M/s. Daffodil Vincom Pvt. Ltd., , Kolkata V. DCIT, Central Circle - 4(3), , Kolkata

ITSSA 95/KOL/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1950 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 14-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P K SRIHARI
• Keywords: Unexplained cash credit; Search and seizure; Document seized; Transactions in derivatives; Source of fund; Onus to prove; Documents seized; Reassessment proceedings
• Section: 143(3); 142(1); 153A; 133(6); 143(1); 131; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C, BENC H KOLKATA BEFORE SHRI A.T. VARKEY, JM &DR. A.L.SAINI, AM ./IT(SS)A NOS.95 & 96/KOL/2018 ( / ASSESSMENT YEARS:2011-12 & 2012-13) M/S DAFFODIL VINCOM PVT. LTD. ROOM NO. 213, 2 ND FLOOR, A.J.C. BOSE ROAD, KOLKATA-700017 VS. DCIT, CENTRAL CIRCLE-4(3), KOLKATA ./ ./PAN/GIR NO.: AADCD 0221 G (ASSESSEE) .. (REVENUE) ASSESSEE BY : SHRI SOMNATH GHOSH, ADVOCATE RESPONDENT BY : DR. P.K. SRIHARI, CIT DR / DATE OF HEARING : 10/06/2019 /DATE OF PRONOUNCEMENT : 28/06/2019 / O R D E R PER DR. A. L. SAINI: THE CAPTIONED TWO APPEALS FILED BY THE ASSESSEE, P ERTAINING TO ASSESSMENT YEARS 2011-12 AND 2012-13, ARE DIRECTED AGAINST THE SEPARATE ORDERS PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-21, KOLKAT A, WHICH IN TURN ARISE OUT OF ASSESSMENT ORDERS PASSED BY THE ASSESSING OFFICER U /S 153A /143(3) OF THE INCOME TAX ACT,1961, (IN SHORT THE ACT). 2.SINCE, THE ISSUES INVOLVED IN THESE TWO APPEALS A RE COMMON AND IDENTICAL; THEREFORE, THESE APPEALS HAVE BEEN HEARD TOGETHER A ND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER. FOR THE SAKE OF CONVENIENCE, TH E GROUNDS AS WELL AS THE FACTS NARRATED IN ITA NO.95/KOL/2018, FOR ASSESSMENT YEAR 2011-12, HAVE BEEN TAKEN INTO CONSIDERATION FOR DECIDING THE ABOVE APPEALS EN MASSE . M/S DAFFODIL VINCOM PVT. LTD. IT(SS)A NOS.95 & 96/KOL/2018 ASSESSMENT YEARS:2011-12 & 2012-13 P PP PA AA AG GG GE EE E | || | 2 22 2 3. GROUNDS OF APPEAL RAISED BY THE ASSESSEE(IN I.T. A. NO. 95/KOL/2018 FOR ASSESSMENT YEAR 2011-12), ARE AS FOLLOWS: 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE CIT(A ) ERRED IN UPHOLDING ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER UN DER SECTION 153A IN CASE OF UNABATED ASSESSMENTS, WHERE NO INCRIMINATIN G EVIDENCES WERE FOUND DURING THE SEARCH. 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE CIT(A ) ERRED IN NOT FOLLOWING BINDING PRECEDENTS OF SUPREME COURT,JURISDICTIONAL HIGH COURTS AND KOLKATA TRIBUNAL ON THE ISSUE OF ILLEGALITY OF ADDI TIONS MADE IN CASE OF UNABATED ASSESSMENT WHICH ARE DEHORS THE INCRIMINAT ING MATERIAL FOUND DURING THE SEARCH. 3) ON THE FACTS AND CIRCUMSTANCES OF THE CASE BOTH CIT(A) & ASSESSING OFFICER ERRED IN NOT APPRECIATING THE FACT THAT FOR A PERIOD PRIOR TO 01/04/2013, (WHEREIN AN AMENDMENT WAS MADE IN SECTI ON 68 BY INSERTION OF EXPLANATION) ASSESSEE WAS NOT REQUIRED TO EXPLAIN S OURCE OF SOURCE OF FUNDS. IN SHORT EXPLANATION TO SECTION 68 IS PROSPE CTIVE AND NOT RETROSPECTIVE. 4) ON THE FACTS AND CIRCUMSTANCES OF THE CASE CIT(A ) ERRED IN CONFIRMING ADDITIONS MADE BY THE ASSESSING OFFICER UNDER SECTI ON 68 WHICH ARE BASED ON CONJECTURES AND SURMISES. 5) ASSESSEE CRAVES LEAVE TO ADD OR ALTER ANY GROUND THAT MAY BE TAKEN DURING THE COURSE OF HEARING. 4. BRIEF FACTS QUA THE ISSUE ARE THAT A SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT WAS CONDUCTED ON 01.12.2015 AT THE RESIDENCE AS WELL AS OFFICIAL PREMISES OF THE ASSESSEE BELONGING TO THE BHALOTIA GROUP. THIS GROUP WAS ENGAGED IN THE BUSINESS OF MANUFACTURING OF SPONGE IRON, INFRASTRU CTURE, JEWELLERY BUSINESS, MANUFACTURING AND SUPPLY OF MEDICAL FURNITURE AND E QUIPMENT AS WELL AS ACCESSORIES AND TRANSPORTATION. DURING THE ASSESSME NT PROCEEDINGS,THE ASSESSING OFFICER NOTED FROM THE PERUSAL OF BANK ACCOUNTS SEI ZED IN THE COURSE OF SEARCH OPERATION U/S 132(1) OF THE ACT IN THE CASE OF THE ASSESSEE, WHICH REVEALED THAT THE ASSESSEE COMPANY HAS RECEIVED SHARE APPLICATION MON EY OF RS. 30 LACS DURING THE ASSESSMENT YEAR 2011-12. IN THE COURSE OF ASSESSMEN T PROCEEDINGS, AS A CONSEQUENCE OF SEARCH AND SEIZURE OPERATION CONDUCT ED UPON THIS GROUP, THE ASSESSING OFFICER ISSUED NOTICED U/S 142(1) ASKING THE ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTION, IDENTITY OF THE SHA RE APPLICANT AND