Shri Abhishek J. Shah,, Ahmedabad v. The Dy. Commissioner of Income Tax, Central Circle-1(2),, Ahmedabad

ITA 1791/AHD/2016 | 2009-2010
Pronouncement Date: 21-10-2016 | Result: Partly Allowed

Appeal Details

RSA Number 179120514 RSA 2016
Assessee PAN AFUPS6499E
Bench Ahmedabad
Appeal Number ITA 1791/AHD/2016
Duration Of Justice 3 month(s) 17 day(s)
Appellant Shri Abhishek J. Shah,, Ahmedabad
Respondent The Dy. Commissioner of Income Tax, Central Circle-1(2),, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 21-10-2016
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted SMC
Tribunal Order Date 21-10-2016
Assessment Year 2009-2010
Appeal Filed On 04-07-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE SHRI N. K. BILLAIYA ACCOUNTANT MEMBER AND SHRI S. S. GODARA JUDICIAL MEMBER. ITA NOS. 1789 TO 1793/AHD/2016 (ASSESSMENT YEARS:2006-07 2008-09 2009-10 2007-0 8 & 2010-11) SHRI ABHISHEK J SHAH 45 ABHISAAJ SARDAR PATEL NAGAR BEHIND TELEPHONE EXCHANGE OFF. C.G. ROAD NAVRANGPURA AHMEDABAD 380006 APPELLANT VS. DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-1(2) AHMEDABAD RESPONDE NT PAN: AFUPS6499E & ITA NOS. 1794 & 1795/AHD/2016 (ASSESSMENT YEARS: 2010-11 & 2011-12) SHRI JAYENDRA N SHAH 45 ABHISAAJ SARDAR PATEL NAGAR BEHIND TELEPHONE EXCHANGE OFF. C.G. ROAD NAVRANGPURA AHMEDABAD 380006 APPELLANT VS. DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-1(2) AHMEDABAD RESPONDE NT PAN: ADIPS2509M ITA NOS.1789 TO 1798/AHD/2016 (SHRI ABHISHEK J SHAH & 3 ORS.) - 2 - & ITA NOS. 1796 & 1797/AHD/2016 (ASSESSMENT YEARS: 2009-10 & 2011-12) SMT. ASHABEN J SHAH 45 ABHISAAJ SARDAR PATEL NAGAR BEHIND TELEPHONE EXCHANGE OFF. C.G. ROAD NAVRANGPURA AHMEDABAD 380006 APPELLANT VS. DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-1(2) AHMEDABAD RESPONDE NT PAN: AFUPS6498F & ITA NO. 1798/AHD/2016 (ASSESSMENT YEAR: 2011 -12) SMT. SAJANI J SHAH 45 ABHISAAJ SARDAR PATEL NAGAR BEHIND TELEPHONE EXCHANGE OFF. C.G. ROAD NAVRANGPURA AHMEDABAD 380006 APPELLANT VS. DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-1(2) AHMEDABAD RESPONDE NT PAN: AEOPS0915G / BY ASSESSEE : SHRI M. G. PATEL & ARTI N. SHA H A.R. ITA NOS.1789 TO 1798/AHD/2016 (SHRI ABHISHEK J SHAH & 3 ORS.) - 3 - / BY REVENUE : SHRI PRADIP KUMAR MAJUMDAR SR. D.R. /DATE OF HEARING : 17.10.2016 /DATE OF PRONOUNCEMENT : 21.10.2016 ORDER PER S. S. GODARA JUDICIAL MEMBER THIS BATCH OF 10 APPEALS PERTAINS TO FOUR DIFFERENT ASSESSEES. FIRST ASSESSEE SHRI ABHISHEK J. SHAH HAS INSTITUTED HIS F IVE APPEALS ITA NOS.1789 TO 1793/AHD/2003 FOR A.YS. 2006-07 TO 2010-11 AGAIN ST SEPARATE ORDERS OF THE CIT(A)-11 AHMEDABAD ; ALL DATED 26.04.2016 EXC EPT THE FIRST ASSESSMENT YEAR CONTAINING ORDER DATED 27.04.2016 PASSED IN C ASE NOS. CIT(A)- 11/093/CC-1(2)/2014-15 CIT(A)-11/094/CC-1(2)/2014- 15 CIT(A)- 11/044/CC-1(2)/2014-15 CIT(A)-11/043/CC-1(2)/2014- 15 & CIT(A)- 11/058/CC-1(2)/2014-15; RESPECTIVELY. 2. SECOND ASSESSEE IS SHRI JAYENDRA J. SHAH. HE HA S FILED TWO APPEALS ITA NOS. 1794 & 1795/AHD/2016 AGAINST THE VERY CIT( A)S ORDERS; BOTH DATED 18.04.2016 IN CASE NOS. CIT(A)-11/045/CC-1(2) /2014-15 & CIT(A)- 11/046/CC-1(2)/2014-15 FOR A.YS. 2010-11 & 2011-12; RESPECTIVELY. 3. THIRD ASSESSEE SMT. ASHABEN J. SHAH. SHE HAS PR EFERRED ITA NOS.1796 & 1797/AHD/2016 FOR A.YS. 2009-10 & 2011-12 AGAINST VERY CIT(A)S ORDERS DATED 12.04.2016 & 11.04.2016 PASSED IN CASE NOS. CIT(A)- 11/041/CC-1(2)/2014-15 & CIT(A)-11/042/CC-1(2)/2014 -15 ; RESPECTIVELY. ITA NOS.1789 TO 1798/AHD/2016 (SHRI ABHISHEK J SHAH & 3 ORS.) - 4 - 4. FOURTH ASSESSEE IS SMT. SAJNI J. SHAH. HER SOLE APPEAL ITA NO.1798/AHD/2016 FOR A.Y.2011-12 PREFERRED AGAINST THE VERY CIT(A)S ORDER DATED 11.04.2016 IN CASE NO. CIT(A)-11/040/CC -1(2)/2014-15. RELEVANT PROCEEDINGS IN ALL CASES ARE U/S.143(3) R .W.S. 153A OF THE INCOME TAX ACT 1961; IN SHORT THE ACT. 5. BOTH PARTIES AT THE OUTSET POINT OUT THAT FIRST ASSESSEES SHRI ABHISHEK J. SHAH THREE APPEALS ITA NOS. 1789 1792 & 1790/AHD/2 016 FOR A.YS. 2006- 07 TO 2008-09; RESPECTIVELY CHALLENGE VALIDITY OF S ECTION 153A PROCEEDINGS ON THE GROUND THAT NEITHER THERE WAS ANY INCRIMINAT ING MATERIAL FOUND IN THE COURSE OF IMPUGNED SEARCH CONDUCTED IN CASE OF M/S. MARUTI GROUP OF COMPANIES ON 27.04.2011 NOR ANY ASSESSMENT HAD BEEN PENDING ON THE DATE OF SEARCH SINCE THE SAME ALREADY STOOD FRAMED ON 07 .05.2007 30.10.2007 & 10.08.2009; RESPECTIVELY IN FURTHERANCE TO CORRESPO NDING RETURNS BEING FILED ON 30.10.2006 30.10.2007 & 17.10.2008. RELEVANT A SSESSMENTS PROCESSED/FRAMED U/S.143(1) STAND PLACED ON RECORD IN THE RESPECTIVE PAPER BOOKS. WE NOTICE THAT THIS ASSESSEE FURTHER ASSAIL S CORRECTNESS OF INTEREST DISALLOWANCE/ADDITION OF RS.1 13 533/- RS.2 10 641 /- & RS.77 883/- IN THESE THREE APPEALS. 