D.C.I.T., Circle-V, Kolkata, Kolkata V. M/s HTC Financ Pvt. Ltd., Kolkata

ITSSA 93/KOL/2013

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3282 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 26-04-2017
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 07-11-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 13-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S BISWAS
• Assessee Lawyers: D S DAMLE
• Keywords: Unexplained expenditure; Search and seizure; Document seized; Principle of natural justice; Opportunity of cross examination; Documents seized
• Section: 132; 139; 143(3); 153A

Judgement Text

1 IT(SS)A NOS. 93 TO 96/K/13 & CO NOS. 149 TO 152/K/13 IN THE INCOME TAX APPELLATE TRIBUNAL,A BENCH, KOLKATA BEFORE: SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER IT(SS)A NO.93/KOL/2013 A.Y 2009-10 DEPUTY COMMISSIONER OF VS M/S. HTC FINANC E P.LTD INCOME TAX, CC-V, PAN: AABCH 3562N (APPELLANT) (RESPONDENT) CO NO. 152/KOL/2013 [ARISING OUT OF IT(SS) A NO. 93/KOL/2013 A.Y 2009-1 0] M/S. HTC FINANCE P.LTD VS DEPUTY COMMISSIONE R OF INCOME TAX, CC-VI, KOLKATA (CROSS OBJECTOR/ASSESSEE) (RESPONDENT/DEPART MENT) IT(SS)A NOS.94 & 95/KOL/2013 A.YS 2008-09 & 2009-10 DEPUTY COMMISSIONER OF VS M/S.PCM CEMENT CONCRETE INCOME TAX, CC-V, P.LTD PAN: AACCP1669D (APPELLANT) (RESPONDENT) CO NOS. 149 & 150/KOL/2013 [ARISING OUT OF IT(SS) A NO. 94 & 95/KOL/2013 A.YS 2008-09 & 09-10] M/S. PCM CEMENT CONCRETE VS DEPUTY COMMISSIONER OF P.LTD INCOME TAX, CC-VI, KOLKATA (CROSS OBJECTOR/ASSESSEE) (RESPONDENT/DEPART MENT) 2 IT(SS)A NOS. 93 TO 96/K/13 & CO NOS. 149 TO 152/K/13 IT(SS)A NO.96/KOL/2013 A.Y 2008-09 DEPUTY COMMISSIONER OF VS M/S. PUNAM CHAN D MITTAL INCOME TAX, CC-V, PAN: AADFP 7834L (APPELLANT) (RESPONDENT) CO NO. 151/KOL/2013 [ARISING OUT OF IT(SS) A NO.96/KOL/2013 A.Y 2008-09 ] M/S. PUNAM CHAND MITTAL VS DEPUTY COMMISSIONER O F INCOME TAX, CC-VI, KOLKATA (CROSS OBJECTOR/ASSESSEE) (RESPONDENT/DEPART MENT) APPEARANCES BY : SHRI R.S BISWAS, CIT, LD.DR FOR THE REVENUE SHRI D.S. DAMLE, FCA,LD.AR FOR THE ASSESSEE DATE OF HEARING : 06-02-2017 DATE OF PRONOUNCEMENT : 26-04-2017 O R D E R SHRI S.S. VISWANETHRA RAVI, JM :- ALL THESE APPEALS AND CORRESPONDING CROSS OBJECTION S BY THE REVENUE AND ASSESSEE ARE AGAINST THE SEPARATE O RDERS DT: 13-09-2013 AND 16-09-2013 PASSED BY THE COMMISSIONE R OF INCOME TAX (APPEALS), CENTRAL-I, KOLKATA FOR THE AS SESSMENT YEARS 2008-09 AND 2009-10 RESPECTIVELY. 2. SINCE THE ISSUES INVOLVED IN ALL THESE APPEALS A ND CROSS OBJECTIONS ARE COMMON AND IDENTICAL, THEREFORE, WE HEARD ALL THE APPEALS TOGETHER AND PROCEED TO DISPOSE OF THE SAME BY A CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 3 IT(SS)A NOS. 93 TO 96/K/13 & CO NOS. 149 TO 152/K/13 3. AT THE TIME OF HEARING THE LD.AR SUBMITS THAT TH E RESPECTIVE ASSESSEE HAVE FILED THE CORRESPONDING CROSS OBJECTI ONS CHALLENGING THE ADDITION MADE IN THE ASSESSMENT ORD ERS PASSED U/S. 153A R.W.S 143(3) OF THE ACT WITHOUT THERE BE ING ANY INCRIMINATING MATERIAL FOUND AT THE TIME OF SEARCH AND SEIZURE OPERATION CONDUCTED U/S. 132 OF THE INCOME-TAX ACT, 1961 (I.T ACT). THEREFORE, HE URGED TO TAKE THE APPEAL IN IT( SS) A NO. 96/KOL/2013 FOR THE A.Y 2008-09 (BY THE REVENUE) AL ONG WITH C.O NO. 151/KOL/2013 (BY THE ASSESSEE) AS LEAD CAS ES FOR THE SAKE OF CONVENIENCE AND BETTER UNDERSTANDING OF FAC TS. THE LD.DR APPEARING ON BEHALF OF REVENUE HAS NOT OBJECTED TO THE SAME. 4. FIRST WE SHALL TAKE UP THE APPEAL IN IT(SS)A NO. 96/KOL/2013 FOR THE A.Y 2008-09 BY THE REVENUE WITH CO NO.151/KOL/2013. 