M/S. MUKESH SANGLA (HUF), Mumbai V. THE DCIT (CENTRAL), Indore

ITSSA 95/IND/2015

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 1103 (ITAT-INDORE)
• Duration Of Justice: 5 month(s) 6 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 05-11-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 29-05-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA; RAJIV VARSHNEY
• Assessee Lawyers: DEVENDRA A MEHTA
• Keywords: Unexplained cash credit; Unexplained investment; Presumptive income; Search and seizure; Document seized; Bonafide belief; Source of fund; Cost of acquisition; Fair market value; Difference of opinion; Validity of assessment; Accommodation entries; Revised return; Change of opinion; Reassessment proceedings; Ignorance of law
• Section: 80C; 143(3); 153A; 133(6); 131; 148; 37; 132; 154

Judgement Text

M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, HONBLE JUDICIAL MEMBER AND SHRI B.C. MEENA, HONBLE ACCOUNTANT MEMBER IT(SS)A NOS. 94 & 95/IND/2015 A.YS.2008-09 & 2010-11 M/S MUKESH SANGLA HUF INDORE PAN AADHM 4930J ::: APPELLANT VS DY. COMMISSIONER OF INCOME TAX (CENTRAL), INDORE ::: RESPONDENT IT(SS)A NOS.109 & 110/IND/2015 A.YS.2008-09 & 2010-11 SMT. MONIKA SANGLA INDORE PAN ANAPS 5580Q ::: APPELLANT VS DY. COMMISSIONER OF INCOME TAX (CENTRAL), INDORE ::: RESPONDENT M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 2 IT(SS)A NOS. 206/IND/2015 A.YS.2010-11 ASSTT. COMMISSIONER OF INCOME TAX (CENTRAL)-I, INDORE ::: APPELLANT VS SMT. MONIKA SANGLA INDORE PAN ANAPS 5580Q ::: RESPONDENT IT(SS)A NOS. 98 & 99/IND/2015 A.YS.2008-09 & 2010-11 SIGNET IMPEX PVT. LTD. INDORE PAN AAICS-5582Q ::: APPELLANT VS DY. COMMISSIONER OF INCOME TAX (CENTRAL), INDORE ::: RESPONDENT IT(SS)A NOS. 201/IND/2015 A.YS.2010-11 ASSTT. COMMISSIONER OF INCOME TAX (CENTRAL)-I, INDORE ::: APPELLANT VS SIGNET IMPEX PVT. LTD. INDORE ::: RESPONDENT M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 3 IT(SS)A NO. 92/IND/2015 A.Y.2008-09 SIGNET LEASING & FINANCE PVT. LTD. INDORE PAN AAMCS 5841G ::: APPELLANT VS DY. COMMISSIONER OF INCOME TAX (CENTRAL), INDORE ::: RESPONDENT IT(SS)A NOS. 209/IND/2015 A.YS.2010-11 ASSTT. COMMISSIONER OF INCOME TAX (CENTRAL)-I, INDORE ::: APPELLANT VS SIGNET LEASING & FINANCE PVT. LTD. INDORE ::: RESPONDENT IT(SS)A NOS. 107 & 108/IND/2015 A.YS.2008-09 & 2010-11 SAURABH SANGLA INDORE PAN ANBPS 5319G ::: APPELLANT VS DY. COMMISSIONER OF INCOME TAX (CENTRAL), INDORE ::: RESPONDENT M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 4 IT(SS)A NOS. 205/IND/2015 A.YS.2010-11 ASSTT. COMMISSIONER OF INCOME TAX (CENTRAL)-I, INDORE ::: APPELLANT VS SAURABH SANGLA INDORE ::: RESPONDENT IT(SS)A NO. 87/IND/2015 A.Y, 2010-11 SHRI BALAJI STARCH & CHEMICALS LTD., MUMBAI PAN AABCS 8103E ::: APPELLANT VS DY. COMMISSIONER OF INCOME TAX (CENTRAL), INDORE ::: RESPONDENT IT(SS)A NO. 106/IND/2015 A.Y, 2010-11 SMT. AVANTIKA SANGLA INDORE PAN PEOPG 4774P ::: APPELLANT VS DY. COMMISSIONER OF INCOME TAX (CENTRAL), INDORE ::: RESPONDENT M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 5 IT(SS)A NOS. 89 & 90/IND/2015 A.YS.2008-09 & 2010-11 SWAN HOLDING PVT. LTD. INDORE PAN AAHCS 5640Q ::: APPELLANT VS DY. COMMISSIONER OF INCOME TAX (CENTRAL), INDORE ::: RESPONDENT IT(SS)A NOS. 193/IND/2015 A.YS.2010-11 ASSTT. COMMISSIONER OF INCOME TAX (CENTRAL)-I, INDORE ::: APPELLANT VS SWAN HOLDING PVT. LTD. INDORE ::: RESPONDENT ASSESSEE BY SHRI DEVENDRA A. MEHTA AND SHRI GIRDHAR GARG REVENUE BY SHRI RAJIV VARSHNEY AND SHRI R.A. VERMA DATE OF HEARING 5.10.2015 DATE OF PRONOUNCEMENT 5 .1 1 .2015 M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 6 O R D E R PER BENCH THESE APPEALS FILED BY THE ASSESSEE AND REVENUE EMANATE FROM DIFFERENT ORDERS OF THE LEARNED CIT(A)-3 , BHOPAL, DATED 29.4.2015. SINCE IN THESE APPEALS, SOME COMMON ISSUES ARE INVOLVED, THEREFORE, THESE ARE BEI NG DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE O F CONVENIENCE. M/S MUKESH SANGLA HUF 2. IN ITA NO. 94/IND/2015 THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL :- 1.0 THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-3, BHOPAL, CONFIRMING THE ASSESSMENT ORDER PASSED U/S 153C R.W. SEC 143(3) OF THE INCOME-TAX ACT, 1961 BY THE DEPUTY COMMISSIONER OF INCOME-TAX IS BOTH BAD IN LAW AND BAD IN FACTS. M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 7 1.1 IN DOING SO, HE DID NOT APPRECIATE THAT NO ADDITION COULD HAVE BEEN MADE WHILE COMPLETING ASSESSMENT U/S 153C OF THE INCOME-TAX ACT, 1961 IN CASE OF COMPLETED ASSESSMENTS IF NO UNDISCLOSED INCOME WAS DETERMINABLE FROM THE MATERIAL FOUND AS A RESULT OF SEARCH. SALE PROCEEDS OF 32,875 SHARES OF ADROIT INDUSTRIES (INDIA) LTD. TREATED AS UNEXPLAINED INCOME : RS. 13,23,220/- 2.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN LAW AS WELL AS IN FACTS IN CONFIRMING THE ADDITI ON OF RS.13,23,220/- MADE IN RESPECT OF SALE OF 32,875 SH ARES OF ADROIT INDUSTRIES (INDIA) LTD. BY THE ASSESSING OFFICER AS UNEXPLAINED INCOME OF THE ASSESSEE. 3.0 THE ASSESSEE MAY BE ALLOWED TO ADD, AMEND, ALTER OR RAISE ADDITIONAL GROUNDS OF APPEAL. 4.0 THE ASSESSEE PRAYS FOR JUSTICE. M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 8 3. IN ITA NO. 95/IND/2015 THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL :- 1.0 THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-3, BHOPAL, CONFIRMING THE ASSESSMENT ORDER PASSED U/S 153C R.W. SEC 143(3) OF THE INCOME-TAX ACT, 1961 BY THE DEPUTY COMMISSIONER OF INCOME-TAX IS BOTH BAD IN LAW AND BAD IN FACTS. 1.1 IN DOING SO, HE DID NOT APPRECIATE THAT NO ADDITION COULD HAVE BEEN MADE WHILE COMPLETING ASSESSMENT U/S 153C OF THE INCOME-TAX ACT, 1961 IN CASE OF COMPLET ED ASSESSMENTS IF NO UNDISCLOSED INCOME WAS DETERMINABLE FROM THE MATERIAL FOUND AS A RESULT OF SEARCH. ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE SHARES OF ADROIT INDUSTRIES (INDIA) LTD. RS. 93,37,094/- 2.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN LAW AS WELL AS IN FACTS IN CONFIRMING THE ADDITI ON OF M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 9 RS.93,37,094/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN 3,27,675 EQUI TY SHARES OF ADROIT INDUSTRIES (INDIA) LTD. REJECTION OF ASSESSEES LEGAL CLAIM FOR DEDUCTION 3.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN LAW AS WELL AS IN FACTS IN CONFIRMING THE REJECTION OF ASSESSEES CLAIM FOR THE FOLLOWING LE GAL DEDUCTIONS BY THE ASSESSING OFFICER :- A) SEC. 80C RS.76,860/- B) SEC. 80D RS.15,000/- 4.0 THE ASSESSEE MAY BE ALLOWED TO ADD, AMEND, ALTE R OR RAISE ADDITIONAL GROUNDS OF APPEAL. 5.0 THE ASSESSEE PRAYS FOR JUSTICE. BRIEF FACTS OF THE CASE 4. THE ASSESSEE IS A HINDU UNDIVIDED FAMILY. THE MEMBERS OF THE ASSESSEE HUF ARE PROMOTERS OF SIGNET INDUSTRIES LTD. AND DIRECTORS OF VARIOUS COMPANIES M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 10 BELONGING TO SIGNET GROUP. A SEARCH AND SEIZURE OPER ATION U/S.132 WAS CARRIED OUT AT THE BUSINESS PREMISES OF VARIOUS COMPANIES BELONGING TO SIGNET GROUP AS WELL AS RESIDENTIAL PREMISES OF VARIOUS PERSONS ON 03.11.2011 INCLUDING KARTA OF ASSESSEE HUF. 5. THE RETURNS OF INCOME WERE FURNISHED BY THE ASSES SEE U/S. 139(1)OF THE INCOME-TAX ACT, 1961. PRIOR TO TH E DATE OF SEARCH, NO ASSESSMENTS WERE PENDING AS EITHER THE ASSESSMENTS WERE COMPLETED U/S 143(3) OR U/S 143(1)( A) OF THE ACT. NOTICES U/S 153C OF THE ACT WERE ISSUED AND ASSESSMENTS WERE COMPLETED U/S.153C R.W.S. 143(3) OF THE ACT DETAILS OF WHICH ARE AS UNDER : A.Y. DATE OF ORIGINAL RETURN FILED RETURNED INCOME U/S.139 (RS.) DATE OF FILING RETURN U/S.153C RETURNED INCOME U/S.153C (RS.) ASSESSED INCOME U/S.153C/ 143(3) RS. 2006 - 07 05.06.200 6 2,10,030 08.11.201 3 2,10,430 2,10,430 2007 - 08 26.10.200 7 1,64,090 08.11.201 3 1,65,690 1,65,690 M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 11 2008 - 09 29.09.200 8 1,51,100 08.11.201 3 1,51, 2 40 14,74,460 2009 - 10 30.03.201 1 2,29,530 08.11.201 3 1, 76 , 770 1, 76,770 2010 - 11 30.03.201 1 2,29,530 08.11.201 3 1,60,620 1,04,95,340 2011 - 12 01.08.201 1 1,90,045 08.11.201 3 1,83,470 1,90,050 2012 - 13 28.03.201 3 NIL - - NIL THUS, THE ADDITIONS WERE MADE ONLY IN THE ASSESSMENT YEARS 2008-09 AND 2010-11. THE ASSESSEE FILED APPEALS BEFORE THE LEARNED C.I.T.(A) CENTRAL, INDORE AGAINST THE ASSESSMENTS COMPLETED U/S. 143(3) R.W.S. 153C. THE LEARNED CIT(A) DISMISSED THE APPEAL FOR THE ASSESSMENT YEAR 2008-09 AND PARTLY ALLOWED THE APPEAL FOR THE ASSESSMENT YEAR 2010-11 AGAINST WHICH THE ASSESSEE HAS PREFERRED APPEALS BEFORE THE TRIBUNAL. SMT. MONIKA SANGLA 6. IN ITA NO. 109/IND/2015 THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL :- M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 12 1.0 THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-3, BHOPAL, CONFIRMING THE ASSESSMENT ORDER PASSED U/S 153A R.W. SEC 143(3) OF THE INCOME-TAX ACT, 1961 BY THE DEPUTY COMMISSIONER OF INCOME-TAX IS BOTH BAD IN LAW AND BAD IN FACTS. 1.1 IN DOING SO, HE DID NOT APPRECIATE THAT NO ADDITIO N COULD HAVE BEEN MADE WHILE COMPLETING ASSESSMENT U/S 153A OF THE INCOME-TAX ACT, 1961 IN CASE OF COMPLETED ASSESSMENTS IF NO UNDISCLOSED INCOME WAS DETERMINABLE FROM THE MATERIAL FOUND AS A RESULT OF SEARCH. SALE PROCEEDS OF SHARES OF ADROIT INDUSTRIES (INDIA) LTD. TREATED AS UNEXPLAINED INCOME : RS. 95,59,375/- 2.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN LAW AS WELL AS IN FACTS IN CONFIRMING THE ADDITION OF RS.95,59,375/- MADE IN RESPECT OF SALE PROCEEDS OF 2,37,500 SHARES OF ADROIT INDUSTRIES (IN DIA) M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 13 LTD. BY THE ASSESSING OFFICER AS UNEXPLAINED INCOME OF THE ASSESSEE. 3.0 THE ASSESSEE MAY BE ALLOWED TO ADD, AMEND, ALTER OR RAISE ADDITIONAL GROUNDS OF APPEAL. 4.0 THE ASSESSEE PRAYS FOR JUSTICE. 7. IN ITA NO. 110/IND/2015 THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL :- 1.0 THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-3, BHOPAL, CONFIRMING THE ASSESSMENT ORDER PASSED U/S 153A R.W. SEC 143(3) OF THE INCOME-TAX ACT, 1961 BY THE DEPUTY COMMISSIONER OF INCOME-TAX IS BOTH BAD IN LAW AND BAD IN FACTS. 1.1 IN DOING SO, HE DID NOT APPRECIATE THAT NO ADDITION COULD HAVE BEEN MADE WHILE COMPLETING ASSESSMENT U/S 153A OF THE INCOME-TAX ACT, 1961 IN CASE OF COMPLETED ASSESSMENTS IF NO UNDISCLOSED INCOME WAS M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 14 DETERMINABLE FROM THE MATERIAL FOUND AS A RESULT OF SEARCH. ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE SHARES OF ADROIT INDUSTRIES (INDIA) LTD. RS. 37,74,200/- 2.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN LAW AS WELL AS IN FACTS IN CONFIRMING THE ADDITION OF RS.37,74,200/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN 3,27,675 EQUITYSHARES OF ADROIT INDUSTRIES (INDIA) LT D. REJECTION OF ASSESSEES LEGAL CLAIM FOR DEDUCTION 3.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN LAW AS WELL AS IN FACTS IN CONFIRMING THE REJECTION OF ASSESSEES CLAIM FOR THE FOLLOWING LEGAL DEDUCTIONS BY THE ASSESSING OFFICER :- A) SEC. 80C RS.39,651/- B) SEC. 80D RS. 9,364/- M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 15 4.0 THE ASSESSEE MAY BE ALLOWED TO ADD, AMEND, ALTER OR RAISE ADDITIONAL GROUNDS OF APPEAL. 5.0 THE ASSESSEE PRAYS FOR JUSTICE. 8. IN ITA NO. 206/IND/2015 THE REVENUE HAS TAKEN T HE FOLLOWING GROUND OF APPEAL :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) ERRED IN RESTRICTING THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE SHARES OF ADROIT INDUSTRIES (INDIA) LTD. TO RS.37,74,200/- AS AGAINST THE ADDITION OF RS.1,05,63,851/- MADE BY A.O. BRIEF FACTS OF THE CASE 9. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL. HER SOURCES OF INCOME CONS ISTS OF INCOME FROM HOUSE PROPERTY, SHARE IN PROFIT/LOSS FRO M PARTNERSHIP FIRM, CAPITAL GAINS, DIVIDEND AND INTEREST E TC. A SEARCH AND SEIZURE OPERATION U/S.132 WAS CARRIED OUT AT THE BUSINESS PREMISES OF VARIOUS COMPANIES BELONGING TO M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 16 SIGNET GROUP AS WELL AS RESIDENTIAL PREMISES OF THE ASSESSEE ON 03.11.2011. CONSEQUENTLY, A NOTICE U/S.153 A WAS ISSUED. THE STATUS REGARDING RETURN OF INCOME FURNISHED BY THE ASSESSEE U/S.139(1) AND 153A OF THE INCOME-TAX ACT, 1961 AND ASSESSMENTS COMPLETED U/S.143(3) R.W.S. 153A OF THE ACT FOR SIX YEARS AND O RDER U/S 143(3) FOR ASSESSMENT YEAR 2012-13 IS AS UNDER : A.Y. DATE OF ORIGINAL RETURN FILED RETURNED INCOME U/S.139 (RS.) DATE OF FILING RETURN U/S.153A RETURNED INCOME U/S.153A (RS.) ASSESSED INCOME U/S.153A/ 143(3) RS. 2006-07 06.06.2006 7,88,670 22.03.2013 8,69,607 8,69,610 2007-08 26.10.2007 7,46,550 22.03.2013 7,99,400 7,99,400 2008-09 29.09.2008 6,24,450 22.03.2013 18,04,630 1,13,64,010 2009-10 30.09.2009 4,31,480 22.03.2013 5,59,570 5,59,570 2010-11 22.02.2011 7,54,400 22.03.2013 6,19,750 1,13,18,250 2011-12 01.08.2011 10,93,684 22.03.2013 10,13,020 10,93,680 2012-13 22.03.2013 11,27,530 - - 11,27,530 10. THE ASSESSEE FILED APPEALS BEFORE THE LEARNED C.I.T.(A) CENTRAL, INDORE AGAINST THE ASSESSMENTS COMPLETED U/S.153A R.W.S. 143(3) OF THE ACT FOR THE ASSESSMENT YEARS 2008-09 AND 2010-11 WERE PARTLY ALLOWED AND THE APPEAL AGAINST ORDER U/S 143(3) OF THE AC T FOR THE ASSESSMENT YEAR 2011-12 WAS DISMISSED. NOW T HE M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 17 ASSESSEE HAS PREFERRED APPEAL BEFORE THE INCOME-TAX APPELLATE TRIBUNAL FOR THE ASSESSMENT YEARS 2008-09 AND 2010-11 AND THE REVENUE IS ALSO IN APPEAL FOR THE 2010- 11. SIGNET IMPEX PVT. LTD. 11. IN IT(SS)A NOS. 98/IND/2015 THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS :- 1.0 THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INC OME- TAX (APPEALS)-3, BHOPAL, PARTLY CONFIRMING THE ASSE SSMENT ORDER PASSED U/S.153A R.W. SEC.143(3) OF THE INCOME -TAX ACT, 1961, BY THE DEPUTY COMMISSIONER OF INCOME-TAX IS BOTH BAD-IN-LAW AND BAD-IN-FACTS. 1.1 IN DOING SO, HE DID NOT APPRECIATE THAT NO ADDITION COULD HAVE BEEN MADE WHILE COMPLETING ASSESSMENT U/S.153A OF THE INCOME-TAX ACT, 1961 IN CASE OF COMPLETED ASSES SMENTS IF NO UNDISCLOSED INCOME WAS DETERMINABLE FROM THE MATERIAL FOUND AS A RESULT OF SEARCH. SALE PROCEEDS OF 3,10,550 SHARES OF ADROIT INDUSTRIES (INDIA) LTD. TREATED AS UNEXPLAINED INCOME : RS. 1,25,00,000/- M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 18 2.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN LAW AS WELL AS IN FACTS IN CONFIRMING THE ADDITION OF RS.1,25,00,000/- MADE IN RESPECT OF SALE PROCEEDS O F 3,10,550 SHARES OF ADROIT INDUSTRIES (INDIA) LTD. B Y THE ASSESSING OFFICER, AS UNEXPLAINED INCOME OF THE ASS ESSEE. 3.0 THE ASSESSEE MAY BE ALLOWED TO ADD, AMEND, ALTE R OR RAISE ADDITIONAL GROUNDS OF APPEAL. 4.0 THE ASSESSEE PRAYS FOR JUSTICE. 12. IN IT(SS)A NOS. 99/IND/2015 THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS :- 1.0 THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INC OME-TAX (APPEALS)-3, BHOPAL, PARTLY CONFIRMING THE ASSESSME NT ORDER PASSED U/S.153A R.W. SEC.143(3) OF THE INCOME-TAX A CT, 1961, BY THE DEPUTY COMMISSIONER OF INCOME-TAX IS BOTH BA D-IN-LAW AND BAD-IN-FACTS. 1.1 IN DOING SO, HE DID NOT APPRECIATE THAT NO ADDITION COULD HAVE BEEN MADE WHILE COMPLETING ASSESSMENT U/S.153A OF T HE INCOME-TAX ACT, 1961 IN CASE OF COMPLETED ASSESSMEN TS IF NO M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 19 UNDISCLOSED INCOME WAS DETERMINABLE FROM THE MATERI AL FOUND AS A RESULT OF SEARCH. ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE SHARES OF ADROIT INDUSTRIES (INDIA) LTD. : RS.1,45,600/- 2.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN LAW AS WELL AS IN FACTS IN CONFIRMING ADDITION OF R S.1,45,600/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLA INED INVESTMENT IN SHARES OF ADROIT INDUSTRIES (INDIA) L TD. 3.0 THE ASSESSEE MAY BE ALLOWED TO ADD, AMEND, ALTE R OR RAISE ADDITIONAL GROUNDS OF APPEAL. 4.0 THE ASSESSEE PRAYS FOR JUSTICE. 