Appeal details
Counselvise Citation
[2021] 107 COUNSELVISE.COM (IT) 4363 (ITAT-LUCKNOW)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 5 month(s) 28 day(s)
Appellant
Respondent
Appeal Type
Income Tax (Search & Seizure) Appeal
Pronouncement Date
02-08-2021
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
B
Assessment Year
2012-2013
Appeal Filed On
04-02-2019
Judgement Text
I.T.(SS)A. NOS.74 TO 77/LKW/2019 ASSTT. YRS.:2010-11 TO 2014-14 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW (THROUGH VIRTUAL HEARING) BEFORE SHRI A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER I.T.(SS)A. NOS.74 TO 77/LKW/2019 ASSESSMENT YEARS:2010-11 TO 2013-14 M/S KEYMAN LAMINATORS PVT. LTD 53/7, NAYAGANJ, KANPUR. PAN:AABCK3085D VS. DY.C.I.T., CENTRAL CIRCLE-1, KANPUR. (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR:A.M. THIS IS A GROUP OF 4 APPEALS FILED BY THE ASSESSEE FOR THE ASSESSMENT YEARS 2010-11 TO 2013-14 AGAINST THE CONSOLIDATED O RDER OF LEARNED CIT(A) DATED 29/11/2018. THE ASSESSEE HAS TAKEN SIMILAR G ROUNDS OF APPEALS AND THESE WERE HEARD TOGETHER, THEREFORE, FOR THE SAKE OF CONVENIENCE A COMMON AND CONSOLIDATED ORDER IS BEING PASSED. 2. THE LEARNED COUNSEL FOR THE ASSESSEE, AT THE TIM E OF HEARING, ARGUED ONLY GROUNDS NOS. 1 AND 2 WHICH ARE COMMON I N ALL THE APPEALS AND FOR THE SAKE OF COMPLETENESS THE SAME ARE REPRO DUCED BELOW: APPELLANT BY SHRI P. K. KAPOOR, C. A. RESPONDENT BY SMT. SHEELA CHOPRA, CIT, D.R. DATE OF HEARING 13 /0 7 /2021 DATE OF PRONOUNCEMENT 02/08/2021 I.T.(SS)A. NOS.74 TO 77/LKW/2019 ASSTT. YRS.:2010-11 TO 2014-14 2 1. BECAUSE THE LEARNED CIT(A) WAS WRONG IN LAW & O N FACTS IN CONFIRMING THE ASSESSMENT ORDER PASSED BY ASSESSING OFFICER U/S 153A OF THE ACT AS THE SAME WAS NOT IN CONSONANCE WITH THE SETTLED POSITION OF LAW VIS--V IS SEARCH CASES. 2. BECAUSE THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE ASSESSMENT IGNORING THE SETT LED POSITION OF LAW THAT PROVISIONS OF SECTION 153A, IN CASE WHE RE PROCEEDINGS ARE NOT PENDING, COULD NOT BE APPLIED I N ABSENCE OF ANY INCRIMINATING MATERIAL. 3. LEARNED COUNSEL FOR THE ASSESSEE INVITED OUR ATT ENTION TO THE FACTS OF THESE CASES AND SUBMITTED THAT A SEARCH & SEIZURE O PERATION WAS CARRIED OUT ON 31/08/2015 IN M/S GOLDIEE MASALA AND SHRI SA NTOSH KUMAR AGARWAL GROUP OF CASES AND WAS ALSO CARRIED OUT AT THE BUSI NESS PREMISES OF THE ASSESSEE AND ACCORDINGLY THE ASSESSEE WAS REQUIRED TO FILE INCOME TAX RETURNS U/S 153A OF THE ACT AND WHICH THE ASSESSEE HAD DULY FILED. IT WAS SUBMITTED THAT ASSESSING OFFICER, IN ALL THESE CASE S, WHILE MAKING THE ADDITIONS, HAS NOT REFERRED TO ANY INCRIMINATING DO CUMENTS BUT HAS MADE THE ADDITIONS ON THE BASIS OF ENTRIES IN THE BOOKS OF ACCOUNT WHICH IS NOT PERMISSIBLE UNDER THE LAW AS IN THESE YEARS, THE AS SESSMENTS STOOD COMPLETED BEFORE THE DATE OF SEARCH AND UNDER THESE CIRCUMSTANCES THE HON'BLE DELHI HIGH COURT IN THE CASE OF PR. CIT VS. MEETA GULTUTIA [2017] 395 ITR 526 HAS DECIDED THE ISSUE IN FAVOUR OF ASSE SSEE AND THE SLP FILED BY THE REVENUE AGAINST THE ORDER OF HON'BLE DELHI H IGH COURT HAS BEEN DISMISSED BY HON'BLE SUPREME COURT. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT HON'BLE DELHI HIGH COURT HAS CATEGOR ICALLY HELD THAT IN THE ABSENCE OF INCRIMINATING DOCUMENTS THE ADDITIONS CA NNOT BE MADE IN CASE OF COMPLETED ASSESSMENTS. THE LEARNED COUNSEL FOR T HE ASSESSEE FURTHER SUBMITTED THAT THE LUCKNOW BENCH OF THE TRIBUNAL, U NDER SIMILAR CIRCUMSTANCES, IN VARIOUS CASES, HAS ALLOWED APPEAL S OF THE VARIOUS I.T.(SS)A. NOS.74 TO 77/LKW/2019 ASSTT. YRS.:2010-11 TO 2014-14 3 ASSESSEES AND IN THIS RESPECT REFERENCE WAS MADE TO THE FOLLOWING CASE LAWS DECIDED BY LUCKNOW BENCH OF THE TRIBUNAL: (I) IT(SS)A NO. 630 & 631/LKW/2019, IT(SS)A NO.633 & 634/LKW/2019 AND IT(SS)A NO. 638/LKW/2019 DATED 01/02/2021 (II) I.T.A. NO.510 TO 512/LKW/2019, I.T.A. NO. 513 & 514/LKW/2019, I.T.A. NO.515 & 516/LKW/2019 AND I.T. A. NO.517/LKW/2019 DATED 16/12/2020 (III) IT(SS)A NO.130-143/LKW/2018 DATED 03/03/2020 (IV) I.T.A. NO.430 TO 433/LKW/2016 DATED 15/03/2018 3.1 LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMIT TED THAT THE PROPOSITION THAT IN THE CASES OF COMPLETED ASSESSME NTS, THE ADDITIONS CAN ONLY BE MADE ON THE BASIS OF INCRIMINATING MATERIAL IS FURTHER STRENGTHENED BY THE ORDER OF