THEIR M/S DAFFODIL VINCOM PVT. LTD. IT(SS)A NOS.95 & 96/KOL/2018 ASSESSMENT YEARS:2011-12 & 2012-13 P PP PA AA AG GG GE EE E | || | 3 33 3 CREDITWORTHINESS. THE ASSESSING OFFICER STATED THAT PRIMARY ONUS TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS IS UPON THE ASSESSEE. SINCE THE ASSESSEE HAS NOT PROVED THE IDENTITY, GENUINENESS AND CREDIT WORTHINESS OF THE SHARE SUBSCRIBING COMPANIES, THEREFORE THE ASSESSING OFFI CER ISSUED SUMMONS U/S 131 TO THE SHARE SUBSCRIBING COMPANIES FOR CROSS-EXAMINATI ON AND CROSS-VERIFICATION. THE ASSESSING OFFICER NOTICED THAT THE SOME OF THE NOTI CES RETURNED UNSERVED AND NO COMPLIANCE WAS MADE BY THE SHARE SUBSCRIBING COMPAN IES. HOWEVER, SOME OF THE SHARE SUBSCRIBING COMPANIES MADE THE COMPLIANCE OF THE NOTICE U/S 131 OF THE ACT AND REPLIED TO THE ASSESSING OFFICER. THE ASSESSIN G OFFICER ALSO ASKED THE ASSESSEE TO DISCLOSE THE ALLOTMENT OF SHARES AND RE PLIED THE QUARRY RAISED IN THE NOTICE ISSUED U/S 131 OF THE ACT TO THE SHARE SUBSC RIBING COMPANIES. IN RESPONSE TO THAT, THE ASSESSEE HAD FAILED A REPLY BEFORE THE AO ON 22.12.2017.THE ASSESSING OFFICER GONE THROUGH THE REPLY OF THE ASSESSEE AND HELD THAT THE ASSESSEE HAD FAILED TO PROVE THE THREE INGREDIENTS VIZ. IDENTITY, GENUI NENESS AND CREDITWORTHINESS IN RESPECT OF SHARE SUBSCRIBING COMPANIES/ SHARE CAPIT AL AND SHARE PREMIUM RECEIVED BY IT. THE ASSESSEE COMPANY HAS ALLOTTED ITS 6000 S HARES OF FAIR VALUE OF RS. 10 EACH DURING THE SUBSEQUENT FINANCIAL YEAR 2011-12 A T A PREMIUM OF RS. 490 PER SHARE TO M/S VEDANT TRADECOM PVT. LTD. HENCE, THE S HARE APPLICATION MONEY TO THE EXTENT OF RS. 30 LACS RECEIVED DURING THE FINANCIAL YEAR 2010-11 WAS TREATED UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT AND THERE FORE AO MADE ADDITION AT RS. 30 LACS. 5. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS JUST REITER ATED THE FINDINGS OF THE ASSESSING OFFICER AND CONFIRMED THE ADDITION MADE B Y ASSESSING OFFICER.AGGRIEVED BY THE ORDER OF THE LD. CIT(A) TH E ASSESSEE IS IN APPEAL BEFORE US. 6. SHRI SOMNATH GHOSH, THE LD. COUNSEL FOR THE ASSE SSEE, BEGINS BY POINTING OUT THAT LD. ASSESSING OFFICER INITIATED THE PROCEEDING SU/S 153A OF THE INCOME TAX ACT1961, CONSEQUENT TO THE SEARCH OPERATION U/S132 OF THE ACT CARRIED ON 01/12/2015 AT THE BUSINESS PREMISES OF THE ASSESSEE . HOWEVER, THE LD. ASSESSING M/S DAFFODIL VINCOM PVT. LTD. IT(SS)A NOS.95 & 96/KOL/2018 ASSESSMENT YEARS:2011-12 & 2012-13 P PP PA AA AG GG GE EE E | || | 4 44 4 OFFICER DID NOT AVER IN THE IMPUGNED ASSESSMENT ORD ER U/S. 153A/143(3) OF THE INCOME TAX ACT, 1961 FRAMED BY HIM THAT THERE WAS A NY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING, AND /OR BOOKS O F ACCOUNTS OR DOCUMENTS FOUND IN THE COURSE OF SEARCH WHILE BELONGED TO THE ASSESSEE . A BARE PERUSAL OF SECTION 153A OF THE INCOME TAX ACT. 1961 INDICATES AS TO HO W A NON-OBSTANTE CLAUSE HAS BEEN INSERTED WITH A DEFINITE INTENT. WHERE SEARCH IS INITIATED UNDER SECTION 132 OF THE ACT OR BOOKS OF ACCOUNTOTHER DOCUMENTS OR ANY A SSETS ARE REQUISITIONED U/S 132A OF THE ACT AFTER 31-05-2003, THEN THE ASSESSIN G AUTHORITY IS MANDATED TO ISSUE NOTICE WITHIN THE MEANING OF SECTION 153A( 1) OF THE INCOME TAX ACT. 1961. IT IS NOT ONLY THE ISSUANCE OF SUCH NOTICE BUT CONS IDERATION OF THE ASSESSMENT OR REASSESSMENT ORDER FOR THE SIX ASSESSMENT YEARS IMM EDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH SUCH SEARCH IS CONDUCTED OR REQUISITION HAS TO BE MADE. IT IS FURTHER THE REQUI REMENT OF LAW THAT ON INITIATION OF THE PROCEEDINGS U/S 153A OF THE ACT, IT IS ONLY THE ASSESSMENT OR REASSESSMENT PROCEEDINGS THAT ARE PENDING ON THE DATE OF CONDUCT ING SEARCH U/S 132 OF THE ACT OR MAKING REQUISITION U/S132A OF THE ACT STAND ABATED AND NOT THE ASSESSMENTS/REASSESSMENTS PROCEEDINGS ALREADY FINAL IZED FOR THOSE ASSESSMENT YEARS. IT IS CLARIFIED THAT ON INITIATION OF PROCEE DINGS U/S 153A OF THE INCOME TAX ACT. 1961, THE PROCEEDINGS PENDING IN APPEALREVISIO N OR RECTIFICATION PROCEEDINGS AGAINST FINALIZED ASSESSMENT/REASSESSMENT SHALL NOT ABATE [C.B.D.T. CIRCULAR NO. 7 DATED 05- 09-2003 (2003) 262 ITR (ST) 107]. I N OTHER WORDS, SINCE THE FINALIZED ASSESSMENT PROCEEDINGS DO NOT ABATE; THE APPEALREVISION OR RECTIFICATION PENDING AGAINST SUCH FINALIZED ASSESSMENT PROCEEDIN GS ALSO WOULD NOT ABATE. ONCE