13. IN IT(SS) A NO. 201/IND/2015 THE REVENUE HAS TAKEN THE FOLLOWING GROUND :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE CIT(A) ERRED IN RESTRICTING THE ADDITION MADE ON ACCOUNT O F UNEXPLAINED INVESTMENT IN THE SHARES OF ADROIT INDUSTRIES (INDI A) LTD. TO RS. 1,45,600/- AS AGAINST THE ADDITION OF RS 89,81,625 MADE BY THE A.O.. M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 20 BRIEF FACTS OF THE CASE 14. THE ASSESSEE IS A CLOSELY-HELD COMPANY BELONGING TO SIGNET GROUP OF INDORE. IT IS ENGAGED IN THE BUSI NESS OF TRADING AND INVESTMENT. A SEARCH AND SEIZURE OPERATION U/S.132 WAS CARRIED OUT AT THE BUSINESS PREMISES OF VARIOUS COMPANIES BELONGING TO SIGNET GROUP AS WELL AS RESIDENTIAL PREMISES OF THE ASSESSEE ON 03.11.2011. CONSEQUENTLY, A NOTICE U/S.153A WAS ISSUED. THE STATUS REGARDING RETURN OF INCOME FURNISHED BY THE ASSESSEE U/S.139(1) AND 153A OF THE INCOME-TAX ACT, 1961 AND ASSESSMENTS COMPLETED AS PER ORIGINAL ASSESSMENT U/S.143(3) / 143(1) AS WELL AS U/S.153A ARE AS UNDER : A.Y. DATE OF ORIGINAL RETURN FILED RETURNED INCOME U/S.139 (RS.) DATE OF FILING RETURN U/S.153A RETURNED INCOME U/S.153A (RS.) ASSESSED INCOME U/S.153A/ 143(3) RS. 2006-07 15.06.2006 17,200 28.02.2013 17,200 17,200 2007-08 19.09.2007 18,680 28.02.2013 21,330 21,330 2008-09 27.09.2008 18,530 28.02.2013 19,110 1,28,14,800 2009-10 21.09.2009 13,000 28.02.2013 15,580 9,25,580 2010-11 16.09.2010 1,66,650 28.02.2013 1,67,230 91,48,860 2011-12 19.09.2011 (30,238) 28.02.2013 3,380 86,53,380 2012-13 30.09.2012 (ORIGINAL) 28.02.2013 (REVISED) (43,990) NIL - - NIL M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 21 THE ASSESSEE FILED APPEALS BEFORE THE LEARNED CIT(A) AGAI NST THE ASSESSMENTS COMPLETED U/S.153A WHO PARTLY ALLOWED THE ASSESSEES APPEALS. AGAINST THE SUSTENANCE OF PART ADDITION, THE ASSESSEE IS IN APPEALS BEFORE THE TRIBUNAL . SIGNET LEASING & FINANCE PVT. LTD. 15. IN IT(SS) A NO. 92/IND/2015 THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS :- 1.0 THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INC OME- TAX (APPEALS)-3, BHOPAL, PARTLY CONFIRMING THE ASSE SSMENT ORDER PASSED U/S.153A R.W. SEC.143(3) OF THE INCOME -TAX ACT, 1961, BY THE DEPUTY COMMISSIONER OF INCOME-TAX IS BOTH BAD-IN-LAW AND BAD-IN-FACTS. 1.1 IN DOING SO, HE DID NOT APPRECIATE THAT NO ADDITION COULD HAVE BEEN MADE WHILE COMPLETING ASSESSMENT U/S.153A OF THE INCOME-TAX ACT, 1961 IN CASE OF COMPLETED ASSES SMENTS IF NO UNDISCLOSED INCOME WAS DETERMINABLE FROM THE MATERIAL FOUND AS A RESULT OF SEARCH. SALE PROCEEDS OF 3,10,550 SHARES OF ADROIT INDUSTRIES (INDIA) LTD. TREATED AS UNEXPLAINED INCOME : RS.1,25,00,000/- M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 22 2.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN LAW AS WELL AS IN FACTS IN CONFIRMING THE ADDITION OF RS.1,25,00,000/- MADE IN RESPECT OF SALE PROCEEDS O F 3,10,550 SHARES OF ADROIT INDUSTRIES (INDIA) LTD. B Y THE ASSESSING OFFICER, AS UNEXPLAINED INCOME OF THE ASS ESSEE. 3.0 THE ASSESSEE MAY BE ALLOWED TO ADD, AMEND, ALTE R OR RAISE ADDITIONAL GROUNDS OF APPEAL. 4.0 THE ASSESSEE PRAYS FOR JUSTICE . 16. IN IT(SS) A NO. 209/IND/2015 THE REVENUE HAS TAKEN THE FOLLOWING GROUND :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) ERRED IN DELETING THE ADDITION MADE ON ACCOU NT OF UNEXPLAINED INVESTMENT IN THE SHARES OF ADROIT INDUSTRIES (INDIA) LTD. OF RS.72,55,750/- MADE BY T HE A.O. M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 23 BRIEF FACTS OF THE CASE 17. THE ASSESSEE IS A CLOSELY-HELD COMPANY BELONGING TO SIGNET GROUP OF INDORE. IT IS ENGAGED IN THE BUSI NESS OF TRADING AND INVESTMENT. A SEARCH AND SEIZURE OPERATION U/S.132 WAS CARRIED OUT AT THE BUSINESS PREMISES OF VARIOUS COMPANIES BELONGING TO SIGNET GROUP AS WELL AS RESIDENTIAL PREMISES OF THE ASSESSEE ON 03.11.2011. CONSEQUENTLY, A NOTICE U/S.153A WAS ISSUED. THE STATUS REGARDING RETURN OF INCOME FURNISHED BY THE ASSESSEE U/S.139(1) AND 153A OF THE INCOME-TAX ACT, 1961 AND ASSESSMENTS COMPLETED AS PER ORIGINAL ASSESSMENT U/S.143(3) / 143(1) AS WELL AS U/S.153A ARE AS UNDER : A.Y. DATE OF ORIGINAL RETURN FILED RETURNED INCOME U/S.139 (RS.) DATE OF FILING RETURN U/S.153A RETURNED INCOME U/S.153A (RS.) ASSESSED INCOME U/S.153A/ 143(3) (RS.) 2006-07 13.09.2006 9,470 28.02.2013 9,470 9470 2007-08 10.09.2007 31,071 28.02.2013 316 31,071 2008-09 21.07.2008 (27,114) 28.02.2013 21,810 1,29,96,864 2010-11 29.08.2010 65,872 28.02.2013 81,170 73,36,920 2011-12 27.07.2011 12,629 28.02.2013 12,630 86,62,630 2012-13 29.09.2012 8,70,830 - - 8,70,830 M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 24 18. THE ASSESSEE FILED APPEALS BEFORE THE LEARNED CIT(A) AGAINST THE ASSESSMENTS COMPLETED U/S.153A WHO PARTLY ALLOWED THE ASSESSEES APPEALS. NOW THE ASSESSEE I S IN APPEAL AGAINST SUSTENANCE OF ADDITION WHEREAS THE REVENUE HAS COME UP IN APPEAL AGAINST THE RELIEF GRANTED BY THE LEARNED CIT(A). SAURABH SANGLA 19. IN IT(SS) A NO. 107/IND/2015 THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS :- 1.0 THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INC OME- TAX (APPEALS)-3, BHOPAL, PARTLY CONFIRMING THE ASSE SSMENT ORDER PASSED U/S.153A R.W. SEC.143(3) OF THE INCOME -TAX ACT, 1961, BY THE DEPUTY COMMISSIONER OF INCOME-TAX IS BOTH BAD-IN-LAW AND BAD-IN-FACTS. 1.1 IN DOING SO, HE DID NOT APPRECIATE THAT NO ADDITION COULD HAVE BEEN MADE WHILE COMPLETING ASSESSMENT U/S.153A OF THE INCOME-TAX ACT, 1961 IN CASE OF COMPLETED ASSES SMENTS M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 25 IF NO UNDISCLOSED INCOME WAS DETERMINABLE FROM THE MATERIAL FOUND AS A RESULT OF SEARCH. SALE PROCEEDS OF 2,84,650 SHARES OF ADROIT INDUSTRIES (INDIA) LTD. TREATED AS UNEXPLAINED INCOME : RS.1,14,57,162/- 2.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN LAW AS WELL AS IN FACTS IN CONFIRMING THE ADDITION OF RS.1,14,57,162/- MADE IN RESPECT OF SALE PROCEEDS O F 2,84,650 SHARES OF ADROIT INDUSTRIES (INDIA) LTD. B Y THE ASSESSING OFFICER, AS UNEXPLAINED INCOME OF THE ASS ESSEE. 3.0 THE ASSESSEE MAY BE ALLOWED TO ADD, AMEND, ALT ER OR RAISE ADDITIONAL GROUNDS OF APPEAL. 4.0 THE ASSESSEE PRAYS FOR JUSTICE 20. IN IT(SS) A NO. 108/IND/2015 THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS :- 1.0 THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-3, BHOPAL, PARTLY CONFIRMING THE ASSESSMENT ORDER PASSED U/S.153A R.W. SEC.143(3) OF THE INCOME-TAX ACT, 1961, BY THE M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 26 DEPUTY COMMISSIONER OF INCOME-TAX IS BOTH BAD-IN- LAW AND BAD-IN-FACTS. 1.1 IN DOING SO, HE DID NOT APPRECIATE THAT NO ADDITIO N COULD HAVE BEEN MADE WHILE COMPLETING ASSESSMENT U/S.153A OF THE INCOME-TAX ACT, 1961 IN CASE OF COMPLETED ASSESSMENTS IF NO UNDISCLOSED INCOME WAS DETERMINABLE FROM THE MATERIAL FOUND AS A RESULT OF SEARCH. ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE SHARES OF ADROIT INDUSTRIES (INDIA) LTD. : RS.85,64,013/- 2.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN LAW AS WELL AS IN FACTS IN CONFIRMING ADDITION OF RS.85,64,013/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN 3,04,200 EQUITY SHARES OF ADROIT INDUSTRIES (INDIA) LTD. REJECTION OF ASSESSEES LEGAL CLAIM FOR DEDUCTION: M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 27 3.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN LAW AS WELL AS IN FACTS IN CONFIRMING THE REJECTION OF ASSESSEES CLAIM FOR THE FOLLOWING LEG AL DEDUCTIONS BY THE ASSESSING OFFICER : A) SEC.80C : RS.29,216/- B) BANK CHARGES : RS. 2,507/- 4.0 THE ASSESSEE MAY BE ALLOWED TO ADD, AMEND, ALTER OR RAISE ADDITIONAL GROUNDS OF APPEAL. 5.0 THE ASSESSEE PRAYS FOR JUSTICE 21. IN IT(SS) NO. 205/IND/2015 THE THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) ERRED IN RESTRICTING THE ADDITION MADE ON AC COUNT OF UNEXPLAINED INVESTMENT IN THE SHARES OF ADROIT INDUSTRIES (INDIA) LTD. TO RS.85,64,013/- AS AGAINS T THE ADDITION OF RS.1,67,35,250/-. M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 28 BRIEF FACTS OF THE CASE 22. THE ASSESSEE IS AN INDIVIDUAL AND IS A MEMBER/DIRECTOR OF VARIOUS COMPANIES BELONGING TO SIG NET GROUP. HIS SOURCES OF INCOME CONSISTS OF INCOME FRO M SALARIES, HOUSE PROPERTY, SHARE IN PROFIT/LOSS FROM PARTNERSHIP FIRM, CAPITAL GAINS, DIVIDEND, INTEREST ETC . A SEARCH AND SEIZURE OPERATION U/S.132 WAS CARRIED OUT AT THE BUSINESS PREMISES OF VARIOUS COMPANIES BELONGING TO SIGNET GROUP AS WELL AS RESIDENTIAL PREMISES OF THE ASSESSEE ON 03.11.2011. CONSEQUENTLY, A NOTICE U/S.153 A WAS ISSUED. THE STATUS REGARDING RETURN OF INCOME FURNISHED BY THE ASSESSEE U/S.139(1) AND 153A OF THE INCOME-TAX ACT, 1961 AND ASSESSMENTS COMPLETED AS PER ORIGINAL ASSESSMENT U/S.143(3)/ 143(1) AS WELL AS U/S. 153A ARE AS UNDER : A.Y. DATE OF ORIGINAL RETURN FILED RETURNED INCOME U/S.139 (RS.) DATE OF FILING RETURN U/S.153A RETURNED INCOME U/S.153A (RS.) ASSESSED INCOME U/S.153A/ 143(3) RS. 2006-07 06.06.2006 8,49,030 25.03.2013 8,86,851 8,86,850 M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 29 2007-08 31.10.2007 6,38,090 25.03.2013 6,82,341 6,85,340 2008-09 29.09.2008 4,95,940 25.03.2013 15,96,360 1,30,53,520 2009-10 30.09.2009 7,55,180 25.03.2013 7,43,120 7,55,180 2010-11 22.02.2011 8,19,995 25.03.2013 6,66,010 1,75,55,250 2011-12 01.08.2011 21,78,320 25.03.2013 20,87,940 21,78,320 2012-13 28.03.2013 24,07,770 - - 24,07,770 23. THE ASSESSEE FILED APPEALS BEFORE THE LEARNED CIT(A ) AGAINST THE ASSESSMENTS COMPLETED U/S.153A WHO PARTLY ALLOWED THE ASSESSEES APPEALS. NOW THE ASSESSEE IS IN APPEAL AGAINST SUSTENANCE OF ADDITION WHEREAS THE REVENUE HAS COME UP IN APPEAL AGAINST THE RELIEF GRANTED BY THE LEARNED CIT(A). SHRI BALAJI STARTH & CHEMICALS LTD. 24. IN IT(SS) A NO. 87/IND/2015 THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS :- 1.0 THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-3, BHOPAL, PARTLY CONFIRMING T HE ASSESSMENT ORDER PASSED U/S.153A R.W. SEC.143(3) OF THE INCOME-TAX ACT, 1961, BY THE DEPUTY COMMISSIONER OF INCOME-TAX IS BOTH BAD-IN-LAW AND BAD-IN-FACTS. M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 30 1.1 IN DOING SO, HE DID NOT APPRECIATE THAT NO ADDITION COULD HAVE BEEN MADE WHILE COMPLETING ASSESSMENT U/S.153A OF THE INCOME-TAX ACT, 1961 IN CASE OF COMPLETED ASSESSMENTS IF NO UNDISCLOSED INCOME WAS DETERMINABLE FROM THE MATERIAL FOUND AS A RESULT OF SEARCH. ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE SHARES OF ADROIT INDUSTRIES (INDIA) LTD. : RS.1,50,14,256/- 2.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN LAW AS WELL AS IN FACTS IN CONFIRMING ADDITION OF RS.1,50,14,256/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE SHARES OF ADROIT INDUSTRIES (INDIA) LTD. 3.0 THE ASSESSEE MAY BE ALLOWED TO ADD, AMEND, ALTE R OR RAISE ADDITIONAL GROUNDS OF APPEAL. 4.0 THE ASSESSEE PRAYS FOR JUSTICE. M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 31 BRIEF FACTS OF THE CASE 25. THE ASSESSEE IS A CLOSELY-HELD COMPANY BELONGING TO SIGNET GROUP OF INDORE. IT IS ENGAGED IN THE BUSI NESS OF TRADING AND INVESTMENT. A SEARCH AND SEIZURE OPERATION U/S.132 WAS CARRIED OUT AT THE BUSINESS PREMISES OF VARIOUS COMPANIES BELONGING TO SIGNET GROUP AS WELL AS RESIDENTIAL PREMISES OF THE ASSESSEE ON 03.11.2011. CONSEQUENTLY, A NOTICE U/S.153A WAS ISSUED. THE STATUS REGARDING RETURN OF INCOME FURNISHED BY THE ASSESSEE U/S.139(1) AND 153A OF THE INCOME-TAX ACT, 1961 AND ASSESSMENTS COMPLETED AS PER ORIGINAL ASSESSMENT U/S.143(3) / 143(1) AS WELL AS U/S.153A ARE AS UNDER : A.Y. DATE OF ORIGINAL RETURN FILED RETURNED INCOME U/S.139 (RS.) DATE OF FILING RETURN U/S.153A RETURNED INCOME U/S.153A (RS.) ASSESSED INCOME U/S.153A/ 143(3) RS. 2006-07 30.11.2006 - 28.02.2013 - NIL 2007-08 31.10.2007 - 28.02.2013 - NIL 2008-09 30.09.2008 - 28.02.2013 - NIL 2009-10 24.09.2009 - 28.02.2013 - NIL 2010-11 15.09.2010 - 28.02.2013 - 1,50,14,260 2011-12 05.08.2011 (5,080) 28.02.2013 (9,320) 2,87,44,920 2012-13 29.09.2012 (ORIGINAL) --- (60,260) (11,365) - - (11,370) M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 32 26. THE ASSESSEE FILED APPEALS BEFORE THE LEARNED CIT(A) AGAINST THE ASSESSMENTS COMPLETED U/S.153A WHO PARTLY ALLOWED THE ASSESSEES APPEALS. NOW THE ASSESSEE I S IN APPEAL AGAINST SUSTENANCE OF ADDITION WHEREAS THE REVENUE HAS COME UP IN APPEAL AGAINST THE RELIEF GRANTED BY THE LEARNED CIT(A). SMT. AVANTIKA SANGLA 27. IN IT(SS) A NO. 106/IND/2015, THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS :- 1.0 THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INC OME- TAX (APPEALS)-3, BHOPAL, PARTLY CONFIRMING THE ASSE SSMENT ORDER PASSED U/S.153A R.W. SEC.143(3) OF THE INCOME -TAX ACT, 1961, BY THE DEPUTY COMMISSIONER OF INCOME-TAX IS BOTH BAD-IN-LAW AND BAD-IN-FACTS. 1.1 IN DOING SO, HE DID NOT APPRECIATE THAT NO ADDITION COULD HAVE BEEN MADE WHILE COMPLETING ASSESSMENT U/S.153A OF THE INCOME-TAX ACT, 1961 IN CASE OF COMPLETED ASSES SMENTS (REVISED) M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 33 IF NO UNDISCLOSED INCOME WAS DETERMINABLE FROM THE MATERIAL FOUND AS A RESULT OF SEARCH. ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE SHARES OF ADROIT INDUSTRIES (INDIA) LTD. : RS.1,42,25,000/- 2.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN LAW AS WELL AS IN FACTS IN CONFIRMING ADDITION OF RS.1,42,25,000/- MADE BY THE ASSESSING OFFICER ON A CCOUNT OF UNEXPLAINED INVESTMENT IN THE SHARES OF ADROIT I NDUSTRIES (INDIA) LTD. DISALLOWANCE OF ASSESSEES CLAIM FOR DEDUCTION U/S.80D : RS.15,000/- 3.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN LAW AS WELL AS IN FACTS IN CONFIRMING THE REJECTION OF ASSESSEES LEGAL CLAIM OF RS.15,000/- U/S.80D BY TH E ASSESSING OFFICER. 4.0 THE ASSESSEE MAY BE ALLOWED TO ADD, AMEND, ALTE R OR RAISE ADDITIONAL GROUNDS OF APPEAL. 5.0 THE ASSESSEE PRAYS FOR JUSTICE . M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 34 BRIEF FACTS OF THE CASE 28. THE ASSESSEE IS AN INDIVIDUAL,WIFE OF SHRI SAURABH SANGLA S/O OF SHRI MUKESH SANGLA. THE ASSESSEE IS A PROPRIETOR OF M/S. AVANTIKA ENTERPRISES.A SEARCH AND SEIZURE OPERATION U/S.132 WAS CARRIED OUT AT THE BUSIN ESS PREMISES OF VARIOUS COMPANIES BELONGING TO SIGNET GR OUP AS WELL AS RESIDENTIAL PREMISES OF THE ASSESSEE ON 03.11.2011. CONSEQUENTLY, A NOTICE U/S.153A WAS ISSUED . THE STATUS REGARDING RETURN OF INCOME FURNISHED BY TH E ASSESSEE U/S.139(1) AND 153A OF THE INCOME-TAX ACT, 1 961 AND ASSESSMENTS COMPLETED AS PER ORIGINAL ASSESSMENT U/S.143(3) / 143(1) AS WELL AS U/S.153A ARE AS UNDER : A.Y. DATE OF ORIGINAL RETURN FILED RETURNED INCOME U/S.139 (RS.) DATE OF FILING RETURN U/S.153A RETURNED INCOME U/S.153A (RS.) ASSESSED INCOME U/S.153A/ 143(3) RS. 2006-07 30.03.2007 2,04,148 03.04.2013 2,08,507 2,08,510 2007-08 17.02.2009 55,094 03.04.2013 55,094 55,090 2008-09 29.03.2009 1,26,160 03.04.2013 16,350 1,26,160 2009-10 30.03.2010 1,79,500 03.04.2013 85,110 1,79,500 2010-11 28.03.2011 2,47,910 03.04.2013 2,36,200 1,44,72,910 2011-12 01.08.2011 3,09,400 03.04.2013 2,94,160 3,09,400 2012-13 28.03.2013 NIL - - NIL M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 35 29. THE ASSESSEE FILED APPEALS BEFORE THE LEARNED LEARNED CIT(A) AGAINST THE ASSESSMENTS COMPLETED U/S.153A. THE LEARNED C.I.T.(A) PARTLY ALLOWED THE ASSESSEES APPEALS AGAINST WHICH THE ASSESSEE HAS PREFERRED THE PRESENT APPEAL. SWAN HOLDING PVT. LTD. 30. IN IT(SS) A NO. 89/IND/2015 THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS :- 1.0 THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INC OME- TAX (APPEALS)-3, BHOPAL, PARTLY CONFIRMING THE ASSE SSMENT ORDER PASSED U/S.153A R.W. SEC.143(3) OF THE INCOME -TAX ACT, 1961, BY THE DEPUTY COMMISSIONER OF INCOME-TAX IS BOTH BAD-IN-LAW AND BAD-IN-FACTS. M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 36 1.1 IN DOING SO, HE DID NOT APPRECIATE THAT NO ADDITION COULD HAVE BEEN MADE WHILE COMPLETING ASSESSMENT U/S.153A OF THE INCOME-TAX ACT, 1961 IN CASE OF COMPLETED ASSES SMENTS IF NO UNDISCLOSED INCOME WAS DETERMINABLE FROM THE MATERIAL FOUND AS A RESULT OF SEARCH. SALE PROCEEDS OF 2,00,000 SHARES OF ADROIT INDUSTRIES (INDIA) LTD. TREATED AS UNEXPLAINED INCOME : RS.80,40,625/- 2.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN LAW AS WELL AS IN FACTS IN CONFIRMING THE ADDITION OF RS.80,40,625/- MADE IN RESPECT OF SALE PROCEEDS OF 2,00,000 SHARES OF ADROIT INDUSTRIES (INDIA) LTD. B Y THE ASSESSING OFFICER, AS UNEXPLAINED INCOME OF THE ASS ESSEE. 3.0 THE ASSESSEE MAY BE ALLOWED TO ADD, AMEND, ALTE R OR RAISE ADDITIONAL GROUNDS OF APPEAL. 4.0 THE ASSESSEE PRAYS FOR JUSTICE. 