HON'BLE SUPREME COURT IN THE LANDMA RK DECISION OF CIT VS. SINHGAD TECHNICAL EDUCATION SOCIETY (2017) 397 ITR 344 (SC) WHEREIN HON'BLE SUPREME COURT HELD THAT THERE MUST BE INCRI MINATING MATERIAL RELATING TO THAT YEAR WHILE MAKING ADDITIONS U/S 15 3C OF THE ACT. IT WAS SUBMITTED THAT WITH THESE FINDINGS HON'BLE SUPREME COURT HAS FURTHER AFFIRMED THAT FOR MAKING ADDITIONS U/S 153A/153C, T HE EXISTENCE OF INCRIMINATING MATERIAL IS SINE QUA NON. LEARNED CO UNSEL FOR THE ASSESSEE IN THIS RESPECT FILED A CHART CONTAINING THEREIN THE I .T.A. NOS., ASSESSMENT YEARS INVOLVED, DATE OF PASSING OF ASSESSMENT ORDER S AND THE RESPECTIVE PAPER. THE CHART FURTHER CONTAINED TIME LIMITS FOR ISSUING NOTICE U/S 143(2) WHERE ASSESSMENT WAS NOT COMPLETED U/S 143(3 ) OF THE ACT. IT WAS ARGUED THAT SINCE IN ALL THESE CASES ADDITIONS HAVE NOT BEEN MADE ON THE BASIS OF INCRIMINATING MATERIAL THEREFORE, ADDITION S SUSTAINED BY LEARNED CIT(A) ARE NOT IN ACCORDANCE WITH LAW AND NEED TO B E DELETED. IT WAS SUBMITTED THAT LEARNED CIT(A) HAS DISMISSED THIS GR OUND OF APPEAL BY HOLDING THAT FOR MAKING ADDITION U/S 153A, THERE IS NO REQUIREMENT THAT THE ADDITION CAN ONLY BE MADE ON THE BASIS OF INCRIMINA TING MATERIAL ONLY. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CASE LAWS RELIED ON BY I.T.(SS)A. NOS.74 TO 77/LKW/2019 ASSTT. YRS.:2010-11 TO 2014-14 4 LEARNED CIT(A) ARE NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE ASSESSEE AS HON'BLE SUPREME COURT IN THE CASE OF PR . CIT VS. MEETA GULTUTIA (SUPRA) HAS CONFIRMED THE FINDINGS OF HON' BLE DELHI HIGH COURT WHEREIN IT HAS BEEN HELD THAT THE ADDITION U/S 153A CANNOT BE MADE IN THE ABSENCE OF INCRIMINATING DOCUMENTS. 4. LEARNED CIT, D.R., ON THE OTHER HAND, HEAVILY PL ACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT IN THESE CASES, THE ASSESSMENT YEARS INVOLVED ARE 2010-11 TO 2013-14. FOR ASSESSMENT YE AR 2010-11, THE ORIGINAL RETURN OF INCOME WAS FILED ON 14/10/2010, A COPY OF ACKNOWLEDGMENT OF RETURN OF INCOME IS PLACED AT PAG E 1 OF THE PAPER BOOK AND THE RETURN WAS PROCESSED ON 17/03/2011, THE EVI DENCE OF WHICH IS PLACED AT PAGE 2 OF THE PAPER BOOK. THE ASSESSMENT IN THIS CASE WAS COMPLETED U/S 143(3) ON 18/12/2012 AND A COPY OF AS SESSMENT ORDER IS PLACED AT PAGES 3 TO 5 OF THE PAPER BOOK AND THEREF ORE, THE ASSESSMENT IN THIS YEAR STOOD COMPLETED BEFORE THE DATE OF SEARCH I.E. 31/08/2015. FOR THE ASSESSMENT YEAR 2011-12, THE ORIGINAL RETURN OF INCOME WAS FILED ON 29/09/2011, A COPY OF THE ACKNOWLEDGMENT OF RETURN IS PLACED AT PAGE 6 OF THE PAPER BOOK. THE RETURN WAS PROCESSED U/S. 14 3(1) ON 20/01/2012, THE EVIDENCE OF WHICH IS PLACED AT PAGE 7 OF THE PA PER BOOK. IN THIS CASE ALSO, THE ASSESSMENT WAS COMPLETED U/S 143(3) VIDE ORDER DATED 28/01/2014, A COPY OF ASSESSMENT ORDER IS PLACED AT PAGES 8 TO 10 OF THE PAPER BOOK THEREFORE, THE ASSESSMENT IN THIS YEAR A LSO STOOD COMPLETED BEFORE THE DATE OF SEARCH I.E. 31/08/2015. NOW COM ING TO ASSESSMENT YEAR 2012-13. IN THIS ASSESSMENT YEAR, THE ORIGINA L RETURN OF INCOME WAS FILED ON 29/09/2012, A COPY OF THE ACKNOWLEDGMENT O F RETURN IS PLACED AT I.T.(SS)A. NOS.74 TO 77/LKW/2019 ASSTT. YRS.:2010-11 TO 2014-14 5 PAGE 11 OF THE PAPER BOOK. THE RETURN WAS PROCESSED U/S. 143(1) ON 17/05/2013, THE EVIDENCE OF WHICH IS PLACED AT PAG E 12 OF THE PAPER BOOK. IN THIS YEAR, THE ASSESSMENT WAS NOT COMPLET ED U/S 143(3). HOWEVER, THE TIME LIMIT FOR ISSUING NOTICE U/S 143( 2) EXPIRED ON 30/09/2013 THEREFORE, THE ASSESSMENT IN THIS YEAR W ILL ALSO BE TREATED AS COMPLETED BEFORE THE DATE OF SEARCH I.E. 31/08/2015 . SIMILARLY, FOR ASSESSMENT YEAR 2013-14, THE ORIGINAL RETURN OF INC OME WAS FILED ON 30/11/2013, A COPY OF THE ACKNOWLEDGMENT OF RETURN IS PLACED AT PAGE 13 OF THE PAPER BOOK. THE EVIDENCE FOR PROCESSING OF RETURN OF INCOME U/S 143(1) HAS NOT BEEN FILED BY THE ASSESSEE. HOWEVER, THE TIME FOR ISSUE OF NOTICE US/ 143(2) FOR ASSESSMENT U/S 143(3) EXPIRED ON 30/09/2014 WHICH DATE AGAIN IS BEFORE THE DATE OF SEARCH I.E. ON 31/ 08/2015. THEREFORE, IN THIS YEAR ALSO THE ASSESSMENT WILL BE TREATED AS CO MPLETED. 