6. LEARNED REPRESENTATIVES FURTHER POINT OUT THAT T HIRD ASSESSEES APPEAL ITA NO.1796/AHD/2016 FILED BY SMT. ASHABEN J. SHAH ALSO RAISED IDENTICAL LEGAL GROUND CHALLENGING VALIDITY OF SECTION 153A P ROCEEDINGS ON THE VERY TWO COUNTS STATED HEREINABOVE BY PLEADING THAT SHE HAD FILED RETURN ON 29.07.2009 WHICH STOOD PROCESSED/ASSESSED U/S.143(1 ) OF THE ACT ON 31.12.2009 (COPY OF THE ORDER AVAILABLE ON RECORD A T PAGE 27 OF THE PAPER BOOK). THIS ASSESSEES LATTER SUBSTANTIVE GROUND C HALLENGES CORRECTNESS OF ADDITION OF RS.5 61 162/- MADE BY BOTH THE LOWER AU THORITIES AFTER ESTIMATING VALUE OF THE PROPERTY AS PER STAMP VALUATION U/S.50 C OF THE ACT. ITA NOS.1789 TO 1798/AHD/2016 (SHRI ABHISHEK J SHAH & 3 ORS.) - 5 - 7. WE HAVE HEARD RIVAL SUBMISSIONS ON THE LEGAL ISS UE OF VALIDITY OF SECTION 153A PROCEEDINGS. THERE IS NO DISPUTE THAT THESE TWO ASSESSEES HAVE FILED THEIR RESPECTIVE RETURNS IN THE CORRESPONDING ASSESSMENT YEARS IN QUESTION AND THE SAME STOOD PROCESSED/ASSESSED U/S. 143(1) OF THE ACT AS PER DATES GIVEN IN PRECEDING PARAGRAPHS. WE AFFORDED S UFFICIENT OPPORTUNITY TO THE REVENUE FOR PLACING ON RECORD ANY INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH PERTAINING TO THESE TWO ASSESSEES WITHIN THE MEANING OF SECTION 153A OF THE ACT. NO SUCH MATERIAL IS QUOTE D IN ORDERS OF THE LOWER AUTHORITIES NOR ANY SUCH EVIDENCE HAS BEEN PLACED O N RECORD BEFORE US. COUPLED WITH THIS LEARNED CIT(A) ALSO DOES NOT SPE CIFICALLY REJECT THESE ASSESSEES CONTENTIONS RAISED IN THE LOWER APPELLAT E PROCEEDINGS THAT ASSESSMENT PROCEEDINGS IN THEIR RESPECTIVE CASES CO ULD NOT HAVE BEEN HELD TO BE PENDING SO AS TO INVOKE SECTION 153A PROCEEDINGS . WE FIND IN THESE BACKDROP THAT BOTH THE LOWER AUTHORITIES HAVE ERRED IN INITIATING THE IMPUGNED PROCEEDINGS U/S.153A OF THE ACT IN VIOLATION OF SEC OND PROVISO THERETO. A COORDINATE BENCH OF THIS TRIBUNAL IN INTAS PHARMACE UTICALS LTD. VS. DCIT IT(SS)A NOS. 807 TO 809/AHD/2010 ALONG WITH A GROUP OF CASES HAS QUASHED SIMILAR ASSESSMENTS FRAMED U/S.153 A OF THE ACT AS UNDER: 3. THE ASSESSEE REFERS TO ITS IDENTICAL GROUNDS RA ISED IN ITS FIRST THREE APPEALS AND IN C.O. NO.4/AHD/2011. IT ARGUES THAT ASSESSME NTS IN ALL FOUR ASSESSMENTS YEARS STOOD COMPLETED ON 27.12.2002 02.01.2006 29 .12.2006 AND 29.03.2006 I.E. MUCH PRIOR TO THE SEARCH IN QUESTION CONDUCTED ON 2 3.10.2007. THE ONLY EXCEPTION IS THAT THE FIRST ASSESSMENT YEAR INVOLVES A SUMMAR Y ASSESSMENT U/S.143(1) OF THE ACT. REST ALL ARE REGULAR ASSESSMENTS. THE LATT ER THREE ASSESSMENTS WERE AGITATED BEFORE THE CIT(A). AND UPTO THE TRIBUNAL ON VARIOUS ISSUES ON MERITS. THE ASSESSEE SUBMITS THAT NO INCRIMINATING DOCUMENTS P APERS BOOKS OF ACCOUNTS OR ANY MONEY OR OTHER VALUABLE ASSETS WAS FOUND IN THE COURSE OF SEARCH. NOR IS ANY SUCH MATERIAL STATED IN THESE IMPUGNED ASSESSMENTS FRAMED U/S. 153A OF THE ACT. IT CONTENDS THAT THE ASSESSING OFFICER FRAMED THE IMPU GNED ASSESSMENTS WITHOUT HIGHLIGHTING ANY INCRIMINATING MATERIAL BY MERELY R EVIEWING MERITS OF THE DISALLOWANCES EARLIER MADE AND THE SAME IS NOT VALI D AS PER LAW. CASE LAW OF (2015) 58 TAXMANN.COM 78 (BOMBAY) CIT VS. CONTINENT AL WAREHOUSING CORPORATION (NHAVA SHEVA ) LTD. AFFIRMING SPECIAL B ENCH DECISION OF THE TRIBUNAL IN ALL INDIA CARGO LOGISTIC VS. DCIT 137 ITD 287 IS QUOTED IN SUPPORT. THEREAFTER SUBMITS IS THAT ITS ASSESSMENT HAD ALRE ADY FINALIZED BEFORE SEARCH ITA NOS.1789 TO 1798/AHD/2016 (SHRI ABHISHEK J SHAH & 3 ORS.) - 6 - WHICH COULD NOT HAVE BEEN TREATED AS ABATED ALIKE P ENDING ASSESSMENTS FOR INITIATING SECTION 153A PROCEEDING IN QUESTION. TH E ASSESSEES LAST PLEA IS THAT FOR THE PURPOSE OF ADJUDICATING VALIDITY OF PROCEEDINGS U/S. 153A OF THE ACT ASSESSMENTS FRAMED U/S. 143(1) AND 143(3) ARE TO BE TREATED AT PAR IN CASE TIME LIMIT OF ISSUING SCRUTINY NOTICES U/S.143(2) LAPSES IN THE FORMER CASE. IT QUOTES CASE LAW OF DELHI BENCH OF THE TRIBUNAL IN ITA NO. 2637/ DEL/2010 ACIT VS. PACL INDIA LTD. DECIDED ON 28 TH JUNE 2013 AND PRAYS FOR QUASHING OF ALL THESE FOU R ASSESSMENTS. 