, 03-04&05-06 MR.MANISH MIMANI. V. DCIT, CC-V, KOL PAGE 8 DIVIDEND. THE ISSUE IS SQUARELY COVERED IN FAVOUR O F ASSESSEE AND AGAINST THE REVENUE BY THE DECISION OF SPECIAL BENCH IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD., V. DCIT (2012) 181 ITR (TRIB) 106 (MUM) (SB) AS WELL AS BY THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF JAI STEEL (INDI A) SUPRA. AS THE ISSUE IS COVERED IN FAVOUR OF ASSESSEE, WE CONFIRM THE ORDER OF CIT(A). THIS ISSUE OF REVENUES APPEALS IS ALLOWED. 10. IN THE RESULT, APPEAL OF ASSESSEE IN IT(SS)A NO . 57/K/2011 IS ALLOWED AND APPEAL IN IT(SS)A NO. 58/K/2011 IS PARTLY ALLOWED A ND APPEALS REVENUE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 17/10/2014 SD/- SD/- (SHAMIM YAHYA) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER *DKP #$% - 17/10/2014 ' ' ' ' &&' &&' &&' &&' (' (' (' (' / COPY OF ORDER FORWARDED TO:- 1. / ASSESSEE MR. MANISH MIMANI, FLAT NO. 11, 4 TH FLOOR, 32, ROWLAND ROW, KOLKATA-20. 2. / REVENUE DCIT, C.C.V, KOLKATA 3. $$&) * / CONCERNED CIT 4. * - / CIT (A) 5. '+, &&&) , &)! / DR, ITAT, KOLKATA 6. ,-. /0 / GUARD FILE. B Y ORDER/ ' , 1/3 $ &)!,