6. THE ABOVE FACTS CLEARLY DEMONSTRATE THAT THE ASS ESSMENT YEARS INVOLVED IN THESE APPEALS STOOD COMPLETED BEFORE TH E DATE OF SEARCH AND ADDITIONS, IF ANY, WERE TO BE MADE ON THE BASIS OF INCRIMINATING MATERIAL ONLY WHICH HAS NOT BEEN DONE AS THE ORDER OF ASSESS ING OFFICER DO NOT INDICATE OR REFER TO ANY INCRIMINATING MATERIAL. BE FORE LD. CIT(A) THE ASSESSEE TOOK A SPECIFIC GROUND THAT IN THE ABSENCE OF INCRIMINATING MATERIAL THE ADDITIONS CANNOT BE MADE IN THE YEARS WHERE THE ASSESSMENTS STOOD COMPLETED. HOWEVER, LEARNED CIT(A) HAS HELD THAT THE LAW DOES NOT REQUIRE THE ASSESSING OFFICER TO MAKE ADDITION IN S UCH CASES ONLY ON THE BASIS OF INCRIMINATING MATERIAL AND THEREFORE, HE D ISMISSED THIS GROUND OF APPEAL. WHILE HOLDING SO THE LEARNED CIT(A) HAS RE LIED ON A NUMBER OF CASE LAWS. FOR THE SAKE OF COMPLETENESS, THE FINDI NGS OF LEARNED CIT(A) WHICH HAS BEEN DISPOSED OF BY A COMMON ORDER IN ASS ESSMENT YEAR 2010- 11 TO 2013-14 ARE REPRODUCED BELOW: I.T.(SS)A. NOS.74 TO 77/LKW/2019 ASSTT. YRS.:2010-11 TO 2014-14 6 5.1 GROUND NO. 1 TO 3 FOR ALL THE ASSESSMENT YEAR S PERTAIN TO LEGAL CHALLENGE TO NOTICE U/S 153A OF THE ACT. I T IS ALSO SUBMITTED BY THE LD. A.R. OF THE APPELLANT THAT ORD ER U/S 153A OF THE ACT IS INVALID IN ABSENCE OF INCRIMINATING M ATERIAL FOUND AS A RESULT OF SEARCH FOR THESE RELEVANT ASSESSMENT YEARS IN APPEALS. 5.2 UNDERSIGNED HAS CAREFULLY CONSIDERED THE SUBMI SSION AND THE CASE LAWS CITED BY THE APPELLANT. HOWEVER, CONSIDERING THE EXPRESS PROVISIONS OF SECTION 153A OF THE ACT, UNDERSIGNED WOULD LIKE TO DIFFER WITH THE SUBMISSIO N OF THE APPELLANT, BECAUSE SECTION 153A OF THE ACT CLEARLY PROVIDES THE POWER TO AO TO ASSESS/REASSESS THE CASES OF PER SON SEARCHED U/S 132(1) OF THE ACT FOR IMMEDIATELY SIX PRECEDING YEARS. SECTION 153A OF THE ACT DOES NOT PROVIDE EXI STENCE OF INCRIMINATING MATERIAL AS ESSENTIAL REQUIREMENT. IN THE OPINION OF THE UNDERSIGNED, THE ACTION U/S 132/132A OF THE ACT WOULD AUTOMATICALLY TRIGGER THE PROVISIONS OF SECTION 153 A OF THE ACT FOR COMPUTATION OF TOTAL INCOME OF THE APPELLANT. T HIS PROVISION DOES NOT RESTRICT THE ASSESSING OFFICER T O TAKE ACTION IN THOSE CASES WHERE ASSESSMENT HAS ALREADY BEEN CO MPLETED. SINCE THE AO HAS RIGHTLY EXERCISED HIS POWERS TO ASSESS/REASSESS THE CASE U/S 153A OF THE ACT. 5.3 THE CONTENTION OF THE LD. A.R. IS ALSO NOT A CCEPTABLE AFTER PLACING RELIANCE ON FOLLOWING JUDICIAL PRONOU NCEMENT. IN THE CASE OF E.N. GOPAKUMAR VS CIT [2016] 75 TAXMANN.COM 215 (KERALA)-HON'BLE KERALA HIGH COURT HELD THAT ASSESSMENT PROCEEDINGS GENERATED BY ISSUANCE O F A NOTICE UNDER SECTION 153A(1)(A) CAN BE CONCLUDED AG AINST INTEREST OF ASSESSEE INCLUDING MAKING ADDITIONS EVE N WITHOUT ANY INCRIMINATING MATERIAL BEING AVAILABLE AGAINST ASSESSEE IN SEARCH UNDER SECTION 132 ON BASIS OF WHICH NOTICE W AS ISSUED UNDER SECTION 153A(1)(A). THE ABOVE ORDER HAS BEEN PASSED AFTER CONSIDERING CASES OF; (I) CIT V. KABUL CHAWLA [2016] 380 ITR 573/[2015] 234 TAXMAN 300/61 TAXMANN.COM 412 (DELHI). I.T.(SS)A. NOS.74 TO 77/LKW/2019 ASSTT. YRS.:2010-11 TO 2014-14 7 (II) CIT V. CONTINENTAL WAREHOUSING CORPN. (NHAVA SHEVA) LTD. [2015] 374 ITR 645/232 TAXMAN 270/58 TAXMANN.COM 78 (BOM.) (III) PRINCIPAL CIT V. KURELE PAPER MILLS (P.) LTD. [2016 ] 380 ITR 571 (DELHI) (IV) CIT V. LANCY CONSTRUCTIONS [201 6] 383 ITR 168/237 TAXMAN 728/66 TAXMANN.COM 264 (KA R.), (V) CIT V. ST. FRANCIES CLAY DECOR TILES [2016 ] 240 TAXMAN 168/70 TAXMANN.COM 234 (KER.) A ND (V) CIT V. PROMY KURIAKOSE [2016] 386 ITR 597 (KER.) FURTHER, IN THE CASE OF CIT VS RAJ KUMAR ARORA [201 4] 52 TAXMANN.COM 172 (ALLAHABAD)/2014 367 ITR 517 (ALLAHABAD)- HON'BLE ALLAHABAD HIGH COURT HELD THAT ASSESSING OFFICER HAS POWER TO REASSESS RETURNS OF ASSESSEE N OT ONLY FOR UNDISCLOSED INCOME FOUND DURING SEARCH OPERATION BU T ALSO WITH REGARD TO MATERIAL AVAILABLE AT TIME OF ORIGIN AL ASSESSMENT. SIMILARLY, IN THE CASE OF CIT VS KESARWANI ZARDA BHANDCR SAHSON ALLD. ITA NO. 270 OF 2014 (ALLAHABAD )-HON'BLE ALLAHABAD HIGH COURT HELD THAT ASSESSING OFFICER HA S POWER TO REASSESS RETURNS OF ASSESSEE NOT ONLY FOR UNDISCLOS ED INCOME FOUND DURING SEARCH OPERATION BUT ALSO WITH REGARD TO MATERIAL AVAILABLE AT TIME OF ORIGINAL ASSESSMENT. ALSO, IN THE CASE OF CIT VS ST. FRANCIS CLAY DECOR TILES (385 ITR 624)-HON'BLE DELHI KERALA COURT HELD THAT NOTIC E ISSUED UNDER SECTION 153A- RETURN MUST BE FILED EVEN IF NO INCRIMINATING DOCUMENTS DISCOVERED DURING SEARCH. IN THE CASE OF CTT VS ANIL KUMAR BHATIA (24 TAXMANN .COM 98. 211 TAXMAN 453. 