4. THE REVENUE STRONGLY OPPOSES THE ASSESSEES ABOV E STATED ARGUMENTS AND SUBMITS THAT AN ASSESSING AUTHORITY CAN INITIATE SE CTION 153A PROCEEDINGS BY REOPENING ALL ASSESSMENTS PERTAINING TO THE PRECEDI NG SIX ASSESSMENT YEARS AFTER SEARCH AND ASSESS INCOME AFRESH AS PER LAW. IT QUO TES CASE LAW OF (2014) 49 TAXMANN.COM 98 (KARNATAKA) CANARA HOUSING DEVELOPME NT CO. VS. DCIT [2014] 52 TAXMANN.COM 172 (ALLAHABAD) CIT VS. RAJ KUMAR AR ORA [2014] 49 TAXMANN.COM 465 (DELHI) FILATEX INDIA LTD. VS. CIT [2014] 24 TAXMANN.COM 98 (DELHI) CIT VS. ANIL KUMAR BHATIA [2015] 53 TAXMAN N.COM 391(BANGALORE TRIB.) RUPESH ANAND VS. ACIT [2010] 130 TTJ 700 (C HENNAI) HARVEY HEART HOSPITALS LTD. VS. ACIT AND PRAYS FOR UPHOLDING THE CIT(A)S COMMON ORDER UNDER CHALLENGE ON THIS LEGAL PLEA IN QUESTION. 5. WE GRANTED THE ASSESSEE AN OPPORTUNITY TO REBUT THE REVENUES ARGUMENTS. IT SUBMITS THAT THE HONBLE BOMBAY HIGH COURT (SUPR A) HAS ALREADY DISTINGUISHED THE CASE LAWS OF ANIL KUMAR BHATIA AND CANARA HOUSI NG DEVELOPMENT CO. (SUPRA) AND HOLDS THAT THE SAME DO NOT DEAL WITH THE ISSUE IN QUESTION. OTHER CASE LAWS CITED AT THE REVENUES BEHEST ARE STATED TO BE IN R ELATION TO SCOPE OF A SECTION 153A ASSESSMENT AS AGAINST THAT OF THE VERY ASSUMPTION O F JURISDICTION. THE ORDER OF CHENNAI BENCH OF THE TRIBUNAL IS STATED TO BE AGAIN ST THE SPECIAL BENCH DECISION IN ALL INDIA CARGO LOGISTICS (SUPRA) CASE. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH TH E CASE FILE AS WELL AS JUDICIAL PRECEDENTS QUOTED HEREINABOVE. 6. THE ASSESSEE COMPANY MANUFACTURES AND TRADES IN PHARMACEUTICAL PRODUCTS. IT FILED ITS RETURNS ON 31.10.2002 29.1 1.2003 30.10.2004 AND 30.10.2005 ADMITTING INCOMES OF RS.5 05 14 253/- R S.6 52 14 632/- RS.13 00 77 099/- AND 8 62 02 182/- RELATING TO THE IMPUGNED FOUR ASSESSMENT YEARS FROM 2002-03 TO 2005-06; RESPECTIVELY. THE A SSESSING OFFICER PROCESSED THE FIRST RETURN ON 27.12.2002 RESULTING IN REFUND OF R S.10 43 020/-. HE FRAMED REGULAR ASSESSMENTS ON 02.01.2006 29.12.2006 AND 29.03.2007 MAKING SOME ADDITIONS; MOST COMMON BEING THOSE OF STAFF WELFARE EXPENSES AND DEDUCTIONS U/S. 80G/80HHC AND INTEREST ETC. THE ASSESSEE FILED SEP ARATE APPEALS FOR THESE THREE LATTER ASSESSMENT YEARS BEFORE THE CIT(A). THE SAM E WERE PARTLY ALLOWED ON 25.01.2007 AND 19.10.2007. THIS LATTER DATE RELATE S TO THE CIT(A)S ORDERS IN A.Y. 2004-05 AND 05-06. THEREAFTER THE PARTIES CAME TO THE TRIBUNAL. 7. IT TRANSPIRES FROM THE CASE FILE THAT IN THE MEA N TIME THE DEPARTMENT CONDUCTED THE IMPUGNED SEARCH IN CASE OF M/S. INTA S GROUP OF COMPANIES. THIS CULMINATED IN ISSUANCE OF SECTION 153A NOTICES DATED 06.05.2008. THE ASSESSEE FILED SEPARATE RETURNS ON 18.11.2008. THE ASSESSING OFFICER FRAMED ITA NOS.1789 TO 1798/AHD/2016 (SHRI ABHISHEK J SHAH & 3 ORS.) - 7 - CONSEQUENTIAL SEARCH ASSESSMENTS ON 30.12.2009 INTE R ALIA MAKING THE ABOVE STATED DISALLOWANCES/ADDITIONS. THE ASSESSEE PREFE RRED SEPARATE APPEAL. IT WOULD RAISE A LEGAL PLEA THAT ONCE NO INCRIMINATING MATER IAL OR ANY UNDISCLOSED ASSETS HAD BEEN DISCOVERED DURING THE SEARCH THE IMPUGNED SECTION 153A JURISDICTION COULD NOT HAVE BEEN ASSUMED. IT SUBMITTED THAT THE ASSESSING OFFICER NOWHERE MENTIONED ALL OR ANY SUCH MATERIAL IN HIS ASSESSMEN T ORDERS. AND ALSO THAT SECTION 153A PROCEEDINGS ARE NOT IN THE NATURE OF A DE NOVO ASSESSMENT. IT PLEADED THAT NONE OF THE ABOVE STATED ASSESSMENTS WERE PENDING A S ON THE DATE OF SEARCH SO AS TO ABATE U/S.153A 2 ND PROVISO THERETO. THE CIT(A) HAS REJECTED THIS SAI D LEGAL PLEA AS UNDER: 4. THE FIRST GROUND IS REGARDING VALIDITY OF THE A SSESSMENT ORDER PASSED UNDER SECTION 153A OF THE INCOME-TAX ACT. I T WAS ARGUED THAT NO INCRIMINATING DOCUMENTS BOOKS OF ACCOUNTS MONEY O R OTHER VALUABLES RELATING TO UNACCOUNTED TRANSACTIONS IS FOUND IN TH E COURSE OF SEARCH. THEREFORE THE ASSESSING OFFICER WAS NOT JUSTIFIED IN INITIATING PROCEEDINGS UNDER SECTION 153 A OF THE INCOME-TAX ACT. FOR THIS PROPOSITION THE APPELLANT HAS RELIED UPON THE VARIOUS DECISIONS. TH IS ISSUE HAS BEEN DEALT BY ME IN THE EASE OF ROHAN DYES AND INTERMEDIATES A ND INTERMEDIATES AND IN THE CASE OF TEX EXCELLENCE PVT. LTD. AS UNDER: 'ACCORDING TO THE AR THE AO WAS NOT JUSTIFIED IN P ASSING ORDER U/S. 153A IN VIEW OF THE DECISIONS OF MEGHMANI ORGANICS PVT. LTD. OF IT AT 129 TTJ 255 (AHD); SHRI ANIL K. BHATIA VS. ACIT C.C.-17 NEW DELHI AND OTHER DECISIONS OF ITAT PARTICULARLY WHE N NO INCRIMINATING 'DOCUMENTS WERE FOUND AND SEIZED FROM THE PREMISES OF THE APPELLANT. IN OTHER WORDS THE CONTENTION OF THE AR IS THAT THE VARIOUS TRIBUNALS HAVE HELD THAT (I) IF NO INCRIMINATING DOCUMENTS/ASSETS ARE FOUND DURING THE COURSE OF SEARCH THEN THE EARLIER ORDERS PASSED U/S. 143(1) OR 143(3) BECOME FINAL AND CANNOT BE REAGITATED IN TH E 153A PROCEEDINGS (II) ONLY THOSE ASSESSMENTS OR RE-ASSESSMENTS WILL ABATE WHICH WERE PENDING AS ON THE DATE OF SEARCH. 