5. BRIEF FACTS ARE THAT A SEARCH AND SEIZURE OPERAT ION U/S. 132 OF THE I.T ACT 1961 WAS CONDUCTED ON 01-03-2011 AT THE RESIDENTIAL AND BUSINESS PREMISES OF M/S. PCM GROUP . ALL THE ASSESSEE HEREIN BELONGS TO SAID GROUP. IN THE COURS E OF SEARCH AND SEIZURE OPERATION THE REVENUE FOUND VARIOUS DOC UMENTS AND ASSETS, WHICH WERE SEIZED FROM THE SAID GROUP. IN P URSUANCE TO SECTION 153A A NOTICE WAS ISSUED TO ASSESSEE. IN R ESPONSE TO WHICH, THE ASSESSEE FILED ITS RETURN OF INCOME DECL ARING TOTAL INCOME OF RS.5,38,498/-. THEREAFTER, THE AO ISSUED NOTICE U/S. 143(2) AND 142(1). THE AO DETERMINED THE INCOME OF ASSESSEE AT RS.1,63,20,887/- AMONGST WHICH A SUM OF RS.1,57, 82,400 HAS BEEN ADDED ON THE GROUND OF UNDISCLOSED CASH RECEI PT ON SALE OF SHARES. 4 IT(SS)A NOS. 93 TO 96/K/13 & CO NOS. 149 TO 152/K/13 6. THE LD.AR SUBMITS THAT THE ASSESSEE HAD SOLD SOM E OF ITS SHARES AND EARNED PROFITS ON SUCH TRANSFER OF SHARE S AND DISCLOSED THE SAME AS PROFIT IN THE RETURN AS FILED U/S. 139 OF THE ACT. THE AO ACCEPTED THE CAPITAL GAINS AS DISCL OSED IN THE ORIGINAL RETURN AND INTIMATED THE ACCEPTANCE U/S. 1 43(1) OF THE ACT. 7. IT IS ALLEGED THAT A SEARCH U/S 132 OF THE ACT W AS CONDUCTED IN THE CASE OF GANDHAMARDAN GROUP ALSO KN OWN AS ML GROUP OR MADAN LAL GROUP OF COMPANIES IN 23-09-2 008. THE AO REFERRING TO DOCUMENT IN KS-14 FOUND IN THE COUR SE OF THE SAID SEARCH ALLEGED THAT THE ML GROUP MADE PAYMENTS TO PCM GROUP TOTALLING TO RS.18 CRORES FOR WHICH ALLEGATIO N THE ASSESSEE DENIED THAT THEY (PCM GROUP) HAVE NO TRANS ACTION WITH ML GROUP DURING THE AYS 2005-06 TO 2011. 8. BASED ON ALLEGED DOCUMENTARY EVIDENCES FOUND IN THE COURSE OF SEARCH AT M L GROUP OF COMPANIES THE AO C ONCLUDED THAT THE ASSESSEE HAD NOT DISCLOSED TRULY AND FULLY THE CONSIDERATION WHICH IT RECEIVED ON TRANSFER OF SHAR ES OF R.P. WARE HOUSE TEA INDUSTRIES LTD HEREAFTER FOR SHORT RPWTIL . ACCORDINGLY, THE AO MADE ADDITION OF RS. 1,57,82,40 0/- AS UNDISCLOSED CAPITAL GAINS OF THE ASSESSEE. 9. BEFORE THE CIT-A, IN FIRST APPELLATE PROCEEDINGS , THE ASSESSEE CONTENDED THAT THE IMPUGNED ADDITION WAS M ADE BASED ON PRESUMPTIONS AND SURMISES WITHOUT PLACING ON RECORD ANY COGENT OR MATERIAL EVIDENCE. THE CIT-A AFTER CO NSIDERING 5 IT(SS)A NOS. 93 TO 96/K/13 & CO NOS. 149 TO 152/K/13 THE SUBMISSIONS OF THE ASSESSEE AND EXAMINING THE A SSESSMENT ORDER DELETED THE IMPUGNED ADDITION BY OBSERVING AS UNDER:- 18. IN THE IMPUGNED ORDER, THE AO HAS JUSTIFIED THE ADDITION BY RELYING ON THE JUDGMENT OF THE HON'BLE DELHI HIGH C OURT IN THE CASE OF CIT VS SONAL CONSTRUCTIONS (28 TAXMANN.COM 127). THE RE LEVANT EXTRACTS FROM THAT JUDGMENT ARE SET OUT IN PARA 6.4 OF THE IMPUGN ED ORDER. IN COURSE OF THE HEARING, COPY OF THE FULL JUDGMENT OF THE HON'B LE DELHI HIGH COURT WAS PLACED BEFORE ME FOR CONSIDERATION BY THE LD AR. IT IS A SETTLED LEGAL PROPOSITION THAT ANY FINDING OR OBITER DICTA IN THE JUDGMENT OF A COURT MUST BE UNDERSTOOD IN THE LIGHT OF THE FACTS OF THA T GIVEN CASE. BEFORE APPLYING THE RATIO LAID DOWN IN ONE JUDGMENT TO ANY OTHER CASE, IT IS NECESSARY FOR THE AUTHORITY TO EVALUATE THE ACTS OF SUCH CASE AND THEN DECIDE WHETHER THE OBSERVATIONS OF THE COURT ARE AP PLICABLE TO THE FACTS