352 ITR 493)- HON'BLE DELHI HIGH CO URT HELD THAT JURISDICTION OF AO UNDER 153A IS TO ASSESS TOT AL INCOME FOR THE YEAR AND NOT RESTRICTED TO SEIZED MATERIAL. POS T SEARCH REASSESSMENT IN RESPECT OF ALL 6 YEARS CAN BE MADE EVEN IF ORIGINAL RETURNS ARE ALREADY PROCESSED U/S 143(1)(A ) - ASSESSING OFFICER HAS POWER U/S 153A TO MAKE ASSESS MENT FOR ALL SIX YEARS AND COMPUTE TOTAL INCOME OF ASSESSEE, INCLUDING UNDISCLOSED INCOME, NOTWITHSTANDING THAT RETURNS FO R THESE YEARS HAVE ALREADY BEEN PROCESSED U/S 143(L)(A). EV EN IF ASSESSMENT ORDER HAD ALREADY BEEN PASSED IN RESPECT OF ALL OR ANY OF THOSE SIX ASSESSMENT YEARS, EITHER UNDER SEC TION I.T.(SS)A. NOS.74 TO 77/LKW/2019 ASSTT. YRS.:2010-11 TO 2014-14 8 143(L)(A) OR SECTION 143(3) PRIOR TO INITIATION OF SEARCH/REQUISITION, STILL ASSESSING OFFICER IS EMPO WERED TO REOPEN THOSE PROCEEDINGS UNDER SECTION 153/4 WITHOU T ANY FETTERS AND REASSESS TOTAL INCOME TAKING NOTE OF UN DISCLOSED INCOME, IF ANY, UNEARTHED DURING SEARCH. IN THE CASE OF FILATEX INDIA LTD VS CTT (49 TAXMANN.COM 465:- HON'BLE DELHI HIGH COURT HELD THA T DURING ASSESSMENT UNDER SECTION 153A, ADDITIONS NEED NOT B E RESTRICTED OR LIMITED TO INCRIMINATING MATERIAL, FO UND DURING COURSE OF SEARCH. 5.4 IN VIEW OF THE DETAILED DISCUSSION MENTIONED H ERE-IN- ABOVE AND CONSIDERING THE JUDICIAL PRONOUNCEMENTS C ITED HERE-IN-ABOVE, LEGAL GROUNDS OF APPEAL OF THE APPEL LANT ARE HEREBY DISMISSED FOR EACH ASSESSMENT YEAR I.E. A.Y. 2010-11 TO A.Y. 2013-14. 7. THE ABOVE FINDINGS OF LEARNED CIT(A) CLEARLY DEM ONSTRATE THAT THERE WAS NO INCRIMINATING MATERIAL ON THE BASIS OF WHICH THE ASSESSING OFFICER HAD MADE THE ADDITIONS. THE LD. CIT(A) IN HIS FINDI NGS HAS HELD THAT LAW DOES NOT REQUIRE THAT ADDITIONS U/S 153A CAN ONLY B E MADE ON THE BASIS OF INCRIMINATING MATERIAL. WHILE HOLDING SO, THE LD. C IT(A) HAS ALSO RELIED ON CERTAIN CASE LAWS WHICH HAS BEEN DECIDED AGAINST TH E ASSESSEE. FIRST CASE LAW OF E. N. GOPAKUMAR VS. CIT WAS PRONOUNCED IN 20 16. SECOND CASE LAW OF CIT VS. RAJ KUMAR ARORA WAS PRONOUNCED IN 20 14. THIRD CASE LAW OF CIT VS. KESARWANI ZARDA BHANDAR SAHSON ALLAHABA D WAS PRONOUNCED IN 2014. SIMILARLY CASE LAW OF CIT VS. ST. FRANCIS CL AY DCOR TILES WAS PRONOUNCED IN THE YEAR 2016 WHEREAS THE HON'BLE DE LHI HIGH COURT HAS PRONOUNCED THE CASE LAW IN THE CASE OF PR. CIT VS. MEETA GUTGUTIA IN 2017 AFTER CONSIDERING THE OTHER CASE LAWS REFERRED BY L EARNED CIT(A) AND WHICH HAS BEEN CONFIRMED BY HON'BLE SUPREME COURT WHEREIN THE HON'BLE SUPREME COURT HAS DISMISSED THE SLP FILED BY REVENU E. THEREFORE, THE CASE LAWS RELIED ON BY LEARNED CIT(A) ARE OF NO HEL P TO REVENUE. THE LUCKNOW BENCH OF THE TRIBUNAL IN A NUMBER OF CASES, AFTER RELYING ON THE I.T.(SS)A. NOS.74 TO 77/LKW/2019 ASSTT. YRS.:2010-11 TO 2014-14 9 JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF PR . CIT VS. MEETA GUTGUTIA (SUPRA) HAS ALLOWED THE APPEALS OF VARIOUS ASSESSEES IN THE FOLLOWING CASES: (I) IT(SS)A NO. 630 & 631/LKW/2019, IT(SS)A NO.633 & 634/LKW/2019 AND IT(SS)A NO. 637 & 638/LKW/2019 DAT ED 01/02/2021 (II) I.T.A. NO.510 TO 512/LKW/2019, I.T.A. NO. 513 & 514/LKW/2019, I.T.A. NO.515 & 516/LKW/2019 AND I.T.A . NO.517/LKW/2019 DATED 16/12/2020 (III) IT(SS)A NO.130-143/LKW/2018 DATED 03/03/2020 (IV) I.T.A. NO.430 TO 433/LKW/2016 DATED 15/03/2018 (V) I.T.A. NO.551, 553, 554, 99,100,113,115,92,93,94,95, 96, 104 AND 109 VIDE A CONSOLIDATED ORDER DATED 27/05/2 021 FOR THE SAKE OF COMPLETENESS THE FINDINGS OF LUCKNO W TRIBUNAL IN I.T.A. NO.630, 631, 633, 634, 637 & 638 ARE REPRODUCED BEL OW: 5. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE T HROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT A SEARCH & SEIZURE OPERATION WAS CARRIED OUT ON THE GROUP OF ASSESSEES ON 23/08/2016 AND IN THE EARLIER APPEALS WHICH WERE DECIDED BY TH E TRIBUNAL VIDE ORDER DATED 16/12/2020, THE TRIBUNAL HAD MADE A FIN DING OF FACT THAT IN ASSESSMENT YEAR 2013-14, THE ADDITIONS COUL D NOT HAVE BEEN MADE AS ADDITIONS WERE NOT MADE ON THE BASIS O F MATERIAL FOUND DURING THE COURSE OF SEARCH AND THE ASSESSMEN TS IN THOSE YEARS HAD ALREADY STOOD COMPLETED. IN THE PRESENT C ASE, THE YEARS INVOLVED ARE ASSESSMENT YEARS 2012-13 AND 2014-15. IN RESPECT OF I.T.A. NO.633 & 634 FOR ASSESSMENT YEARS 2012-13 AND 2014-15, THE ASSESSMENTS STOOD COMPLETED ON THE DATE OF SEAR CH I.E. ON 23/08/2016 AS