AN ASSESSMENT PROCEEDING HAS ATTAINED FINALITY, THE N THE ASSESSING AUTHORITY WHILEPASSING THE INDEPENDENT ASSESSMENT ORDER U/S 1 53A READ WITH SECTION 143(3) OF THE ACT COULD NOT HAVE DISTURBED SUCH ASSESSMEN T ORDER. IF THERE IS NOTHING ON RECORD TO SUGGEST THAT ANY INCRIMINATING MATERIAL W AS UNEARTHED DURING THE SEARCH U/S 132 OF THE ACT, THE ASSESSING AUTHORITY WHILE P ASSING THE ORDER U/S 153A READ WITH SECTION 143(3) OF THE ACT CANNOT DISTURB THE A SSESSMENT ORDER ORIGINALLY FRAMED. IN THE PRESENT INSTANCE, THE LD. ASSESSING OFFICER ALSO DID NOT RECORD ANY FINDING THAT ANY INCRIMINATING MATERIALS BELONGING TO THE ASSESSEE WAS FOUND IN COURSE OF THE SEARCH U/S 132 OF THE ACT WHICH AFFE CTS THE FINALITY OF THE ASSESSMENT M/S DAFFODIL VINCOM PVT. LTD. IT(SS)A NOS.95 & 96/KOL/2018 ASSESSMENT YEARS:2011-12 & 2012-13 P PP PA AA AG GG GE EE E | || | 5 55 5 ORDER FRAMED U/S 143(1) OF THE ACT. THEREFORE, ADDI TION MADE BY ASSESSING OFFICER SHOULD BE DELETED. 7. PER CONTRA, THE LD. DR FOR THE REVENUE, SUBMITTE D BEFORE US THAT DURING THE SEARCH AND SEIZURE OPERATION THE DOCUMENTS MARKED A S SFA01 AND SFA02 HAVE BEEN SEIZED (PB-89).ACCORDING TO LD. DR THESE SFA01 AND SFA02 ARE INCRIMINATING DOCUMENTS, HENCE ASSESSING OFFICER HA S RIGHTLY MADE ADDITION. THE LD. DR FOR THE REVENUE ALSO SUBMITTED THAT THE MERE LY FILING OF BANK STATEMENT, INCOME TAX RETURN, COPIES OF BANK STATEMENT, WOULD NOT SUFFICE TO PROVE THE GENUINENESS AND CREDITWORTHINESS AND IDENTITY OF TH E SHARE SUBSCRIBING COMPANIES. THESE SHARE SUBSCRIBING COMPANIES DO NOT HAVE INCOM E GENERATION ACTIVITY IN THE ASSESSMENT YEAR UNDER CONSIDERATION. APART FROM THI S, THE ASSESSEE COMPANY HAS ISSUED SHARES AT PREMIUM OF RS. 490 TO 990 PER SHAR E WHICH IS NOT ACCEPTABLE FOR SUCH A LOW PROFIT MAKING COMPANY WHICH DOES NOT HAV E ENOUGH CREDIT IN THE MARKET. THE SHARE SUBSCRIBING COMPANIES HAVE ALSO F AILED TO REPLY IN RESPONSE TO NOTICE U/S 131 OF THE ACT THEREFORE THE ADDITION MA DE BY THE ASSESSING OFFICER SHOULD BE SUSTAINED. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. WE FIND IT WOULD BE NECESSARY TO ADDRESS THE PRELIM INARY ISSUE OF WHETHER THE ADDITION COULD BE FRAMED U/S 153A OF THE ACT IN RES PECT OF A CONCLUDED PROCEEDING WITHOUT THE EXISTENCE OF ANY INCRIMINATING MATERIAL S FOUND IN THE COURSE OF SEARCH. THE SCHEME OF THE ACT PROVIDES FOR ABATEMENT OF PEN DING PROCEEDINGS AS ON THE DATE OF SEARCH. IT IS NOT IN DISPUTE THAT THE ASSE SSMENT FOR THE ASSESSMENT YEARS 2011-12 AND 2012-13WERE ORIGINALLY COMPLETED U/S 14 3(1)/143(3) OF THE ACT AND THE TIME LIMIT FOR ISSUANCE OF NOTICE U/S 143(2) OF THE ACT HAD EXPIRED AND HENCE IT FALLS UNDER CONCLUDED PROCEEDING, AS ON THE DATE OF SEARCH. WE HOLD THAT THE LEGISLATURE DOES NOT DIFFERENTIATE WHETHER THE ASSE SSMENTS ORIGINALLY WERE FRAMED U/S 143(1) OR 143(3) OR 147 OF THE ACT. HENCE UNLE SS THERE IS ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH RELATABL E TO SUCH CONCLUDED ASSESSMENT YEARS, THE STATUTE DOES NOT CONFER ANY POWER ON TH E LD AO TO DISTURB THE FINDINGS GIVEN THEREON AND INCOME DETERMINED THEREON, AS FIN ALITY HAD ALREADY BEEN REACHED M/S DAFFODIL VINCOM PVT. LTD. IT(SS)A NOS.95 & 96/KOL/2018 ASSESSMENT YEARS:2011-12 & 2012-13 P PP PA AA AG GG GE EE E | || | 6 66 6 THEREON, AND SUCH PROCEEDING WAS NOT PENDING ON THE DATE OF SEARCH TO GET ITSELF ABATED. WE NOTE THAT THE ASSESSEE COMPANY HAS FILED ITS RET URN OF INCOME U/S 139(4) OF THE ACT, ON 19.03.2012 DECLARING TOTAL INCOME AT RS. NI L. IN THE ASSESSEES CASE A SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT WAS CONDUCTED ON 01.12.2015 AT THE BUSINESS PREMISES OF BHALOTIA AND KAYAL GROUP. IN THE ASSESSEES CASE UNDER CONSIDERATION, THE TIME LIMIT TO ISSUE NOTICE U/S 1 43(2) OF THE ACT WAS ELAPSED ON 30.09.2012 FOR ASSESSMENT YEAR 2011-12. THE TIME LI MIT TO ISSUE NOTICE U/S 143(2) OF THE ACT WAS ALSO ELAPSED ON 30.09.2013 FOR ASSES SMENT YEAR 2012-13. THEREFORE, BOTH THE ASSESSMENT YEARS, THAT IS, A.Y. 2011-12 AND A.Y.2012-13 ARE UNABATED ASSESSMENTS. ASSESSMENT YEAR 2012-13 WAS C OMPLETED BY ASSESSING OFFICER UNDER SECTION 143(3) OF THE ACT ON 27.08.20 14, THAT IS, BEFORE THE SEARCH ACTION UNDER SECTION 132 OF THE ACT ON 01.12.2015, THEREFORE IT IS AN UNABATED ASSESSMENT PROCEEDINGS WHERE ADDITION CAN BE MADE B Y AO UNDER SECTION 