5.1 NONE OF THESE DECISIONS HAVE CONSIDERED THE APP LICABILITY OF DIFFERENT LAWS AT THE TIME OF ORIGINAL ASSESSMENT A ND ASSESSMENT ORDER U/S. 153A. IF THE LAW IS DIFFERENT AT DIFFERE NT POINTS OF TIME THEN THE AO IS DUTY BOUND TO APPLY SUCH LAW. IN THI S CASE ALSO THE LAW AT THE TIME OF PASSING ORIGINAL ASSESSMENT WAS DIFFERENT THAN THE LAW PREVAILING AT THE TIME OF SEARCH AS THE PROVISI ONS OF SECTION 80HHC AND SECTION 28(IIIA) 28(IIIB) ETC. WERE AMEN DED WITH RETROSPECTIVE EFFECT. THE RATIO OF THE ABOVE MENTIO NED DECISIONS OF ITAT WOULD NOT BE APPLICABLE IN SUCH CASES OF RETRO SPECTIVE AMENDMENT. 5.2. FURTHER IN ALL THE DECISIONS RELIED UPON BY TH E APPELLANT I.E. DECISION OF ITA NOS.1789 TO 1798/AHD/2016 (SHRI ABHISHEK J SHAH & 3 ORS.) - 8 - A) ANIL P. KHIMANI VS. DCIT 14 (MUM) B) HELIOS FOOD ADDITIVA P. LTD. VS. DCIT CC 40(MUMB AI) C)) MEGHMANI ORGANICS LTD (AHD) D) ANILKUMAR BHATIA VS. ACIT C.C.I7 DELHI. IT HAS BEEN HELD THAT THE INITIATION OF 153A/153CPR OCEEDINGS ARE INVALID IN RESPECT OF THOSE YEARS FOR WHICH NO INCR IMINATING DOCUMENTS IS FOUND D SEARCH. THAT MEANS 153A PROC EEDINGS CAN BE INITIATED ONLY IN THOSE YEA) WHICH INCRIMINATING DOCUMENTS IS SEIZED. IN OTHER WORDS THE ASSESSMENT U/S. 153A/ 153C CAN BE MADE ONLY IN RESPECT OF SEIZED MATERIAL. ONLY IN RE SPECT OF PENDING ASSESSMENTS OTHER ISSUES CAN BE CONSIDERED BESID ES THE SEIZED DOCUMENTS. IN OTHER WORDS THERE NEEDS TO BE TWO ASSESSMENTS ORDER FOR COMPLETED ASSESSMENTS - ONE REGULAR AND O THER BASED ON SEIZED DOCUMENTS. WITH DUE RESPECT THIS INTERPRETA TION IS NOT CORRECT AS THE BASIC SCHEME OF SEARCH ASSESSMENTS U /S. 153A/153C WAS INTRODUCED W.E.F. 2003 TO OVERCOME THE TWO ASSE SSMENTS THEORY I.E. BLOCK ASSESSMENTS U/S. 158BC/158BD BASED ON SE IZED MATERIAL AND REGULAR ASSESSMENT U/S. 143(3). SECTION 153A PR ESUPPOSES MAKING OF THE ASSESSMENT OF 6YEARS IRRESPECTIVE OF WHETHER ANY INCRIMINATING DOCUMENT IS SEIZED OR NOT. 5.3 FURTHER IF THE DECISIONS ARE CONSIDERED AS GOO D LAW THEN NO REMEDIAL ACTION IS POSSIBLE IN RESPECT OF COMPLETED ASSESSMENTS U/S. 143(3) OR RETURNS ACCEPTED U/S 143(1) BY RESORTING TO THE PROVISIONS OF SECTION 154 OR 147 OR L53A OF THE ACT. FOR EXAMP LE IF IN A CASE THE COMPLETED ASSESSMENT YEARS ARE 2003-04 AND 2004 -05 AND REGULAR ASSESSMENT FOR A.Y. 2005-06 IS PENDING AS O N THE DATE OF SEARCH AND THE ASSESSMENT FOR A.Y. 2002-03 WAS RE-O PENED AND PENDING FOR ASSESSMENT AS ON THE DATE OF SEARCH TH EN AS PER THESE DECISIONS THE AO CAN PASS ORDER U/S. 153A ONLY IN RESPECT OF A.Y. 2002-03 AND A.Y. 2005-06 WHEREAS IN RESPECT OF A.Y. 2003-04 AND 2005-06 ON THE SAME ISSUE HE CANNOT PASS THE ASSESS MENT ORDER. THIS INTERPRETATION IS DEFINITELY NOT IN ACCORDANCE WITH LAW. THIS ISSUE HAS BEEN DECIDED BY ME IN THE CASE OF TEXCELL ENCE OVERSEAS BY HOLDING AS UNDER : '6. I HAVE CONSIDERED THE SUBMISSION OF THE APPELLA NT. IT WAS ADMITTED BY THE AR OF THE APPELLANT THAT IN ORI GINAL RETURN OF INCOME FOR A. Y. 2002-03 TO A. Y. 2004-05 THE APPELLANT HAS MADE CLAIM OF DEDUCTION U/S. 80HHC AN D U/S. 80IA. THE RETURN FOR A.Y. 2002-03 WAS ACCEPTED U/S. 143(1). IN A.Y. 2003-04 AND 2004-05 THE ASSESSMENT ORDER WA S PASSED U/S. 143(3). IN THESE TWO YEARS THE CLAIM O F DEDUCTION U/S. 80HHC ON DEPB WAS DISALLOWED BY THE AO IN THE ORIGINAL ASSESSMENT. FURTHER AFTER THE RETU RN FOR A.Y. 2002-03 WAS ACCEPTED U/S. 143(1) THERE HAS BEEN AN AMENDMENT IN THE YEAR 2005 WHEREIN CERTAIN CONDITIO NS WERE STIPULATED IN RESPECT OF DEDUCTION U/S. 80HHC ON DEPB. THIS AMENDMENT WAS MADE RETROSPECTIVE W.E.F. ITA NOS.1789 TO 1798/AHD/2016 (SHRI ABHISHEK J SHAH & 3 ORS.) - 9 - 1/4/1998. THIS AMENDMENT WAS NOT THERE WHEN THE RE TURN FOR A.Y. 2002-03 WAS ACCEPTED U/S.143(1). IN A.Y. 2003-04 AND 2004-05 THE AO HAS ALREADY MADE A DISALLOWANCE OF DEDUCTION U/S.80HHC ON DEPB LICENCE IN 143(3) ORDER . THE CASES RELIED UPON BY THE APPELLANT OF DIFFERENT ITATS ARE DISTINGUISHABLE ON THE FACTS THAT IN NEITHER OF SUCH CASES THE AO HAS MADE THE ADDITION OF THE SAME AMOUNT IN ORIGINAL ASSESSMENT NOR THERE WAS ANY RETROSP ECTIVE AMENDMENT. IN FACT IN THE CASE OF SHRI ANIL K. BHA TIA & OTHERS THE ITAT DELHI AT PARA 9.2 OF THE ORDER WHI LE REFERRING TO THE DECISION OF ITAT AHMEDABAD IN THE CASE OF MEGHMANI ORGANICS LTD. HAS MENTIONED AS UNDER: '10. THE DECISIONS RELIED ON BY THE LEARNED DR AR E DISTINGUISHABLE ON FACTS. IN THE SAID CASES THE TRI BUNAL HAVE GIVEN A FINDING THAT 'IT IS NOT THE COMPLAINT OF TH E ASSESSEE THAT ANY INCOME WHICH IS ALREADY SUBJECTED TO ASSE SSMENT UNDER S. 