FOR ASSESSMENT YEAR 2012-13 THE RETUR N WAS FILED ON 29/09/2012 WHICH IS APPARENT FROM PAGE NO. 48 OF TH E PAPER BOOK AND THE TIME FOR ISSUE OF NOTICE U/S 143(2) EXPIRED ON 30/09/2013 AND INTIMATION U/S 143(1) WAS ISSUED VIDE ORDER DAT ED 22/05/2013, A COPY OF WHICH IS PLACED IN PAPER BOOK PAGES 51 TO 69. SIMILARLY, FOR ASSESSMENT YEAR 2014-15 IN I.T.A. NO.634/LKW/20 19, THE RETURN WAS FILED ON 26/11/2014 WHICH IS APPARENT FROM PAGE NO. 38 OF THE PAPER BOOK AND THE TIME FOR ISSUE OF NOTICE U/S 143 (2) EXPIRED ON 30/09/2015 AND INTIMATION U/S 143(1) WAS ISSUED VID E ORDER DATED 04/08/2015, A COPY OF WHICH IS PLACED IN PAPER BOOK AT PAGES 41 TO 61. SIMILARLY, IN RESPECT OF APPEALS IN I.T.A. NO.6 37 & 638, THE RETURN FOR ASSESSMENT YEAR 2012-13 WAS FILED ON 30/ 09/2012 WHICH IS APPARENT FROM PAGE NO. 18 OF THE PAPER BOO K AND THEREFORE, THE TIME FOR ISSUE OF NOTICE U/S 143(2) EXPIRED ON I.T.(SS)A. NOS.74 TO 77/LKW/2019 ASSTT. YRS.:2010-11 TO 2014-14 10 30/09/2013 WHICH IS BEFORE THE DATE OF SEARCH. SIM ILARLY, FOR ASSESSMENT YEAR 2014-15, THE RETURN WAS FILED ON 30 /11/2014 WHICH IS APPARENT FROM PAGE NO. 39 OF THE PAPER BOO K AND THE TIME FOR ISSUE OF NOTICE U/S 143(2) EXPIRED ON 30/0 9/2015 AND INTIMATION U/S 143(1) WAS ISSUED VIDE ORDER DATED 1 9/12/2014, A COPY OF WHICH IS PLACED IN PAPER BOOK AT PAGES 42 T O 47. SIMILARLY, IN RESPECT OF APPEALS IN I.T.A. NO.630 & 631, THE RETURN FOR ASSESSMENT YEAR 2012-13 WAS FILED ON 30/09/2012 WHICH IS APPARENT FROM PAGE NO. 18 OF THE PAPER BOOK AND TIM E FOR ISSUE OF NOTICE U/S 143(2) EXPIRED ON 30/09/2013 WHICH IS BEFORE THE DATE OF SEARCH I.E. 23/08/2016. SIMILARLY, FOR ASS ESSMENT YEAR 2014-15 THE RETURN WAS FILED ON 30/11/2014 WHICH IS APPARENT FROM PAGE NO. 37 OF THE PAPER BOOK AND THE DATE FOR ISSUE OF NOTICE U/S 143(2) EXPIRED ON 30/09/2015 AND INTIMAT ION U/S 143(1) WAS ISSUED VIDE ORDER DATED 29/12/2014, A CO PY OF WHICH IS PLACED IN PAPER BOOK AT PAGES 40 TO 48. THEREFOR E, FOR ASSESSMENT YEARS 2012-13 & 2014-15 THE ADDITIONS AR E NOT SUSTAINABLE AS THE ADDITIONS HAVE NOT BEEN MADE ON THE BASIS OF ANY SEIZED MATERIAL WHICH IS APPARENT FROM THE ASSE SSMENT ORDERS ITSELF. 6. WE HAVE ALREADY HELD IN OUR ORDER DATED 16/12/20 20 IN THE CASE OF THE PRESENT ASSESSEES ITSELF IN OTHER A SSESSMENT YEARS THAT ADDITIONS WERE NOT MADE ON THE BASIS OF ANY INCRIMINATING MATERIAL AS THE ASSESSING OFFICER, WH ILE MAKING THE ADDITIONS, HAD NOT RELIED ON ANY SEIZED MATERIAL AN D HAD RELIED ON THE DOCUMENT MARKED AS BK-2 WHICH WAS SEIZED BY THE SEARCH PARTY FROM SOME OTHER GROUP AND THERE THE SE ARCH TOOK PLACE ALMOST ONE YEAR BEFORE THE DATE OF SEARCH ON THE PRESENT ASSESSEES. THE FINDINGS OF THE TRIBUNAL ARE CONT AINED IN PARA 5 OF THE ORDER, WHICH FOR THE SAME OF COMPLETENESS, A RE REPRODUCED BELOW: 5. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE THROUGH THE MATERIAL PLACED ON RECORD. WE FIND THA T THE FIRST ARGUMENT OF LEARNED COUNSEL FOR THE ASSESSEE WAS THAT IN CASE OF COMPLETED ASSESSMENTS, THE ADDITION CANNOT BE MADE IF THERE IS NO INCRIMINATING MATERIA L. IN THIS REGARD LEARNED COUNSEL FOR THE ASSESSEE HAD SUBMITTED THAT IN THE YEAR 2013-14 AND 2015-16 THE ASSESSMENTS STOOD COMPLETED AND THERE WAS NO INCRIMINATING MATERIAL FOUND DURING THE SEARCH. IN THIS RESPECT THE BENCH HAD ASKED BOTH THE PARTIES TO FUR NISH THE MATERIAL WHICH WAS IMPOUNDED DURING THE SEARCH AND WHICH BOTH THE PARTIES HAD FILED WITH THE BENCH I.T.(SS)A. NOS.74 TO 77/LKW/2019 ASSTT. YRS.:2010-11 TO 2014-14 11 WHICH WE HAVE EXAMINED AND HAVE COMPARED WITH THE MATERIAL USED BY ASSESSING OFFICER IN ASSESSMENT OR DER. WE FOUND THAT NONE OF THE MATERIAL SEIZED DURING TH E SEARCH WAS USED BY THE ASSESSING OFFICER FOR MAKING ADDITION AND INSTEAD HAD RELIED ON A DOCUMENT MARKE D AS BK-2, WHICH WAS SEIZED DURING A SEARCH OPERATION ON A DIFFERENT GROUP OF COMPANY AND THAT TOO ON 28/04/2015 THAT IS MORE THAN ONE YEAR BEFORE THE DA TE OF SEARCH ON ASSESSEES. THIS FACT IS FURTHER STRENGTHENED FROM THE ASSESSMENT ORDER WHEREIN THE ASSESSING OFFICER, AT PAGE 8, HAS OBSERVED AS UNDER : IN THIS CONTEXT, IT IS NOTEWORTHY THAT A SEARCH & SEIZURE OPERATION U/S 132 OF THE I.T. ACT, 1961 CONDUCTED UPON THE COMPANIES OF SHMSHWAT AGARWAL ON 28.04.2015 BY THE INVESTIGATION WING, KANPUR. THE INCRIMINATING DOCUMENTS WHICH WERE FOUND AND