31. IN IT(SS) A NO. 90/IND/2015 THE ASSESSEE HAS TAKE N THE FOLLOWING GROUNDS :- 1.0 THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INC OME-TAX (APPEALS)-3, BHOPAL, PARTLY CONFIRMING THE ASSESSME NT ORDER M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 37 PASSED U/S.153A R.W. SEC.143(3) OF THE INCOME-TAX A CT, 1961, BY THE DEPUTY COMMISSIONER OF INCOME-TAX IS BOTH BAD-I N-LAW AND BAD-IN-FACTS. 1.1 IN DOING SO, HE DID NOT APPRECIATE THAT NO ADDITION COULD HAVE BEEN MADE WHILE COMPLETING ASSESSMENT U/S.153A OF THE INCOME-TAX ACT, 1961 IN CASE OF COMPLETED ASSESSMENTS IF NO UNDISCLOSED INCOME WAS DETERMINABLE FROM THE MATERIAL FOUND AS A RESULT OF SEARCH. ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN TH E SHARES OF ADROIT INDUSTRIES (INDIA) LTD. : RS.8,19, 375/- 2.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN LAW AS WELL AS IN FACTS IN CONFIRMING ADDITION OF RS.8,19, 375/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTM ENT IN 28,500 EQUITY SHARES OF ADROIT INDUSTRIES (INDIA) LTD. 3.0 THE ASSESSEE MAY BE ALLOWED TO ADD, AMEND, ALTER OR RAISE ADDITI ONAL GROUNDS OF APPEAL. 4.0 THE ASSESSEE PRAYS FOR JUSTICE. M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 38 32. IN IT(SS) A NO. 193/IND/2015 THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) ERRED IN RESTRICTING THE ADDITION MADE ON AC COUNT OF UNEXPLAINED INVESTMENT IN THE SHARES OF ADROIT INDUSTRIES (INDIA) LTD. TO RS. 8,19,375/- AS AGAINS T THE ADDITION OF RS.65,69,375/- MADE BY THE A.O. FACTS OF THE CASE 33. THE ASSESSEE IS A CLOSELY-HELD COMPANY BELONGING TO SIGNET GROUP OF INDORE. IT IS ENGAGED IN THE BUSI NESS OF TRADING AND INVESTMENT. A SEARCH AND SEIZURE OPERATION U/S.132 WAS CARRIED OUT AT THE BUSINESS PREMISES OF VARIOUS COMPANIES BELONGING TO SIGNET GROUP AS WELL AS RESIDENTIAL PREMISES OF THE ASSESSEE ON 03.11.2011. CONSEQUENTLY, A NOTICE U/S.153A WAS ISSUED. THE STATUS REGARDING RETURN OF INCOME FURNISHED BY THE ASSESSEE U/S.139(1) AND 153A OF THE INCOME-TAX ACT, 1961 AND M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 39 ASSESSMENTS COMPLETED AS PER ORIGINAL ASSESSMENT U/S.143(3) / 143(1) AS WELL AS U/S.153A ARE AS UNDER : A.Y. DATE OF ORIGINAL RETURN FILED RETURNED INCOME U/S.139 (RS.) DATE OF FILING RETURN U/S.153A RETURNED INCOME U/S.153A (RS.) ASSESSED INCOME U/S.153A/ 143(3) RS. 2006-07 22.06.2006 9,480 28.02.2013 9,880 9,880 2007-08 29.09.2007 11,172 28.02.2013 11,170 11,170 2008-09 23.08.2008 15,231 28.02.2013 16,920 84,83,110 2009-10 16.09.2009 13,884 28.02.2013 13,890 13,890 2010-11 14.09.2010 91,233 28.02.2013 92,114 66,61,490 2011-12 26.07.2011 1,684 28.02.2013 1,680 1,38,51,680 2012-13 29.09.2012 NIL - - NIL THE ASSESSEE FILED APPEALS BEFORE THE LEARNED CIT(A) AGAI NST THE ASSESSMENTS COMPLETED U/S.153A WHO PARTLY ALLOWED THE ASSESSEES APPEALS. NOW THE ASSESSEE HAS FILED THESE APPEALS AGAINST PART SUSTENANCE OF ADDITION WHEREAS THE REVENUE HAS FILED THE APPEAL AGAINST THE RELIEF GRANTED B Y THE LEARNED CIT(A). 34. LAST TWO GROUNDS IN EACH OF THE APPEALS OF THE ASSESSEES PERTAINING TO THE PRAYER FOR ALLOWING THE ASS ESSEE TO ADD, AMEND, ALTER OR RAISE ADDITIONAL GROUNDS OF APPEAL AS ALSO THE PRAYER FOR JUSTICE ARE GENERAL IN GENERAL IN NATURE. HENCE, THE SAME ARE DISMISSED. SINCE GROUNDS M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 40 TAKEN BY THE ASSESSEE AND THE REVENUE ARE COMMON IN ALL THESE APPEALS, FIRST OF ALL WE WOULD PREFER TO DECIDE THE ISSUE RELATING TO CONFIRMATION OF ASSESSMENT MADE U/S 153A/153C R.W.S. 143(3) OF THE ACT. 35 . WE HAVE HEARD BOTH THE SIDES AND CONSIDERED THEIR ARGUMENTS IN THE WAKE OF FACTS OF THE CASE AS ALSO THE CASE LAWS RELIED UPON BY BOTH THE PARTIES. 36. THE C.I.T.(A) REJECTED THE ASSESSEES CONTENTION BY HOLDING THAT WHERE A SEARCH U/S.132 OF THE ACT IS INIT IATED AFTER 31.05.2003 IN CASE OF A PERSON, THE ASSESSING O FFICER HAS NO OPTION BUT TO ASSESS OR REASSESS THE TOTAL INCO ME FOR EACH OF PRECEDING SIX ASSESSMENT YEARS. THIS IS C LEAR AND UNAMBIGUOUS FROM THE PLAIN LANGUAGE OF SEC.153A(1) OF THE ACT AND REITERATION IN THE FIRST PROVISO TO SE CTION 153A. THE TERMS TOTAL INCOME AND SCOPE OF TOTAL INCOME ARE DEFINED IN SEC.2(45) AND SEC.5 OF THE INCOME-TAX ACT RESPECTIVELY. THE 'TOTAL INCOME' TO BE ASSESSED OR M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 41 REASSESSED IN TERMS OF SEC.153A SHALL INCLUDE BOTH RE GULAR AND UNDISCLOSED INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS. UNLIKE CHAPTER XIV-B OF THE ACT, WHERE THE DEFINITION OF 'UNDISCLOSED INCOME' WAS SPECIFICALLY PROVIDED IN SEC TION 158B(B), NO SEPARATE AND DISTINCT DEFINITION OF 'TOTAL INCOME' IS PROVIDED IN SECTION 153A IN CONTRADISTINC TION TO ITS DEFINITION U/S.2(45) OF THE ACT. HAD THE LEGISLAT URE INTENDED TO CURTAIL THE SCOPE OF TOTAL INCOME IN RELAT ION TO SEARCH AND SEIZURE ASSESSMENTS, IT WOULD HAVE SPECIFICAL LY PROVIDED IT UNDER THE RELEVANT PROVISIONS. IN THE ABS ENCE OF THE TERM UNDISCLOSED INCOME HAVING BEEN INCORPORATE D IN THE SECTION ITSELF, THE SAME CANNOT BE READ INTO THE S ECTION. WHILE SEC.153A PROVIDES FOR DETERMINATION OF TOTAL IN COME WHICH INCLUDES BOTH THE DISCLOSED AS WELL AS UNDISCLO SED INCOME, CHAPTER XIV-B PROVIDED FOR DETERMINATION OF UNDISCLOSED INCOME FOR THE WHOLE BLOCK PERIOD. UNLI KE M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 42 CHAPTER XIV-B, THERE IS NOTHING IN SEC.153A WHICH REQUIRES COMPLETION OF A SEARCH ASSESSMENT ONLY ON THE BASIS OF EVIDENCE FOUND AS A RESULT OF SEARCH OR OTHER DOCUMENTS AND SUCH OTHER MATERIALS OR INFORMATION AS ARE AVAILABLE WITH THE AO AND RELATABLE TO THE EVIDENCE FOUN D. THE AO IS STATUTORILY REQUIRED TO MAKE ASSESSMENT U/S.153A FOR ALL SUCH SIX YEARS AND COMPUTE TOTAL INCOM E OF THE ASSESSEE INCLUDING UNDISCLOSED INCOME NOTWITHSTANDING THAT RETURNS OF THESE ASSESSMENT YEARS HAVE ALREADY BEEN PROCESSED U/S 143(1) OR ASSESSED U/S 143(3) OF THE ACT. THE SCOPE OF SEC.153A IS SIMILAR TO SEC.143(3) AND IN THAT CONTEXT, THE LEGISLATURE USED T HE WORD TOTAL INCOME. THE FIRST AND SECOND PROVISO TO SEC.153A ARE COMPLEMENTARY TO EACH OTHER AND REQUIRES THE AO TO ASSESS OR RE-ASSESS THE 'TOTAL INCOME' IN RE SPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS IN ASSESSMENT ORDERS U/S.153A. IN M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 43 SUPPORT OF HIS CONTENTION, RELIANCE WAS PLACED UPON MEMORANDUM EXPLAINING THE PROVISIONS IN THE FINANCE BILL, 2003 [(2003) 260 ITR (ST.) 191], THE RULE OF CONSTRUCTION LAID DOWN IN HEYDONS CASE FOR INTERPRE TATION OF THE LANGUAGE USED IN SEC.153A AND THE FOLLOWING JUDGEMENTS: C.I.T. VS. RAJ KUMAR ARORA 367 ITR 517 (ALL) CANARA HOUSING DEVELOPMENT COMPANY VS. D.C.I.T. 49 TAXMAN.COM 98 (KAR) NANDINIDELUX VS. C.I.T. 3 7 ITR (TRIB.) 52 (BANG.) MADUGULAVENU VS. D.I.T. 29 TAXMANN.COM 200 (DEL) SHIVNATH RAI HARNARAIN (INDIA) LTD.VS.D.C.I.T. 117 ITD 74 (DEL) MS. SHYAMLATA KAUSHIK VS. A.C.I.T. 306 ITR (A.T.)117 (DEL) HARVEY HEART HOSPITALS LTD. VS. A.C.I.T. 130 TTJ 700 (CHENNAI) DR. MANSUKH KANJIBHAI SHAH VS. A.C.I.T. 129 ITD 3 76 (AHD.) RAJATTRADECOM INDIA (P.) LTD. VS. D.C.I.T. 120 ITD 48 (INDORE) INCOME - TAX - VII V. CHETAN DAS LACHMAN DAS 25 TAXMANN.COM 227 (DEL) C.I.T. VS. ANIL KUMAR BHATIA 24 AXMANN.COM 98 (DEL) 37. BEFORE US, IT IS SUBMITTED BY THE LEARNED COU NSEL FOR THE ASSESSEE THAT SATISFACTION OF A.O. U/S.153C NECESSARY FOR ASSUMING JURISDICTION. IN THE ASSESSEE S CASE, NOTICE U/S.153C WERE ISSUED BY THE A.O. WHICH REQUIR ES M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 44 RECORDING OF HIS SATISFACTION. RELIANCE IS PLACED ON T HE DECISION OF THE HON'BLE MADHYA PRADESH HIGH COURT IN THE CASE OF C.I.T. VS. MECHMEN [I.T.A.NO.44/2011 DT.10.07.2015] WHEREIN IT IS HELD THAT SATISFACTION O F A.O. IS ESSENTIAL TO ASSUME JURISDICTION. THE RELEVANT PARAS OF THE JUDGMENT ARE AS FOLLOWS : 15. WE MAY NOW TURN TO SECTION 153C. NO DOUBT, THE FORM OF SECTION 153C IS DISSIMILAR TO THAT OF SECTION 15 8BD. IT IS ALSO TRUE THAT THE TWO PROVISIONS ARE EMBEDDED UNDE R DIFFERENT CHAPTERS. FOR, SECTION 153C IS IN CHAPTER XIV PROVIDING FOR PROCEDURE FOR ASSESSMENT, WHEREAS SEC TION 158BD IS FOUND IN CHAPTER XIV-B PROVIDING FOR SPECI AL PROCEDURE FOR ASSESSMENT OF SEARCH CASES. FURTHER, SECTION 153C OPENS WITH NON-OBSTANTE CLAUSE. HOWEVER, THE N ON- OBSTANTE CLAUSE IN SECTION 153C IS NECESSITATED TO GIVE POWER TO THE ASSESSING OFFICER HAVING JURISDICTION TO PROCEED AGAINST THE PERSON OTHER THAN THE PERSON REFERRED T O IN SECTION 153A, INSPITE OF THE ACTION UNDER SECTION 1 39, 147, 148, 149, 151 AND 153 OF THE I.T. ACT. HOWEVER, ON CLOSER SCRUTINY OF THE TWO PROVISIONS, IT IS INDISPUTABLE THAT, THESE PROVISIONS ARE MACHINERY PROVISIONS AND HAVE BEEN PROVIDED FOR IN THE STATUTE BOOK FOR THE PURPOSE OF CARRYING OUT ASSESSMENT OF A PERSON OTHER THAN THE SEARCHED PERSON UNDER SECTION 132 OR 132A OF THE I.T. ACT IN RELATI ON TO SECTION 158BD; AND SECTION 153A IN RELATION TO SECT ION 153C. NOTABLY, THE PURPOSE UNDERLYING BOTH THESE PR OVISIONS IS SIMILAR, EVEN THOUGH SECTION 153C DOES NOT SPECI FICALLY REFER TO THE EXPRESSION UNDISCLOSED INCOME. HOWEV ER, IN M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 45 BOTH THE SITUATIONS, THE ASSESSING OFFICER ENGAGED IN CARRYING ON SEARCH OF THE ASSESSEE WITHIN HIS JURIS DICTION, IF SEIZES OR REQUISITIONS THE ITEMS (BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR ANY ASSETS FOR SECTION 158BD; AND MONE Y, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG OR BOOKS OF ACCOUNT OR DOCUMENTS FOR SECTION 153C), IS EXPEC TED TO HANDOVER THOSE ITEMS TO THE ASSESSING OFFICER HAVIN G JURISDICTION OVER SUCH OTHER PERSON AND THEREAFTER THE ASSESSING OFFICER HAVING JURISDICTION HAS TO PROCEE D AGAINST SUCH OTHER PERSON WITHIN HIS JURISDICTION. EVEN FOR THE PURPOSE OF SECTION 153C, THE ASSESSING OFFICER BEFO RE HANDING OVER THE ITEMS TO THE ASSESSING OFFICER HAV ING JURISDICTION MUST BE SATISFIED THAT THE ITEMS BEL ONGS OR BELONG TO THE PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A. THAT SATISFACTION OF THE CONCERNED AS SESSING OFFICER IS A SINE QUA NON. THE CONSEQUENCES FLOWING FROM THE ACTION TO BE TAKEN ON THE BASIS OF SUCH INFORMATION HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION, FOR THE ASSESSE, WHO IS A PERSON OTHER THAN THE PERSON REFE RRED TO IN SECTION 153A, IS DRASTIC OF ASSESSMENT OR REAS SESSMENT OF HIS INCOME FALLING WITHIN SIX ASSESSMENT YEARS. 16. SUFFICE IT TO OBSERVE THAT THE DISSIMILARITY OF THE FORM OF TWO PROVISIONS WOULD MAKE NO DIFFERENCE TO THE PURP OSE UNDERLYING. THE POWER BESTOWED ON THE ASSESSING OFF ICER HAVING JURISDICTION BE IT UNDER SECTION 153C OR S ECTION 158BD IS IDENTICAL. 17. WE ARE NOT INCLINED TO ACCEPT THE ARGUMENT OF T HE DEPARTMENT THAT THE PURPOSE UNDERLYING THE TWO PROV ISIONS IS DIFFERENT. WE ALSO FIND THAT EVEN THE PROCEDURE IS NOT DIFFERENT. THE SUBJECT MATTER OF THE ACTION WOULD D IFFER IN THE CONTEXT OF THE MACHINERY PROVISION INVOKED, IN THE GIVEN CASE. THAT, HOWEVER, CANNOT BE THE BASIS TO EXTRICA TE THE ASSESSING OFFICER, WHO RESORTS TO POWER UNDER SECTI ON 153C M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 46 OF HANDING OVER THE ITEMS REFERRED TO IN SECTION 15 3C TO THE ASSESSING OFFICER HAVING JURISDICTION, OF HIS DUTY TO BE SATISFIED ABOUT THE JURISDICTIONAL FACT THAT THE IT EMS BELONGS OR BELONG TO A PERSON OTHER THAN THE PERSON REFERRE D TO IN SECTION 153A. 18. THE CONCOMITANT OF THIS CONCLUSION, IS THAT, TH E LEGAL POSITION AS APPLICABLE TO SECTION 158BD REGARDING SATISFACTION IN THE FIRST INSTANCE OF THE FIRST ASS ESSING OFFICER FORWARDING THE ITEMS TO THE ASSESSING OFFICER HAVIN G JURISDICTION; AND IN THE SECOND INSTANCE OF THE ASS ESSING OFFICER HAVING JURISDICTION WHILST SENDING NOTICE T O SUCH OTHER PERSON (OTHER THAN THE PERSON REFERRED TO IN SECTION 153A), MUST APPLY PROPRIOVIGORE. THE FACT THAT INCI DENTALLY THE ASSESSING OFFICER IS COMMON AT BOTH THE STAGES WOULD NOT EXTRICATE HIM FROM RECORDING SATISFACTION AT TH E RESPECTIVE STAGES. IN THAT, THE ASSESSING OFFICER I S SATISFIED THAT THE ITEMS REFERRED TO IN SECTION 153C BELONGS OR BELONG TO A PERSON (OTHER THAN THE PERSON REFERRED TO IN S ECTION 153A), BEING SINE QUA NON. HE CANNOT ASSUME JURISDI CTION TO TRANSMIT THOSE ITEMS TO ANOTHER FILE WHICH INCIDENT ALLY IS PENDING BEFORE HIM CONCERNING OTHER PERSON (PERSON OTHER THAN THE PERSON REFERRED TO IN SECTION 153A). THE Q UESTION AS TO WHETHER THAT MAY INFLUENCE THE OPINION OF THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTH ER PERSON, ALSO CANNOT BE THE BASIS TO TAKE ANY OTHER VIEW. AS A MATTER OF FACT, THE OTHER ASSESSING OFFICER TO WHOM THE IT EMS ARE HANDED OVER, BEFORE ISSUING NOTICE MUST HIMSELF BE SATISFIED AFTER DUE VERIFICATION OF THE ITEMS RECEIVED AND TH E DISCLOSURES MADE BY THE OTHER PERSON IN THE RETURNS FOR THE RELEVANT PERIOD ALREADY FILED BY THE OTHER PERSON B EFORE HIM. FOR THE SAME REASON, WE MUST REJECT THE ARGUMENT OF THE DEPARTMENT THAT THE DISCRETION OF THE ASSESSING OFF ICER HAVING JURISDICTION WILL BE IMPAIRED IN ANY MANNER, IF HE M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 47 WERE TO HOLD A DIFFERENT VIEW. SIMILARLY, AS THERE IS NO PROVISION EITHER EXPRESS OR IMPLIED (IN THE ACT) TO DISPENSE WITH THE REQUIREMENT OF SATISFACTION, IF THE ASSESS ING OFFICER HAPPENS TO BE THE SAME, AS IN THIS CASE, THE ARGUME NT OF THE DEPARTMENT MUST BE NEGATIVED. 19. AFTER RECEIPT OF THE MATERIALS, THE ASSESSING O FFICER HAVING JURISDICTION IS EXPECTED TO CONDUCT ENQUIRY AND DUE VERIFICATION OF THE RELEVANT FACTS; BEFORE FORMING HIS PRIMA FACIE SATISFACTION. THE ASSESSING OFFICER HAVING JU RISDICTION WILL BE WELL WITHIN HIS RIGHTS TO FORM AN INDEPENDE NT VIEW BEFORE ISSUING NOTICE TO THE OTHER PERSON (PERSON O THER THAN THE PERSON REFERRED TO IN SECTION 153A) UNDER HIS J URISDICTION ON THE BASIS OF HIS OWN ENQUIRY. IN OUR OPINION, TH E VIEW FORMED BY THE ASSESSING OFFICER AFTER HIS OWN ENQUI RY DOES NOT ENTAIL IN SEATING IN APPEAL OVER THE SATISFACTI ON OF THE FIRST ASSESSING OFFICER, WHO HAD HANDED OVER THE IT EMS TO HIM. 20. AS A RESULT, WE HOLD THAT THERE IS NO INFIRMITY IN THE VIEW TAKEN BY THE TRIBUNAL ON THE QUESTIONS UNDER CONSID ERATION. THE VIEW TAKEN BY US IS REINFORCED FROM THE DECISIO NS OF OTHER HIGH COURTS IN THE CASES OF COMMISSIONER OF I NCOME TAX (CENTRAL) VS. GOPI APARTMENT (SUPRA), PEPSI FOO DS P. LTD. (SUPRA), PEPSICO INDIA HOLDINGS P. LTD. (SUPRA ) AND LASTLY CIT VS. MADHIKESHWANI (SUPRA). THE OBSERVATI ONS OF THE DELHI HIGH COURT IN THE CASE OF SSP AVIATION LT D. (SUPRA) HAVE BEEN EXPLAINED IN THE SUBSEQUENT CASE OF PEPSI CO INDIA HOLDINGS P. LTD. (SUPRA). 21. WE CONCLUDE THAT THE CONDITION PRECEDENT FOR RE SORTING TO ACTION UNDER SECTION 158BD DELINEATED BY THE SUPREM E COURT IN THE CASE OF MANISH MAHESHWARI (SUPRA) AND IN THE RECENT CASE OF COMMISSIONER OF INCOME TAX-III VS. C ALCUTTA KNITWEARS (SUPRA), WOULD APPLY ON ALL FOURS MANDATI NG M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 48 SATISFACTION OF THE ASSESSING OFFICER(S) DEALING WI TH THE CASE AT THE RESPECTIVE STAGES REFERRED TO IN SECTION 153 C. 22. REVERTING TO THE SUBSTANTIAL QUESTIONS OF LAW A RTICULATED WHILE ADMITTING THESE APPEALS, WE HOLD THAT THE SAM E WILL BE OF NO AVAIL TO THE DEPARTMENT CONSIDERING THE FA CT SITUATION OF THE PRESENT CASE AND FOR THE REASONS M ENTIONED HITHERTO. IN THAT, WE HAVE REJECTED THE ARGUMENT TH AT EVEN IN CASES, UNDER SECTION 153C THE ASSESSING OFFICER(S) NEED NOT RECORD SATISFACTION AND IN PARTICULAR AT BOTH THE S TAGES BE IT ASSESSING OFFICER OF SEARCHED PERSON OR ASSESSIN G OFFICER HAVING JURISDICTION OVER SUCH OTHER PERSON. NOTABLY , THE REQUIREMENT OF RECORDING SATISFACTION IS NOT FOR TH E BENEFIT OF THE ASSESSING OFFICER(S), BUT LENDING CREDENCE TO H IS SATISFACTION AND ON WHICH MATTERS THE ASSESSEE CAN GIVE MEANINGFUL EXPLANATION AND REASON IT OUT AS AND WHE N OPPORTUNITY IS GIVEN TO THE CONCERNED ASSESSEE. 23. IN THE PRESENT CASE, THE CONCURRENT FINDING OF FACT RECORDED BY THE APPELLATE FORUMS IS THAT, NO SATISF ACTION HAS BEEN RECORDED BY THE ASSESSING OFFICER BEFORE I SSUING OF NOTICE UNDER SECTION 153C. FURTHER, NONE OF THE PAP ERS SEIZED BELONGS OR BELONG TO THE ASSESSEE (NOTICEE). THE APPELLATE FORUMS HAVE FURTHER FOUND THAT NO ADDITIO N OR EVEN OBSERVATIONS HAVE BEEN MADE BY THE ASSESSING O FFICER IN ANY OF THE ORDERS FOR THE RELEVANT ASSESSMENT YE ARS IN CONNECTION WITH ANY MATERIAL FOUND DURING THE COURS E OF SEARCH. EVEN FOR THAT REASON NO ACTION UNDER SECTIO N 153C, IS JUSTIFIED. THESE FINDINGS OF FACT NEED NO INTERF ERENCE AND HAVE NOT BEEN QUESTIONED BEFORE US. CONSIDERING THE ABOVE, THESE APPEALS MUST FAIL. 24. ACCORDINGLY, THESE APPEALS ARE DISMISSED WITH N O ORDER AS TO COSTS . M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 49 38. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THE ASSESSEES CASE, THERE IS NOTHING IN THE ASSESS MENT ORDER OR OTHERWISE TO SHOW THAT THE SATISFACTION AS ENVISAGED U/S.153C WAS EVER RECORDED BY THE A.O. CONSIDERING IT, THE A.O. DID NOT ASSUME JURISDICTION TO COMPLETE ASSESSMENT U/S.153A AND THEREFORE, THE ASSESSMENT ORDER PASSED BY HIM IS INVALID. HE PLEADED T HAT EVEN WHEN THERE IS SAME ASSESSING OFFICER FOR SEARCH ED PERSON AND WHERE 153C ACTION IS TAKEN THEN ALSO RECORDI NG OF SATISACTION IN BOTH THE CASES IS NECESSARY IN VIEW OF DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF MECHMAN (SUPRA). HE FURTHER SUBMITTED THAT NO ADDITI ON CAN BE MADE IN NON-ABATED ASSESSMENTS SANS INCRIMINATING MATERIAL. THE ASSESSMENT U/S.153A IS MAD E ONLY IN CASES WHERE A SEARCH IS INITIATED U/S.132 OR BO OKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED U/S.132A AFTER 31.05.2003. THEREFORE, M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 50 SECTION 153A OF THE ACT CANNOT BE READ IN ISOLATION. T HE REQUIREMENT OF ASSESSMENT OR REASSESSMENT OF TOTAL INCO ME UNDER THE SAID SECTION HAS TO BE READ IN THE CONTEXT O F SECTIONS 132 OR 132A OF THE ACT. ONCE NOTICE U/S.15 3A IS ISSUED, THE ASSESSEE IS COMPULSORILY REQUIRED TO FILE RETURN OF INCOME FOR SIX ASSESSMENT YEARS NOTWITHSTANDING DISCOVERY OR OTHERWISE OF ANY INCRIMINATING MATERIAL. A LL THE ASSESSMENT PROCEEDINGS WHICH ARE PENDING ON THE DATE O F SEARCH ABATE IN TERMS OF SECOND PROVISO TO SEC.153A. A S A COROLLARY, ALTHOUGH BUT NOT EXPRESSLY PROVIDED IN SEC TION, THE ASSESSMENT PROCEEDINGS WHICH ARE NOT PENDING DO N OT ABATE. IF NOTHING INCRIMINATING IS FOUND ON ACCOUNT OF SUCH SEARCH OR REQUISITION IN RELATION TO UNABATED ASSESSMENT S I.E. COMPLETED OR CONCLUDED ASSESSMENTS, ONLY ASSESSE D INCOME SHOULD BE REITERATED. THE HARMONIOUS CONSTRUCT ION OF ENTIRE PROVISION WOULD LEAD TO AN IRRESISTIBLE CON CLUSION THAT THE TERM ASSESSMENT HAS TO BE READ IN THE CONTE XT OF M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 51 ABATED ASSESSMENTS AND THE TERM REASSESSMENT HAS BEEN USED IN THE CONTEXT OF UNABATED ASSESSMENTS. IN THE C ASE OF COMPLETED ASSESSMENTS, INCOME HAS TO BE RE-ASSESSE D IN TERMS OF SEC.153A. THE RE-ASSESSMENT REQUIRES BELIEF OF ASSESSING OFFICER REGARDING ESCAPEMENT OF INCOME FROM ASSESSMENT. THE BELIEF SHOULD BE FOUNDED ON EXISTENC E OF APPROPRIATE MATERIAL OR INFORMATION. IT SHOULD BE RATIONAL BELIEF HELD IN GOOD FAITH AND NOT ARBITRARY, SUBJECTIVE OR A MERE PRETENCE. THE MATERIAL OR INFORMATION IN HIS POSSESSION SHOULD HAVE DIRECT NEXUS WITH HIS BELIEF REGARDING ESCAPEMENT OF INCOME. THE ABSENCE OF SUCH NEXUS SHALL RENDER THE RE-ASSESSMENT PROCEEDINGS INVAL ID. THUS, THE RE-ASSESSMENT OF INCOME U/S.153A CANNOT BE MADE SANS ANY INCRIMINATING MATERIAL OR MERELY ON CHANGE OF OPINION IN RELATION TO MATERIAL ALREADY CONSIDERED. [INDIAN & EASTERN NEWSPAPER SOCIETY VS. C.I.T. (119 IT R 996 SC); CALCUTTA DISCOUNT CO. LTD. VS. I.T.O (41 ITR 191 M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 52 SC)] THE CONTENTION OF THE REVENUE TO THE EFFECT TH AT ONCE A NOTICE UNDER SECTION 153A OF THE ACT IS ISSUED, THE ASSESSMENTS FOR ALL THE SIX YEARS ARE AT LARGE FOR THE A O HAS NO WARRANT IN LAW. THE LEARNED COUNSEL FOR THE ASSESSE E PLACED RELIANCE WAS PLACED UPON THE FOLLOWING JUDGMENT S: 1. JAI STEEL (INDIA) VS. A.C.I.T. (2013) 259 CTR 281 ( RAJ ) 19 . THE UNDERLINE PURPOSE OF MAKING ASSESSMENT OF TOTAL INCOME UNDER SECTION 153A OF THE ACT IS, THER EFORE, TO ASSESS INCOME WHICH WAS NOT DISCLOSED OR WOULD N OT HAVE BEEN DISCLOSED. THE PURPOSE OF SECOND PROVISO IS ALSO VERY CLEAR, INASMUCH AS, ONCE A ASSESSMENT OR REASSESSMENT IS 'PENDING' ON THE DATE OF INITIATION OF SEARCH OR REQUISITION AND IN TERMS OF SECTION 153A A RETURN IS FILED AND THE AO IS REQUIRED TO ASSESS TH E SAME, THERE CANNOT BE TWO ASSESSMENT ORDERS DETERMINING THE TOTAL INCOME OF THE ASSESSEE FOR TH E SAID ASSESSMENT YEAR AND, THEREFORE, THE PROVISO PROVIDE S FOR ABATEMENT OF SUCH PENDING ASSESSMENT AND REASSESSMENT PROCEEDINGS AND IT IS ONLY THE ASSESSMENT MADE UNDER SECTION 153A OF THE ACT WOULD BE THE ASSESSMENT FOR THE SAID YEAR. 20 . THE NECESSARY COROLLARY OF THE ABOVE SECOND PROVIS O IS THAT THE ASSESSMENT OR REASSESSMENT PROCEEDINGS, WHICH HAVE ALREADY BEEN 'COMPLETED' AND ASSESSMENT ORDERS HAVE BEEN PASSED DETERMINING THE ASSESSEE'S TOTAL INCOME AND, SUCH ORDERS ARE SUBSISTING AT THE TIME WHEN THE SEARCH OR THE REQUISITION IS MADE, THERE I S NO QUESTION OF ANY ABATEMENT SINCE NO PROCEEDINGS ARE M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 53 PENDING. IN SUCH CASES, WHERE THE ASSESSMENTS ALREA DY STANDS COMPLETED, THE AO CAN REOPEN THE ASSESSMENTS OR REASSESSMENTS ALREADY MADE WITHOUT FOLLOWING THE PROVISIONS OF SECTIONS 147, 148 AND 151 OF THE ACT AND DETERMINE THE TOTAL INCOME OF THE ASSESSEE. 21. THE ARGUMENT RAISED BY THE COUNSEL FOR THE APPELLANT TO THE EFFECT THAT ONCE A NOTICE UNDER SE CTION 153A OF THE ACT IS ISSUED, THE ASSESSMENTS FOR SIX YEARS ARE AT LARGE BOTH FOR THE AO AND ASSESSEE HAS NO WARRANT IN LAW. 22 . IN THE FIRM OPINION OF THIS COURT FROM A PLAIN REA DING OF THE PROVISION ALONG WITH THE PURPOSE AND PURPORT OF THE SAID PROVISION, WHICH IS INTRICATELY LINKED WIT H SEARCH AND REQUISITION UNDER SECTIONS 132 AND 132A OF THE ACT, IT IS APPARENT THAT: (A) THE ASSESSMENTS OR REASSESSMENTS, WHICH STAND ABATED IN TERMS OF II PROVISO TO SECTION 153A OF TH E ACT, THE AO ACTS UNDER HIS ORIGINAL JURISDICTION, FOR WH ICH, ASSESSMENTS HAVE TO BE MADE; (B) REGARDING OTHER CASES, THE ADDITION TO THE INCOME T HAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT WILL BE MADE ON THE BASIS OF INCRIMINATING MATERIAL AND (C) IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MADE. THOUGH SUCH A CLAIM BY THE ASSESSEE FOR THE FIRST T IME UNDER SECTION 153A OF THE ACT IS NOT COMPLETED, THE CASE IN HAND, HAS TO BE CONSIDERED AT BEST SIMILAR TO A CASE WHERE IN SPITE OF A SEARCH AND/OR REQUISITION, NOTH ING INCRIMINATING IS FOUND. IN SUCH A CASE THOUGH SECTI ON M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 54 153A OF THE ACT WOULD BE TRIGGERED AND ASSESSMENT O R REASSESSMENT TO ASCERTAIN THE TOTAL INCOME OF THE P ERSON IS REQUIRED TO BE DONE, HOWEVER, THE SAME WOULD IN THAT CASE NOT RESULT IN ANY ADDITION AND THE ASSESSMENTS PASSED EARLIER MAY HAVE TO BE REITERATED. ............ 26. THE PLEA RAISED ON BEHALF OF THE ASSESSEE THAT AS THE FIRST PROVISO PROVIDES FOR ASSESSMENT OR REASSESSMENT OF THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSESSMENT YEARS, IS MERELY READING THE SAID PROVISION IN ISOL ATION AND NOT IN THE CONTEXT OF THE ENTIRE SECTION. THE W ORDS 'ASSESS' OR 'REASSESS' HAVE BEEN USED AT MORE THAN ONE PLACE IN THE SECTION AND A HARMONIOUS CONSTRUCTION OF THE ENTIRE PROVISION WOULD 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 COMPLETED ASSESSMENT PROCEEDINGS, WHICH WOULD NOT ABATE AS THEY ARE NOT PENDING ON TH E DATE OF INITIATION OF THE SEARCH OR MAKING OF REQUI SITION AND WHICH WOULD ALSO NECESSARILY SUPPORT THE INTERPRETATION THAT FOR THE COMPLETED ASSESSMENTS, THE SAME CAN BE TINKERED ONLY BASED ON THE INCRIMINATIN G MATERIAL FOUND DURING THE COURSE OF SEARCH OR REQUI SITION OF DOCUMENTS. 2. C.I.T. VS. KABUL CHAWLA [I.T.A.NO.707/2014 DT.28.08.2015 (DEL)(HC)] 37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOSTHERETO, AND IN THE LIGHT OF THE L AW EXPLAINED IN THE AFOREMENTIONEDDECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UNDER: M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 55 I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF T HE ACT, NOTICEUNDER SECTION 153 A (1) WILL HAVE TO BE MANDATORILY ISSUED TOTHE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYSIMMEDIATELY PRECEDING TH E PREVIOUS YEAR RELEVANT TO THE AY INWHICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DA TE OF THESEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TOBE COMPUTED BY THE AOS AS A FRESH EXERC ISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OFTHE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCHTAKES PLACE. THE AO HAS THE POWER T O ASSESS AND REASSESS THE'TOTAL INCOME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATEASSESSMENT ORDE RS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THEREWILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIXAYS IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOMEWOULD BE BROUGHT TO TAX. IV. ALTHOUGH SECTION 153 A DOES NOT SAY THAT ADDITI ONS SHOULD BESTRICTLY MADE ON THE BASIS OF EVIDENCE FOU ND IN THE COURSE OF THESEARCH, OR OTHER POST-SEARCH MATER IAL OR INFORMATION AVAILABLEWITH THE AO WHICH CAN BE RELAT ED TO THE EVIDENCE FOUND, IT DOESNOT MEAN THAT THE ASSESSMENT CAN BE ARBITRARY OR MADE WITHOUTANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOU SLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONL Y ON THE BASISOF SEIZED MATERIAL. V. IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPLETEDASSESSMENT CAN BE REITERATED AND THE ABATE D ASSESSMENT ORREASSESSMENT CAN BE MADE. THE WORD 'ASSESS' IN SECTION 153 AIS RELATABLE TO ABATED PROCEEDINGS (I.E. THOSE PENDING ON THE DATEOF SEARC H) M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 56 AND THE WORD 'REASSESS' TO COMPLETED ASSESSMENTPROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED, T HE JURISDICTIONTO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDERSECTION 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BEMADE SEPARATELY FOR EACH AY ON THE BASIS OF THE FINDINGS OF THESEARCH AND ANY O THER MATERIAL EXISTING OR BROUGHT ON THE RECORDOF THE AO . VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH B Y THE AO WHILEMAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON THE BASISOF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OFSEARCH OR REQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME ORPROPERTY DISCOVER ED IN THE COURSE OF SEARCH WHICH WERE NOTPRODUCED OR N OT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSEOF ORIGINAL ASSESSMENT. 38. THE PRESENT APPEALS CONCERN AYS, 2002-03, 2005- 06 AND 2006-07.ONTHE DATE OF THE SEARCH THE SAID ASSESSMENTS ALREADY STOOD COMPLETED. SINCENO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEARCH, NO ADDITIONSCOULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. 39. THE QUESTION FRAMED BY THE COURT IS ANSWERED IN FAVOUR OF THE ASSESSEEAND AGAINST THE REVENUE. 40. THE APPEALS ARE ACCORDINGLY DISMISSED BUT IN TH E CIRCUMSTANCES NOORDERS AS TO COSTS. 3. C.I.T. VS. MURLIAGRO PRODUCTS LTD. [(2014) 49 TAXMANN.COM 172 (BOM)][KINDLY REFER TO PARA 8 TO 10 ] 4. C.I.T VS. CONTINENTAL WAREHOUSING CORPORATION [58 TAXMANN.COM 78 (BOM)] [KINDLY REFER TO PARA 28 TO 3 7] M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 57 5. ALL CARGO GLOBAL LOGISTICS LTD. VS. D.I.T. [137 ITD 287 (MUM-SB)] [KINDLY REFER TO PARA 48 TO 53; 53 CONCLU DE THE ISSUE] 6. GOVIND AGARWAL [ITA NO.3389 & 3390/M/2011 DT.10.01.2014 (MUM.TRIB.)] 7. A.C.I.T. VS. PRATIBHA INDUSTRIES LTD. [28 TAXMANN.C OM 246 (MUM. TRIB)] 8. GURINDER SINGH BAWA VS. D.C.I.T.[28 TAXMANN.COM 328 (MUM. TRIB)] 9. DINESH TOBACCO INDUSTRIES VS. D.C.I.T. [148 ITD 118 (JODH. TRIB)] 39. AS REGARDS JUDGMENTS RELIED UPON BY THE C.I.T. (A), THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SAM E WERE DISTINGUISHABLE ON FACTS INASMUCH AS RECOVERY OF INCRIMINATING MATERIAL EITHER DURING SEARCH OR POST SEAR CH INQUIRIES. 40. ON THE ISSUE OF ADDITION SANS INCRIMINATING MATERIAL , THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE ARE TWO VIEWS OF VARIOUS JUDICIAL AUTHORITIES. IT IS A SETTLED LEGAL POSITION THAT IF TWO VIEWS ARE POSSIBLE ON A PARTI CULAR ISSUE, THE VIEW WHICH ISFAVOURABLETO THE ASSESSEE SHOU LD BE M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 58 FOLLOWED. [C.I.T. VS. VEGETABLE PRODUCTS LTD. 88 ITR 192 (SC)]. 41. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT IN THE ASSESSEES CASE, THERE ARE NO INCRIMINATING MATERIAL WHATSOEVER IN RELATION TO INVESTM ENT IN SHARES OF ADROIT INDUSTRIES (INDIA) LTD. IN ASSESSM ENT YEAR 2007-08, TRANSFER OF THESE SHARES IN ASSESSMENT YE AR 2008-09 AND THEIR RE-ACQUISITION SUBSEQUENTLY IN ASSESSMENT YEAR 2010-11. NO PROCEEDINGS IN RELATION TO ASSESSMENTS FOR THESE ASSESSMENT YEARS WERE PENDING AN D THEREFORE NO ADDITION COULD HAVE BEEN MADE IN ASSESSMEN T COMPLETED U/S.153A R.W.S. 143(3) OF THE ACT IN THE ABSENCE OF ANY INCRIMINATING MATERIAL ON ACCOUNT OF UNEXPLAINED CASH CREDITS IN ASSESSMENT YEAR 2008-09 AND UNEXPLAINED INVESTMENT IN ASSESSMENT YEAR 2010-11.THE ADDITION MAD E BY THE ASSESSING OFFICER BY WAY OF REASSESSMENT IN RE LATION TO IMPUGNED CONCLUDED ASSESSMENTS AMOUNTED TO CHANGE M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 59 IN OPINION ON THE SAME SET OF FACTS WHICH IS NOT PERM ISSIBLE U/S.153A. 42. ON THE OTHER HAND, ON THE ISSUE OF VALIDITY OF ASSESSMENT U/S 153A AND 153C OF THE ACT, THE LD. DR SUBMITTED THAT THIS ISSUE HAS BEEN RAISED BY THE ASSESS EE IN ALMOST IN ALL THE APPEALS FILED IN THIS GROUP AND TH E LEARNED CIT(A) HAS DEALT WITH THE SAME IN DETAIL AND REJECTED THE ASSESSEES CONTENTION WITH DETAILED FIND INGS. THE LEARNED DR PLACED RELIANCE ON THE FINDING OF THE LEARNED CIT(A) AND ALSO PLACED RELIANCE ON THE SET OF CA SE LAWS OF WHICH HE HAS PROVIDED A COMPILATION BEFORE US. THE CASE LAWS RELIED ON BY THE LD. DR ARE AS UNDER :- S. NO. CASE LAW REMARKS 1 CIT V/S RAJKUMAR ARORA 367 ITR 517, HIGH COURT. ALL AHABAD VALIDITY OF SEARCH ASSESSMENT U/S 153-A/C 2 NANDINI DELUX V/S ACIT, 37 ITR (TRB) 52, ITAT BAN GLORE, C BENCH, - DO- 3 SHIVNATH RAI HARNARAIN INDIA LTD. VS/ DCIT, 117 ITD 74, ITAT, DELHI D BENCH - DO- M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 60 43. WE HAVE HEARD BOTH THE SIDES. WE HAVE ALSO GON E THROUGH THE CASE LAWS RELIED UPON BY BOTH THE SIDES. WE HAVE ALSO CONSIDERED VARIOUS RELEVANT FACTS OF THE CASE. IT IS A SETTLED LEGAL POSITION THAT ONCE A SEARCH AND SEIZURE ACTION HAS TAKEN PLACE U/S 132 OF THE ACT OR A REQUISITI ON HAS BEEN MADE U/S 132A, THE PROVISIONS OF SECTION 153 A TRIGGED AND ASSESSING OFFICER IS BOUND TO ISSUE NOTI CE U/S 153A OF THE ACT. ONCE NOTICES ARE ISSUED U/S 153A OF THE ACT THEN ASSESSEE IS LEGALLY OBLIGED TO FILE RETURN O F INCOME FOR SIX YEARS. THE ASSESSMENT AND REASSESSMENT FOR SIX YEARS SHALL BE FINALISED BY THE ASSESSING OFFICER. IT IS ALSO 4 HARVAY HEART HOSPITAL LTD. V/S ACIT 130 TTJ 700 , ITAT CHENNAI A BENCH - DO- 5 DR. MANSUKH KANJIBHAI SHAH V/S ACIT, 129 ITD 376, ITAT AHMADABAD D BENCH - DO- 6 RAJAT TRADECOM INDIA (P) LTD V/S DCIT, 120 ITD 48 , ITAT INDORE BENCH - DO- 7 CANARA HOUSING DEVELOPMENT CO. V/S DCIT, 49 TAXMANN .COM 98 HIGH COURT, KARNATAKA. - DO- 8 MADUGULA VENU V/S DIT, 29 TAXMANN.COM HIGH COURT, DELHI. - DO- 9 CIT V/S CHETANDAS LAXMANDAS 25 TAXMANN.COM 227, DEL HI HIGH COURT - DO- 10 CIT V/S ANIL KUMAR BHATIA, 25 TAXMANN.COM 98, DE LHI HIGH COURT - DO- 11 MEMORANDUM EXPLAINING THE PROVISIONS IN THE FINA NCE BILL 2003 - DO- M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 61 HELD BY VARIOUS COURTS THAT ONCE NOTICE U/S 153A OF T HE ACT ISSUED, THEN ASSESSMENT FOR SIX YEARS SHALL BE AT L ARGE BOTH FOR ASSESSING OFFICER AND ASSESSEE HAVE NO WARRANT OF LAW. IT HAS BEEN ALSO HELD THAT IN THE ASSESSMENT YEARS WHERE ASSESSMENTS HAVE BEEN ABATED IN TERMS OF SECOND PROVISO TO SECTION 153A THEN ASSESSING OFFICER ACTS UNDER ORIGINAL JURISDICTION AND ONE ASSESSMENT IS MADE FOR TO TAL INCOME INCLUDING THE ADDITION MADE ON THE BASIS OF SEI ZED MATERIAL. BUT WHERE THERE IS NO ABATEMENT OF ASSESSMENT S AND ASSESSMENTS WERE COMPLETED ON THE DATE OF SEARCH THEN ADDITION CAN BE MADE ONLY ON THE BASIS OF INCRIMINATING DOCUMENTS OR UNDISCLOSED ASSETS, ETC. I N THESE CASES THERE WAS NO INCRIMINATING DOCUMENT FOUND AND SEIZED IN RELATION TO SALE AND REPURCHASE OF SHARES O F ADROIT INDIA LTD. NO ASSESSMENT PROCEEDINGS WERE