143(3) OR UNDER S. 148 OF THE ACT COMPLETE D PRIOR TO THE SEARCH IN RESPECT OF SIX ASSESSMENT YEARS REFER RED TO IN S. 153A HAS ALSO BEEN INCLUDED IN THE ASSESSMENT FRAM ED UNDER S. 153A OF THE ACT. HOWEVER IN THE PRESENT CASE THE ASSESSING OFFICER HAS RECOMPUTED DEDUCTION U/S. 80H HC AND 80IA OF THE ACT BY REDUCING THE CLAIM THEREOF. THE ASSESSING OFFICER WAS NOT COMPETENT TO DO SO IN ASS ESSMENT U/S. 153A OF THE ACT. WE THEREFORE CANCEL THE AS SESSMENT FRAMED U/S. 153A OF THE ACT FOR ALL THE YEARS ' THEREFORE THE RATIO OF THE DECISIONS OF THE ITAT W ILL NOT BE APPLICABLE IN THIS CASE. THE ASSESSMENT ORDER PASSE D U/S. 153A IS THEREFORE UPHELD. THE FIRST GROUND OF APPEA L OF THE APPELLANT IS DISMISSED. ' 4.1 AS THE FACTS OF THE PRESENT CASE ARE SIMILAR TO THE FACTS OF THE CASE OF ROHAN DYES AND INTERMEDIATES LTD THAT IS IN THE O RIGINAL ASSESSMENT ORDER IS ALSO THE DEDUCTION UNDER SECTION 80 HHC HAS BEEN DISALLOWED ALONG WITH OTHER EXPENSES AS MENTIONED IN THE GROUND NUMB ER 4 UNLIKE IN THE CASE OF MEGHMANI INDUSTRIES LTD THE AO WAS FULLY JUSTIF IED IN INITIATING PROCEEDINGS UNDER SECTION 153 A OF THE INCOME-TAX A CT. IN SHORT THIS GROUND OF THE APPELLANT IS DISMISSED. THIS LEAVES THE ASSESSEE AGGRIEVED. 8. WE HAVE ALREADY NARRATED ARGUMENTS ADVANCED OF B OTH THE PARTIES HEREINABOVE. THE QUESTION THAT ARISES FOR OUR CONS IDERATION IS AS TO WHETHER THE ASSESSING OFFICER HAS RIGHTLY ASSUMED SECTION 153A JURISDICTION OR NOT IN THESE FOUR ASSESSMENT YEARS. WE DEEM IT APPROPRIATE TO R EPRODUCE THE STATUTORY PROVISION ITSELF READING AS UNDER: 153A. [(1)] NOTWITHSTANDING ANYTHING CONTAINED IN SECTIO N 139 SECTION 147 PERSON WHERE A SEARCH IS INITIATED UNDER SECTI ON 132 OR BOOKS OF ITA NOS.1789 TO 1798/AHD/2016 (SHRI ABHISHEK J SHAH & 3 ORS.) - 10 - ACCOUNT OTHER DOCUMENTS OR ANY ASSETS ARE REQUISIT IONED UNDER SECTION 132A AFTER THE 31 ST DAY OF MAY 2003 THE ASSESSING OFFICER SHALL (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FU RNISH WITHIN SUCH PERIOD AS MAY BE SPECIFIED IN THE NOTICE THE RETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING W ITHIN SIX ASSESSMENT YHEARS REFERRED TO IN CLAUSE (B) IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANN ER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRES CRIBED AND THE PROVISIONS OF THIS ACT SHALL SO FAR AS MAY BE APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRE D TO BE FURNISHED UNDER SECTION 139; (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSE SSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IN CONDUCTED OR REQUISITION IS MADE: PROVIDED THAT THE ASSESSING OFFICER SHALL ASSESS OR REASSES S THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING W ITHIN SUCH SIX ASSESSMENT YEARS: PROVIDED FURTHER THAT ASSESSMENT OR REASSESSMENT IF ANY RELATING T O ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX AS SESSMENT YEARS REFERRED TO IN THIS [SUB-SECTION] PENDING ON THE DATE OF INI TIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A AS THE CASE MAY BE SHALL ABATE: [PROVIDED ALSO THAT THE CENTRAL GOVERNMENT MAY BY RULES MADE BY IT AND PUBLISHED IN THE OFFICIAL GAZETTE (EXCEPT IN CASES WHERE ANY ASSESSMENT OR REASSESSMENT HAS ABATED UNDER THE SECOND PROVISO) SPECIFY THE CLASS OR CLASSES OF CASES IN WHICH THE ASSESSING OFFICER SHA LL NOT BE REQUIRED TO ISSUE NOTICE FOR ASSESSING OR REASSESSING THE TOTAL INCOME FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR REL EVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED OR REQUISITION IS MADE. ] [(2) IF ANY PROCEEDING INITIATED OR ANY ORDER OF AS SESSMENT OR REASSESSMENT MADE UNDER SUB-SECTION (1) HAS BEEN AN NULLED IN APPEAL OR ANY OTHER LEGAL PROCEEDING THEN NOTWITHSTANDING A NYTHING CONTAINED IN SUB-SECTION (1) OR SECTION 153 THE ASSESSMENT OR R EASSESSMENT RELATING TO ANY ASSESSMENT YEAR WHICH HAS ABATED UNDER THE SECO ND PROVISO TO SUB- SECTION (1) SHALL STAND REVIVED WITH EFFECT FROM T HE DATE OF RECEIPT OF THE ORDER OF SUCH ANNULMENT BY THE COMMISSIONER: PROVIDED THAT SUCH REVIVAL SHALL CEASE TO HAVE EFFECT IF SU CH ORDER OF ANNULMENT IS SET ASIDE.] EXPLANATION. FOR THE REMOVAL OF DOUBTS IT IS HERE BY DECLARED THAT ITA NOS.1789 TO 1798/AHD/2016 (SHRI ABHISHEK J SHAH & 3 ORS.) - 11 - (I) SAVE AS OTHERWISE PROVIDED IN THIS SECTION SEC TION 153B AND SECTION 153C ALL OTHER PROVISIONS OF THIS ACT SHAL L APPLY TO THE ASSESSMENT MADE UNDER THIS SECTION; (II) IN AN ASSESSMENT OR REASSESSMENT MADE IN RESPE CT OF AN ASSESSMENT YEAR UNDER THIS SECTION THE TAX SHALL B E CHARGEABLE AT THE RATE OR RATES