OF THAT OTHER CASE. UNLESS THE FACTS OF THE GIVEN CASE ARE FOUND COMPARABLE SO AS TO JUSTIFY THE APPLICATION OF THE RATIO, NE C ANNOT BLINDLY APPLY THE OBSERVATIONS OF THE COURT TO ANOTHER CASE. IN THE CASE BEFORE THE HON'BLE DELHI HIGH COURT, TH E ASSESSEE WAS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF DEVELOP ING REAL ESTATE AND DEALING IN PROPERTIES. SEARCH WAS CONDUCTED AT THE BUSINESS PREMISES OF THE FIRM A WELL AS ON THE PARTNERS; AND, INCRIMINAT ING DOCUMENTS WERE FOUND WHICH CONTAINED ENTRIES RELATING TO INVESTMEN TS MADE IN PURCHASE OF PROPERTIES AND SALE CONSIDERATIONS RECEIVED WHICH W ERE NOT RECORDED IN THE REGULAR BOOKS OF THE FIRM. IN COURSE OF THE SEA RCH, BOTH THE PARTNERS WERE EXAMINED AND THEIR STATEMENTS WERE RECORDED IN WHICH THEY HAD ADMITTED THAT THE ENTRIES IN THE SEIZED RECORDS WER E NOT FULLY RECORDED IN THE REGULAR BOOKS. ON THESE FACTS, THE AO HAD MADE ADDITIONS IN THE ASSESSMENT OF THE I PARTNERSHIP FIRM BOTH IN. RESPE CT OF UNDISCLOSED INVESTMENT AS WELL AS UNACCOUNTED SALE CONSIDERATIO N. THE CIT(APPEALS) PARTLY CONFIRMED AND PARTLY ALLOWED THE APPEAL' OF THE ASSESSEE. ON CROSS APPEALS, THE TRIBUNAL ALLOWED THE APPEAL OF THE ASS ESSEE AND DISMISSED THE APPEAL OF THE REVENUE. ON FURTHER APPEAL, THE H ONBLE HIGH COURT OBSERVED THAT IN COURSE OF THE SEARCH CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE FIRM AND THE RESIDENTIAL PREMISES O F ITS PARTNERS, INCRIMINATING ENTRIES WERE FOUND RECORDED IN THE SE IZED DOCUMENTS WHICH CORROBORATED THE FINDINGS OF THE AO. THE HON'BLE HI GH COURT THEREFORE HELD THAT IN SUCH A SITUATION, THE ONUS WAS ON THE ASSES SEE TO PROVE THAT ADVERSE INFERENCE WAS NOT CALLED FOR. THE HIGH COUR T THEREFORE DID NOT AGREE WITH THE DECISION OF THE HON'BLE ITAT AND RES TORED THE MATTER TO THE FILE OF THE AO. I THUS FIND THAT THE FACTUAL MATRIX OF THE CASE DECIDED BY THE HON'BLE DELHI HIGH COURT WAS TOTALLY DIFFERENT FROM THE FACTS OF THE APPELLANT'S CASE. IN THE PRESENT CASE, IT IS NOT IN DISPUTE THAT THE ADDITION IS BASED ON THE ENTRIES IN THE DOCUMENT KS-14 WHICH WAS NEITHER FOUND NOR SEIZED FROM THE PCM GROUP. THE DOCUMENT WAS FOU ND FROM THE PREMISES OF THE GANDHAMARDAN GROUP IN SEPTEMBER 200 8. THE NOTINGS IN KS-14 NOWHERE CONTAINED NAMES OF THE PCM GROUP ENTI TIES AGAINST THE NOTINGS WHICH REPRESENTED UNACCOUNTED PAYMENTS. THE EXISTENCE OF KS-14 WAS KNOWN TO THE DEPARTMENT MUCH PRIOR TO THE SEARC H CONDUCTED IN THE CASE OF THE PCM GROUP IN MARCH 2011. HOWEVER, IN TH E ASSESSMENTS OF THE PURCHASERS OF THE SHARES OF RPWTIL, NO ADVERSE INFE RENCE ON ACCOUNT OF UNEXPLAINED EXPENDITURE ON PURCHASE OF SHARES WAS M ADE. THE MAIN' ACCOUNTANT OF THE GANDHAMARDAN GROUP HAD ADMITTED T HAT MOST OF THE ENTRIES IN KS-14 WERE NOT RECORDED IN THE REGULAR B OOKS OF THE GANDHAMARDAN GROUP BUT NOWHERE HE HAD STATED THAT T HE NOTINGS PERTAINING TO CASH PAYMENTS WERE RELATED TO THE PCM GROUP. APPLYING THE RATIO LAID DOWN BY THE HON 'BLE DELHI HIGH COURT IN THE CASE OF SONAL CONSTRUCTIONS, AN INFERENCE AGAINST THE GANDHAMARDA N GROUP COULD CERTAINLY BE DRAWN. IN FACT, BECAUSE OF THESE FACTS THE GANDHAMARDAN GROUP HAD MADE DISCLOSURE OF INCOME IN THE RETURNS FILED PURSUANT TO THE SEARCH. BUT, NEITHER IN THE STATEMENT OF SHRI SULTA NIA NOR IN THE DISCLOSURE PETITION FILED BY GANDHAMARDAN SPONGE INDUSTRIES LI MITED, ANYONE HAD 6 IT(SS)A NOS. 93 TO 96/K/13 & CO NOS. 149 TO 152/K/13 ADMITTED THAT THE NOTINGS IN SEIZED DOCUMENT KS-14 ENTIRELY REPRESENTED PAYMENTS MADE TO THE PCM GROUP FOR ACQUIRING SHARES OF RPWTIL. EVEN THE NOTINGS IN THE SEIZED DOCUMENTS DID NOT IN ANY MANNER INDICATE THAT THE NOTINGS REPRESENTED PAYMENTS MADE TO THE PCM GR OUP ENTITIES. UNDER SECTION 132(4A), A PRESUMPTION IS RAISED THAT THE C ONTENTS OF DOCUMENTS FOUND ARE TRUE. IN THE CIRCUMSTANCES, HAD IT BEEN T HE CASE THAT ENTRIES IN SEIZED DOCUMENT KS-14 CONTAINED NAMES OF THE PCM GR OUP ENTITIES AGAINST THE TRANSACTIONS NOTED THEREIN AND WHICH WERE FOUND UNRECORDED IN THE BOOKS OF THE GANDHAMARDAN GROUP, THEN CERTAINLY A L EGAL PRESUMPTION COULD BE RAISED THAT THE PAYMENTS WERE MADE TO THE PCM GROUP ENTITIES. ON THE CONTRARY, HOWEVER, I FIND THAT IN RELATION T O THE NOTINGS OF UNRECORDED PAYMENTS EITHER NO NAMES WERE SPECIFIED OR NAMES OF MR RAJESH JAJODIA OR MR BINOD WERE SPECIFIED. THE IDEN TITY OF MR RAJESH JAJODIA OR MR BINOD WAS NEVER ESTABLISHED NOR THEIR RELATIONSHIP WITH THE PCM GROUP, IF ANY, WAS BROUGHT ON RECORD. FURTHER, BOTH IN THE SEIZED DOCUMENT AS WELL AS IN THE DISCLOSURE PETITION, THE GANDHAMARDAN GROUP HAD ACCEPTED THAT THE NOTINGS IN KS-14 PERTAINED EI THER TO LAND OR A BUSINESS AT 2ND MILE. IN THE CIRCUMSTANCES, BEFORE DRAWING INFERENCE AGAINST THE ASSESSEE ON ACCOUNT OF TRANSFER OF SHAR ES OF RPWTIL, IT WAS NECESSARY FOR THE AO TO SHOW RELEVANCE OF THE SAID '2ND MILE' WITH THE TRANSACTION OF SHARES OF RPWTIL. THE FACTS AS BROUG HT ON RECORD BY THE ASSESSEE SHOW THAT THE BUSINESS PREMISES OF RPWTIL AS ALSO THE BUSINESS CARRIED ON BY THAT COMPANY WAS NOT SITUATED AT 2ND MILE AND THEREFORE GOING BY THE CONTENTS OF KS-14 AS WELL THE DISCLOSU RE PETITION, IT CANNOT BE HELD THAT NOTINGS IN KS-14 REPRESENTED PAYMENTS MADE TO THE PCM GROUP FOR ACQUIRING SHARES OF RPWTIL. CONSIDERING T HE TOTALITY OF THE FACTS THEREFORE I AM OF THE CONSIDERED VIEW THAT THE AO C OULD NOT PICK- UP SOME OF THE OBSERVATIONS MADE BY THE HON'BLE DELHI HIGH COURT IN ITS JUDGMENT DATED 04-10-2012 AND PRESS IT INTO SERVICE TO JUSTI FY HIS CONCLUSIONS. IN THIS REGARD, I AM REMINDED OF THE OBSERVATIONS OF T HE HON'BLE SUPREME COURT IN THE CASE OF CIT VS SUN ENGINEERING WORKS 1 98 ITR 297 THAT 'IT IS NEITHER DESIRABLE NOR PERMISSIBLE TO PICK OUT A WOR D OR A SENTENCE FROM THE JUDGMENT OF THE COURT, DIVORCED FROM THE CONTEX T OF THE QUESTION UNDER CONSIDERATION AND TREAT IT TO BE THE COMPLETE 'LAW' DECLARED BY THE COURT. THE JUDGMENT MUST BE READ AS A WHOLE AND THE OBSERVATIONS FROM THE JUDGMENT HAVE TO BE CONSIDERED IN THE LIGHT OF THE QUESTIONS WHICH WERE BEFORE THE COURT. A DECISION OF THE COURT TAKE S ITS COLOUR FROM THE QUESTIONS INVOLVED IN THE CASE IN WHICH IT IS RENDE RED AND WHILE APPLYING THE DECISION TO A LATER CASE, THE COURTS MUST CAREF ULLY TRY TO ASCERTAIN THE TRUE PRINCIPLE LAID DOWN BY THE DECISION OF THE COU RT AND NOT TO PICK OUT WORDS OR SENTENCES FROM THE JUDGMENT, DIVORCED FROM THE CONTEXT OF THE QUESTIONS UNDER CONSIDERATION BY THE COURT, TO SUPP ORT THEIR PROCEEDINGS'. 