153A PROVIDED THERE IS AN INCRIMINATING MATERIAL (PB-381 ). IN THE ASSESSEES CASE UNDER CONSIDERATION, THE ONLY ADDITION MADE BY THE ASSESS ING OFFICER WAS TO THE TUNE OF RS. 30 LAKH ON ACCOUNT OF SHARE APPLICATION MONEY R ECEIVED DURING THE ASSESSMENT YEAR. WE ALSO NOTE THAT THE ADDITION MADE BY THE AS SESSING OFFICER UNDER SECTION 153A ASSESSMENT, WAS ON ACCOUNT OF SHARE APPLICATIO N MONEY OF RS. 30 LAKH, WHICH EMANATED FROM THE DISCLOSED BANK STATEMENT WH ICH WAS DULY DISCLOSED IN THE ORIGINAL RETURN OF INCOME FILED BY THE ASSESSEE . THE LD. COUNSEL FOR THE ASSESSEE CLAIMED THAT IN BOTH THE ASSESSMENT YEARS, THAT IS, A.Y. 2011-12 AND A.Y. 2012-13, ORIGINAL ASSESSMENTS WERE COMPLETED UNDER SECTION 143(1)/143(3) AND THE TIME LIMIT TO ISSUE NOTICE UNDER SECTION 143(2) WAS ELAPSED, THEREFORE ADDITION SHOULD NOT BE MADE UNLESS THERE IS INCRIMINATING MA TERIAL. THERE IS NO WHISPER OF INCRIMINATING MATERIAL IN BOTH THE ASSESSMENT YEARS .WE NOTE THAT THE PAPER BOOK PAGE -64 CONTAINS PANCHANAMA, WHEREIN, IN ADDITION TO ASSESSEE,ANOTHER GROUP COMPANY NAMELY, A ONE INFRA PROJECT PVT. LTD. WAS ALSO SEARCHED. DURING THE SEARCH AND SEIZURE OPERATION, THE SEARCH PARTY FOUN D THE DOCUMENTS / BOOKS OF ACCOUNTS WHICH IS MARKED AS SFA/KOL/1 AND SFA/KOL/2 (PB-65). THIS SEARCH PARTY ALSO TOOK THE INVENTORY OF THE CASH FOUND DU RING THE COURSE OF SEARCH AND M/S DAFFODIL VINCOM PVT. LTD. IT(SS)A NOS.95 & 96/KOL/2018 ASSESSMENT YEARS:2011-12 & 2012-13 P PP PA AA AG GG GE EE E | || | 7 77 7 SEIZURE U/S 132 OF THE ACT VIDE ANNEXURE-1 (PB-66). DURING THE SEARCH AND SEIZURE OPERATION INVENTORY OF BOOKS OF ACCOUNTS WERE TAKEN BY THE SEARCH TEAM WHICH IS MENTIONED AS SFA/KOL/1 RED COLOUR REGISTER AND SFA/ KOL/2 LOOSE SHEETS (PB-67). 9. THE LD. CIT DR FOR THE REVENUE, (VIDE PG 65 OF P APER BOOK) BROUGHT TO OUR NOTICE THAT DURING THE SEARCH AND SEIZURE OPERATION THE DOCUMENTS MARKET AS SFA 01 AND SFA 02 HAD BEEN SEIZED WHICH ARE INCRIMINATI NG DOCUMENTS, THEREFORE, ACCORDING TO LD. DR FOR THE REVENUE, THE ADDITION M AY PERTAIN TO THESE SEIZED DOCUMENTS. PER CONTRA, LD. COUNSEL FOR THE ASSESSEE , BROUGHT TO OUR ATTENTION THAT ASSESSMENT ORDER OF THE ASSESSING OFFICER HAS NOT S PELT OUT ABOVE SFA 01 AND SFA 02 DOCUMENTS TO MAKE THE ADDITION. THAT IS, AO HAS NOT MADE ADDITION BASED ON SFA 01 AND SFA 02 DOCUMENTS. WHEREAS ASSESSING O FFICER HAS TAKEN AID OF DISCLOSED BANK STATEMENT, WHICH WERE DISCLOSED BY T HE ASSESSEE IN THE ORIGINAL RETURN OF INCOME; THAT IS, AXIS BANK AND IDBI BANK STATEMENT. THESE BANK STATEMENTS, SHOWED THAT ASSESSEE HAS RECORDED RS. 3 0 LAKHS THIS YEAR I.E. YEAR ENDING MARCH 31,2011. THE LD. COUNSEL DREW OUR ATTE NTION TO PAGE 89 OF PAPER BOOK WHERE BALANCE SHEET AS ON 31.03.2011 IS PLACED , WHEREIN THE BANK ACCOUNT MAINTAINED BY THE ASSESSEE IN AXIS BANK HAD SHOWN R S. 50 LAKHS AS CASH AT BANK WHICH IS NOT BASED ON SFA 01 AND SFA 02 OF THE SEIZ ED DOCUMENTS. HOWEVER, LD. D.R. FOR THE REVENUE WANTED THE COUNSEL TO RECONCIL E THE FIGURES OF RS. 50 LAKH SHOWN AS CASH AT BANK IN THE SAID BANK ACCOUNT WITH RS. 30 LAKHS( SHARE APPLICATION MONEY), WHICH THE ASSESSEE HAS RECEIVED . BEFORE US, THE LD COUNSEL SUBMITTED THE BALANCE SHEET AS ON 31.03.2011, WHERE IN WE NOTICED IN THE HEAD OF THE CURRENT LIABILITIES, THAT THERE IS MENTIONED A BOUT SHARE APPLICATION MONEY RECEIVED FROM VEDANT TRADECOM PVT. LTD. AT RS. 30 L AKH (PB-89). BASED ON THIS, FACTUAL POSITION NOW WE SHALL EXAMINE WHETHER IN TH E ASSESSEES CASE UNDER CONSIDERATION IS THERE ANY INCRIMINATING MATERIAL. 10. THIS IS AN UNDISPUTED FACT, AS EXPLAINED ABOVE, THAT IN THE ASSESSEES CASE, IT IS AN UNABATED ASSESSMENT PROCEEDINGS IN BOTH THE YEAR S I.E. ASSESSMENT YEAR 2011-12 AND 2012-13. WE NOTE THAT FOR ASSESSMENT YEAR 2012- 13, THE ASSESSEE HAS SUBMITTED BEFORE US THE ASSESSMENT ORDER U/S 143(3) DATED 27.08.2014 (PB- M/S DAFFODIL VINCOM PVT. LTD. IT(SS)A NOS.95 & 96/KOL/2018 ASSESSMENT YEARS:2011-12 & 2012-13 P PP PA AA AG GG GE EE E | || | 8 88 8 381).THE ASSESSEE ALSO SUBMITTED BALANCE SHEET AS O N 31.03.2012 WHICH SHOWS THAT THERE IS AN INCREASE IN THE SHARE CAPITAL (PB-398). THE ASSESSMENT FOR A.Y.2012-13, WAS COMPLETED BY THE ASSESSING OFFICER U/S 143(3) O F THE ACT, DATED 27.08.2014, ANDTHE RELEVANT PARA OF THE ASSESSMENT ORDER, WHIC H IS USEFUL FOR OUR DISCUSSION IS