AS APPLICABLE TO SU CH ASSESSMENT YEAR. A PERUSAL OF ABOVE STATED STATUTORY PROVISION REVEA LS THAT PENDING ASSESSMENTS ON THE DATE OF SEARCH IN RESPECT OF PRECEDING SIX ASSE SSMENT YEARS ABATE AS PER THE 2 ND PROVISION. HOWEVER THE SAME DOES NOT INCLUDE THOS E ASSESSMENTS WHICH HAVE ALREADY ATTAINED FINALITY OR WHEREIN ASSESSMENT O RDERS HAVE ALREADY BEEN PASSED. WE REITERATE THAT ASSESSMENT ORDERS IN ALL THESE FO UR ASSESSMENT YEARS STOOD PASSED ON 27.12.2002 02.01.2006 29.12.2006 AND 29 .03.2007 I.E. MUCH BEFORE THE DATE OF SEARCH FALLING ON 23.10.2007. THE ASSE SSEES CASE HAS THROUGH OUT BEEN THAT THERE IS NO INCRIMINATING MATERIAL; WHATSOEVER AS PRESCRIBED U/S.153A SO AS TO GIVE RISE TO THE PROCEEDINGS IN QUESTION. IN THESE FACTS WE NOTICE THAT THE SPECIAL BENCH OF THE TRIBUNAL IN ALL INDIA CARGO LOGISTICS (SUPRA) ANSWERED THE VERY REFERENCE AND HELD IN PARA 58 THAT ONLY PENDING ASS ESSMENTS ABATE IN CASE OF A SEARCH BEING CONDUCTED AND AN ASSESSING OFFICER RET AINS THE ORIGINAL JURISDICTION AS WELL AS THE ONE CONFERRED ON HIM U/S.153A FOR WH ICH ASSESSMENTS SHALL BE MADE FOR EACH OF THE SIX ASSESSMENT YEARS SEPARATELY. T HE SPECIAL BENCH THEREAFTER COMES TO NON ABATED I.E. ASSESSMENTS WHICH ARE NOT PENDING AS PER ABOVE SAID 2 ND PROVISION AND HOLDS THAT THE ASSESSMENT THEREIN U/S .153A WILL BE MADE ON THE BASIS OF BOOKS OF ACCOUNT OR OTHER DOCUMENTS NOT PRODUCED IN THE COURSE OF ORIGINAL ASSESSMENT BUT FOUND IN THE COURSE OF SEARCH AND UN DISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEARCH. THIS IS NOT TH E REVENUES CASE; OR FOR THAT NO SUCH MATERIAL IS PLACED ON RECORD THAT THE SEARCH I N QUESTION UNEARTHED ANY SUCH UNDISCLOSED MATERIAL IN ASSESSEES CASE. WE ARE IN FERRING IN THESE FACTS THAT THERE DOES NOT EXIST ANY SUCH MATERIAL NOT PRODUCED IN TH E COURSE OF REGULAR ASSESSMENT BUT FOUND IN SEARCH. PARTIES INFORM US VERY FAIRLY THAT HONBLE JURISDICTIONAL HIGH COURT HAS NOT ADJUDICATED THIS QUESTION. IN THESE FACTS WE OBSERVE THAT THE SPECIAL BENCHS DECISION SQUARELY COVERS THE ASSESSEES CAS E. THE HONBLE BOMBAY HIGH COURT (SUPRA) AFFIRMS THE SAID DECISION BY HOLDING THAT THE SAME DOES NOT SUFFER FROM ANY INFIRMITY. THEIR LORDSHIPS ALSO SPECIFICA LLY ADVERT WITH THE DECISIONS OF HONBLE DELHI AND KARNATAKA HIGH COURT (SUPRA) AND OBSERVE THAT THE SAME DO NOT DEAL WITH AN ISSUE WHEREIN SECTION 153A PROCEEDINGS ARE INITIATED WITHOUT ANY INCRIMINATING MATERIAL DISCOVERED IN SEARCH OF THE CORRESPONDING REGULAR ASSESSMENTS STOOD FINALIZED. THEIR LORDSHIPS DISC USSION ABOUT THE HONBLE KARNATAKA HIGH COURT IS THAT THE SAME PERTAINS TO A N INSTANCE OF EXERCISE OF SECTION 263 JURISDICTION VIS--VIS 153A PROCEEDINGS. WE TA KE INTO ACCOUNT ALL THESE CIRCUMSTANCES AND HOLD THAT INITIATION OF IMPUGNED SECTION 153A PROCEEDINGS IN THIS SET OF FOUR ASSESSMENT YEARS IN ABSENCE OF ANY INCRIMINATING MATERIAL FOUND IN SEARCH CONDUCTED AFTER FINALIZATION OF REGULAR ASSE SSMENTS IS NOT SUSTAINABLE. WE QUOTE DELHI TRIBUNALS DECISION (SUPRA) AND HOLD TH AT ASSESSMENTS FRAMED U/S.143(1) AND 143(3) OF THE ACT HAVE TO BE TREATED AT PAR IN SUCH CASES. THIS LEAVES US WITH THE OTHER JUDGMENTS QUOTED AT THE REVENUES BEHEST. THE CASE LAW OF RAJ KUMAR ARORA (SUPRA) DEALS WITH SCOPE OF A SECTION 153A ITA NOS.1789 TO 1798/AHD/2016 (SHRI ABHISHEK J SHAH & 3 ORS.) - 12 - ASSESSMENT AND NOT THAT OF ASSUMPTION OF JURISDICTI ON WHICH STANDS ON A DIFFERENT FOOTING. THE SAME IS THE CASE IN OTHER DECISION OF FILATEX INDIA LTD. (SUPRA). THE CASE LAW OF BANGALORE AND CHENNAI BENCHES OF THE TR IBUNAL HOLDING THAT AN ASSESSING OFFICER GETS JURISDICTION FOR PASSING ORD ERS U/S.153A AFTER SEARCH EVEN IN ABSENCE OF ANY INCRIMINATING MATERIAL IN CASE OF A SSESSMENTS ALREADY FINALIZED; GO AGAINST THE SPECIAL BENCH DECISION HEREINABOVE. TH E SAME ARE NO LONGER VALID PRECEDENTS. THE REVENUES ARGUMENTS RELYING ON THE ABOVE STATED DECISION ARE ACCORDINGLY REJECTED. WE ACCEPT THE ASSESSEES ARG UMENTS CHALLENGING VALIDITY OF INITIATION OF SECTION 153A PROCEEDINGS IN ALL THESE FOUR ASSESSMENT YEARS. THE IMPUGNED ASSESSMENTS ARE ACCORDINGLY QUASHED. THE REVENUE FAILS TO POINT OUT ANY DISTINCTION ON FACTS OR LAW INVOLVED THEREIN VIS--VIS THE ISSUE BEFORE US. WE DRAW SUP PORT FROM LEARNED COORDINATE BENCH DECISION AND ACCEPT ASSESSEES LEG AL CHALLENGE MADE TO VALIDITY OF SECTION 153A PROCEEDINGS IN THESE FOUR APPEALS ITA NOS. 1789 1790 1792 & 1796/AHD/2016. THE SAME ARE ACCORDING LY QUASHED. ASSESSEES PLEADINGS ON MERITS THEREIN CHALLENGING VARIOUS ADDITIONS (SUPRA) ARE ACCORDINGLY RENDERED INFRUCTUOUS. THESE FOUR A PPEALS ARE ALLOWED. 