19. IN THE IMPUGNED ORDER, THE AO HAS ALSO RELIED O N THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF HINDUSTA N TOBACCO CO VS CIT 211 TAXMANN 111 TO SUPPORT HIS CONCLUSION THAT THE ASSESSEE WILL NOT BE ELIGIBLE TO CLAIM CROSS-EXAMINATION SUBSEQUENTLY. O NCE AGAIN, I FIND THAT THE FACTUAL MATRIX OF THAT CASE WAS TOTALLY DIFFERE NT FROM THAT OF THE PRESENT CASE. IN THAT CASE, THE AO HAD FOUND THAT T HE ASSESSEE HAD CLAIMED DEDUCTION FOR EXPENSES ON MARKETING, PUBLIC ITY & COMMISSION ETC WHICH WAS DISPROPORTIONATELY HIGHER AS COMPARED TO THE PREVIOUS YEARS. HE THEREFORE CONDUCTED ENQUIRIES FROM THE BANKS AS WELL AS FROM THE PAYEES AND THEN MADE ADDITIONS BY DISALLOWING EXPEN SES. BEFORE THE TRIBUNAL AND THE HIGH COURT, IT WAS CLAIMED BY THE ASSESSEE THAT ENQUIRIES WERE CONDUCTED AT THE BACK OF THE ASSESSEE AND THAT IT WAS NOT ALLOWED PROPER OPPORTUNITY OF CROSS- EXAMINING THE PERSONS WH SE STATEMENTS WERE RELIED BY THE AO JUSTIFYING THE DISALLOWANCES. THE TRIBUNAL AS WELL AS THE HIGH COURT REJECTED THE CLAIM OF THE ASSESSEE. IN THE PRESENT CASE, HOWEVER, NEITHER IN THE SEIZED DOCUMENTS THERE IS A NY ADMISSION ABOUT PAYMENTS MADE TO THE PCM GROUP NOR IN HIS STATEMENT SHRI SULTANIA EVER ADMITTED THAT THE-NOTINGS IN KS-14 REPRESENTED PAYM ENTS MADE TO THE PCM GROUP FOR PURCHASE OF SHARES. EVEN M THE DISCLO SURE PETITION, E GANDHAMARDAN GROUP HAD NEITHER ADMITTED NOR IMPLICA TED THE PCM GROUP OF RECEIVING SUMS RECORDED IN KS-14. FURTHER, NEITH ER SHRI SULTANIA NOR ANY RESPONSIBLE PERSON OF THE GANDHAMARDAN GROUP WA S PERSONALLY 7 IT(SS)A NOS. 93 TO 96/K/13 & CO NOS. 149 TO 152/K/13 EXAMINED BY THE AO BEFORE PASSING OF THE IMPUGNED O RDER. THE AO OF GANDHAMARDAN GROUP IN THE ASSESSMENT ORDERS OF ALL THE PURCHASERS OF SHARES OF RPWTIL HAD NOT MADE ANY ADDITION ON ACCOU NT OF ALLEGED UNDISCLOSED PAYMENT/ INVESTMENT IN PURCHASE OF SHAR ES. IN THE LIGHT OF THESE FACTUAL ASPECTS, THE AO'S RELIANCE ON THE DEC ISION OF THE CALCUTTA HIGH COURT IN THE CASE OF HINDUSTAN TOBACCO CO VS C IT 211 TAXMANN 111 WAS INAPPROPRIATE AND NOT RELEVANT. 20. IN HIS WRITTEN SUBMISSIONS, THE LD AR OF THE ASSESSEE HAS RELIED ON OF DECISIONS OF THE HON 'BLE HIGH COURTS AND TRIBUN ALS IN SUPPORT OF HIS CLAIM THAT ADDITIONS WERE NOT JUSTIFIED. IN MY OPIN ION, IN THE PRESENT CASE, THE APPEAL NEEDS TO BE ADJUDICATED ONLY ON THE SPEC IFIC FACTS INVOLVED IN THIS CASE AND NOT ON THE BASIS OF ANY LEGAL PRINCIP LES. IT IS A TRITE LEGAL PROPOSITION THAT THE RATIO LAID DOWN IN ANY JUDGMEN T CAN SERVE USEFUL PURPOSE ONLY WHEN FACTS OF ANY GIVEN CASE JUSTIFY I TS APPLICATION. IT IS NOT PROPER FOR A JUDICIAL OR APPELLATE AUTHORITY TO REF ER TO CATENA OF JUDGMENTS TO DRAW AN INFERENCE IN A GIVEN CASE UNLESS FACTS O F THE CASE JUSTIFY DRAWING SUCH INFERENCE. IN THE PRESENT CASE OF THE APPELLANT, HAVING CONSIDERED THE FACTS AND DOCUMENTS ON RECORD, I FIN D THAT THE APPEAL CAN BE DECIDED ON THE FIRST PRINCIPLES OF TAXATION. I A M THEREFORE OF THE OPINION THAT NO USEFUL PURPOSE WILL BE SERVED BY EX AMINING EACH AND EVERY DECISION RELIED UPON BY THE ASSESSEE IN SUPPORT OF ITS CLAIM. 21. FOR THE REASONS SET OUT IN THE FOREGOING, I HOL D THAT THE AO WAS NOT JUSTIFIED IN ASSESSING RS.1,,57,82,400/- AS UNDISCL OSED CONSIDERATION RECEIVED BY THE ASSESSEE FOR TRANSFER OF SHARES OF RPWTIL TO THE GANDHAMARDAN GROUP. THE AO IS DIRECTED TO DELETE TH E IMPUGNED ADDITION AND RE-COMPUTE THE CAPITAL GAIN ACCORDINGLY ON SALE OF SHARES OF RPWTIL WITH REFERENCE TO THE CONSIDERATION AS DECLARED BY THE ASSESSEE IN ITS RETURN OF INCOME. THE GROUNDS RAISED BY THE ASSESSE E ARE ALLOWED. 