FURNISHED BELOW: DURING THE F.Y. 2011-12 THE ASSESSEE COMPANY ENGAG ED IN THE BUSINESS OF COMMODITY TRANSACTION AND INVESTMENT. DURING THE CO URSE OF HEARING, THE A.R. PRODUCED AND FURNISHED SOME DOCUMENTS AS CALLED FOR , WHICH ARE PLACED ON RECORDS. DURING THE F.Y. 2011-12 RELATED TO THE A.Y. 2012-13 THE ASSESSEE COMPANY RAISED FRESH SHARE CAPITAL ALONG WITH SECURITY PREMIUM AMO UNTING TO RS. 5,34,00,000/-. NOTICE U/S 133(6) WAS ISSUED TO ALL NEW SHARE INVES TORS. IN RESPONSE, THE INVESTORS FURNISHED REPLIED ALONG WITH SOURCES OF INVESTMENT REFLECTING IN THE BANK STATEMENT WHICH ARE PLACED ON RECORDS: ASSESSED U/S 143(3) AT A TOTAL INCOME : RS. 2,01, 793/- R/O : RS. 2,01,800/- FROM THE FACTS NARRATED ABOVE, IT IS ABUNDANTLY CLE AR THAT DURING THE ORIGINAL ASSESSMENT U/S 143(3), THE INFORMATION WAS THERE WI TH THE ASSESSING OFFICER REGARDING ISSUE OF SHARE CAPITAL AND SHARE PREMIUM WHEREIN THE ASSESSING OFFICER ISSUED NOTICES U/S 133(6) OF THE ACT AND ALL THE IN VESTORS HAVE RESPONDED AND THEREFORE HE DID NOT MAKE AN ADDITION. THE SEARCH P ARTY DID NOT FIND ANY NEW MATERIAL EXCEPT THE SHARE CAPITAL AND SHARE PREMIUM WHICH HAD ALREADY BEEN ASSESSED BY THE ASSESSING OFFICER U/S 143(3) OF THE ACT, THEREFORE IN UNABATED ASSESSMENT PROCEEDINGS, IN THE ASSESSEES CASE, THE RE IS NO ANY WHISPER OF INCRIMINATING MATERIAL AND THEREFORE THE ADDITION S HOULD NOT BE MADE. 11. IT IS SETTLED POSITION OF LAW THAT THE ASSESSIN G OFFICER HAD NO JURISDICTION U/S 153A OF THE ACT TO REOPEN THE CONCLUDED ASSESSMENT WHEN THE SEARCH AND SEIZURE DID NOT DISCLOSE ANY INCRIMINATING MATERIAL. WE NOT E THAT ONE OF THE GROUP COMPANIES M/S A ONE INFRA PROJECTS PVT. LTD. HAS BEEN SEARCHED ALONG WITH ASSESSEE ( VIDE PB-64 PANCHNAMA), WHOSE ASSESSMENT HAS BEEN COMPLETED AND THE CO-ORDINATE BENCH OF ITAT KOLKATA IN IT(SS) A NO. 9 1/KOL/2018, FOR ASSESSMENT YEAR 2012-13, HAS DELETED THE ADDITION OBSERVING TH E FOLLOWING: M/S DAFFODIL VINCOM PVT. LTD. IT(SS)A NOS.95 & 96/KOL/2018 ASSESSMENT YEARS:2011-12 & 2012-13 P PP PA AA AG GG GE EE E | || | 9 99 9 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND AL SO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NO W WELL SETTLED THAT WHEN THE ASSESSMENT ORIGINALLY COMPLETED FOR T HE RELEVANT YEAR HAS BECOME FINAL BEFORE THE DATE OF SEARCH, TH ERE IS NO ABATEMENT OF THE SAID ASSESSMENT AND THE SCOPE OF A SSESSMENT UNDER SECTION 153A WHICH IS MADE IN PURSUANT TO THE SEARCH IS LIMITED TO ASSESSING THE UNDISCLOSED INCOME OF THE ASSESSEE AS FOUND/DETECTED ON THE BASIS OF INCRIMINATING MATERI AL FOUND DURING THE COURSE OF SEARCH. IN THE CASE OF KERELE PAPER MILLS PVT. LIMITED (SUPRA) CITED BY THE LD. COUNSEL FOR T HE ASSESSEE, NO INCRIMINATING EVIDENCE RELATED TO SHARE CAPITAL ISS UE WAS FOUND DURING THE COURSE OF SEARCH AND KEEPING IN VIEW THE SAME, THE ADDITION MADE BY THE ASSESSING OFFICER BY TREATING THE SHARE CAPITAL AS UNEXPLAINED CASH CREDIT UNDER SECTION 68 WAS HELD TO BE UNSUSTAINABLE BY THE HONBLE DELHI HIGH COURT. I N THE CASE OF SALASAR STOCK BROKING LIMITED (SUPRA), IT WAS HELD BY THE HONBLE CALCUTTA HIGH COURT THAT INCRIMINATING MATERIAL IS PRE-REQUISITE BEFORE POWER COULD HAVE BEEN EXERCISED UNDER SECTIO N 153A AND THE ASSESSING OFFICER HAD NO JURISDICTION UNDER SEC TION 153A TO REOPEN THE CONCLUDED CASES WHEN THE SEARCH AND SEIZ URE DID NOT DISCLOSE ANY INCRIMINATING MATERIAL. 8. IN THE PRESENT CASE, THE ADDITION OF RS.15,00,00 0/- BY TREATING THE SHARE APPLICATION MONEY AS UNEXPLAINED CASH CRE DIT UNDER SECTION 68 WAS MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT COMPLETED UNDER SECTION 153A OF THE ACT ON THE BASI S OF BANK ACCOUNT FOUND DURING THE COURSE OF SEARCH AND SINCE THE SAID BANK ACCOUNT AS WELL AS THE TRANSACTIONS REFLECTED THEREIN WERE DULY DISCLOSED BY THE ASSESSEE IN ITS RETURN OF INC OME ORIGINALLY FILED FOR THE YEAR UNDER CONSIDERATION, WE FIND OUR SELVES IN AGREEMENT WITH THE CONTENTION OF THE LD. COUNSEL FO R THE ASSESSEE THAT THE SAME CANNOT BE TREATED AS INCRIMINATING MA TERIAL FOUND DURING THE COURSE OF SEARCH. THE ADDITION OF RS.15, 00,000/- MADE BY THE ASSESSING OFFICER UNDER SECTION 68 AND CONFI RMED BY THE LD. CIT(APPEALS) THUS WAS NOT BASED ON ANY INCRIMIN ATING MATERIAL FOUND DURING THE COURSE OF SEARCH AND THE SAME, IN OUR OPINION, IS NOT SUSTAINABLE BEING