8. WE NOW COME TO SHRI ABHISHEK J. SHAHS APPEAL IT A NO.1791/AHD/2016 RAISING TWO SUBSTANTIVE GROUNDS IN TER ALIA PLEADING THAT THE CIT(A) HAS ERRED IN CONFIRMING ADOPTION OF VALU ATION ON THE BASIS OF STAMP DUTY AT RS.13 35 510/- INSTEAD OF SALE CONSID ERATION OF RS.11 09 200/- AS PER SUB REGISTRAR CERTIFICATE THEREBY CONFIRMING ADDITION OF RS.8 85 510/- AND INTEREST DISALLOWANCE OF RS.21 686/- ; RESPECTI VELY. 9. WE FIRST PROCEED TO DEAL WITH THE FORMER ISSUE O F VALUATION OF ASSESSEES PROPERTY SOLD TO THE EXTENT OF SHARE A T SURVEY NO.458 JETHLAJ KALOL ON 31.03.2009. THE ASSESSEE DECLARED COST OF ACQUISITION AND IMPROVEMENT AS RS.2.25LACS. HE STATED SALE CONSIDE RATION OF RS.4.5LACS. THE ASSESSEE FURTHER DISCLOSED STAMP DUTY OF RS.1 30 88 0/-. THE STAMP AUTHORITIES VALUED THIS PROPERTY AT RS.13 35 510/-. THE ASSESS EE WOULD SUBMIT CAPITAL GAINS FOR ASSESSMENT TO THE TUNE OF RS.2.25 LACS. THE ASSESSING OFFICER IN THESE FACTS OBSERVED THAT THE ACTUAL SALE CONSIDERA TION OF THE PROPERTY SOLD ITA NOS.1789 TO 1798/AHD/2016 (SHRI ABHISHEK J SHAH & 3 ORS.) - 13 - WAS MUCH HIGHER. HE SOUGHT TO INVOKE SECTION 50C O N THE BASIS OF ABOVE ASSESSED VALUE. THE ASSESSEES REPLY CAME ON 11.03 .2013 STATING ACTUAL SALE PRICE OF RS.4.5LACS TO BE JUST AND PROPER IN VIEW O F VARIOUS DEPRECIATING FACTORS. THE ASSESSING OFFICER REJECTED THE SAME O N THE GROUND THAT PROVISIONS OF SECTION 50C APPLIED IN THIS CASE. HE INFERRED THAT THE ASSESSEE HAD ALSO NOT CHALLENGED STAMP VALUATION IN ANY PROC EEDINGS WHICH FORMED AN INDEPENDENT VALUATION CRITERIA. ALL THIS MADE THE ASSESSING OFFICER TO ADOPT STAMP VALUE RESULTING IN THE IMPUGNED SHORT TERM CA PITAL GAIN OF RS.8 85 510/- IN QUESTION. THE CIT(A) CONFIRMS AS SESSING OFFICERS ACTION. 10. LEARNED COUNSEL FOR THE ASSESSEE SUBMITS THAT B OTH THE LOWER AUTHORITIES HAVE ERRED IN ADOPTING STAMP PRICE OF A SSESSEES CAPITAL ASSETS SOLD AS FAIR MARKET VALUE WITHOUT EVEN MAKING SECTION 50 C(2) REFERENCE DESPITE THE FACT THAT THE APPELLANT HAS THROUGHOUT BEEN CLA IMING THE ACTUAL SALE PRICE OF RS.4.5 LACS TO BE JUST AND PROPER IN VIEW OF VAR IOUS DEPRECIATING FACTOR. LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTS C IT(A)S ORDER. WE NOTICE FROM THE PAPER BOOK THAT HONBLE CALCUTTA HI GH COURT IN SUNIL KUMAR AGRAWAL VS. CIT (2015) 372 ITR 83 (CAL.) DEALS WITH THE VERY STATUTORY PROVISION I.E. 50C(2) OF THE ACT TO HOLD THAT WHEN AN ASSESSEE SUPPORTS THE SALE PRICE TO BE FAIR MARKET VALUE OF THE ASSETS SO LD AN ASSESSING OFFICER HAS TO MAKE REFERENCE TO THE DVO FOR ASCERTAINING THE A PPROPRIATE VALUE. THE REVENUE FAILS TO POINT OUT ANY EXCEPTION TO THE SET LAW. WE ACCORDINGLY SET ASIDE THIS ISSUE TO THE FILE OF ASSESSING OFFICER F OR MAKING NECESSARY REFERENCE TO THE DVO AND PROCEED FURTHER AS PER LAW AFTER AFFORDING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. THIS FIRST SUBSTANTIVE GROUND SUCCEEDS FOR STATISTICAL PURPOSES. 11. THE ASSESSEES LATTER SUBSTANTIVE GROUND CHALLE NGES INTEREST DISALLOWANCE OF RS.21 686/-. HE HAD DECLARED INTER EST INCOME UNDER THE HEAD ITA NOS.1789 TO 1798/AHD/2016 (SHRI ABHISHEK J SHAH & 3 ORS.) - 14 - INCOME FROM OTHER SOURCES OF RS.1 24 914/- AND CL AIMED EXPENDITURE OF RS.1 46 900/-. THE ASSESSING OFFICER SOUGHT TO KNO W NEXUS BETWEEN THE TWO FIGURES OF INCOME AND EXPENDITURE. THE ASSESSEE AP PEARS TO HAVE FAILED IN PROVING THE SAME. THIS MADE THE ASSESSING OFFICER TO INVOKE SECTION 57(III). HE OBSERVED THAT ASSESSEES INCOME WAS MOSTLY FROM BANK DEPOSITS AND OTHER ADVANCES WHEREAS HE HAS HIMSELF CHARGED INTEREST ON HIGHER RATES THAN THAT PAID. HE FURTHER QUOTED ASSESSEES FAILURE IN PROV ING THAT HE HAD INCURRED THE IMPUGNED EXPENDITURE FULLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS. ALL THIS RESULTED IN IMPUGNED INTEREST DISALLOWANCE OF RS.21 686/-. THE CIT(A) CONFIRMS THE SAME. 12. WE HAVE HEARD BOTH THE PARTIES. RELEVANT FINDI NGS PERUSED. LEARNED COUNSEL REPRESENTING ASSESSEE IS UNABLE TO PROVE TH E VERY NEXUS BETWEEN THE IMPUGNED DISALLOWANCE FIGURE AND THE ABOVE STATED I NTEREST INCOME IN THE INSTANT PROCEEDINGS AS WELL. WE THUS FIND NO REASO N TO INTERFERE IN THE ABOVE DISALLOWANCE OF INTEREST OF RS.21 686/-. THE SAME IS ACCORDINGLY CONFIRMED. THIS LATTER SUBSTANTIVE GROUND FAILS. ITA NO.1791/ AHD/2016 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 13. THIS VERY ASSESSEES NEXT APPEAL ITA NO.1792/AH D/2016 ALSO RAISED TWO SUBSTANTIVE GROUNDS INTER ALIA PLEADING THAT TH E CIT(A) HAS ERRED IN LAW AND FACTS IN CONFIRMING VALUE OF PROPERTY AS PER SE CTION 50C THOUGH HE HAD NO TITLE OVER IT AND ONLY THE POSSESSION THEREOF WA S TRANSFERRED. THIS IS FOLLOWED BY THE LATTER SUBSTANTIVE GROUND CHALLENGI NG INTEREST DISALLOWANCE OF RS.17 572/-. 