ABATED IN THESE ASSESSMENT YEARS OF THESE ASSESSEES. THUS ASSESSMENTS FOR THESE ASSESSMENT YEARS WERE COMPLETED ON M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 62 THE DATE OF SEARCH. THE ASSESSMENTS WERE COMPLETED U/S 143(3) OF THE ACT READ WITH SECTION 153A/153C OF THE ACT AFTER THE SEARCH. IT IS AN UNDISPUTED FACT THAT NO INCRIMINATING MATERIAL IN RELATION TO THE INVESTMENT BY THESE ASSESSEES IN SHARES OF ADROIT INDIA LIMITED DURI NG THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR 2007-08 AN D TRANSFER OF SHARES DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR 2008-09 AND REACQUISITION OF SOME SHARES IN THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR 201 0- 11 WERE FOUND AND SEIZED. THERE WAS NO ABATEMENT OF ANY PROCEEDINGS IN THESE CASES FOR THESE ASSESSMENT YEARS IN TERMS OF SECOND PROVISO TO SECTION 153A OF THE ACT. IN THE CASE OF MUKESH SANGLA HUF, THE PROCEEDINGS WERE INITIAT ED U/S 153C OF THE ACT. THE HON'BLE JURISDICTIONAL HIGH COURT IN A RECENT DECISION IN THE CASE OF CIT VS. MECHMAN WH ILE DECIDING THE ISSUE RELATING TO ASSESSMENTS MADE BY ISS UING THE NOTICE U/S 153C OF THE ACT HAS HELD THAT THE ASSE SSING M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 63 OFFICER BEFORE ISSUING NOTICE U/S 153C OF THE ACT H AS TO RECORD SATISFACTION. HON'BLE HIGH COURT HELD THAT THE ASSESSING OFFICER HAVING JURISDICTION WHILST GIVING NOTICE TO SUCH OTHER PERSON (OTHER THAN THE PERSON REFERRED TO IN SECTION 153A) MUST APPLY PROPRIO VIGORE. AFTER REC EIPT OF THE MATERIALS, THE ASSESSING OFFICER HAVING JURISDICTI ON IS EXPECTED TO CONDUCT INQUIRY AND DUE VERIFICATION OF TH E RELEVANT FACTS BEFORE FORMING HIS PRIMA FACIE SATISFACTIO N. THE ASSESSING OFFICER MUST FORM HIS INDEPENDENT VIE W BEFORE ISSUE OF NOTICE. THERE IS NO SEIZED MATERIAL B ELONGING TO THE ASSESSEE WHICH WAS FOUND AND SEIZED IN RELATION TO ADDITIONS MADE. IN VIEW OF THIS FACT, THERE IS NO JUS TIFICATION FOR ACTION U/S 153C OF THE ACT THAT TOO WITHOUT RECOR DING SATISFACTION. IN OUR CONSIDERED VIEW, THE ASSESSING O FFICER MUST HAVE SOME MATERIAL TO PRIMA FACIE SATISFY HIMSELF TO RECORD THE SATISFACTION PRIOR TO ISSUE OF NOTICE U/S 153C OF THE ACT. HON'BLE JURISDICTIONAL HIGH COURT HELD THAT WHERE M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 64 NO SATISFACTION HAS BEEN RECORDED BY THE ASSESSING OFF ICER BEFORE ISSUING NOTICE U/S 153C OF THE ACT AND NO PAPERS/DOCUMENTS/ASSETS WERE SEIZED BELONGING TO THE ASSESSEE THEN NO PROCEEDINGS U/S 153C OF THE ACT CAN BE INITIATED. WITH REGARD TO THE ASSESSMENT MADE ON THE BAS IS OF NOTICES ISSUED U/S 153A OF THE ACT, WE WOULD LIK E TO HOLD THAT IN A RECENT DECISION HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA (SUPRA) HAS HELD THAT COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY THE ASSESSING OFFICER WHILE MAKING ASSESSMENT U/S 153A OF THE ACT, ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITION O F DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVE RED IN THE COURSE OF SEARCH WHICH WAS NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURSE OF ORIGI NAL ASSESSMENT. IN ALL THESE CASES NO ASSESSMENTS WERE PENDING ON THE DATE OF SEARCH FOR BOTH THE ASSESSMENT M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 65 YEARS 2008-09 AND 2010-11. NO ASSESSMENTS WERE ABATED IN TERMS OF SECOND PROVISO TO SECTION 153A OF THE A CT. HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA (SUPRA) HAS CONSIDERED VARIOUS HIGH COURT DECISIONS RELIED UPON BY THE LEARNED DR. THE HON'BL E DELHI HIGH COURT HAS CONSIDERED THE CASES OF CANARA HOUSING DEVELOPMENT CO. VS. DCIT; MADUGULA VS. DCIT; CIT VS. CHETANDAS LAXMANDAS AND CIT VS. ANIL KUMAR BHATIA (SUPRA). THE ONLY DECISION OF THE HON'BLE ALLAHABAD HI GH COURT IN THE CASE OF CIT VS. RAJ KUMAR ARORA; 367 ITR 517 RELIED ON BY THE LEARNED DR WAS NOT CONSIDERED BY HON 'BLE DELHI HIGH COURT WHILE DECIDING THE ISSUE IN THE CAS E OF KABUL CHAWLA. THE HON'BLE ALLAHABAD HIGH COURT HAS REVERSED THE ORDER OF THE TRIBUNAL AND REMANDED THE IS SUE TO THE TRIBUNAL TO CONSIDER THE APPEAL OF THE DEPARTMEN T ON MERITS. IT IS A SETTLED LEGAL POSITION THAT WHEN TWO VIEWS ARE POSSIBLE ON A PARTICULAR ISSUE THEN THE VIEW FAVOURABLE TO M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 66 THE ASSESSEE SHOULD BE FOLLOWED AS HELD BY THE HON'BL E APEX COURT IN THE CASE OF CIT VS. VEGETABLE PRODUCTS; 88 ITR 192. RESPECTFULLY FOLLOWING THE DECISION OF TH E HON'BLE APEX COURT, WE ALLOW THESE GROUNDS OF APPEAL OF THE ASSESSEE. 44. GROUND NO. 2.0 IN A.YS.: 2008-09 & 2010-11 OF ASSESSEES APPEALS READS AS UNDER : ASSESSMENT YEAR : 2008-09 SALE PROCEEDS OF 32,875 SHARES OF ADROIT INDUSTRIES (INDIA) LTD. TREATED AS UNEXPLAINED INCOME : RS.13,23,220 /- 2.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN LAW AS WELL AS IN FACTS IN CONFIRMING THE ADDITION OF RS.13,23,220/- MADE IN RESPECT OF SALE PROCEEDS OF 32,875 SHARES OF ADROIT INDUSTRIES (INDIA) LTD. BY THE ASSESSING OFFICER, AS UNEXPLAIN ED INCOME OF THE ASSESSEE. ASSESSMENT YEAR : 2010-11 ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE SHARES OF ADROIT INDUSTRIES (INDIA) LTD. : RS.93,37,094/- 2.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN LAW AS WELL AS IN FACTS IN CONFIRMING M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 67 ADDITION OF RS.93,37,094/- MADE BY THE ASSESSING OFFICER ON ACCOUNT OF UNEXPLAINED INVESTMENT IN 3,27,675 EQUITY SHARES OF ADROIT INDUSTRIES (INDIA) LTD. 45. THE FACTS IN RELATION TO INVESTMENT AND REACQUIS ITION OF SHARES OF ADROIT INDUSTRIES (INDIA) LTD. ARE THAT TH E SIGNET GROUP, SANGLA FAMILY AND ITS ASSOCIATES CONCERNS ACQUIRED MANAGEMENT CONTROL OF ADROIT INDUSTRIES (INDI A) LTD., INDORE, A 100% EXPORT ORIENTED AUTO ANCILLARY UN IT, FROM ANAND FAMILY OF INDORE IN MARCH 2007. THERE IS NO DISPUTE REGARDING THE PRICE AT WHICH SHARES WERE ACQUIRE D FROM ANAND FAMILY AS WELL AS FROM EMPLOYEES AND OTHER ASSOCIATES AND THE REVENUE DID NOT DISPUTE THE INVESTM ENT BY SIGNET GROUP, SANGLA FAMILY AND ITS ASSOCIATES CONCERN S. THE DETAILS OF SHARES PURCHASED ARE AS FOLLOWS: NAME OF THE PARTIES NUMBER OF SHARES PRICE PER SHARES (RS.) TOTAL AMOUNT (RS.) ANAND FAMILY 56,06,750 40.25 22,56,71,688 EMPLOYEES, ETC. 14,750 30.00 4,42,500 M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 68 56,21,500 22,61,14,188 SHARES NOT ACQUIRED IN MARCH 2007 3,500 TOTAL 56,25,000 IN MAY 2007, VARIOUS ENTITIES OF SIGNET GROUP AND MEM BERS OF SANGLA FAMILY SOLD 22,88,025 SHARES TO SHALIMAR FERROU S METALS PVT. LTD., INDORE, (SHALIMAR) AT VARIOUS RATES RANGING FROM RS.40.35 TO RS.44.80 PER SHARES. THE RESULTANT SHORT TERM CAPITAL GAIN WAS DULY SHOWN IN THEI R RETURN OF INCOME FILED BEFORE THE INCOME-TAX DEPARTM ENT. AT THE END OF MARCH 2009, THE SIGNET GROUP WAS HOLDIN G ONLY 26.51% OF THE TOTAL PAID UP SHARE CAPITAL OF ADROI T INDUSTRIES (INDIA) LTD. (14,91,400 SHARES) AND REST OF THE SHARES WERE HELD BY NON-SIGNET GROUP ENTITIES (41,33 ,600 SHARES). IN AUGUST AND SEPTEMBER 2009, THE SHARES OF ADROIT INDUSTRIES (INDIA) LTD. HELD BY NON-SIGNET GR OUP WERE ACQUIRED BY MEMBERS OF SANGLA FAMILY AND OTHER ASSOCIATE CONCERNS AT AROUND RS.11.25 TO RS.12.25 PER SHARE. BY M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 69 MARCH 2010, THE ENTIRE SHARE CAPITAL OF ADROIT INDUSTRI ES (INDIA) LTD. I.E. 56,25,000 SHARES OF ADROIT INDUSTRI ES (INDIA) LTD. WERE AGAIN HELD BY VARIOUS ENTITIES OF MEMBERS OF SANGLA FAMILY AND ASSOCIATE CONCERNS. THE TOTAL FUNDS PROVIDED DIRECTLY OR INDIRECTLY FROM SIGNET INDUSTR IES LTD. AMOUNTED TO RS.16.47 CRORES APART FROM ITS OWN INVESTMENTS OF RS.6.00 CRORES IN SHARES OF ADROIT IN DUSTRIES (INDIA) LTD. ADROIT INDUSTRIES (INDIA) LTD. INCURRE D EXPENSES TOWARDS PUBLIC ISSUE IN THE FINANCIAL YEAR 201 0- 11 & 2011-12 DETAILS OF WHICH ARE AS UNDER :- FINANCIAL YEAR PUBLIC ISSUE EXPENSES (RS.) 2010 - 11 69,08,696 2011 - 12 14,72,210 83,80,906 46. THERE WERE NO EVIDENCES FOUND EITHER DURING SEARCH OR POST SEARCH ENQUIRIES OR DURING ASSESSMENT PROCEEDI NGS WHICH COULD SHOW THAT ANY PAYMENT OF ANY CONSIDERATION M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 70 OVER AND ABOVE THE RECORDED CONSIDERATION IN BOOKS OF SANGLA FAMILY AND THEIR ASSOCIATE CONCERNS WERE PAID OR RECEIVED AS UNACCOUNTED CASH OR OTHERWISE. 47. THE ASSESSING OFFICER HELD THAT NO PROMOTER W ILL DIVEST 73.5% OF ITS HOLDING TO THIRD PARTIES AND THAT TOO AT A VERY NOMINAL PROFIT, PARTICULARLY WHEN THE PROMOTER INTENDED TO GO PUBLIC AND ANTICIPATED SIGNIFICANT VALUE ADDITION TO ITS INVESTMENT. ADROIT INDUSTRIES (INDIA) LTD. HAS BEEN CONSISTENTLY PERFORMING WELL. EVIDENT FROM THE FOLLOWING TABLE SHOWING YEAR WISE TURNOVER, PROFITABIL ITY AND EARNINGS PER SHARE: FINANCIAL YEARS TURNOVER PROFIT BEFORE TAX PROFIT AFTER TAX EARNING PER SHARE 31.03.2007 20,53,03,097 3,24,43,605 2,51,24,433 4.00 31.03.2008 22,11,45,868 2,79,53,727 1,68,66,562 3.00 31.03.2009 24,61,35,713 2,22,92,834 1,45,21,059 2.58 31.03.2010 16,98,84,237 3,13,32,877 2,06,68,119 3.67 31.03.2011 26,16,49,372 6,08,43,868 4,09,00,040 3.89 31.03.2012 23,45,32,888 4,56,79,338 3,20,21,038 3.05 31.03.2013 36,78,86,610 7,13,90,758 4,91,83,297 4.68 THE ASSESSEE HAS NOT GIVEN A SINGLE NAME EITHER OF ANY BROKER OR ANY INVESTOR THROUGH WHOM HE CONTACTED THE M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 71 ULTIMATE INVESTOR. ANY PRUDENT BUSINESS GROUP WILL A CQUIRE ANOTHER COMPANY ONLY AFTER HAVING FIRM FINANCIAL TIE UPS . THE DIVESTMENT TO THE TUNE OF 73.5% IMMEDIATELY AFTER ACQUIRING A COMPANY IS AGAINST ALL HUMAN PROBABILITIES. THE CONTENTION OF THE ASSESSEE THAT DUE TO BAD CAPITAL MARKET SITUATION, THE GROUP COULD NOT GO PUBLIC AND WA S COMPELLED TO ACQUIRE SHARES OF ADROIT INDUSTRIES (INDI A) LTD. AT RS.11 TO RS.12.5 PER SHARE IS ALSO NOT JUSTIFIED BE CAUSE NO INVESTOR WOULD EVER INVEST IN THE SHARES OF THE U NLISTED COMPANY WITHOUT HAVING PROPER EXIT ROUTE AND WITHOUT ENSURING PROPER RETURNS ON HIS INVESTMENT PARTICULARL Y WHEN THESE SHARES HAVE CHANGED MANY HANDS BEFORE COMING BACK TO SANGLA GROUP WHICH IS USUALLY NOT POSSIB LE IN CASE OF UNLISTED SHARES. THE ASSESSEE DID NOT BRING ANYTHING ON RECORD THAT THERE WAS HIGH INTEREST BEARING DEBT TO BE DISCHARGED OR WAS FACING ANY FINANCIAL LIQUID ITY PROBLEM. FURTHER, NOTHING WAS BROUGHT ON RECORD TO S HOW M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 72 THAT THE SALE PROCEEDS WERE UTILIZED FOR DISCHARGING AN Y INTEREST BEARING LIABILITY. IF THE ACQUISITION OF ADROI T INDUSTRIES (INDIA) LTD. WAS SO RISKY, WHY THE INVESTM ENT IN ADROIT INDUSTRIES (INDIA) LTD. WAS MADE IN THE FIRST PLACE? IT IS NOT POSSIBLE TO ACCEPT THE ASSERTION OF THE ASSESS EE THAT THE DIVESTMENT OF PART OF THE INVESTMENT WAS TO REDUC E THE ASSESSEE GROUPS RISK. MERELY BECAUSE THE ENTIRE TRANSACTION WAS THROUGH BANKING CHANNELS WOULD NOT MAKE A SHAM TRANSACTION GENUINE. THE A.O. HELD THAT THESE INVESTOR COMPANIES WERE PAPER COMPANIES HAVING MEAGER PROFITS AND WERE NOT REGULARLY FILING THEIR RETURN OF INCOME. THE GROUP DID NOT MAKE ANY ATTEMPT TO GO PUBLIC IN F.Y.2007-08 AND 2008-09. IT WAS ONLY AFTER THE SHARES OF ADROIT INDUSTRIES (INDIA) LTD. WERE ACQUIRED IN SEPTEM BER 2009, THAT THE GROUP TRIED FOR ITS PUBLIC ISSUE IN F .Y.2011- 12. M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 73 48. THEREFORE THE CONTENTION OF THE ASSESSEE THAT T HE SHARES WERE REACQUIRED FOR A PRICE RANGING FROM RS.11.2 5 TO RS.12.25 PER SHARE DUE TO ITS INABILITY TO BRING OUT PUBLIC ISSUE. THE DIVESTMENT OF SHARES OF ADROIT INDUSTRIES (INDIA) LTD. WAS A SHAM TRANSACTION AS THESE COMPANIES DID NOT EXIST IN REAL SENSE. IN THEIR STATEMENT RECORDED DURI NG THE ASSESSMENT PROCEEDINGS, SHRI PARASRAMPATIDAR AND SHRI VIMAL BANDI (BOTH OF THEM ARE EMPLOYEES OF SIGNET GROU P) CATEGORICALLY ADMITTED THAT THEY HAD NEITHER ANY IDEA ABOU T THE ACTUAL AFFAIRS OF THE COMPANY NOR ANY INFORMATION ABOUT TRANSFER OF SHARES OF ADROIT INDUSTRIES (INDIA) L TD. SHALIMAR FERROUS METAL PVT. LTD. WAS USED AS A CONDUIT TO INTRODUCE UNACCOUNTED AND UNEXPLAINED INCOME THROUGH BOGUS PAPER COMPANY LIKE LUCKY COMMOTRADE PVT. LTD. OF WHICH THE ULTIMATE BENEFICIARY IS THE ASSESSEE. SINCE THE ASSESSEE HAS FINALLY RECEIVED THE AMOUNT IN THE GUISE O F SALE PROCEEDS OF SHARES OF ADROIT INDUSTRIES (INDIA) L TD., THE M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 74 SAME IS BROUGHT TO TAX AS UNEXPLAINED CASH CREDIT IN ASSESSMENT YEAR 2008-09. THE REPURCHASE OF SHARES BY T HE SIGNET GROUP, SANGLA FAMILY AND ITS ASSOCIATE CONCERNS I N THE ASSESSMENT YEAR 2010-11 FROM VARIOUS PAPER COMPANIES WAS NOTHING BUT A COLOURABLE DEVICE AND AN ARRANGED AND MANAGED AFFAIR. THEREFORE THE DIFFERENCE BETWEEN THE FAIR MARKET VALUE PER SHARE I.E. RS.40.25 AN D COST OF REACQUISITION IS TREATED AS UNEXPLAINED INVESTM ENT OF THE ASSESSEE. ACCORDINGLY, THE FOLLOWING ADDITIONS ARE MADE: ASSESSMENT YEAR AMOUNT (RS.) REMARKS 2008 - 09 14,72,800 UNEXPLAINED CASH CREDIT 2010 - 11 1,02,65,813 UNEXPLAINED INVESTMENTS 49. THE C.I.T.(A) CONFIRMED THE ACTION OF THE A.O. AND REJECTED THE ASSESSEES CONTENTION. AGREEING TO THE FINDINGS OF THE ASSESSING OFFICER, C.I.T.(A) ALSO OBSERVED THAT THE SANGLA GROUP HAD INTRODUCED CERTAIN MORE LAYERS OF ENTI TIES M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 75 IN WHOSE NAME THE SHARES WERE TRANSFERRED (IN SOME CASE S SIX TRANSFERS) AND FINALLY REPURCHASED THE SHARES AT A P RICE OF RS.11.25 TO RS.12.25 PER SHARE. THE FLOW OF SHARES OF ADROIT INDUSTRIES (INDIA) LTD. INVOLVING NUMBER OF T RANSFERS IS AS UNDER : CHART-I [FLOW OF TRANSFER OF 22,88,075 SHARES ORIGINALLY HE LD BY ANAND FAMILY] NAME OF SHAREHOLDER OF ANAND FAMILY NO. OF SHARES HELD 1 ST TRANSFER 2 ND TRANSFER DATE NAME NO. OF SHARES RATE AMOUNT DATE NAME NO. OF SHARES RATE AMOUNT JAGJIT SINGH ANAND 3,10,550 13.03.07 ORNATE LEASING & FINANCE PVT. LTD. 3,10,550 40.25 1,25,00,000 10.05.07 SHALIMAR FERROUS METALS PVT. LTD. 3,10,550 42.60 1,32,29,430 GAJENDRA KAUR ANAND JAGJIT SINGH ANAND 3,10,550 13.03.07 SIGNATE LEASING & FINANCE PVT. LTD. 3,10,550 40.25 1,25,00,000 10.05.07 SHALIMAR FERROUS METALS PVT. LTD. 3,10,550 40.35 1,25,30,693 GAJENDRA KAUR ANAND JAGJIT SINGH ANAND 2,00,000 13.03.07 SWAN HOLDING PVT. LTD. 2,00,000 40.20 80,40,625 10.05.07 SHALIMAR FERROUS METALS PVT. LTD. 2,00,000 40.40 80,80,000 GAJENDRA KAUR ANAND JAGJIT SINGH ANAND 3,10,550 13.03.07 SIGNET IMPEX PVT. LTD. 3,10,550 40.25 1,25,00,000 10.05.07 SHALIMAR FERROUS METALS PVT. LTD. 3,10,550 40.35 1,25,30,693 GAJENDRA KAUR ANAND JAGJIT SINGH ANAND 3,10,550 13.03.07 SWAN PETROCHEMICALS PVT. LTD. 3,10,550 40.25 1,25,00,000 10.05.07 SHALIMAR FERROUS METALS PVT. LTD. 3,10,550 40.65 1,26,23,858 GAJENDRA KAUR ANAND M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 76 VIRENDRA SINGH ANAND 2,84,650 13.03.07 SAURABHSANGLA 2,84,650 40.25 1,14 ,57,163 10.05.07 SHALIMAR FERROUS METALS PVT. LTD. 2,84,650 44.20 1,25,81,530 NARINDER KAUR ANAND JAGJIT SINGH ANAND 3,10,550 13.03.07 PRANAY TRADE LINK PVT LTD 3,10,550 40.25 1,24,99,638 10.05.07 SHALIMAR FERROUS METALS PVT. LTD. 3,10,550 40.40 1,25,46,220 ISHDEEP SINGH ANAND 3,750 13.03.07 M/S MUKESHSANGLA HUF 3,750 40.25 1,50,938 10.05.07 SHALIMAR FERROUS METALS PVT. LTD. 32,875 44.80 14,72,800 RUPINDER SINGH ANAND GAMANBHASIN 2,500 13.03.07 M/S MUKESHSANGLA HUF 2,500 40.25 1,00,625 RAJENDRAPAL SINGH BHASIN TARANJOT KAUR CHANDOK 17,875 13.03.07 M/S MUKESHSANGLA HUF 17,875 40.25 7,19,469 RANJEET SINGH CHANDOK RUPINDER SINGH ANAND 2,500 13.03.07 M/S MUKESHSANGLA HUF 2,500 40.25 1,00,625 PARMINDER KAUR ANAND PARMINDER KAUR ANAND 2,500 13.03.07 M/S MUKESHSANGLA HUF 2,500 40.25 1,00,625 RUPINDER SINGH ANAND JASHDEEP SINGH ANAND 3,750 13.03.07 M/S MUKESHSANGLA HUF 3,750 40.25 1,50,938 RUPINDER SINGH ANAND NAME OF SHAREHOLDER OF ANAND FAMILY NO. OF SHARES HELD 1 ST TRANSFER 2 ND TRANSFER DATE NAME NO. OF SHARES RATE AMOUNT DATE NAME NO. OF SHARES RATE AMOUNT KAMAL C. SANGHAVI 1,250 13.03.07 MUKESHSANGLA 1,250 30.00 37,500 10.05.07 SHALIMAR FERROUS METALS PVT. LTD. 217,750 40.85 8,895,088 VIRENDRA SINGH 103,800 13.03.07 MUKESHSANGLA 103 ,800 40.24 4,176,912 M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 77 ANAND NARINDER KAUR ANAND JAGJIT SINGH ANAND 99,200 13.03.07 MUKESHSANGLA 99,200 40.32 4,000,000 GAJENDRA KAUR ANAND ISHWERLALBHAVSAR 