OUTSIDE THE SCOPE OF SECTION 153A OF THE ACT. WE, THEREFORE, DELETE THE SAID ADD ITION AND ALLOW THIS APPEAL OF THE ASSESSEE. SINCE THE ASSESSEES CASE UNDER CONSIDERATION IS SQ UARELY COVERED BY M/S A ONE INFRA PROJECTS PVT. LTD., IN IT(SS)A NO. 91/KOL/201 8 (SUPRA), AND THE LD. DR FOR THE REVENUE HAS FAILED TO CONTROVERT THE FINDINGS O F THE ORDER OF THE CO-ORDINATE BENCH OF ITAT, KOLKATA (SUPRA), THEREFORE RESPECTFU LLY FOLLOWING THE JUDGMENT OF THE CO-ORDINATE BENCH, WE NOTE THAT WITHOUTANY INCR IMINATING MATERIAL ADDITION SHOULD NOT BE MADE IN CASE OF CONCLUDED (U NABATED) ASSESSMENTS. M/S DAFFODIL VINCOM PVT. LTD. IT(SS)A NOS.95 & 96/KOL/2018 ASSESSMENT YEARS:2011-12 & 2012-13 P PP PA AA AG GG GE EE E | || | 1 11 10 00 0 12. WE NOTE THAT THE SOLE ADDITION MADE BY THE LD. ASSESSING OFFICER IS ON ACCOUNT OF THE SHARE APPLICATION MONEY IN THE AMOUNT OF RS. 30,00,000/- WHICH WAS CONCEIVED U/S 68 OF THE ACT AND WHICH EMANATES OUT OF THE ORIGINAL RETURN FILED BY THE ASSESSEE WHICH WAS IMPLIEDLY ACCEPTED U/S 143(1 ) OF THE ACT. THE STATUTORY PRESCRIPTION CONTAINED IN THE PROVISIONS OF SECTION 153A OF THE ACT REQUIRES A FINDING THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING, AND/OR BOOKS OF ACCOUNTS OR DOCUMENTS BELONGING TO THE ASS ESSEE WAS FOUND IN THE COURSE OF THE SEARCH AND SEIZURE OPERATION OF THE PERSON L IABLE TO BE ASSESSED THEREUNDER. IT IS THUS THE REQUIREMENT OF THE STATUTE THAT IF N O INCRIMINATING MATERIALS WERE FOUND TO BELONG TO THE ASSESSEE AND AS SUCH, THE PR OCEEDINGS CONTEMPLATED UNDER THE PROVISIONS OF S. 153A OF THE ACT WAS ONLY TO BE RESTRICTED TO THE INCOME ASSESSED U/S 143(1) OF THE ACT. IN THE INSTANT CASE , THE LD. ASSESSING OFFICER HAS ASSUMED JURISDICTION U/S 153A OF THE ACT DEHORS ANY INCRIMINATING MATERIALS FOUND IN THE COURSE OF SEARCH AND SEIZURE OPERATION BELON GING TO THE ASSESSEE FOR THE ASSESSMENT YEAR UNDER DISPUTE. ALSO, IN THE ASSESSM ENT PROCEEDINGS, THE LD. ASSESSING OFFICER DID NOT JUSTIFY HIS STAND EVEN IN THE NOTICE DATED 27.07.2017 ISSUED U/S 142(1) OF THE ACT TO PROVE THE BASIS FOR ASSUMING JURISDICTION U/S 153A OF THE ACT AND THEREBY PASSED THE ASSESSMENT ORDER U/S 153A / 143(3) OF THE ACT ON THE ISSUE WHICH IS ALREADY DISCLOSED IN THE ORIGINA L RETURN FILED U/S 139(1) OF THE ACT. THEREFORE, IT IS APPARENT THAT THE LD. ASSESSI NG OFFICER HAD, IN FACT, NO MATERIAL IN HIS POSSESSION, FAR FROM ANY INCRIMINATING EVIDE NCE, TO CLAIM THAT BOOKS OF ACCOUNTS AND/OR DOCUMENTS BELONGING TO THE ASSESSEE WERE SEIZED DURING THE SEARCH AND SEIZURE PROCEEDINGS U/S 132 OF THE ACT A ND THEREFORE LACKED ANY JURISDICTION TO RESORT TO THE ADDITIONS MADE IN TH E ASSESSMENT ORDER FRAMED U/S 153A / 143(3) OF THE ACT. IT IS SETTLED LAW THAT IN ASSESSMENTS THAT ARE ABATED, THE ASSESSING OFFICER RETAINS THE ORIGINAL JURISDICTION AS WELL AS JURISDICTION CONFERRED ON HIM UNDER SECTION 153A FOR WHICH ASSESSMENTS SHA LL BE MADE FOR EACH OF THE SIX PRECEDING ASSESSMENT YEARS SEPARATELY. IN OTHER CASES, IN ADDITION TO THE INCOME THAT HAS ALREADY BEEN ASSESSED, THE ASSESSMENT UNDE R SECTION 153A WILL BE MADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL, WHICH IN THE CONTEXT OF RELEVANT PROVISIONS MEANS (I) BOOKS OF ACCOUNT, OTHER DOCUME NTS FOUND IN THE COURSE OF SEARCH BUT NOT PRODUCED IN THE COURSE OF ORIGINAL A SSESSMENT AND (II) UNDISCLOSED M/S DAFFODIL VINCOM PVT. LTD. IT(SS)A NOS.95 & 96/KOL/2018 ASSESSMENT YEARS:2011-12 & 2012-13 P PP PA AA AG GG GE EE E | || | 1 11 11 11 1 INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEAR CH [ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT(2012) 137 ITD 287 (MUM) (SB)]. WHILE CONFERRING SUCH JURISDICTION UPON THE ASSESSING AUTHORITY, THE LEGI SLATURE, TO REMOVE ALL THE DIFFICULTIES WITH REGARD TO THE MULTIPLICITY OF PRO CEEDINGS PENDING ON THE DATE OF INITIATION OF SEARCH, THROUGH SECOND PROVISO TO SEC TION 153A OF THE ACT, WHICH REQUIRED ABATEMENT OF ALL THOSE PROCEEDINGS WHICH A RE PENDING ON THAT DATE, SO THAT THE ASSESSEE AND THE ASSESSING AUTHORITY SHALL DEAL WITH ONLY ONE TYPE OF PROCEEDINGS, WHEREIN THE ASSESSING AUTHORITY SHALL ACCESS OR REASSESS THE TOTAL INCOME OF THE PERSON SEARCHED. THIS BARRIER HAS BEE N SET UP BY THE LEGISLATURE ONLY WITH REGARD TO PROCEEDINGS THAT WERE FOUND PENDING BEFORE THE ASSESSING AUTHORITY