10. THE LD.DR SUBMITS THAT THE REVENUE SEIZED AND I DENTIFIED ONE DOCUMENT KS-14 DURING COURSE OF SEARCH ON GANDH AMARDAN GROUP. THE SAID DOCUMENT CLEARLY SUGGESTS THAT THE PAYMENTS TO AN EXTENT OF RS.18 CRORES WERE MADE TO PCM GROUP TO WHICH THE ASSESSEE BELONGS AND THE SAID PAYMENTS WERE MAD E IN CASH AND CHEQUES. THE LD.DR SUBMITS, FURTHER, BY REFERRI NG TO PARA-2 OF AOS ORDER THAT THE MAIN ACCOUNTANT OF GANDHAMAR DAN GROUP ADMITTED THAT THE SAID TRANSACTIONS WERE OUT OF BOO KS AND SAME WERE CORROBORATED BY MR. RAJ KUMAR AGARWAL OF GANDH AMARDAN GROUP IN THEIR ASSESSMENT PROCEEDINGS. THE LD.DR SU PPORTED THE ORDER OF AO AND URGED TO ALLOW THE APPEAL AND D ISMISS THE CROSS OBJECTION. 8 IT(SS)A NOS. 93 TO 96/K/13 & CO NOS. 149 TO 152/K/13 11. THE LD.AR SUBMITS THAT IN THE COURSE OF SEARCH CONDUCTED AT THE ASSESSEE'S BUSINESS PREMISES NO DOCUMENTARY EVIDENCES WERE FOUND EVIDENCING THE ALLEGED PAYMENTS RECEIVED FROM THE SAID ML GROUP OF COMPANIES. BEFORE MAKING THE ADDIT ION NO PERSON BELONGING TO ML GROUP OF COMPANIES WAS EXAMI NED BY THE AO HIMSELF NOR OPPORTUNITY OF CROSS EXAMINATION OF ANY RESPONSIBLE PERSON BELONGING TO THE SAID ML GROUP O F COMPANIES WAS AFFORDED TO THE ASSESSEE. THE ENTIRE ADDITION WAS BASED ON THE DOCUMENTS ALLEGEDLY FOUND AND SEIZ ED FROM POSSESSION OF A PERSON ALLEGEDLY BELONGING TO ML GR OUP OF COMPANIES. THE AO WITHOUT COMPLYING WITH THE REQUIR EMENT OF THE PRINCIPLES OF NATURAL JUSTICE PROCEEDED TO MAKE ADDITION OF RS. 1,57,82,400/- ON ACCOUNT OF ALLEGED CASH RECEIP T ON SALE OF SHARES. THE LD.AR ARGUED THE ADDITION MADE WITHOUT ANY BASIS. THE LD.AR ALSO ARGUED THAT NO INCRIMINATING EVIDENC ING FOUND AGAINST THE ASSESSEE IN THE SEARCH OPERATION CONDUC TED ON PCM GROUP TO WHICH THE ASSESSEE BELONG AND RELIED ON TH E DECISION OF KABUL CHAWLA AND URGED TO DISMISS APPEAL AND SU PPORTED THE ORDER OF CIT-A. 12. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIA L AVAILABLE ON RECORD. THE CIT-A EXAMINED THE SEIZED DOCUMENTS AND FOUND NO EVIDENCE ABOUT PAYMENTS MADE TO THE PCM GROUP NO R SHRI SULTANIA IN HIS STATEMENT EVER ADMITTED THAT THE-NO TINGS IN KS- 14 REPRESENTED PAYMENTS MADE TO THE PCM GROUP FOR P URCHASE OF SHARES. WHILE EXAMINING THE DISCLOSURE PETITION, THE CIT-A OBSERVED THAT THE GANDHAMARDAN GROUP HAD NEITHER AD MITTED NOR IMPLICATED THE PCM GROUP OF RECEIVING SUMS RECO RDED IN KS- 14 AND MR. SULTANIA, THE MAIN ACCOUNTANT NOR ANY RE SPONSIBLE 9 IT(SS)A NOS. 93 TO 96/K/13 & CO NOS. 149 TO 152/K/13 PERSON OF THE GANDHAMARDAN GROUP WAS PERSONALLY EXA MINED BY THE AO BEFORE ADDING THE IMPUGNED AMOUNT AS UNDISCL OSED CAPITAL GAINS. FURTHER, THE CIT-A OBSERVED THAT IN THE ASSESSMENT ORDERS OF GANDHAMARDAN GROUP ALL THE PUR CHASERS OF SHARES OF RPWTIL THE AO HAD NOT MADE ANY ADDITIO N ON ACCOUNT OF ALLEGED UNDISCLOSED PAYMENT/ INVESTMENT IN PURCHASE OF SHARES. ACCORDING TO AO THE ASSESSEE RECEIVED CONSIDERATION IN CASH AND CHEQUE WHICH WERE NOT DIS CLOSED IN THE BOOKS. WHILE MAKING THE SAID ADDITION THE AO HO WEVER FAILED TO TAKE INTO ACCOUNT THE FACT THAT IN THE AS SESSMENTS OF THE PURCHASERS WHO HAD ACQUIRED THE SHARES, NO ADVE RSE INFERENCES WAS DRAWN ON ACCOUNT OF THE ALLEGED PAYM ENT OF CASH CONSIDERATION FOR PURCHASE OF SHARES. 