SEIZED ARE THE PREMISES ALSO INCLUDE A DIARY IDENTIFIED AS BK-2, CONTAINING LEDGERS OF DIFFERENT PARTIES. ON GOING THROUGH PAGES OF THESE LEDGERS, IT WAS FOUND THAT T HE COMPANIES OF SRI SHASHWAT AGARWAL ARE PAPER COMPANIES AND ARE ENGAGED IN PROVIDING THE ACCOMMODATION ENTRIES OF BOGUS LTCG, UNSECURED LOAN ETC, TO VARIOUS PARTIES BY ACCEPTING UNDISCLOSED CA SH FROM BENEFICIARIES. NAME OF SUCH BENEFICIARIES, DAT E- WISE RECEIPT OF CASH AND ISSUANCE OF CHEQUES FROM A ND TO THEM, IS RECORDED IN THIS DIARY VERY VIVIDLY. TH E NAME OF SRI NAVIN JAIN AND HIS FAMILY MEMBERS SUCH AS HI S FATHER SRI NARESH KIUNAR JAIN, NARESH KUMAR JAIN HU F, HIS MOTHER SMT. SHRIMATI JAIN AND HIS WIFE NEETU JA IN ALSO FIGURE IN THIS DIARY. SHRI NAVIN JAIN AND HIS AFOREMENTIONED FAMILY MEMBERS HAVE TAKEN ACCOMMODATION ENTRIES OF TAX EXEMPT LONG TERM CAPITAL GAIN BY THE WAY OF PRE-ARRANGED AND MANIPULATIVE TRADING IN THE SHARES CITYON SYSTEMS (INDIA) LIMITED. THIS SALE WAS STAGE MANAGED BY SH . SHASHWAT AGARWAL AND HIS BROTHERS AS ALL THE SHARES WERE PURCHASED BY THE COMPANIES CONTROLLED BY SH. SHASHWAT AGARWAL. 5.1 THE ABOVE OBSERVATIONS, NOTED BY THE ASSESSING OFFICER, CLEARLY DEMONSTRATE THAT A DIARY IDENTIFIE D AS BK-2 WAS IMPOUNDED DURING SEARCH & SEIZURE OPERATIO N I.T.(SS)A. NOS.74 TO 77/LKW/2019 ASSTT. YRS.:2010-11 TO 2014-14 12 ON 28/04/2015 IN THE CASE OF SEARCH ON THE COMPANIE S BELONGING TO SHRI SHASHWAT AGARWAL WHEREIN THE NAME OF SHRI NAVIN JAIN AND HIS FAMILY MEMBERS WERE MENTIONED. THE ASSESSING OFFICER NOWHERE NOTED THA T THE NAMES OF THE ASSESSEES WAS ALSO MENTIONED IN SU CH DIARY. MOREOVER, FROM THE FINDINGS OF THE ASSESSIN G OFFICER, WE FIND THAT THE COMPANIES OF SHRI SHASHWA T AGARWAL WERE ENGAGED IN PROVIDING ACCOMMODATION ENTRIES OF BOGUS LONG TERM CAPITAL GAIN, UNSECURED LOANS ETC. TO VARIOUS PARTIES AND THERE IS NO MENTI ON OF BOGUS TRANSACTIONS OF CLOTH. MOREOVER, THE ABOVE FINDINGS CLEARLY INDICATE THAT THE ACCOMMODATION EN TRIES OF LONG TERM CAPITAL GAIN AND UNSECURED LOANS WERE OBTAINED BY THE INDIVIDUALS MENTIONED IN THE ASSESSMENT ORDER AND THERE IS NO MENTION THAT THE ASSESSEES HAD TAKEN ANY ENTRY OF LONG TERM CAPITAL GAIN OR UNSECURED LOANS FROM THE COMPANIES OF SHRI SHASHWAT AGARWAL. THIS FACT IS FURTHER CORROBORATE D FROM THE FACT THAT THE ASSESSING OFFICER IN THE CAS E OF THE ASSESSEES DID NOT MAKE ANY ADDITION ON ACCOUNT OF LONG TERM CAPITAL GAIN OR UNSECURED LOANS BUT HE MADE THE ADDITIONS BY HOLDING THE SALE AND PURCHASE OF CLOTH WHICH WAS PURCHASED FROM RICH GROUP OF COMPANIES TO BE BOGUS. ALL THESE FACTS DEMONSTRATE THAT THE ASSESSING OFFICER HAD NOT MADE THE ADDITIO N ON THE BASIS OF ANY INCRIMINATING DOCUMENT BUT HAD MAD E THE ADDITION ON ACCOUNT OF BOGUS SALE AND PURCHASE OF CLOTH FOR WHICH NO DOCUMENT WAS FOUND DURING THE COURSE OF SEARCH. EVEN OTHERWISE, THE DOCUMENTS RE LIED ON BY THE ASSESSING OFFICER WERE FOUND AT THE PREMI SES OF THE COMPANIES OF SHRI SHASHWAT AGARWAL WHEREIN T HE SEARCH WAS CARRIED OUT ON 28/04/2015 AND THERE TOO THE INCRIMINATING MATERIAL, AS MENTIONED IN THE ASSESSM ENT ORDER, WAS A DIARY IDENTIFIED AS BK-2 WHEREIN THE N AMES OF SOME PROMOTERS/DIRECTORS OF THE ASSESSEES WERE MENTIONED. NOWHERE THEREIN THE NAMES OF THE ASSESSEES HAVE BEEN MENTIONED. LEARNED COUNSEL FOR THE ASSESSEE HAD RELIED ON A NUMBER OF CASE LAWS FO R THE PROPOSITION THAT IN CASE NO INCRIMINATING MATER IAL IS FOUND, THE ADDITIONS CANNOT BE MADE IN THE CASE OF COMPLETED ASSESSMENTS. PARTICULAR RELIANCE WAS PLA CED ON THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA (SUPRA) WHEREIN THE SLP FILED BY TH E I.T.(SS)A. NOS.74 TO 77/LKW/2019 ASSTT. YRS.:2010-11 TO 2014-14 13 DEPARTMENT WAS DISMISSED BY HON'BLE SUPREME COURT. LEARNED COUNSEL FOR THE ASSESSEE HAD ALSO RELIED ON CASE LAW OF PR. CIT VS. MEETA GUTGUTIA (SUPRA), THE SLP OF WHICH HAS ALSO BEEN DISMISSED BY HON'BLE SUPREME COURT. THOUGH THE SLP IN THE CASE OF KABUL CHAWLA WAS DISMISSED DUE TO LOW TAX EFFECT BUT THE SLP IN THE CASE OF MEETA GUTGUTIA WAS NOT DISMISSED DUE TO LOW TAX EFFECT BUT WAS DISMISSED ON MERITS. FOR THE SAKE O F COMPLETENESS, THE JUDGMENT OF HON'BLE DELHI HIGH CO URT IN THE CASE OF MEETA GUTGUTIA IS REPRODUCED BELOW: A SEARCH AND SEIZURE UNDER SECTION 132 URNS CONDUC TED IN THE PREMISES OF THE FNP GROUP WHICH COMPRISED OF VARIOUS