ON THE DATE OF SEARCH. THEREFORE, ONLY A PROCEEDING WHICH IS PENDING SHALL GET ABATED. THE TIME LIMIT TO ISSUE NOTICE U/S 143(2) O F THE ACT FOR THE RELEVANT ASSESSMENT YEAR HAS ELAPSED AND THUS, THE RETURN FI LED HAS BECOME FINAL ACCORDING TO THE MANDATE OF SECTION 143(1) OF THE ACT. FURTHE R, NO MATERIAL IS ADDUCED TO PROVE THAT THE LD. ASSESSING OFFICER IN THE INSTANT CASE FOUND ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLES OR THINGS OR B OOKS OF ACCOUNTS OR DOCUMENTS SEIZED OR REQUISITIONED BELONGS TO THE ASSESSEE SO THAT HIS JUSTIFICATION OF RESORTING TO THE ADDITION IN RESPECT OF THE SOLE ISSUE OF SHA RE APPLICATION MONEY DISCLOSED IN THE ORIGINAL RETURN FAILS ON MERIT. IN THE INSTANT CASE, THERE IS NO EVIDENCE IN POSSESSION OF THE LD. ASSESSING OFFICER TO ASSUME T HAT THERE WERE ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLES OR TH INGS OR BOOKS ACCOUNTS OR DOCUMENTS SEIZED WHICH BELONGED TO THE ASSESSEE WHI CH SUGGEST ANY EVIDENCE OF HIDDEN INCOME. 13. WE NOTE THAT THE LD. ASSESSING OFFICER ALLEGED THAT THE DISCLOSED BANK ACCOUNT STATEMENT FOUND DURING THE COURSE OF SEARCH AND SEI ZURE OPERATION TO BE THE INCRIMINATING EVIDENCE FOR HIS JUSTIFICATION IN RES ORTING TO THE IMPUGNED ADDITION ON ACCOUNT OF SHARE APPLICATION MONEY. IT IS AN ADM ITTED FACT THAT THE DEPOSITS AND WITHDRAWALS OF THE SAID BANK ACCOUNT STATEMENT WERE DULY CONSIDERED IN THE ORIGINAL RETURN FILED U/S 139(1) OF THE ACT WHICH S TOOD ACCEPTED U/S 143(3) OF THE ACT BY THE LD. ASSESSING OFFICER AND AS SUCH, THE B ANK ACCOUNT STATEMENT CANNOT FORM INCRIMINATING EVIDENCE SO AS TO JUSTIFY HIS ILLEGAL ADDITION ON THAT ACCOUNT. M/S DAFFODIL VINCOM PVT. LTD. IT(SS)A NOS.95 & 96/KOL/2018 ASSESSMENT YEARS:2011-12 & 2012-13 P PP PA AA AG GG GE EE E | || | 1 11 12 22 2 IT IS SETTLED POSITION OF LAW THAT THE ASSESSING O FFICER HAD NO JURISDICTION UNDER SECTION 153A OF THE ACT TO REOPEN THE CONCLUDED CAS ES WHEN THE SEARCH AND SEIZURE DID NOT DISCLOSE ANY INCRIMINATING MATERIAL [PCIT V S. SALASAR STOCK BROKING LTD. (ITAT NO. 264 OF 2016 DATED 25.08.2016 (CAL)]. FURT HER, WHERE NO INCRIMINATING EVIDENCE RELATED TO SHARE CAPITAL ISSUED WAS FOUND DURING THE COURSE OF SEARCH AS IS MANIFEST FROM THE ORDER OF THE A.O. AND CONSEQUENTL Y, HE WAS NOT JUSTIFIED IN INVOKING SECTION 68 OF THE ACT FOR THE PURPOSES OF MAKING ADDITIONS ON ACCOUNT OF SHARE CAPITAL [PCIT VS KURELE PAPER MILLS PVT. LTD. (2016) 380 ITR 571 (DEL)]. WHERE THE ADDITION OF THE SHARE APPLICATION MONEY A S UNEXPLAINED CASH CREDIT UNDER SECTION 68 WAS MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT COMPLETED UNDER SECTION 153A OF THE ACT ON THE BASIS OF BANK ACCOUNT FOUND DURING THE COURSE OF SEARCH AND SINCE THE SAID BANK ACCOUNT AS WELL AS THE TRANSACTIONS REFLECTED THEREIN WERE DULY DISCLOSED BY THE ASSESS EE IN ITS RETURN OF INCOME ORIGINALLY FILED FOR THE YEAR UNDER CONSIDERATION, THEREFORE, THE SAME CANNOT BE TREATED AS INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH AND AS SUCH, SUCH ADDITION WAS NOT BASED ON ANY INCRIMINATING MA TERIAL FOUND DURING THE COURSE OF SEARCH AND THE SAME IS NOT SUSTAINABLE BEING OUT SIDE THE SCOPE OF SECTION 153A OF THE ACT. 14.WE ALSO NOTE THAT THE HON'BLE JURISDICTIONAL CAL CUTTA HIGH COURT IN ITA NO. 661 OF 2008 COMMISSIONER OF INCOME TAX VS. VEERPRAB HU MARKETING LTD. HAS ALSO HELD AS UNDER: WE AGREE WITH THE VIEW EXPRESSED BY THE KARNATAKA HIGH COURT THAT INCRIMINATING MATERIAL IS PRE-REQUISITE BEFORE POWER COULD HAVE B EEN EXERCISED U/S 153(C) R.W SECTION 153(A). IN THE CASE BEFORE US, THE AO HAS M ADE A DISALLOWANCE OF THE EXPENDITURE, WHICH WAS HELD DISCLOSED, FOR ONE REAS ON OR THE OTHER, BUT SUCH DISALLOWANCES MADE BY THE AO WERE UPHELD BY THE LD. CIT(A) BUT THE LD. TRIBUNAL DELETED THESE DISALLOWANCE. WE FIND NO INFIRMITY IN THE AFORESAID ACT OF THE LD. TRIBUNAL. THE APPEAL IS, THEREFORE, DISMISSED. WE FIND THAT THE CO-ORDINATE BENCH OF DELHI TRIBUNA L IN THE CASE OF DY. CIT V. AGGARWAL ENTERTAINMENT (P.) LTD REPORTED IN [2016] 72 TAXMANN.COM 340 (DELHI - TRIB.) HAD ADDRESSED THIS ASPECT. THE RELEVANT HEADNOTES IS REPRODUCED BELOW: 'SECTION 153A, READ WITH SECTION 143, OF THE INCOME -TAX ACT, 1961-SEARCH AND SEIZURE - ASSESSMENT IN CASE OF (IN CASE OF SECTION 143(1) ASSESSMENT)- ASSESSMENT YEAR 2004-05- WHETHER ASSESSMENT