13. IN THIS REGARD, WE MAY REFER TO THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS KABUL CHAWLA REPORTED I N (2016) 380 ITR 573 (DEL) HELD AS UNDER:- 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN T HE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UN DER: I) ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153A(1) WILL HAVE TO BE MANDATORILY I SSUED TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARC H TAKES PLACE. II) ASSESSMENTS AND REASSESSMENTS PENDING ON THE DATE O F THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HA VE TO BE COMPUTED BY THE AOS AS A FRESH EXERCISE. III) THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RE SPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAKES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORD ERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WILL BE ONLY ONE ASSESS MENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE DISCLOSED AN D THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX'. 10 IT(SS)A NOS. 93 TO 96/K/13 & CO NOS. 149 TO 152/K/13 IV) ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITIONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SEARCH, OR OTHER POST-SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE AO WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMENT 'CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UN DER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL.' V) IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSM ENT OR REASSESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATABLE TO ABATED PROCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEAR CH) AND THE WORD 'REASSESS' TO COMPLETED ASSESSMENT PROCEEDINGS. VI) INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, THE J URISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UND ER SECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND A NY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECORD OF THE AO. VII) COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON T HE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISC OVERED IN THE COURSE OF SEARCH WHICH WERE NOT PRODUCED OR NOT ALREADY DI SCLOSED OR MADE KNOWN IN THE COURSE OF ORIGINAL ASSESSMENT. 38. THE PRESENT APPEALS CONCERN AYS 2002-03, 2005-0 6 AND 2006-07 , ON THE DATE OF THE SEARCH THE SAID ASSESSMENTS ALREADY STOOD COMPLETED. SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURIN G THE SEARCH, NO ADDITIONS COULD HAVE BEEN MADE TO THE INCOME ALREAD Y ASSESSED. 14. THE HONBLE HIGH COURT HELD THAT IN THE SEARCH CASES THE AO IS EMPOWERED TO ISSUE STATUTORY NOTICE SECTION 1 53A(1) OF THE ACT TO THOSE ASSESSMENTS WHICH ARE PENDING AS ON TH E DATE OF SEARCH. THE HONBLE HIGH COURT FURTHER HELD THAT THE AO CANNOT MAKE ASSESSMENTS ARBITRARILY AND SHALL BE MADE ON THE BA SIS OF SEIZED MATERIAL EVIDENCE FOUND DURING THE COURSE OF SEARCH AND IN THE ABSENCE OF WHICH THE ASSESSMENT MADE ORIGINA LLY SHALL REMAIN INTACT. IN THE PRESENT CASE, AS DISCUSSED AB OVE AND AS FOUND BY THE CIT-A THAT THERE WAS NO INCRIMINATING MATERIAL EVIDENCE AS FOUND DURING THE COURSE OF SEARCH AND T HEREFORE, THE ASSESSMENT MADE U/SECTIONS 153A/153D/143(3) OF THE ACT 11 IT(SS)A NOS. 93 TO 96/K/13 & CO NOS. 149 TO 152/K/13 FAILS AND THE IMPUGNED ORDER OF CIT-A IS JUSTIFIED. ACCORDINGLY, GROUNDS RAISED BY REVENUE IN IT(SS) 96/KOL/2013 OF M/S PUNAM CHAND MITTAL ARE DISMISSED. GROUNDS RAISED BY THE ASSESSEE IN CROSS OBJECTIONS IN CO NO.151/KOL/2013 ARE ALLOWED. 