COMPANIES, PARTNERSHIPS AND PROPRIETORSHIP CONCERNS. THE STATEMENT OF AN EMPLOYEE PG WAS RECORDED ON OATH UNDER SECTION 133A. THE ASSESSEE W AS A DIRECTOR/PARTNER/SHAREHOLDER IN THE GROUP OF COMPANIES/CONCERNS. SHE WAS THE PROPRIETOR OF THE CONCERN FNP. ON THE BASIS OF DOCUMENTS RECOVERED DURING THE SEARCH OPERATION, A NOTICE UNDER SECTION 153A WAS ISSUED TO THE ASSESSEE. THEREAFTER, A NOTI CE AND QUESTIONNAIRE UNDER SECTIONS 143(2) AND 142(1) WERE ALSO ISSUED. THE ASSESSING OFFICER PASSED SEPA RATE ORDERS IN RESPECT OF THE ASSESSMENT YEARS 2000-01 T O 2003-04. FOR THE ASSESSMENT YEAR 2004-05, AS IN THE PRECEDING YEARS, THE ASSESSEE HAD CLAIMED DEDUCTION ON ACCOUNT OF FRANCHISEE COMMISSIONS PAID TO VARIOUS PARTIES. THE ASSESSING OFFICER HELD THAT THE ADDRES SES OF THE FRANCHISEES WERE NOT REVEALED AND THAT THERE WE RE DISCREPANCIES IN THE DETAILS OF THE ACCOUNTS OF THE FRANCHISEES FILED BY THE ASSESSEE. CONSEQUENTLY, TH E FRANCHISEE COMMISSION PAYMENTS CLAIMED BY THE ASSESSEE WERE ADDED BACK TO HER INCOME. FOR THE ASSESSMENT YEAR 2004-05, THE ASSESSING OFFICER ALSO MADE AN ADDITION ON ACCOUNT OF STOCK. THE ASSESSING OFFICER ESTIMATED THE UNDISCLOSED INCOME, ON ACCOUN T OF FRANCHISEE FEE, AT A CERTAIN PERCENTAGE FOR THE ASS ESS- MENT YEARS 2001-02 TO 2006-07. NO ADDITION WAS MADE FOR THE ASSESSMENT YEAR 2006-07, ALTHOUGH A DISCLOS URE WAS MADE. BEFORE THE COMMISSIONER (APPEALS), THE ASSESSEE PRODUCED ADDITIONAL EVIDENCE UNDER RULE 46 A OF THE INCOME-TAX RULES, 1962, WHICH INCLUDED COPIE S OF FRANCHISEE AGREEMENTS. A REJOINDER WAS FILED BY THE I.T.(SS)A. NOS.74 TO 77/LKW/2019 ASSTT. YRS.:2010-11 TO 2014-14 14 ASSESSEE. ON ANALYSIS OF THE ADDITIONAL EVIDENCE, T HE COMMISSIONER (APPEALS) HELD THAT THE ACCOUNTS OF TH E ASSESSEE HAD BEEN TAX AUDITED AND THAT NO ADVERSE REMARKS HAD BEEN MADE BY THE TAX AUDITORS. HE FURTH ER HELD THAT THE ASSESSING OFFICER HAD NOT REJECTED TH E BOOKS OF ACCOUNT OF THE ASSESSEE. ACCORDINGLY, HE H ELD THAT THE DISALLOWANCE OF THE FRANCHISEE COMMISSIONS PAID WERE UNSUSTAINABLE AND DELETED THE ADDITIONS MADE. HE DELETED THE ADDITIONS MADE ON ACCOUNT OF PAYMENT OF RENT, NON-REFUNDABLE SECURITY, INCOME FR OM SELF-CONTROLLED OUTLETS AND REDUCED THE ADDITION MA DE ON ACCOUNT OF CLOSING STOCK. HE ALSO DELETED THE ADDITIONS OF UNDISCLOSED INCOME, MADE ON ACCOUNT OF FRANCHISEE FEE, ACCEPTING THE CONTENTION OF THE ASS ESSEE THAT THERE WAS NO DISCLOSURE MADE FOR EARLIER YEARS , OR ANY EVIDENCE UNEARTHED DURING THE SEARCH BY THE DEPARTMENT THAT SUCH FRANCHISEE FEE INCOME WAS NOT DISCLOSED BY HER. BOTH THE DEPARTMENT AND THE ASSES SEE FILED APPEALS BEFORE THE APPELLATE TRIBUNAL. ACCEPT ING THE CONTENTION OF THE ASSESSEE THAT FOR THE ASSESSM ENT YEARS 2000-01 TO 2003-04, THERE WAS NO INCRIMINATIN G MATERIAL SEIZED DURING THE COURSE OF SEARCH, AND THEREFORE, THE ASSESSMENT ORDERS IN RESPECT OF THOS E YEARS OUGHT TO BE QUASHED, THE APPELLATE TRIBUNAL H ELD THAT THE ASSUMPTION OF JURISDICTION UNDER SECTION 1 53 A FOR THOSE ASSESSMENT YEARS WAS ILLEGAL. IN RESPECT OF THE ASSESSMENT YEAR 2004-05, THE APPELLATE TRIBUNAL HEL D THAT THE ADDITIONS MADE WERE BASED ON SEIZED DOCUMENTS AND, THEREFORE, THE ASSESSMENT UNDER SECTION 153A WAS VALID. IT DISMISSED THE APPEALS FI LED BY THE DEPARTMENT IN RESPECT OF THE DELETIONS MADE BY THE COMMISSIONER (APPEALS) AND DISMISSED THE ASSESSEE'S APPEAL FOR NON-PROSECUTION. ON APPEALS: HELD, DISMISSING THE APPEALS, (I) THAT IT WAS ONLY IF DURING THE COURSE OF SEARCH UNDER SECTION 132 INCRIMINATING MATERIAL JUSTIFYING THE REOPENING OF THE ASSESSMENTS FOR SIX PREVIOUS YEARS WAS FOUND THAT T HE INVOCATION OF SECTION 153 A QUA EACH OF THE ASSESSM ENT YEAR WOULD BE JUSTIFIED. 5.2 THE ABOVE JUDGMENT OF HON'BLE DELHI HIGH COURT HAS BEEN UPHELD BY HON'BLE SUPREME COURT AS THE SLP FILED BY REVENUE HAS BEEN DISMISSED WHICH IS REPORT ED I.T.