500 13.03.07 MUKESHSANGLA 500 30.00 15,000 RAMESH SEN 500 13.03.07 MUKESHSANGLA 500 30.00 15,000 RAMESH PAL 500 13.03.07 MUKESHSANGLA 500 30.00 15,000 NEELKANTH BADE 500 13.03.07 MUKESHSANGLA 500 30.00 15,000 D.G.KAMBLE 500 13.03.07 MUKESHSANGLA 500 30.00 15,000 SHYAM SHARMA 500 13.03.07 MUKESHSANGLA 50 0 30.00 15,000 JYOTIVALLABHTRIPA THI 500 13.03.07 MUKESHSANGLA 500 30.00 15,000 NARAYAN SURYAVANSHI 500 13.03.07 MUKESHSANGLA 500 30.00 15,000 NAND K. VISHWAKARMA 500 13.03.07 MUKESHSANGLA 500 30.00 15,000 GAJANANDGANGRE 500 13.03.07 MUKESHSANGLA 500 30.00 15,000 TARACHAND JAIN 500 13.03.07 MUKESHSANGLA 500 30.00 15,000 AFSAR ANSARI 500 13.03.07 MUKESHSANGLA 50 0 30.00 15,000 SHARAVAN KUMAR 500 13.03.07 MUKESHSANGLA 500 30.00 15,000 MOHAN SINGH SIDDU 500 13.03.07 MUKESHSANGLA 500 30.00 15,000 ASHOK KUMAR SAHU 500 13.03.07 MUKESHSANGLA 500 30.00 15,000 SHAILESH VYAS 500 13.03.07 MUKESHSANGLA 5 00 30.00 15,000 AJAY GARUD 500 13.03.07 MUKESHSANGLA 500 30.00 15,000 PARVATI BAI BABLE 500 13.03.07 MUKESHSANGLA 500 30.00 15,000 RAMESH NIMBALKAR 500 13.03.07 MUKESHSANGLA 500 30.00 15,000 D.N. VYAS 500 13.03.07 MUKESHSANGLA 500 30.00 15,000 HARI SHANKAR GAUD 500 13.03.07 MUKESHSANGLA 500 30.00 15,000 JAGJIT SINGH PUNJABI 500 13.03.07 MUKESHSANGLA 500 30.00 15,000 ASHOK AWESTHI 500 13.03.07 MUKESHSANGLA 5 00 30.00 15,000 KISHORILAL PATEL 500 13.03.07 MUKESHSANGLA 500 30.00 15,000 M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 78 RAJESH SETH` 500 13.03.07 MUKESHSANGLA 50 0 30.00 15,000 PAHDURANGPAHALK AR 500 13.03.07 MUKESHSANGLA 500 30.00 15,000 SURENDRA SINGH CHADDA 500 13.03.07 MUKESHSANGLA 500 30.00 15,000 22,88,025 22,88,025 9,19,40,056 22,88,025 9 ,44,90,310 CHART II [FURTHER TRANSFER OF 22,88,025 SHARES OF CHART-I AN D 3,10,550 SHARES ORIGINALLY HELD BY SHRI JAGJIT SINGH ANAND AND GAJENDRA KAUR ANAND = 2 5,98,575 SHARES] NAME OF SHAREHOLDER OF ANAND FAMILY NO. OF SHARES HELD 2 ND TRANSFER 3 RD TRANSFER DATE NAME NO. OF SHARES RATE AMOUNT DATE NAME NO. OF SHARES RATE AMOUNT JAGJIT SINGH ANAND 310,550 13.03.07 SHALIMAR F ERROUS METALS PVT. LTD. 310,550 40.25 12,500,000 10.12.07 LUCKY COMMOTRADEP VT LTD 2,598,575 41.37 107,510,026 GAJENDRA KAUR ANAND 310,550 310,550 12,500,000 2,598,57 5 107,510,026 4 TH TRANSFER 5 TH TRANSFER 6 TH TRANSFER DATE NAME NO. OF SHARES RATE AMOUNT DATE NAME NO. OF SHARES RATE AMOUNT DATE NAME NO. OF SHARES RATE AMOUNT 05.03.08 DOOLDRUM INVESTEMN T& FINANCE PVT LTD 7,20,300 41.46 2,98,63,638 08.09.0 9 SAURAB HSANGLA 2,59,750 11.50 29,87,125 08.09.0 9 MUKESH SANGLA 4,60,550 11.50 52,96,325 7,20,300 82,83,450 12.03.08 OSHIN INVESTMEN T & FINANCE PVT LTD 6,36,075 40.48 2,57,48,316 12.09.0 9 MUKESH SANGLA 1,89,275 12.25 23,18,619 12.09.0 9 SAURAB HSANGLA 1,18,550 12.25 14,52,238 M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 79 12.09.0 9 SMT. AVANTIK ASANGLA 2,00,000 12.25 24,50,000 12.09.0 9 CAN INDIA OVERSE AS 1,28,250 12.25 15,71,063 22.09.0 9 SIGNET IMPEXP VT LIMITED 1,28,25 0 12.25 15,71,063 6,36,075 77,91,919 1,28,25 0 15,71,063 15.03.08 GYNESHWA R TRADING & CO. LTD 6,21,100 40.95 2,54,34,045 08.09.0 9 SAURAB HSANGLA 2,10,550 12.00 25,26,600 08.09.0 9 MUKESH SANGLA HUF 2,00,000 12.00 24,00,000 08.09.0 9 MONIKA SANGLA 2,10,550 12.00 25,26,600 6,21,100 74,53,200 28.03.08 SIDH HOUSING DEVELOPM ENT COMPANY LTD 6,21,100 40.90 2,54,02,990 12.09.0 9 MUKESH SANGLA HUF 1,60,550 11.50 18,46,325 12.09.0 9 MONIKA SANGLA 1,60,550 11.50 18,46,325 12.09.0 9 AVANTIK ASANGLA 3,00,000 11.50 34,50,000 6,21,100 71,42,650 25,98,57 5 10,64,48,98 9 25,98,575 3,06,71,2 19 CHART III [FLOW OF TRANSFER OF 12,94,775 SHARES ORIGINALLY HE LD BY MANJEET KAUR ANAND] NAME OF SHAREHOLDER OF ANAND FAMILY NO. OF SHARES HELD 1 ST TRANSFER 2 ND TRANSFER DATE NAME NO. OF SHARES RATE AMOUNT DATE NAME NO. OF SHARES RATE AMOUNT MANMEET KAUR ANAND 1,294,775 13.03.07 LUCKY COMMOTRADE 1,294,775 40.25 52,114,694 10.03.09 ISPAT SHEE TS LTD 397,540 40.55 16,120,247 M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 80 PVT LTD 19.03.09 CLIFTON SECURITIES PVT LTD 272,235 40.50 11,025,518 19.03.09 NOVELTY TRADERS LTD 375,000 40.55 15,206,250 10.03.09 OLMPUS VISION PVT LTD 250,000 40.50 10,125,000 1,294,775 1,294,775 52,114,694 1,294,775 52,477,015 3 RD TRANSFER 4 TH TRANSFER DATE NAME NO. OF SHARES RATE AMOUNT DATE NAME NO. OF SHARES RATE AMOUNT 0 0 0 25.09.09 SWAN-HOLDING PVT LTD 1,52,500 11.5 0 17,53,750 26.09.09 ORNATE LEASING & FINANCE PVT LTD 2,45,040 11.50 28,17,960 3,97,540 45,71,710 20.03.09 ISPAT SHEET LTD 2,72,235 40.50 1,10,25,518 28.09.09 SHREE BALAJI STARCH & CHEMICALS LTD 2,72,235 11.50 31,30,703 0 0 0 22.09.09 SIGNATE LEASING & FINANCE PVT LTD 1,87,500 11.50 21,56,250 24.09.09 SIGNET IMPEXTPVT LTD 1,87,500 11.50 2 1,56,250 3,75,000 43,12,500 20.03.09 NOVELTY TRADERS PVT LTD 2,50,000 40.50 1,01,25,000 26.09.09 SHREE BALAJI ST ARCH & CHEMICALS LTD 2,50,000 11.50 28,75,000 12,94,775 1,48,89,913 CHART IV [FLOW OF TRANSFER OF 2,37,500 SHARES ORIGINALLY HEL D BY JAGJIT SINGH ANAND& GAJENDRA KAUR ANAND] NAME OF SHAREHOLDER OF NO. OF SHARES 1 ST TRANSFER 2 ND TRANSFER M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 81 ANAND FAMILY HELD DATE NAME NO. OF SHARES RATE AMOUNT DATE NAME NO. OF SHARES RATE AMOUNT JAGJIT SINGH ANAND 2,37,500 13.03.07 MONIKA SANGLA 2,37,500 40.25 95,59,375 30.10.07 SIDDACHALDEVLO PERS P. LTD. 21,500 46.00 9,89,000 GAJENDRA KAUR ANAND 30.10.07 ANIKANT SHARE & SECURITY 21,500 46.00 9,89,000 30.10.07 SAMYANK SHARE & STOCK BROKERS 21,500 46.00 9,89,000 30.10.07 SEA ENTERTAINMENT LTD. 21,500 46.00 9,89,000 30.10.07 SKY TOUCH INFRACTURE 28,000 46.00 12,88,000 30.10.07 PALASIA LEASING & FINANCE LTD. 47,500 46.00 21,85,000 30.10.07 UNO INDUSTRIES LTD. 76,000 46.00 34,96,000 2,37,500 2,37,500 95,59,375 2,37,500 1,09,25, 000 3 RD TRANSFER 4 TH TRANSFER DATE NAME NO. OF SHARES RATE AMOUNT DATE NAME NO. OF SHARES RATE AMOUNT 12.08.09 CAN-INDIA OVERSEAS LIMITED 21,500 11.50 2,47,250 21.09.09 ORNATE LEASING PVT LTD 97,000 11.38 11,03,625 13.08.09 CAN-INDIA OVERSEAS LIMITED 21,500 11.25 2,41,875 23.09.09 SIGNATE LEASING PVT LTD 64,500 11.33 7,30,785 13.08.09 CAN-INDIA OVERSEAS LIMITED 21,500 11.50 2,47,250 23.09.09 SWAN-HOLDING PVT LTD 76,000 11.50 8,74,000 14.08.09 CAN-INDIA OVERSEAS LIMITED 21,500 11.25 2,41,875 M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 82 17.08.09 CAN-INDIA OVERSEAS LIMITED 28,000 11.50 3,22,000 18.08.09 CAN-INDIA OVERSEAS LIMITED 47,500 11.25 5,34,375 19.08.09 CAN-INDIA OVERSEAS LIMITED 76,000 11.50 8,74,000 2,37,500 27,08,625 2,37,500 27,08,410 CHART V NAME OF SHAREHOLDER OF ANAND FAMILY NO. OF SHARES HELD 1 ST TRANSFER DATE NAME NO. OF SHARES RATE AMOUNT VIRENDRA SINGH ANAND 1,490,650 13.03.07 SIGNET OV ERSEAS LTD. 1,490,650 40.25 60,000,403 NARINDER KAUR ANAND YOGENDRA BHATIA 750 05.06.08 MUKESHSANG LA 750 30.00 22,500 50. THE REDUCTION IN MARKET VALUE OF ADROIT INDU STRIES (INDIA) LTD. FROM RS.40.25 IN FINANCIAL YEAR 2006-07 TO RS.11.25 TO RS.12.25 IN FINANCIAL YEAR 2009-10 IS BEY OND COMPREHENSION PARTICULARLY WHEN THE COMPANY IS CONSISTENTLY EARNING HIGHER PROFITS AS OBSERVED BY T HE A.O. THE LEARNED CIT(A) ALSO OBSERVED THAT IT IS BEYOND COMPREHENSION THAT THE SIGNET GROUP, SANGLA FAMILY AND ITS ASSOCIATE CONCERNS WOULD DIVEST ABOUT 75% OF THEIR HOLDING TO UNRELATED PARTIES AFTER TAKING OVER THE CONT ROL M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 83 AND MANAGEMENT OF ADROIT INDUSTRIES (INDIA) LTD. THE CONTENTION OF THE ASSESSEE ABOUT PUBLIC ISSUE OF ADR OIT INDUSTRIES (INDIA) LTD. IN FUTURE BEING A REASON FOR DIVESTMENT IS ALSO UNCONVINCING. RELYING UPON THE CASE OF C.I.T. VS. RATHI FINLEASE LTD. (2008) 215 CTR 429 (MP ) AND INDUSTRIAL FILTERS AND FABRICS PVT. LTD. [APPEAL NO.IT- 185/09-10/510 ORDER DT.30.03.2012 PASSED BY C.I.T.(A ), INDORE], IT WAS HELD THAT THE INTERMEDIARY COMPANIES LI KE SHRI ANIKET SHARES AND SECURITIES PVT. LTD., UNNO INDUSTRIES LTD., SIDDHACHAL DEVELOPERS PVT. LTD. AND PALASIA LEASING AND INVESTMENT PVT. LTD. WERE ENTRY PROVIDERS. FURTHER, IN CASE OF SIGNET INDUSTRIES LTD ., IT WAS HELD THAT LUCKY COMMOTRADE PVT. LTD. IS A PAPER COMPANY WHICH IS USED BY THE SANGLA GROUP TO INTRODUCE UNSECU RED LOAN AND SHARE APPLICATION MONEY WITHIN THE GROUP CONCERNS. THE TRANSACTION OF TRANSFER OF SHARES OF ADR OIT INDUSTRIES (INDIA) LTD. BY VARIOUS MEMBERS AND CONCERN S OF M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 84 SANGLA GROUP WERE ONLY ACCOMMODATION ENTRIES AND NOT GENUINE TRANSACTIONS AND THEREFORE, THE AMOUNT OF SALE PROCEEDS CREDITED IN THE BOOKS OF VARIOUS MEMBERS AND CONCERNS OF SANGLA GROUP AMOUNTED TO UNEXPLAINED CASH CREDIT IN THE ASSESSMENT YEAR 2008-09. HOWEVER, THE SHORT TERM CAPITAL GAIN WHICH WAS OFFERED FOR TAXATION BY VARIO US ENTITIES OF THE ASSESSEE GROUP WERE REDUCED FROM SALE PROCEEDS. THE WORKING IN THIS REGARD IS AS UNDER: NO. OF SHARES SOLD RATE (RS.) SALE PROCEEDS (RS.) SHORT TERM CAPITAL GAIN (RS.) UNEXPLAINED CASH CREDIT (RS.) 32,875 44.80 14,72,800 1,49,580 13,23,220 FOR THE ASSESSMENT YEAR 2010-11, ASSUMING FAIR MARKET VALUE OF THE SHARES AT RS.40.25 (ORIGINAL COST OF ACQUIS ITION FROM ANAND FAMILY IN MARCH 2007), THE DIFFERENCE BETW EEN THE COST OF REACQUISITION AND FAIR MARKET VALUE WAS TREATE D AS UNEXPLAINED INVESTMENT. HOWEVER, TO AVOID DOUBLE TAXATION, ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMEN T M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 85 WAS NOT MADE IN RELATION TO SHARES SOLD BY THE GROUP ENTITIES IN ASSESSMENT YEAR 2008-09 AS THEIR SALE PROC EEDS WAS BROUGHT TO TAX U/S.68 AS UNEXPLAINED CASH CREDIT. T HE WORKING IN THIS REGARD IS AS UNDER: NO. OF SHARES ACTUAL RATE PER SHARE (RS.) PURCHASE RATE DECLARED PER SHARE (RS.) DIFFERENCE UNEXPLAINED INVESTMENT A B C D (B C) E (D X A) 1,67,125 (200000- 32875) 40.25 12.00 28.25 47,21,281 1,60,550 40.25 11.50 28.75 46,15,813 3,27,675 93,37,094 ACCORDINGLY, THE FOLLOWING ADDITIONS WERE PARTLY CONF IRMED : ASSTT. YEAR AMOUNT (RS.) REMARKS 2008 - 09 13,23,220 UNEXPLAINED CASH CREDIT 2010 - 11 93,37,094 UNEXPLAINED INVESTMENTS 51. BEFORE US, IT IS SUBMITTED THAT THE SOURCE OF INVESTMENT BY SIGNET GROUP, MEMBERS OF SANGLA FAMILY AND ITS ASSOCIATE CONCERNS IN MARCH 2007 FOR ACQUIRING 56,21,500 SHARES OF ADROIT INDUSTRIES (INDIA) LTD. ALO NGWITH M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 86 ITS CONTROL AND MANAGEMENT WAS NOT DISPUTED BY THE REVENUE AUTHORITIES. THE SOURCE OF INVESTMENT IN TH E SHARES OF ADROIT INDUSTRIES (INDIA) LTD. WAS MAINLY OU T OF LOANS PROVIDED BY SIGNET INDUSTRIES LTD. AND PARTLY BY UNSECURED INTER-CORPORATE LOANS, WHICH WERE ADVANCED TO VARIOUS GROUP ENTITIES AND LUCKY COMMOTRADE PVT. LTD. THROUGH SHALIMAR FERROUS METALS PVT. LTD. (SHALIMAR). THE ASSESSEE HAS SUBMITTED A FUND FLOW CHART IN THIS REGARD. SHALIMAR FERROUS METALS PVT. LTD. (SHALIMAR) WAS INCORPORATED ON 18.06.1986 UNDER THE PROVISIONS OF T HE COMPANIES ACT, 1956, HAVING PAN NO. AAICS 4429G. IT W AS REGULARLY ASSESSED TO TAX. THE ASSESSMENT FOR ASSESSMEN T YEAR 2007-08 WAS COMPLETED U/S.143(3) R.W. SEC.264 OF THE INCOME-TAX ACT, 1961. THE RETURNED INCOME WAS ACCEPTE D. DURING FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR 2007-08 SHALIMAR FERROUS METAL PVT. LTD. RECEIVED UNSECURED LOAN FROM FOLLOWING ENTITIES :- M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 87 NAME OF THE COMPANY P.A.NO. AMOUNT (RS.) NALANDA MERCHANT PVT. LTD. (OUT OF LOAN OF RS.3,50,00,000/- GIVEN BY SIGNET OVERSEAS LTD.) AACCN 2446 C 3,50,00,000 RATNAGIRIVINIMAY PVT. LTD. AABCR 1870 R 15,00,000 UTILITY EXIM PVT. LTD. (OUT OF LOAN OF RS.3,50,00,000/- GIVEN BY SIGNET OVERSEAS LTD.) AAACU 8022 B 3,50,00,000 ANUBHAV INFRASTRUCTURE PVT. LTD. AAFCA 5482 J 40,00,000 SNEHSHIL MARKETING PVT. LTD. AAJCS 5894 E 50,00,000 LEKHRAJ STEEL PVT. LTD. AABCL 0866 B 2,05,000 KAMDEEP MARKETING PVT. LTD. AAACK 9556 A 2,30,000 SIGNET OVERSEAS LTD. AABCS 3489 F 5,46,05,407 BANK OVERDRAFT (CHEQUE ISSUED BUT NOT PRESENTED FOR PAYMENT IN THE BANK AND CLEARED IN THE IMMEDIATELY SUCCEEDING YEAR OUT OF LOAN OF RS.3,73,15,000/- RECEIVED FROM SIGNET OVERSEAS LTD.) 3,58,47,845 17,13,88,252 M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 88 THE UNSECURED LOANS SO RECEIVED WERE ADVANCED TO THE FOLLOWING PERSONS/ENTITIES FOR ACQUIRING SHARES OF ADROIT INDUSTRIES (INDIA) LTD. :- NAME OF THE COMPANY P.A.NO. AMOUNT (RS.) GROUP COMPANIES ORNATE LEASING & FINANCE PVT. LTD. AABCO 1101 A 14,20,000 SIGNET LEASING & FINANCE PVT. LTD. AAMCS 5841 G 1,26,00,000 SWAN HOLDING PVT. LTD. AAHCS 5640 Q 80,50,000 SIGNET IMPEX PVT. LTD. AAICS 5582 Q 1,26,60,000 SWAN PETROCHEMICALS PVT. LTD. AABCR 9592 C 1,24,40,000 SMT. MONIKA SANGLA ANAPS 5580 Q 1,83,32,399 SHRI SAURABHSANGLA ANBPS3195 G 1,53,41,162 SHRI MUKESHSANGLA ANAPS 5579 F 1,34,62,000 SHRI MUKESHSANGLA HUF AADHM 4930 J 81,947 SMT. AVANTIKASANGLA AEOPG 4774 R 60,000 NON-GROUP COMPANIES LUCKY COMMOTRADE PVT. LTD. AAACL 4501 E 5,21,14,350 M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 89 NAME OF THE COMPANY P.A.NO. AMOUNT (RS.) PRANAY TRADE LINK PVT. LTD. AADCP 0735 F 1,26,20,000 15,91,81,858 52. THE MEMBERS OF SANGLA FAMILY AND ITS ASSOCIATE CONCERNS SOLD 22,88,025 SHARES OF ADROIT INDUSTRIES (INDIA) LTD. TO SHALIMAR FERROUS METALS PVT. LTD. (SHALIMAR) I N MAY 2007 FOR A CONSIDERATION RANGING FROM RS.40.35 TO RS.44.80 PER SHARE. AS THE MEMBERS OF SANGLA FAMILY AND ITS ASSOCIATE CONCERNS HAD TAKEN LOAN FROM SHALIMAR WHILE ACQUIRING THE SHARES OF ADROIT INDUSTRIES (INDIA) LTD. , THE SALE PROCEEDS OF SHARES WERE ADJUSTED AGAINST OUTSTANDIN G UNSECURED LOANS. 53. LUCKY COMMOTRADE PVT. LTD. IS A CLOSELY HELD NON- BANKING FINANCIAL COMPANY INCORPORATED ON 16.03.1994 HAVING PAN NO. AAACL 4501 E. IT IS NOT A GROUP CONCE RN OR ASSOCIATE CONCERN OF SIGNET GROUP. IT IS HAVING AN INDEPENDENT BOARD OF DIRECTORS. ITS SHARE CAPITAL AND F REE RESERVES AS ON 31.03.2005, STOOD AT RS.1,28,80,000/- AND M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 90 RS.9,34,20,000/- RESPECTIVELY. FOR A.Y.2007-08 THE SHAREHOLDERS FUND STOOD AT RS.10,63,97,734/-. THE ASSESSMENT FOR A.Y.2007-08 WAS COMPLETED U/S.143(3) AN D TOTAL INCOME ASSESSED WAS RS.1,23,92,580/-. THE ASSESSMENT FOR A.Y.2005-06 WAS ALSO COMPLETED U/S. 143(3). COPY OF ORDER WAS PLACED BEFORE THE LOWER AUTHORITIES. THE FINANCIAL CAPACITY OF THE COMPANY AND ITS CREDITWORTHINESS STOOD ESTABLISHED FROM THE FOLLOWIN G TABLE SHOWING ITS FINANCIALS AS: ASSESSMENT YEARS PAID - UP SHARE CAPITAL FREE RESERVES PROFIT FOR THE YEAR TAXES PAID 2008 - 09 1,28,80,000 9,35,17,734 1,17,408 44,400 2009 - 10 1,28,80,000 9,40,46,001 6,04,107 75,840 2010 - 11 1,28,80,000 9,63,52,036 34,40,035 11,34,000 2011 - 12 1,28,80,000 9,78,27,075 22,03,439 7,28,400 2012 - 13 1,28,80,000 9,85,63,971 11,54,896 4,18,000 ONCE THE INCOME-TAX DEPARTMENT, KOLKATA ASSESSED LUCKY COMMOTRADE PRIVATE LTD. U/S. 143(3) FOR ASSESSMENT YE AR 2005-06 AND ASSESSMENT YEAR 2007-08, INCOME-TAX M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 91 DEPARTMENT, INDORE HAS NO LOCUSSTANDI TO TREAT IT AS A BOGUS PAPER COMPANY AND A KNOWN ENTRY PROVIDERPARTICULARLY WHEN NO INVESTIGATION WHAT SO EVER WAS CONDUCTED BY IT AND NOT AN IOTA OF EVIDENCE WAS BROUGHT ON RECORDS IN SUPPORT OF SUCH SERIOUS AND BASELESS ALLEGATIONS. IN F ACT, DURING THE ENTIRE ASSESSMENT PROCEEDINGS U/S.153A/15 3C OF THE ACT IN RESPECT OF ALMOST ALL THE ASSESSEES OF T HE GROUP, THE AUTHORITIES BELOW DID NOT ISSUE EVEN A SIN GLE NOTICE TO IT U/S.133(6) TO COLLECT INFORMATION OR SU MMON U/S 131 FOR MAKING INVESTIGATION. THEREFORE, THESE C HARGES AGAINST LUCKY COMMOTRADE PRIVATE LTD. ARE BASELESS, HEARSAY AND MERE CONJECTURES AND SURMISES. IN CASE OF L AL CHAND BHAGATAMBICA RAM VS. C.I.T. 37 ITR 288, HONOURABLE SUPREME COURT STRONGLY DISAPPROVED THE PRACTICE OF MAKING ADDITION IN THE ASSESSMENT ON MERE SUSPICION AND SURMISES OR TAKING NOTE OF SO CALLED NOTORIOUS PRACTICE PREVAILING IN TRADE CIRCLES. M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 92 54. SHALIMAR SOLD ITS SHAREHOLDING IN ADROIT INDUSTRIES (INDIA) LTD. TO LUCKY AND THE PROCEEDS THE REOF WERE UTILIZED FOR REPAYMENT OF INTER-CORPORATE LOAN T O SIGNET INDUSTRIES LIMITED. THIS FACT WAS EXPLAINED TO THE LOW ER AUTHORITIES WITH EVIDENCE LIKE BANK STATEMENTS OF SHAL IMAR, LUCKY AND SIGNET, DULY CONFIRMED COPIES OF ACCOUNTS. BUT THE SAME WAS BRUSHED ASIDE BY THEM ON THE PRETEXT THAT LUCKY SOLD ITS HOLDING TO VARIOUS BOGUS PAPER COMPAN IES NOTWITHSTANDING THE FACT THAT THESE SO CALLED BOGUS PAP ER COMPANIES PRODUCED ALL THE DOCUMENTS AS REQUIRED BY THE A.O. IN TERMS OF NOTICE U/S 133(6) FOR VERIFICATION OF TRANSACTION AND ESTABLISHING THEIR IDENTITIES AND CREDITWORTHINESS. SURPRISINGLY, THE LOWER AUTHORITI ES DID NOT BOTHER TO EVEN LOOK INTO THEM AND GIVE ANY FINDIN G IN THIS REGARD. THEREFORE THE TRANSFER OF SHARES BY SIGNE T GROUP AND SANGLA FAMILY WAS GENUINE TRANSACTION. IT APPEARS THAT IN THE EYES OF INCOME-TAX DEPARTMENT, ALL T HE M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 93 FINANCE AND INVESTMENT COMPANIES OPERATING FROM BOMBAY AND KOLKATA ARE BOGUS PAPER COMPANIES. NOTWITHSTANDING PLETHORA OF EVIDENCE PLACED BEFORE IT TO ESTABLISH IDE NTITY AND CREDITWORTHINESS AND GENUINENESS OF TRANSACTION. 