15. IT(SS)A NO.93/KOL/2013 FOR A.Y 2009-10 BY REVENUE AND CO NO. 152/KOL/2013 [ARISING OUT OF IT(SS) A NO. 93/KOL/2013 A.Y 2009-10] 16. IN THE AFOREMENTIONED APPEAL AND CROSS OBJECTIO N THE GROUNDS RAISED BY THE REVENUE AND ASSESSEE ARE IDEN TICAL AND WE FIND THAT ON SIMILAR SET OF FACTS THE ADDITIONS WERE MADE BY THE AO. THE CIT-A FOUND NO INCRIMINATING MATERIAL T O SUSTAIN THE ADDITION MADE BY AO. IN VIEW OF THE DECISION IT (SS) 96/KOL/2013 WHEREIN WE DELETED THE ADDITION BY UPHO LDING THE ORDER OF CIT-A. ACCORDINGLY GROUNDS RAISED BY REVEN UE IN IT(SS)A NO.93/KOL/2013 OF M/S HTC FINANCE PVT LTD FOR A.Y 2009-10 ARE DISMISSED. GROUNDS RAISED BY THE ASSESS EE IN CROSS OBJECTIONS IN CO152/KOL/2013 ARE ALLOWED. 17. IT(SS)A NO.94/KOL/2013 FOR A.Y 2008-09 BY REVENUE AND CO NO. 149/KOL/2013 [ARISING OUT OF IT(SS) A NO. 94/KOL/2013 A.Y 2009-10] 18. IN THE AFOREMENTIONED APPEAL AND CROSS OBJECTIO N THE GROUNDS RAISED BY THE REVENUE AND ASSESSEE ARE IDEN TICAL AND WE FIND THAT ON SIMILAR SET OF FACTS THE ADDITIONS WERE MADE BY THE AO. THE CIT-A FOUND NO INCRIMINATING MATERIAL T O SUSTAIN THE ADDITION MADE BY AO. IN VIEW OF THE DECISION IT (SS) 12 IT(SS)A NOS. 93 TO 96/K/13 & CO NOS. 149 TO 152/K/13 96/KOL/2013 FOR AY 2008-09 WHEREIN WE DELETED THE A DDITION BY UPHOLDING THE ORDER OF CIT-A. ACCORDINGLY GROUNDS R AISED BY REVENUE IN IT(SS)A NO.94/KOL/2013 OF M/S PCM CEMENT CONCRETE PVT LTD FOR A.Y 2008-09 ARE DISMISSED. GROUNDS RAISED BY THE ASSESSEE IN CROSS OBJECTIONS IN CO149/KOL/20 13 ARE ALLOWED. 19. IT(SS)A NO.95/KOL/2013 FOR A.Y 2009-10 BY REVENUE AND CO NO. 150/KOL/2013 [ARISING OUT OF IT(SS) A NO. 95/KOL/2013 A.Y 2009-10] 20. IN THE AFOREMENTIONED APPEAL AND CROSS OBJECTIO N THE GROUNDS RAISED BY THE REVENUE AND ASSESSEE ARE IDEN TICAL AND WE FIND THAT ON SIMILAR SET OF FACTS THE ADDITIONS WERE MADE BY THE AO. THE CIT-A FOUND NO INCRIMINATING MATERIAL T O SUSTAIN THE ADDITION MADE BY AO. IN VIEW OF THE DECISION IT (SS) 96/KOL/2013 WHEREIN WE DELETED THE ADDITION BY UPHO LDING THE ORDER OF CIT-A. ACCORDINGLY GROUNDS RAISED BY REVEN UE IN IT(SS)A NO.95/KOL/2013 M/S PCM CEMENT CONCRETE PVT LTD FOR A.Y 2009-10 ARE DISMISSED. GROUNDS RAISED BY THE AS SESSEE IN CROSS OBJECTIONS IN C.O NO. 150/KOL/2013 ARE ALLOWE D. 21. IN THE RESULT, ALL THE APPEALS OF THE REVENUE A RE DISMISSED AND CORRESPONDING CROSS OBJECTIONS OF THE ASSESSEE ARE ALLOWED AS UNDER:- 1) IT(SS)A NO.93/KOL/2013 BY THE REVENUE FOR THE A. Y 2009-10 IS DISMISSED. 13 IT(SS)A NOS. 93 TO 96/K/13 & CO NOS. 149 TO 152/K/13 2) IT (SS) A NOS. 94 & 95/KOL/2013 BY THE REVENUE FOR THE A.YS 2008-09 & 2009-10 ARE DISMISSED. 3) IT(SS)A NO.96/KOL/2013 BY THE REVENUE FOR THE A. Y 2008-09 IS DISMISSED. 4) THE C.O NOS.149 TO 152/KOL/2013 FOR THE A.YS 200 8-09 & 2009-10 BY THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 26 /04/ 2017 J.SUDHAKAR REDDY S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 26 -04-2017 SD/- SD/- *PP/SPS: COPY OF THE ORDER FORWARDED TO: 1 . THE APPELLANT/REVENUE: THE DEPUTY COMMISSIONER OF INCOME TAX, CC-V, AAYKAR BHAWAN POORVA, 3 RD FLOOR, 110 SHANTIPALLY, KOLKATA-107. 2 THE RESPONDENT/ASSESSEE: M/S. HTC FINANCE PVT. L TD SWAIKA CENTRE, ROOM NO. 410, 4A POLLOCK STREET, KOL KATA-700 001./ M/S. PUNAM CHAND MITTAL/M/S. PCM CEMENT CONCRETE P VT. LTD 10C MIDDLETON ROW, DEBRIWALA HOUSE, 4 TH FLOOR, KOLKATA-71. 3 4. THE CIT(A) THE CIT 5 . DR, KOLKATA BENCH 6 . GUARD FILE . BY ORDER, ASSTT. REGISTRAR 14 IT(SS)A NOS. 93 TO 96/K/13 & CO NOS. 149 TO 152/K/13