(SS)A. NOS.74 TO 77/LKW/2019 ASSTT. YRS.:2010-11 TO 2014-14 15 AT 96 TAXMANN.COM 468. HON'BLE DELHI HIGH COURT IN ABOVE CASE HAS DISTINGUISHED THE CASE LAW OF DAYAWA NTI GUPTA VS. CIT 390 ITR 496 (DEL) WHICH LEARNED D. R. HAD HEAVILY RELIED. THE CASE LAW OF HON'BLE ALLAHA BAD HIGH COURT IN THE CASE OF RAJ KUMAR ARORA 367 ITR 5 17, THOUGH SUPPORTS THE CONTENTIONS OF THE REVENUE BUT SINCE HON'BLE SUPREME COURT HAS DECIDED THE ISSUE I N FAVOUR OF THE ASSESSEE IN THE CASE OF MEETA GUTGUTI A THEREFORE, THE JUDGMENT OF JURISDICTIONAL HIGH COUR T WILL NOT HELP THE REVENUE. THE CONTENTION OF THE REVENU E THAT SINCE THE DEPARTMENT HAS NOT ACCEPTED THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF KA BUL CHAWLA AND MEETA GUTGUTIA AS SLP IN THE CASE OF CIT VS. CONTINENTAL WAREHOUSING CORPORATION 235 TAXMAN 568 (SC) HAS BEEN ADMITTED IS ALSO OF NO HELP TO REVENUE. THEREFORE, IN VIEW OF THE ABOVE CASE LAWS , WE HOLD THAT IN CASE OF COMPLETED ASSESSMENTS, THE ADDITION CAN BE MADE ONLY ON THE BASIS OF INCRIMINA TING MATERIAL FOUND DURING SEARCH. WE HAVE ALREADY HELD THAT NO INCRIMINATING MATERIAL WAS FOUND FROM THE PREMISES OF THE ASSESSEE THEREFORE, THE ADDITIONS CANNOT BE MADE IN THE CASE OF COMPLETED ASSESSMENTS WHICH IN THIS CASE IS APPEAL FOR ASSESSMENT YEAR 20 13- 14 WHEREIN IN I.T.A. NO.510 THE ASSESSMENT ORDER WA S ALREADY PASSED U/S 143(3) ON 22/03/2016 WHICH IS BEFORE THE SEARCH DATE OF 23/08/2016, COPY OF ASSESSMENT ORDER IS PLACED AT PAGES 51 TO 54 OF THE PAPER BOOK. SIMILARLY IN I.T.A. NO. 515, THE ASSES SMENT WAS COMPLETED U/S 143(3) VIDE ORDER DATED 23/03/201 6, THE COPY OF WHICH IS PLACED AT PAGES 54 TO 57 OF TH E PAPER BOOK. SIMILARLY IN I.T.A. NO.517 RELATING TO ASSESSMENT YEAR 2013-14, THE ASSESSMENT ORDER U/S 143(3) DATED 30/03/2016, A COPY OF WHICH IS PLACED IN PAPER BOOK AT PAGES 52 TO 56. THEREFORE, THE ASSESSMENTS IN THESE CASES STOOD COMPLETED. LEARNE D COUNSEL FOR THE ASSESSEE HAD THOUGH ARGUED THAT THE ASSESSMENT FOR ASSESSMENT YEAR 2015-16 ALSO STOOD COMPLETED BUT IN OUR OPINION THE APPEALS FOR ASSESSMENT YEAR 2015-16 CANNOT BE SAID TO BE COMPLETED AS TIME FOR ISSUE OF NOTICE U/S 143(2) WA S STILL AVAILABLE TO THE DEPARTMENT WHICH WAS UPTO 30/09/2016 WHEREAS THE SEARCH TOOK PLACE ON 23/08/2016 WHICH MEANS THAT THERE WAS TIME AVAILABL E I.T.(SS)A. NOS.74 TO 77/LKW/2019 ASSTT. YRS.:2010-11 TO 2014-14 16 TO THE DEPARTMENT TO ISSUE NOTICE U/S 143(2) THEREF ORE, THE APPEALS FILED FOR ASSESSMENT YEAR 2015-16 CANNO T BE SAID TO HAVE COMPLETED. IN VIEW OF THE ABOVE DISCUSSION, GROUND NO. 2 & 7 OF THE APPEALS IN I.T. A. NO.510, 515 & 517 ARE ALLOWED. 7. IN VIEW OF THE ABOVE TRIBUNAL ORDERS, FIRST LEGA L ISSUE RAISED BY ASSESSEE VIDE GROUND NUMBERS 1 & 2 IN I.T .A. NO.630 AND 631, GROUND NUMBERS 1 TO 4 IN I.T.A. NO. 633, 634, 637 AND 638 ARE ALLOWED. SINCE WE HAVE ALLOWED THE ABOVE APPEALS ON GROUND NO. 1 &2, OTHER GROUNDS OF APPEAL ARE NOT ADJUDICATED. IN VIEW OF THE ABOVE, THE APP EALS FILED BY THE ASSESSEE IN I.T.A. NO.630, 631, 633, 634, 63 7 AND 638 ARE PARTLY ALLOWED. 8. NOW COMING TO APPEALS IN I.T.A. NO.643 AND 678 F OR ASSESSMENT YEAR 2017-18, WE FIND THAT ASSESSMENTS I N THESE YEARS WERE PENDING AS ON THE DATE OF SEARCH AND ADD ITIONS COULD HAVE BEEN MADE IN THESE YEARS EVEN WITHOUT HA VING FOUND ANY INCRIMINATING MATERIAL THEREFORE, GROUND NO. 1 & 2 IN THESE APPEALS ARE DISMISSED. 8. THE EXISTENCE OF INCRIMINATING MATERIAL FOR MAKI NG ADDITIONS U/S 153A IS FURTHER STRENGTHENED FROM THE DECISION OF H ON'BLE SUPREME COURT IN THE CASE OF CIT VS. SINHGAD TECHNICAL EDUCATION SOCIETY [2017] 397 ITR 344 (SC) WHERE HON'BLE SUPREME COURT IN A CASE U/S 153C HAS AGAIN HIGHLIGHTED THE IMPORTANCE OF EXISTENCE OF INCRIMIN ATING MATERIAL FOR MAKING THE ADDITIONS. THE HON'BLE SUPREME COURT WE NT ON TO HOLD THAT THE ASSESSING OFFICER, WHILE RELYING ON THE INCRIMI NATING MATERIAL, HAS TO MAKE REFERENCE IN THE SATISFACTION NOTE REGARDING Y EAR-WISE EXISTENCE OF INCRIMINATING MATERIAL. SINCE THERE IS AN INTERPLA Y BETWEEN SECTION 153A AND SECTION 153C, THE FINDINGS OF HON'BLE SUPREME C OURT IN A CASE U/S 153C ARE APPLICABLE FOR MAKING ADDITIONS U/S 153A A LSO. 9. IN VIEW OF THESE FACTS AND CIRCUMSTANCES AND IN VIEW OF THE JUDICIAL PRECEDENTS, GROUNDS NO. 1 & 2 IN ALL THE APPEALS AR E ALLOWED. SINCE WE I.T.(SS)A. NOS.74 TO 77/LKW/2019 ASSTT. YRS.:2010-11 TO 2014-14 17 HAVE ALLOWED THE APPEALS OF THE ASSESSEE ON LEGAL I SSUE, OTHER GROUNDS OF APPEAL DO NOT REQUIRE ANY ADJUDICATION. 10. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE STAND PARTLY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 02/08/2021) SD/. SD/. ( A. D. JAIN ) ( T. S. KAPOOR ) VICE PRESIDENT ACCOUNTANT MEMBER DATED:02/08/2021 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW BY ORDER ASSISTANT REGISTRAR