55. THE DIVESTMENT OF SHAREHOLDING OF ADROIT INDUSTRIES (INDIA) LTD. TO THE EXTENT OF 73.5% WAS NECESSITATED DUE TO PERILOUS FINANCIAL POSITION OF THE ENTIRE GROUP DUE TO HUGE CASH OUTFLOW OF ABOUT RS.22.61 CROR ES TO FINANCE THE ACQUISITION. IT IS NOT UNCOMMON FOR THE PROMOTERS TO DIVEST THEIR INVESTMENT PRIOR TO PUBLI C ISSUE, COLLECT FUNDS TO UNBURDEN THE COMPANY OF ITS FINANCIAL LIABILITIES AND PROVIDE AN HONOURABLE EXIT TO THE INVE STORS. HOWEVER, DUE TO NEGATIVE STOCK MARKET SENTIMENTS (SEN SEX FELL FROM HIGH OF 20,500 IN 2007 TO LOWS OF 8,000 I N 2009), THE PUBLIC ISSUE DID NOT MATERIALIZE DESPITE UTMOST E FFORTS OF THE PROMOTERS. FURTHER, THE AUTO INDUSTRY GLOBALLY WAS FACING TREMENDOUS RECESSION AND UNCERTAINTY AS EVIDENT M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 94 FROM BSE AUTO INDEX WHICH FELL FROM A HIGH OF 5,900 IN 2007 TO LOWS OF 2,350 IN 2009. THE TURNOVER OF ADR OIT INDUSTRIES (INDIA) LTD. DECLINED FROM RS.24.61 CRORE S IN FINANCIAL YEAR 2008-09 TO RS.16.88 CRORES IN FINANCIAL YEAR 2009-10. ALTHOUGH THE PROFIT SHOWED AN INCREASE F ROM RS.2.23 CRORES TO RS.3.13 CRORES BUT IT WAS DUE TO VALUATION OF WORK-IN-PROGRESS WHICH WAS WRITTEN OFF IN FINANCIAL YEAR 2011-12. ALSO, THE COMPANY WAS FACING SEVERE LABOUR PROBLEMS WITH THE ARRIVAL OF TRADE UNION S AND ULTIMATELY THE ENTIRE WORK FORCE WAS LAID OFF AFTER INC URRING A HUGE SEVERANCE COST. WITH THESE PROBLEMS, THE INVES TORS WANTED AN HONOURABLE EXIT WHICH ARE ULTIMATELY PROVIDED BY THE PROMOTERS I.E. SIGNET GROUP AFTER PROTRACTED NEGOTIATIONS BY ACQUIRING SHARES AT A MUTUALLY AGREEABLE PRICE BAND OF RS.11.25 TO RS.12.25. THE DETAILS OF INVESTORS WERE PLACED ON RECORD AND HAD ALSO BEEN REPRODUCED IN THE ASSESSMENT ORDER. THEREFORE, THE M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 95 INFERENCE OF THE ASSESSING OFFICER THAT NO INVESTOR W AS NAMED BY THE ASSESSEE IS TOTALLY BASELESS. THE MULTIPLE TRANSFERS IN SOME CASES WERE DUE TO REQUIREMENTS AND CONVENIENCE OF INVESTING COMPANIES AND THEIR PROMOTER S. GENERALLY, THE INVESTORS ENTER A COMPANY BEFORE ITS PU BLIC ISSUE WITH THE INTENTION TO EARN SIGNIFICANT GAINS ON LISTING OF SHARES. HOWEVER, SOMETIMES THEIR CALCULATION GO HAY WIRE AND THEY HAVE TO EXIT AT A SIGNIFICANT LOSS PARTICULARLY IN A SITUATION IN WHICH MOST OF THE PUBLIC ISSUES DEVOLVE D ON BANKERS AND GUARANTORS AND THERE WAS NO PUBLIC PARTICIPATION. THE SAME IS EVIDENT FROM THE FACT THAT MAN Y IPOS WERE WITHDRAWN OR DEFERRED BY VARIOUS COMPANIES DURING THIS PERIOD AND NO OF IPOS FELL FROM 108 IN 2 007 TO 22 IN 2009. IN THE CASE OF ADROIT INDUSTRIES (INDIA) LTD., THE PROMOTERS MADE UTMOST EFFORTS TO BRING IPO AND INCURR ED SIGNIFICANT COST (ABOUT RS.83.80 LACS) IN THIS PURSUIT BUT THEY COULD NOT ACHIEVE ANY SUCCESS DUE TO NEGATIVE MARK ET M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 96 CONDITIONS AND SENTIMENTS AS DISCUSSED ABOVE. THE STATEMENT OF DIRECTORS OF SHALIMAR VIZ. SHRI PARAS RAM PATIDAR AND SHRI VIMAL KUMAR BANDI WAS RECORDED AFTER A LAPSE OF OVER 4 YEARS (ACQUISITION OF SHARES IN MAY 2007 AND THEIR STATEMENT WAS RECORDED IN NOVEMBER 2011). MOREOVER, THE DAY TO DAY AFFAIRS OF SHALIMAR WERE LOOKE D AFTER BY THE EMPLOYEES OF SIGNET GROUP AND CONTROLLED BY SHRI MUKESH SANGLA AS ITS EXECUTIVE OFFICER. AS THE TRANSACTIONS WERE VERIFIABLE FROM BANK STATEMENTS OF RELEVANT ENTITIES, THE STATEMENTS OF ITS DIRECTORS DO NOT HAVE MUCH SIGNIFICANCE IN RELATION TO CREDITWORTHINESS AND GENUINENESS OF TRANSACTIONS. IF THE TRANSACTION WITH ALL EGED BOGUS PAPER COMPANIES IS HELD TO BE COLOURABLE DEVICE AND ARRANGE AND MANAGED AFFAIR AS PER THE CONTENTION OF THE REVENUE AUTHORITIES, THE BENEFIT OF LOSS WAS DERIVED BY THESE INTERMEDIARY COMPANIES AND THE ACTION SHOULD HAVE BEEN TAKEN IN THEIR CASE. AS THE ASSESSEE GROUP DID NOT DE RIVE M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 97 ANY TAX BENEFIT, IT CANNOT BE PENALIZED FOR FAILURE, IF ANY, OF INTERMEDIARY COMPANIES TO JUSTIFY ACQUISITION OF SHARES AT A HIGHER PRICE AS WELL AS THEIR SUBSEQUENT DIVESTMENT AT THE LOWER PRICE. SHRI RAMCHAND KEDIA, THE DIRECTORS OF LUC KY COMMOTRADE PVT. LTD. IS A CLOSE FRIEND OF SHRI MUKESH SANGLA, HEAD OF SIGNET GROUP AND SANGLA FAMILY. ALSO, THERE WERE REGULAR FINANCIAL TRANSACTIONS BETWEEN LUCKY AND VARIOUS SIGNET GROUP COMPANIES. TO SAVE COST OF TRANSFER OF FUNDS, INTEREST COST AND FACILITATING MOVEM ENT OF FUNDS, LUCKY OPENED A BANKING ACCOUNT AT INDORE AND SHRI RAMCHAND KEDIA KEPT A SIGNED CHEQUE BOOK WITH SHRI MUKESH SANGLA. THERE WAS A CLEAR UNDERSTANDING BETWEEN THE TWO THAT SHRI MUKESH SANGLA WOULD GIVE COMPLETE ACCOUNT OF TRANSACTION TO LUCKY IMMEDIATELY AND RECONCIL E THE ACCOUNT INTERSE . THEREFORE, THERE WAS NOTHING SUSPICIOUS ABOUT CHEQUE BOOK OF LUCKY HAVING BEEN FOU ND WITH SHRI MUKESH SANGLA DURING SEARCH PARTICULARLY WHEN M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 98 ALL THE TRANSACTIONS WERE AT ARMS LENGTH, RECORDED IN THE REGULAR BOOKS OF ACCOUNTS OF RESPECTIVE ENTITIES AND I NTEREST BEARING. THERE WERE NO CASH TRANSACTIONS BETWEEN LUCKY AND SIGNET GROUP ENTITIES. AS REGARD PALASIA LEASING & FINANCE LTD., THE HONOURABLE MADHYA PRADESH HIGH COUR T CONFIRMED THE ADDITION OF RS.5 LACS IN THE CASE OF RATH I FINLEASE (215 CTR 429) BECAUSE SUMMON COULD NOT BE SERVED ON IT DURING ENQUIRY BY THE ASSESSING OFFICER. THE HIGH COURT NEVER HELD THAT PALASIA LEASING WAS A BOGUS PAPER COMPANY AND KNOWN ENTRY PROVIDER. IN THE ASSESSEES CASE, THE NOTICE U/S.133(6) WERE DULY SERV ED AND THE COPIES OF BANK STATEMENTS AND OTHER REQUISITE DETAIL S WERE FILED BEFORE THE ASSESSING OFFICER IN WHICH THE TRANSACTIONS WERE DULY REFLECTED. THEREFORE, THE INFE RENCE OF C.I.T.(A) IS WITHOUT APPRECIATION OF THE JUDGEMENT AS WELL AS THE FACTS PLACED ON RECORD. AS REGARD SHRI ANEKANT SHARE S AND SECURITIES PVT. LTD., UNNO INDUSTRIES LTD., SIDD HACHAL M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 99 DEVELOPERS PVT. LTD., THE ASSESSEE WAS NOT GIVEN THE COPY OF JUDGEMENT PASSED BY C.I.T.(A) II, INDORE IN THE CASE OF INDUSTRIAL FILTERS AND FABRICS PVT. LTD. AND THEREFORE, THE SAME CANNOT BE USED FOR ADVERSE INFERENCE AGAINST THE ASSESSEE. MOREOVER, IN COMPLIANCE OF NOTICE ISSUED U/S.133(6), THESE COMPANIES FURNISHED THE COPIES OF THEIR BANK ACCOUNT, RETURN OF INCOME FILED BY THEM ETC. IN WHICH THE TRANSACTIONS WERE DULY REFLECTED AND NO DISCREPANCY WHATSOEVER WAS BROUGHT ON RECORD BY THE LOWER AUTHORI TY. AS REGARD CAN-INDIA OVERSEAS LTD., IT WAS A COMPANY IN WHICH THE CLOSE RELATIVES OF SHRI MUKESHSANGLA WERE SHAREHOLDERS AND DIRECTORS. THE COMPANY WAS FILING ITS RETURN OF INCOME REGULARLY AND ALSO ASSESSED TO TAX. IT S PAID UP SHARE CAPITAL WAS RS.30 LACS AND FREE RESERVES O F RS.30 LACS. AS AT 31.03.2010, IT HAD A CASH AND BANK BALANCE OF RS.41,79,012/- AND INVESTMENT OF RS.8,80,00 0/- IN 2,40,000 SHARES (INCLUDING BONUS SHARES 1,60,000) OF M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 100 SIGNET INDUSTRIES LTD. UNDER THESE CIRCUMSTANCES, T HE CAN- INDIA OVERSEAS LTD. CANNOT BE CALLED A BOGUS PAPER COMPANY. 56. SECTION 69 OF THE ACT IS APPLICABLE ON CUMULATI VE SATISFACTION OF THE FOLLOWING CONDITIONS : I. THE ASSESSEE SHOULD HAVE MADE THE INVESTMENTS AND THE SAME ARE NOT RECORDED IN THE BOOKS OF ACCOUNTS; AND II. THE ASSESSEE EITHER OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF INVESTMENT OR THE EXPLANATION OFFERED IS NOT SATISFACTORY IN THE OPINION OF THE ASSESSING OFFICER. III. THE SATISFACTION OF THE ASSESSING OFFICER CANNOT BE ARBITRARY AND SUBJECTIVE BUT HAS TO BE BASED ON THE RELEVANT MATERIAL B) SEC.69B IS APPLICABLE ON CUMULATIVE SATISFACTION OF THE FOLLOWING CONDITIONS: M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 101 I. THE ASSESSEE SHOULD HAVE MADE THE INVESTMENTS OR IS FOUND TO BE THE OWNER OF ANY BULLION, JEWELLERY OR VALUABLE ARTICLES; II. BASED ON THE MATERIAL FACTS, THE ASSESSING OFFICER FINDS THAT THE AMOUNT EXPENDED ON SUCH INVESTMENT ACTUALLY EXCEEDS THE AMOUNT RECORDED IN THE BOOKS OF ACCOUNT; AND III. THE ASSESSEE EITHER OFFERS NO EXPLANATION ABOUT THE NATURE AND SOURCE OF INVESTMENT OR THE EXPLANATION OFFERED IS NOT SATISFACTORY IN THE OPINION OF THE ASSESSING OFFICER. IV. THE SATISFACTION OF THE ASSESSING OFFICER CANNOT BE ARBITRARY AND SUBJECTIVE BUT HAS TO BE BASED ON THE RELEVANT MATERIAL 57. WHEREVER THE LEGISLATURE DESIRED DETERMINATION O F INCOME IN A SPECIFIC MANNER OR EXISTENCE OF CERTAIN ST ATE OF AFFAIRS, IT HAS SPECIFICALLY PROVIDED FOR IN RELEVANT SE CTIONS. M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 102 SEC.69 AND SEC.69B DEALING WITH TAXATION OF UNACCOUNTED INVESTMENTS ARE DEEMING PROVISION AND DOES NOT DEAL WI TH PRESUMPTIVE TAXATION OF UNACCOUNTED/UNDER-VALUED INVESTMENTS. IN ABSENCE OF THE CLEAR LEGISLATIVE MANDATE , THE A.O. CANNOT PRESUME MARKET VALUE/FAIR VALUE OF INVESTMENTS AND MAKE ADDITION UNDER SEC.69 OR SEC.69B OF THE ACT. RELIANCE IS PLACED UPON THE FOLLOWING JUDGEM ENTS: (I) C.I.T. VS. NAVEEN GERA 328 ITR 516 (DEL) (II) C.I.T. VS. DINESH JAIN HUF 352 ITR 628 (DEL) (III) RUPEE FINANCE & MANAGEMENT PVT. LTD. VS. A.C.I.T. 119 TTJ 643 (MUM TRIB) 58. IN THE ASSESSEE GROUP CASES,THE ORIGINAL PURCHASE OF SHARES AT RS.40.25 PER SHARES AS WELL AS REACQUISITION OF SHARES AT RS.11.25 TO RS.12.25 WERE DULY RECORDED IN THE BOOKS OF ACCOUNTS OF THE RESPECTIVE ASSESSEE. A CHART SHOWING SOURCE OF RE-ACQUISITION OF SHARES BY SIGNET G ROUP, MEMBERS OF SANGLA FAMILY AND OTHER ASSOCIATE CONCERNS M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 103 WAS FILED. THE REVENUE DID NOT BRING ANY EVIDENCE TO SHOW THAT ACTUAL CONSIDERATION PAID BY THE ASSESSEE GROUP EITH ER AT THE TIME OF ORIGINAL ACQUISITION OR AT THE TIME OF REACQUISITION WAS MORE THAN THE STATED AND RECORDED CONSIDERATION IN THE BOOKS OF RESPECTIVE ASSESSEE. TH E A.O. MERELY PRESUMED THE FAIR VALUE OF SHARES AT RS.40.25 P ER SHARE (ORIGINAL COST OF ACQUISITION FROM ANAND FAMILY I N MARCH 2007) AND TREATED THE DIFFERENCE BETWEEN THE CO ST OF REACQUISITION AND FAIR VALUE PER SHARE AS UNEXPLAINED INVESTMENT IN THE CASE OF THE ASSESSEE, WITHOUT BRING ING ANY EVIDENCE ON RECORD. HE SIMPLY REJECTED THE EXPLAN ATION GIVEN BY THE ASSESSEE GROUP. IN THE ASSESSEES CASE, THERE WERE NO INCRIMINATING MATERIAL WHATSOEVER IN RELATION TO INVESTMENT IN SHARES OF ADROIT INDUSTRIES (INDIA) LTD . IN ASSESSMENT YEAR 2007-08, TRANSFER OF THESE SHARES IN ASSESSMENT YEAR 2008-09 AND THEIR REACQUISITION SUBSEQUENTLY IN ASSESSMENT YEAR 2010-11. NO PROCEEDING S M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 104 IN RELATION TO ASSESSMENTS FOR THESE ASSESSMENT YEARS WERE PENDING AND THEREFORE NO ADDITION COULD HAVE BEEN MADE IN ASSESSMENT COMPLETED U/S.153A/153C OF THE ACT IN THE ABSENCE OF ANY INCRIMINATING MATERIAL ON ACCOUNT OF UNEXPLAINED CASH CREDITS IN ASSESSMENT YEAR 2008-09 AND UNEXPLAINED INVESTMENT IN ASSESSMENT YEAR 2010-11. THE ADDITION MADE BY THE ASSESSING OFFICER BY WAY OF REASSESSMENT IN RELATION TO IMPUGNED CONCLUDED ASSESSMENTS AMOUNTED TO CHANGE IN OPINION ON THE SAME SET OF FACTS WHICH IS NOT PERMISSIBLE IN LAW EVEN U/S.153A/153C OF THE ACT. 59. THE LEARNED DR RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND PLEADED THAT NO PROMOTER WOULD DIVEST MAJORITY OF ALL THE SHAREHOLDINGS AND THAT TOO AT A NOMINAL PROFIT WHEN A PUBLIC ISSUE WAS ANTICIPATED IN NE AR FUTURE. HE ALSO SUBMITTED THAT ADROIT INDUSTRIES (IN DIA) LTD. WAS A PROFIT MAKING COMPANY AND NO PRUDENT M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 105 BUSINESSMAN WILL DIVEST THE HUGE INVESTMENT. HE ALSO PLEADED THAT THE ASSESSEES CONTENTION THAT THE ASSESSE E COULD NOT GO FOR PUBLIC ISSUE DUE TO CAPITAL MARKET SITUATION IS ALSO NOT JUSTIFIED. THESE SHARES HAVE CHAN GED MANY HANDS BEFORE COMING SIGNET GROUP WHICH IS USUALLY NOT POSSIBLE IN UNLISTED SHARES. HE ALSO PLEADED THAT T HE ASSESSEE HAS NOT BROUGHT ON RECORD ANYTHING TO SHOW TH AT SALE PROCEEDS WERE UTILISED IN DISCHARGING THE INTERE ST BEARING LIABILITIES AND HE PLEADED THAT IT IS NOT POSSIB LE TO ACCEPT THE ASSERTIONS OF THE ASSESSEE WITH REGARD TO DISINVESTMENT THAT IT WAS TO REDUCE THE RISK OF THE G ROUP. HE PLEADED THAT THE DISINVESTMENT OF SHARES OF ADROIT INDUSTRIES (INDIA) LTD. WAS A SHAM TRANSACTION. HE RELIE D UPON THE ORDERS OF THE ASSESSING OFFICER AND THE LEA RNED CIT(A) ON THIS ISSUE. HE ALSO DREW OUR ATTENTION TO V ARIOUS CASE LAWS RELIED ON BY HIM. M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 106 60. IN EARLIER PART OF THIS ORDER, WE HAVE HELD T HAT THE ASSESSMENTS FRAMED U/S 153A R.W.S. 143(3) OF THE ACT AGAINST THE ASSESSEE ARE NOT AS PER LAW. HOWEVER, WE ARE ALSO DECIDING THE ISSUE ON MERITS OF THE ADDITION MADE OF RS. 13,23,220/- IN RESPECT OF SALE PROCEEDS OF 32,87 5 SHARES OF ADROIT INDIA LIMITED IN THE ASSESSMENT YEAR 2008-09 AS UNEXPLAINED INCOME OF THE ASSESSEE AND ALSO ISSUE REGARDING THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN SHARES OF ADROIT INDUSTRIES LIMITED OF RS.93,37,094/- IN THE ASSESSMENT YEAR 2010 -11. THE SANGLA FAMILY AND ASSOCIATES ACQUIRED MANAGEMENT AND CONTROLLING RIGHTS IN ADROIT INDUSTRIES LTD. WHI CH WAS 100% EXPORT ORIENTED AUTO ANCILLARY UNIT FROM ANAND FAMILY IN THE MONTH OF MARCH, 2007. THERE IS NO DISPU TE REGARDING THE PRICE OF SHARES PAID FOR ACQUIRING SHARES F ROM ANAND FAMILY AS WELL AS TO OTHER PERSONS. IN MAY, 2007 SOME OF THE SHARES WERE SOLD BY THE ASSESSEE AND OTHER M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 107 GROUP PERSONS AND ASSOCIATES. THE RESULTANT SHORT TERM CAPITAL GAIN WAS OFFERED FOR TAXATION IN THE RETURN OF INCOME. THERE WAS NO INCRIMINATING DOCUMENT SEIZED DURING THE SEARCH OPERATION IN RELATION TO ACQUISITION OF SHARES OF ANAND FAMILY AND TRANSFER OF SHARES BY THE ASSESSEE. THE ASSESSEE HAS EXPLAINED THE REASON FOR TRANSFER OF SHARES TO RAISE THE FUNDS. IT IS ALSO ESTAB LISHED THAT ADROIT INDUSTRIES LTD. WAS TO GO FOR PUBLIC ISSU E FOR WHICH EXPENDITURE HAS BEEN DEBITED IN THE FINANCIAL Y EARS 2010-11 AND 2011-12. ULTIMATELY THIS PUBLIC ISSUE COU LD NOT BE MATERIALISED. THE EXPENDITURE DEBITED IN THE B OOKS OF ADROIT INDUSTRIES LTD. ESTABLISHES THAT ADROIT IN D. LTD. WAS TO GO TO FOR PUBLIC ISSUE. NO EVIDENCE EITHER DU RING THE SEARCH OPERATION OR IN THE POST SEARCH INQUIRIES SHOWI NG EVEN SUGGESTING THAT ANY CONSIDERATION OVER AND ABOVE RECORDED IN THE BOOKS OF ACCOUNTS OF ANY ASSESSEE OF S IGNAT GROUP WAS REALISED IN CASH OR OTHERWISE. EVEN NO POSIT IVE M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 108 EVIDENCE WAS COLLECTED DURING THE PROCEEDINGS U/S 153A/153C OF THE ACT. THUS, THERE IS NO EVIDENCE RE GARDING ANY UNACCOUNTED TRANSACTION WITH RELATION TO SHARES ACQUIRED, TRANSFERRED AND RE-ACQUIRED BY VARIOUS FAMILY MEMBERS OF SANGLA FAMILY AND ASSOCIATE CONCERNS. THE REVENUES CLAIM THAT NO PROMOTER WOULD DIVEST WITH SU CH A HUGE HOLDING AT A VERY NOMINAL PROFIT IS WITHOUT ANY BA SIS AND ONLY A GUESS WORK. THE ASSESSEES CONTENTION THAT THE PROMOTERS WERE INTENDED TO GO FOR PUBLIC ISSUE IS W ELL ESTABLISHED BY THE FACT THAT EXPENDITURE INCURRED IN T HIS REGARD HAS BEEN DEBITED IN THE BOOKS OF ACCOUNTS OF A DROIT INDUSTRIES LTD., THEREFORE, THE REVENUES CONTENTIO N THAT THE PROMOTERS WERE NOT INTENDED TO GO FOR PUBLIC ISSUE IS NOT CORRECT. IN OUR CONSIDERED VIEW, ALL SUCH ALLEGATIONS ARE WILD AND WITHOUT ANY