IN RESP ECT OF WHICH RETURN HAS M/S DAFFODIL VINCOM PVT. LTD. IT(SS)A NOS.95 & 96/KOL/2018 ASSESSMENT YEARS:2011-12 & 2012-13 P PP PA AA AG GG GE EE E | || | 1 11 13 33 3 BEEN PROCESSED UNDER SECTION 143(1), CANNOT BE REGA RDED AS PENDING FOR PURPOSE OF SECTION 153A AS ASSESSING OFFICER IS NOT REQUIRED TO DO ANYTHING FURTHER ABOUT SUCH A RETURN AND, THUS, SAID ASSESSM ENT CANNOT BE REOPENED IN EXERCISE OF POWER OF SECTION 153A-HELD YES (PARAS 1 0 AND 12) (IN FAVOUR OF ASSESSEE).' OUR VIEW IS ALSO FORTIFIED BY THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS KABUL CHAWLA REPORTED IN (2016) 380 ITR 573 (DEL), WHEREIN IT WAS HELD AS UNDER:- '37. ON A CONSPECTUS OF SECTION 153A(1) OF THE ACT, READ WITH THE PROVISOS THERETO, AND IN THE LIGHT OF THE LAW EXPLAINED IN T HE AFOREMENTIONED DECISIONS, THE LEGAL POSITION THAT EMERGES IS AS UNDER: (I) ONCE A SEARCH TAKES PLACE UNDE R SECTION 132 OF THE ACT, NOTICE UNDER SECTION 153A(1) WILL HAVE TO BE MANDATORILY ISSUED TO THE P ERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDI NG THE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. (II) A SSESSMENTS AND REASSESSMENTS PENDING ON THE DATE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO BE COMPU TED BY THE LD AOS AS A FRESH EXERCISE. (III) THE LD AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPEC T OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAK ES PLACE. THE LD AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORD ERS FOR EACH OF THE SIX YEARS. IN OTHER WORDS THERE WILL BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX AYS 'IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX'. (IV) ALTHOUGH SECTION 153A DOES NOT SAY THAT ADDITI ONS SHOULD BE STRICTLY MADE ON THE BASIS OF EVIDENCE FOUND IN THE COURSE OF THE SE ARCH, OR OTHER POST- SEARCH MATERIAL OR INFORMATION AVAILABLE WITH THE LD AO WHICH CAN BE RELATED TO THE EVIDENCE FOUND, IT DOES NOT MEAN THAT THE ASSESSMEN T 'CAN BE ARBITRARY OR MADE WITHOUT ANY RELEVANCE OR NEXUS WITH THE SEIZED MATERIAL. OBVIOUSLY AN ASSESSMENT HAS TO BE MADE UNDER THIS SECTION ONLY O N THE BASIS OF SEIZED MATERIAL.' (V) IN ABSENCE OF ANY INCRIMINATING MATERIAL, THE COMPL ETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMENT CAN BE MA DE. THE WORD 'ASSESS' IN SECTION 153 A IS RELATABLE TO ABATED PR OCEEDINGS (I.E. THOSE PENDING ON THE DATE OF SEARCH) AND THE WORD 'REASSESS' TO C OMPLETE ASSESSMENT PROCEEDINGS. (VI) INSOFAR AS PENDING A SSESSMENTS ARE CONCERNED, THE JURISDICTION TO MAKE THE ORIGINAL ASSESSMENT AND THE ASSESSMENT UNDER SECTIO N 153A MERGES INTO ONE. ONLY ONE ASSESSMENT SHALL BE MADE SEPARATELY FOR EA CH AY ON THE BASIS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXI STING OR BROUGHT ON THE RECORD OF THE LD AO. M/S DAFFODIL VINCOM PVT. LTD. IT(SS)A NOS.95 & 96/KOL/2018 ASSESSMENT YEARS:2011-12 & 2012-13 P PP PA AA AG GG GE EE E | || | 1 11 14 44 4 (VII) COMPLETED ASSESSMENTS CAN BE INTERFERED WITH BY T HE LD AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR R EQUISITION OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE CO URSE OF SEARCH WHICH WERE NOT PRODUC ED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE CO URSE OF ORIGINAL ASSESSMENT.' 38. THE PRESENT APPEALS CONCERN AYS 2002-03, 2005-0 6 AND 2006-07, ON THE DATE OF THE SEARCH THE SAID ASSESSMENTS ALREADY STO OD COMPLETED. SINCE NO INCRIMINATING MATERIAL WAS UNEARTHED DURING THE SEA RCH, NO ADDITIONS COULD HAVE BEEN MADE TO THE INCOME ALREADY ASSESSED. 15. IN THE LIGHT OF THE SETTLED POSITION OF LAW (SU PRA), WE NOTE THAT ASSESSMENT YEARS 2011-12 AND 2012-13 WERE NOT PENDING ON THE D ATE OF SEARCH AND NO INCRIMINATING MATERIAL QUA THESE ASSESSMENT YEARS W AS THE BASIS FOR THE ADDITION/DISALLOWANCE, THEREFORE, WE DELETE THE ADD ITION MADE BY ASSESSING OFFICER AND ALLOW BOTH THE APPEALS OF THE ASSESSEE. 16. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 28.06.2019 SD/- ( A.T.VARKEY ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / DATE: 28/06/2019 ( SB, SR.PS ) COPY OF THE ORDER FORWARDED TO: 1. M/S DAFFODIL VINCOM PVT. LTD. 2. DCIT, CC-4(3), KOLKATA 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES M/S DAFFODIL VINCOM PVT. LTD. IT(SS)A NOS.95 & 96/KOL/2018 ASSESSMENT YEARS:2011-12 & 2012-13 P PP PA AA AG GG GE EE E | || | 1 11 15 55 5