BASIS. THE REVENUE HAS EVEN FAILED TO BRING ANYTHING ON RECORD TO ESTABLISH THAT ANY UNACCOUNTED TRANSACTION IN ANY FORM WAS DONE BY ANY OF M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 109 THE PERSONS OF THIS GROUP AND ASSOCIATES. THERE IS NO EVIDENCE AGAINST THE ASSESSEE WITH REGARD TO TRANSFER AND REACQUISITION OF SHARES OF ADROIT INDUSTRIES LTD. DURI NG THE RELEVANT PERIOD TO THE ASSESSMENT YEARS 2007-08, 2008- 09 AND 2010-11 RESPECTIVELY. THE REVENUES ALLEGATIONS ARE GENERAL AND NOT SUPPORTED BY ANY EVIDENCE. IN OUR CONSIDERED VIEW, NO ADDITION COULD BE SUSTAINED ONLY ON THE BASIS OF GUESS WORK OR IN THE ABSENCE OF ANY POSIT IVE EVIDENCE. IN VIEW OF THIS FACTUAL MATRIX, WE FIND NO M ERIT IN THE ADDITION MADE IN THE ASSESSMENT YEAR 2008-09 ON THE TRANSFER OF SHARES OF ADROIT INDUSTRIES LIMITED AND ALS O THE ADDITION MADE FOR UNEXPLAINED INVESTMENT ON ACCOUNT OF REACQUISITION OF SHARES OF ADROIT INDUSTRIES LTD. DURI NG THE FINANCIAL YEAR 2010-11. WE DIRECT TO DELETE THE SAME. 61. GROUND NO. 3 (A.Y. 2010-11) OF THE ASSESSEE S APPEALS READ AS UNDER :- M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 110 REJECTION OF ASSESSEES LEGAL CLAIM FOR DEDUCTION : 3.0 THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN LAW AS WELL AS IN FACTS IN CONFIRMING THE REJECTION OF ASSESSEES CLAIM FOR THE FOLLOWING LEG AL DEDUCTIONS BY THE ASSESSING OFFICER : A) SEC.80C : RS.76,860/- B) SEC.80D : RS.15,000/- 62. THE FACTS OF THE CASE ARE THAT WHILE FILING THE RETURN PURSUANT TO THE NOTICE ISSUED U/S.153C THE ASSESSEE CLAIMED THE FOLLOWING DEDUCTIONS: S.NO PARTICULARS AMOUNT (RS.) (A) SECTION 80C 76,860/ - (B) SECTION 80D 15,000/ - THE SAID CLAIMS WERE NOT MADE WHILE FILING THE RETURN U/S.139(1)/139(4). THE ASSESSING OFFICER HELD THAT T HE CONTENTION OF THE FRESH CLAIM OF DEDUCTIONS OF THE AS SESSEE FOR THE RETURN FILED U/S.153C IS REJECTED AS THE ASSE SSEE CANNOT MAKE THE FRESH CLAIM FOR DEDUCTION/EXEMPTION IN M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 111 PROCEEDINGS INITIATED U/S.153C OF THE ACT. HE ALSO HE LD THAT IF THE ASSESSEE FOUND ANY MISTAKE IN HIS ORIGINAL RETUR N OF INCOME, THE CORRECT COURSE WAS TO REVISE THE RETURN WHICH HAS NOT BEEN DONE. AGGRIEVED, THE ASSESSEE WENT IN AP PEAL BEFORE THE LEARNED CIT(A) AND THE LEARNED CIT(A) RELY ING ON THE JUDGEMENT OF JAI STEEL INDIA VS. A.C.I.T. [36 TAXMAN.COM 523 (RAJ)] AND CHARCHIT AGARWAL VS. A.C.I.T. [34 SOT 348 (ITAT-DEL)], THE C.I.T.(A). HELD THAT WH ERE A CLAIM FOR DEDUCTION/EXEMPTION WAS NOT MADE BY THE ASSESSEE IN ORIGINAL RETURN OF INCOME FILED U/S.139(1 ), NO FRESH DEDUCTION OR CLAIM CAN BE MADE BY THE ASSESSEE IN THE RETURN OF INCOME FILED U/S.153A PURSUANT TO A SE ARCH U/S.132 OR REQUISITION U/S.132A BECAUSE THE PROCEEDI NGS U/S.153A ARE FOR THE BENEFIT OF REVENUE AND NOT FOR T HE BENEFIT OF THE ASSESSEE. NOW THE ASSESSEE IS IN APPEAL BEFORE US. M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 112 63. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CLAIMS/DEDUCTIONS MADE BY THE ASSESSEE WHILE FILING THE RETURN OF INCOME PURSUANT T O NOTICE U/S.153C WERE SUCH CLAIM/DEDUCTIONS WHICH WER E LEGALLY ALLOWABLE TO THE ASSESSEE. IN FACT, BECAUSE OF TH EIR VERY NATURE, THE ASSESSING OFFICER SHOULD HAVE ALLOWED THESE DEDUCTIONS ON HIS OWN AND HE SHOULD NOT HAVE TAK EN ADVANTAGE OF ASSESSEES IGNORANCE. IN THIS REGARD THE RELIANCE IS PLACED ON THE CIRCULAR NO.14(XL-35), DATED APRIL 11, 1955 ISSUED BY THE CENTRAL BOARD OF DIRECT TAXES, WHICH READS AS UNDER : (3) OFFICERS OF THE DEPARTMENT MUST NOT TAKE ADVANTAGE OF IGNORANCE OF AN ASSESSEE AS TO HIS RIGHTS. IT IS ON E OF THEIR DUTIES TO ASSIST A TAXPAYER IN EVERY REASONABLE WAY , PARTICULARLY IN THE MATTER OF CLAIMING AND SECURING RELIEFS AND IN THIS REGARD THE OFFICERS SHOULD TAKE THE INI TIATIVE IN GUIDING A TAXPAYER WHERE PROCEEDINGS OR OTHER PARTI CULARS BEFORE THEM INDICATE THAT SOME REFUND OR RELIEF IS DUE TO HIM. THIS ATTITUDE WOULD, IN THE LONG RUN, BENEFIT THE D EPARTMENT FOR IT WOULD INSPIRE CONFIDENCE IN HIM THAT HE MAY BE SURE OF GETTING A SQUARE DEAL FROM THE DEPARTMENT. ALTHOUGH , THEREFORE, THE RESPONSIBILITY FOR CLAIMING REFUNDS AND RELIEFS RESTS WITH ASSESSEE ON WHOM IT IS IMPOSED BY LAW, O FFICERS M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 113 SHOULD- (A) DRAW THEIR ATTENTION TO ANY REFUNDS OR RELIEFS TO W HICH THEY APPEAR TO BE CLEARLY ENTITLED BUT WHICH THEY H AVE OMITTED TO CLAIM FOR SOME REASON OR OTHER ; (B) FREELY ADVISE THEM WHEN APPROACHED BY THEM AS TO TH EIR RIGHTS AND LIABILITIES AND AS TO THE PROCEDURE TO B E ADOPTED FOR CLAIMING REFUNDS AND RELIEFS. HE ALSO SUBMITTED THAT THE HONOURABLE BOMBAY HIGH COU RT HAS HELD IN THE CASE OF SANCHIT SOFTWARE AND SOLUTIONS P. LTD. VS. C.I.T. [2012] (349 ITR 404) AS UNDER : IN ANY CIVILIZED SYSTEM, THE ASSESSEE IS BOUND TO PAY THE TAX WHICH HE LIABLE UNDER THE LAW TO THE GOVERNMENT. TH E GOVERNMENT ON THE OTHER HAND IS OBLIGED TO COLLECT ONLY THAT AMOUNT OF TAX WHICH IS LEGALLY PAYABLE BY AN ASSESS EE. THE ENTIRE OBJECT OF ADMINISTRATION OF TAX IS TO SECURE THE REVENUE FOR THE DEVELOPMENT OF THE COUNTRY AND NOT TO CHARGE AS SESSEE MORE TAX THAN THAT WHICH IS DUE AND PAYABLE BY THE ASSES SEE. IT IS IN AFORESAID CIRCUMSTANCES THAT AS FAR BACK AS IN 11-4 -1955 THE CENTRAL BOARD OF DIRECT TAX HAD ISSUED A CIRCULAR D IRECTING ASSESSING OFFICER NOT TO TAKE ADVANTAGE OF ASSESSEE S IGNORANCE AND/OR MISTAKE. THEREFORE, THE ABOVE CIRCULAR SHOUL D ALWAYS BE BORNE IN MIND BY THE OFFICERS OF THE RESPONDENT RE VENUE WHILE ADMINISTERING THE SAID ACT. [PARA 5] THERE WAS A FUNDAMENTAL ERROR IN THE ORDER OF C.I.T . AS IT PROCEEDS ON THE ERRONEOUS BASIS THAT THE ASSESSEE H AD ADMITTEDLY NOT CLAIMED THE BENEFIT OF SECTIONS 10(3 4) AND 10(38) IN RESPECT OF ITS DIVIDEND INCOME AND LONG TERM CAP ITAL GAINS ON SALE OF SHARES RESPECTIVELY IN ITS RETURN OF INCOME . IN FACT, IN THE RETURN OF INCOME, THE ASSESSEE HAD ADMITTEDLY SOUGH T TO EXCLUDE M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 114 ITS DIVIDEND INCOME AND LONG TERM CAPITAL GAINS FRO M SALE OF SHARES UNDER SECTION 1O AS IS EVIDENT FROM THE RETU RN OF INCOME. HOWEVER, IN THE RETURN OF INCOME AS FILED ORIGINALL Y ON THE ASSESSEE BY MISTAKE, OMITTED TO EXCLUDE THE DIVIDEN D INCOME AND INCOME FROM LONG TERM CAPITAL GAINS FROM THE TO TAL INCOME BEING DECLARED BY IT. [PARA 6] HE ALSO PLEADED THAT THE HONOURABLE MADRAS HIGH COURT HAS HELD IN THE CASE OF C.I.T. VS. GEO INDUSTRIES & INSECTICIDES (I) (P.) LTD. (234 ITR 541) AS UNDER : WE ARE OF THE VIEW THAT, WHEN THE ASSESSEE MADE A CLAIM FOR CONSIDERATION OF AN ITEM FOR DEDUCTION DURING THE C OURSE OF ASSESSMENT PROCEEDINGS, IT IS THE DUTY OF THE ITO T O EXAMINE THE CLAIM ON THE MERITS OF THE CLAIM. THE PRESENT CASE IS NOT A CASE WHERE THE ASSESSEE MADE A CLAIM WITH REFERENCE TO A MATTER WHICH WAS CONCLUDED AND HAS BECOME FINAL IN THE ORI GINAL ASSESSMENT PROCEEDINGS. BUT, ON THE OTHER HAND, IT WAS FOUND IN THE SUBSEQUENT YEARS ASSESSMENT PROCEEDINGS THAT T HE LIABILITY OF THE ASSESSEE HAD ACCRUED WHEN THE SUIT FOR INJUN CTION FILED BY THE ASSESSEE WAS DISMISSED BY THE CITY CIVIL COURT, MADRAS AND IN VIEW OF THE SUBSEQUENT EVENT THAT THE DEDUCTION MIGHT RELATE TO THE PRESENT ASSESSMENT YEAR, THE ASSESSEE MADE A CLAIM FOR DEDUCTION OF THE DAMAGES AND WHEN SUCH A CLAIM WAS MADE, THE ITO WAS BOUND TO EXAMINE THE CLAIM ON MERITS AN D IT IS NOT OPEN TO HIM TO REJECT THE CLAIM EVEN AT THE THRESHO LD AND REFUSE TO ENTERTAIN THE CLAIM. THE ZEAL OF THE ITO TO CARR Y OUT THE DIRECTIONS OF THE HIGHER AUTHORITY MAY BE JUSTIFIED , BUT AT THE SAME TIME IT SHOULD NOT PREVENT HIM FROM EXAMINING THE CLAIM OF THE ASSESSEE ON MERITS. HIS DUTY TO MAKE AN ASSESSM ENT DOES NOT BEGIN AND END WITH THE CARRYING OUT THE DIRECTI ONS OF THE COMMISSIONER OF INCOME-TAX AND HIS DUTY IS SOMETHIN G MORE, M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 115 THAT IS, TO DETERMINE THE CORRECT TAXABLE INCOME. W E ARE OF THE OPINION, NOTHING PRECLUDES THE ASSESSEE FROM MAKING A CLAIM BEFORE THE ITO AT THE TIME OF FINALIZATION OF THE A SSESSMENT PROCEEDINGS AND EQUALLY NOTHING PREVENTS THE ITO FR OM EXAMINING THE CLAIM ON MERITS OF THE MATTER. IT IS WELL TO REMEMBER THAT THE ASSESSMENT WAS BEING REDONE BY TH E ITO WITHIN FOUR YEARS FROM THE DATE OF THE ORIGINAL ASS ESSMENT ORDER AND WHEN HE IS ON THE PROCESS OF THE COMPLETION OF THE ASSESSMENT, HE IS BOUND TO CONSIDER EACH AND EVERY CLAIM PREFERRED BY THE ASSESSEE. LET US IMAGINE A CASE OF A CONCLUDED ASSESSMENT AND THERE ARE NO PENDING ASSESSMENT PROC EEDINGS, BUT WHEN THE ASSESSEE MAKES A CLAIM FOR DEDUCTION O F LOSSES, THE ITO CANNOT REFUSE TO ENTERTAIN THE CLAIM AND HE MAY REJECT THE CLAIM ON THE PARAMETERS FOUND IN S. 154 OF THE ACT. IN THE INSTANT CASE, IT IS A STRONGER CASE FOR THE ASSESSE E AS THE ITO WAS DIRECTED TO DETERMINE THE CORRECT TOTAL INCOME OF THE ASSESSEE ACCORDING TO LAW AND DURING THAT PROCEEDIN GS WHEN THE ASSESSEE MAKES A CLAIM, THE ITO IS BOUND TO CON SIDER THE CLAIM OF THE ASSESSEE. WE ARE OF THE OPINION THAT, WHILE CONSIDERING SUCH A CLAIM, THE QUESTION OF FULFILLM ENT OF THE CONDITIONS FOR RECTIFICATION IS NOT A SINE QUA NON AND EVEN THE CONDITIONS TO RECTIFY THE MISTAKES ARE NOT PRESENT, THE ITO, IN OUR OPINION, SHOULD EXAMINE THE CLAIM OF THE ASSESSEE O N MERITS OF THE CASE. THE POWER OF THE ITO TO MAKE THE ASSESSME NT AS OBSERVED BY THIS COURT IN C.I.T. VS. SETH MANICKLAL FOMRA (SUPRA) IS DERIVED FROM THE STATUTORY PROVISIONS OF S.143(3 ) OF THE ACT. THOUGH THE SUPREME COURT IN THE CASE OF MODI INDUST RIES LTD. VS. C.I.T. (SUPRA) HAS HELD THAT THE JURISDICTION OF TH E ITO IS DERIVED FROM THE ORDER OF THE C.I.T., HIS JURISDICTION TO A LLOW OR DISALLOW THE CARRY FORWARD LOSSES OF THE DEFUNCT BUSINESS WO ULD BE DERIVED FROM THE ORDER OF THE C.I.T., BUT IN OTHER RESPECTS AND, FOR COMPLETING THE ASSESSMENT, HIS POWERS WOULD BE TRAC EABLE TO S. 143(3) OF THE ACT. THIS COURT IN FAIZUNNISSABEGAM V S. ASSTT. CED (SUPRA) HAS INDICATED SUCH AN APPROACH AND IT W AS HELD M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 116 THAT IN SO FAR AS OTHER ITEMS NOT CONSIDERED BY THE HIGHER AUTHORITIES ARE CONCERNED, THE POWER OF THE ITO TO REASSESS THE INCOME WOULD BE TRACEABLE TO THE PROVISIONS OF THE STATUTE. THEREFORE, THE REFUSAL OF THE ITO EVEN TO CONSIDER THE CLAIM OF THE ASSESSEE IS NOT JUSTIFIABLE AND WE ARE OF THE OPINI ON THAT BOTH THE C.I.T.(A) AND THE TRIBUNAL WERE RIGHT IN DIRECT ING THE ITO TO CONSIDER THE CLAIM OF THE ASSESSEE ON THE MERITS OF THE MATTER. THOUGH WE ARE NOT AGREEING WITH THE VIEW EXPRESSED BY THE TRIBUNAL THAT THE ENTIRE ASSESSMENT ORDER WAS SET A SIDE BY THE C.I.T., STILL THE POWER OF THE ITO TO CONSIDER THE CLAIM OF THE ASSESSEE IS NEITHER CURTAILED NOR TAKEN AWAY BY THE ORDER OF THE C.I.T. THE ITO WAS BOUND TO CONSIDER THE CLAIM OF T HE ASSESSEE UNDER S. 143(3) OF THE ACT WHEN HE WAS IN FINAL PRO CESS OF ASSESSMENT IN THE DETERMINATION OF TOTAL INCOME OF THE ASSESSEE AS THE ASSESSMENT PURSUANT TO THE DIRECTIONS OF THE C.I.T. HAS NOT REACHED THE STAGE OF FINALITY. WE FIND THAT THE CENTRAL BOARD IS MORE LIBERAL IN ITS APPROACH AND DIRECTED THE IT O TO CONSIDER THE CLAIM OF STATUTORY DEDUCTION EVEN WHEN THE ASSE SSEE HAS NOT MADE SUCH A CLAIM [VIDE:CIRCULAR NO. 14(XL-35) OF 1 955 DT. : 11 TH APRIL, 1955 : CHOKSHI METAL REFINERY VS. C.I.T. (19 77) 107 ITR 63 (GUJ) AT PAGE 71]. WE ARE OF THE OPINION, SUCH AN A TTITUDE OF THE ITO WOULD INSTIL CONFIDENCE IN THE MINDS OF THE TAX PAYER THAT HIS INCOME WOULD BE PROPERLY DETERMINED AND HE IS NOT R EQUIRED TO PAY THE TAX, NEITHER ONE PAISE MORE NOR ONE PAISE L ESS THAN WHAT IS CORRECTLY AND RIGHTLY DUE IN ACCORDANCE WITH AND UNDER THE PROVISIONS OF THE STATUTE. IN THIS VIEW OF THE MATT ER, WE ARE OF THE OPINION THAT THE ORDER OF THE TRIBUNAL IS SUSTAINAB LE IN LAW, THOUGH FOR DIFFERENT REASONS STATED ABOVE. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO RELIED UPON THE DECISION OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 117 RAJ RANI GULATI VS. C.I.T. CENTRAL TILAK,(2012) (346 I TR 543) WHEREIN IT WAS HELD AS UNDER : NEEDLESS TO MENTION THAT PROVISO OF SECTION 112(1) WAS INTRODUCED WITH EFFECT FROM 01.04.2000 BY THE FINAN CE ACT, 1999. IN OTHER WORDS, IT WAS INTRODUCED DURING THE ASSESSMENT YEAR UNDER CONSIDERATION AND ASSESSEE WAS NOT AWARE ABOUT LATEST AMENDMENT INTRODUCED BY THE FINANCE ACT, 19 99 W.E.F. 01.04.2000. THOUGH IGNORANCE OF LAW HAS NO EXCUSE, BUT IT CAN BE EXCUSED IN TAX MATTER AS PER THE RATIO LAID DOWN IN THE CASE OF P. V. DEVASSY VS. C.I.T., 84 ITR 502 (KER). IT IS N OT EXPECTED THAT THE DEPARTMENT SHALL TAKE THE ADVANTAGE OF ASSESSEE S IGNORANCE AS PER CB.D. T. CIRCULAR NO.14 (XL 35)19 55 DATED 11 APRIL 1955. EVEN UNDER THE BONAFIDE BELIEF, THE ASS ESSEE HAS SHOWN THE LONG TERM CAPITAL GAIN AT THE RATE OF 20% , BUT IT WAS EXPECTED FROM THE A.O. TO KNOW THE LATEST AMENDMENT . THE MISTAKE MIGHT HAVE BEEN CORRECTED BY PASSING AN ORD ER UNDER SECTION 154 OF THE ACT. IN THE CASE OF C.I.T. VS. M AHALAXMI SUGAR MILLS CO. LTD. (1986) 160 ITR 920 (SC), IT WAS OBSE RVED THAT: THERE IS A DUTY CAST ON THE INCOME-TAX OFFICER TO APPLY THE RELEVANT PROVISIONS OF THE INDIAN INCOME-TAX ACT FO R THE PURPOSE OF DETERMINING THE TRUE FIGURE OF THE ASSES SEES TAXABLE INCOME AND THE CONSEQUENTIAL TAX LIABILITY. THUS THE ASSESSEE FAILS TO CLAIM THE BENEFIT OF A SET-OF F CANNOT RELIEVE THE INCOME-TAX OFFICER OF HIS DUTY TO APPLY SECTION 24 IN AN APPROPRIATE CASE. 64. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT SIMILAR VIEW WAS TAKEN BY THE HONOURABLE I.T.A.T. M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 118 INDORE IN THE CASE OF SUBHADRA DEVI GUPTA VS. A.C.W.T. (WTA NOS.1 TO 6/IND/2012 DT.28.06.2013). 65. WE HAVE HEARD BOTH THE SIDES ON THIS ISSUE AND ALSO GONE THROUGH THE CASE LAW RELIED UPON. WHILE FIL ING THE RETURN OF INCOME U/S 153A/153C OF THE ACT SOME OF T HESE ASSESSEE HAVE CLAIMED DEDUCTION U/S 80C AND 80D OF TH E ACT. NO SUCH CLAIM WAS MADE WHILE FILING THE RETURN O F INCOME U/S 139(1)/139(4) OF THE ACT. SINCE WE HAVE AL READY ALLOWED THE APPEAL OF THE ASSESSEE ON THE GROUND OF IS SUE OF RECORDING SATISFACTION PRIOR TO ISSUE OF NOTICE U/S 1 53C OF THE ACT AND ALSO ON THE GROUND THAT NO INCRIMINATING DOCUMENT WAS FOUND AND SEIZED, THEREFORE, THERE IS NO QUESTION OF ALLOWING SUCH DEDUCTION TO THE ASSESSEE. FURTHER WE WOULD ALSO LIKE TO STATE THAT THE PROVISION S OF SECTION 153A/153C ARE NOT MADE FOR THE BENEFIT OF THE ASSESSEE. RETURN FILED IN RESPONSE TO NOTICE U/S 153A/153C OF THE ACT IS NOT SUBSTITUTE OF REVISED R ETURN FOR M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 119 THE CLAIM OF SUCH BENEFITS. HON'BLE APEX COURT IN TH E CASE OF GOETZE (INDIA) LIMITED VS. CIT; 284 ITR 323 RULED OUT THAT A FRESH CLAIM BEFORE THE ASSESSING OFFICER CAN BE MADE ONLY BY FILING A REVISED RETURN AND NOT OTHERWISE. THEREFORE, WHATEVER CLAIM THE ASSESSEE HAS NOT MADE WH ILE FILING THE RETURN U/S 139(1)/139(4) OF THE ACT, HE CANNOT MAKE FRESH CLAIM BY FILING THE RETURN U/S 153A/153C O F THE ACT AND REDUCE THE TAXABLE INCOME ORIGINALLY DECLARED. SUCH VIEW HAS BEEN UPHELD BY THE HON'BLE RAJASTHAN HIG H COURT IN THE CASE OF JAI STEELS (INDIA) VS. ACIT (SUPR A). THEREFORE, THIS GROUND OF THE ASSESSEES APPEAL STANDS DISMISSED. 66. IN THE RESULT, IT(SS) NO. 94/IND/2015 IS ALLOWE D, IT(SS) NO. 95/IND/2015 IS PARTLY ALLOWED, IT(SS) NO. 109/IND/2015 IS ALLOWED, IT(SS) NO. 110/IND/2015 IS PARTLY ALLOWED, IT(SS) NO. 206/IND/2015 IS DISMISSED, IT(SS) NO. 98/IND/2015 IS ALLOWED, IT(SS) NO. 99/IND /2015 M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 120 IS ALLOWED, IT(SS) NO. 201/IND/2015 IS DISMISSED, IT (SS) NO. 92/IND/2015 IS ALLOWED, IT(SS) NO. 209/IND/2015 IS DISMISSED, IT(SS) NO. 107/IND/2015 IS ALLOWED, IT(SS ) NO. 108/IND/2015 IS PARTLY ALLOWED, IT(SS) NO. 205/IND/20 15 IS DISMISSED, IT(SS) NO. 87/IND/2015 IS ALLOWED, IT( SS) NO. 106/IND/2015 IS PARTLY ALLOWED, IT(SS) NO. 89/IND/201 5 IS ALLOWED, IT(SS) NO. 90/IND/2015 IS ALLOWED AND IT(SS) NO. 193/IND/2015 IS DISMISSED. PRONOUNCED IN OPEN COURT ON 5 TH NOVEMBER, 2015 SD SD (D.T. GARASIA) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER 5 TH NOVEMBER, 2015 DN/- M/S MUKESH SANGLA HUF AND OTHERS ITA NOS. 94 & 95/IND/2015 ETC. 121