14. BOTH PARTIES ARE AD IDEM THAT THE ASSESSEE IN T HE INSTANT APPEAL HAD TRANSFERRED THE IMPUGNED CAPITAL ASSET NAMELY DEVPA TH OFFICE NO. 309 TO 310. HE PURCHASED THE SAME ON 08.10.1997 FOLLOWED BY IT SALE ON 08.10.2009. THE ASSESSEE TOOK COST OF ACQUISITION AND IMPROVEME NT AS RS.1 76 824/- ITA NOS.1789 TO 1798/AHD/2016 (SHRI ABHISHEK J SHAH & 3 ORS.) - 15 - FOLLOWED BY ITS SALE PRICE OF RS.4 80 318/- STAMP DUTY OF RS.35 200/- AND ASSESSED VALUE OF RS.7 11 111/-. HE CLAIMED LACK OF TITLE AND ONLY TRANSFER OF POSSESSION TO FORM FEW AMONGST MANY DEPRECIATING FA CTORS. BOTH THE LOWER AUTHORITIES HAVE GONE BY THE ABOVE STAMP VALUATION RESULTING IN THE IMPUGNED ADDITION COMPUTED AS PER STAMP PRICE. THERE IS FUR THER NO QUARREL THAT NEITHER THE ASSESSING OFFICER NOR CIT(A) HAVE MADE SECTION 50C(2) REFERENCE TO THE DVO DESPITE ASSESSEES VEHEMENT CONTENTION SUPPORTI NG THE ACTUAL SALE PRICE TO BE THE FAIR MARKET VALUE. WE FOLLOW OUR DISCUSS ION IN PRECEDING PARAGRAPHS IN VIEW OF CALCUTTA HIGH COURT DECISION AND ISSUE THE SAME DIRECTION TO THE ASSESSING OFFICER TO PROCEED AFRES H FOR MAKING SECTION 50C(2) REFERENCE TO THE DVO AS PER LAW. THIS FIRST SUBSTANTIVE GROUND AS STATED ALLOWED FOR STATISTICAL PURPOSE. 15. COMING TO LATTER ISSUE OF INTEREST DISALLOWANCE BOTH PARTIES ARE UNANIMOUS THAT SAME IS COVERED BY OUR FINDINGS ON T HE VERY ISSUE IN PRECEDING ASSESSMENT YEAR DECIDED HEREINABOVE AGAIN ST THE ASSESSEE. WE APPRECIATE THIS FAIR STAND AND DISMISS THIS LATTER SUBSTANTIVE GROUND. THIS APPEAL ITA NO.1793/AHD/2016 IS PARTLY ALLOWED FOR S TATISTICAL PURPOSES. 16. WE NOW COME TO SECOND ASSESSEE JAYENDRA N. SHAH S APPEAL ITA NO.1794/AHD/2016 FOR A.Y. 2010-11 RAISING SOLE SUBS TANTIVE GROUND IN CHALLENGING THE CIT(A)S ORDER ESTIMATING VALUE OF PROPERTY AS PER STAMP VALUE U/S.50C OF THE ACT RESULTING IN ADDITION OF R S.3 64 629/- DESPITE THE FACT THAT THE APPELLANT HAD POINTED OUT VARIOUS DEPRECIA TING FACTORS INCLUDING LACK OF TITLE OVER THE PROPERTY AND ONLY TRANSFER OF POS SESSION BEING INVOLVED IN THE SALE INSTANCE IN QUESTION. BOTH PARTIES POINT OUT BEFORE US THAT THIS CAPITA ASSET IS ALSO DEVPATH OFFICE NO. 311 TO 313 ACQUIRE D ON 08.10.1997 AND SOLD ON 08.10.2009 I.E. THE VERY OFFICE/PROPERTY AS INVO LVED IN ITA NO.1793/AHD/2016 IN CASE OF FIRST ASSESSEE SHRI ABH ISHEK J. SHAH WHEREIN ITA NOS.1789 TO 1798/AHD/2016 (SHRI ABHISHEK J SHAH & 3 ORS.) - 16 - WE HAVE ALREADY REMITTED MATTER BACK TO THE ASSESSI NG OFFICER FOR MAKING REFERENCE TO THE DVO U/S.50C(2) OF THE ACT TO ASCER TAIN THE FAIR MARKET VALUE. WE DEEM IT APPROPRIATE IN THIS FACTUAL BACKDROP THA T BOTH THE LOWER AUTHORITIES HAVE ERRED IN ADOPTING STAMP PRICE OF R S.11 23 232/- INSTEAD OF THE ACTUAL SALE PRICE OF RS.7 58 703/- WITHOUT MAKI NG THE STATUTORY REFERENCE AS PER HONBLE CALCUTTA HIGH COURTS DECISION (SUPR A). WE THUS REMIT THIS ISSUE AS WELL TO THE ASSESSING OFFICER BY ADOPTING THE VERY REASONING. THIS SOLE SUBSTANTIVE GROUND AS WELL AS MAIN CASE APPEAL ITA NO.1794/AHD/2016 ARE ALLOWED FOR STATISTICAL PURPOSES. 17. SHRI JAYENDRA N. SHAHS NEXT APPEAL ITA NO.1795 /AHD/2015 FOR A.Y. 2011-12. HE RAISES THREE SUBSTANTIVE GROUNDS INTER ALIA PLEADING THAT THE CIT(A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN NOT ACCEPTING NET CAPITAL GAIN SHOWN OF RS.44 64 578/- THEREBY ADOPTING THE S AME AS RS.1 09 51 564/- IN NOT GIVING INDEXATION BENEFIT W.E.F. 01.04.1981 DESPITE THE FACT THAT THE ASSET IN QUESTION WAS PURCHASED WELL BEFORE THE SAI D DATE FOR VALID CONSIDERATION AND ALSO IN CONFIRMING NON ACCEPTANCE OF VALUE OF LAND AT RS.1500 PER SQ.MTR. AS ON 01.04.1981 DESPITE SUPPOR TED BY A GOVERNMENT APPROVED VALUERS REPORT; RESPECTIVELY. LEARNED CO UNSEL APPEARING FOR THE ASSESSEE DOES NOT PRESS FOR THE ABOVE SECOND SUBSTA NTIVE GROUND. HE FURTHER CLARIFIES THAT ABOVE THIRD SUBSTANTIVE GROUND IS SU PPLEMENTAL TO ASSESSEES FIRST SUBSTANTIVE GROUND. THE REVENUE IS FAIR ENOU GH IN NOT DISPUTING THE SAME. WE ACCORDINGLY PROCEED TO ADEQUATE ASSESSEE S FIRST SUBSTANTIVE GROUND. 18. WE COME TO RELEVANT FACTS OF THE CASE. THIS AS SESSEE THROUGH HIS EPONYMOUS HUF AND THREE OTHER CO-PURCHASERS ACQUIRE D IMPUGNED CAPITAL ASSETS I.E. PLOT NOS. 50 & 51 AT VILLAGE SOLA AHME DABAD ON 29.08.1975 FOR RS.48 884/-. HIS SHARE WAS 1/4 TH THEREIN TO THE TUNE OF RS.12 221/-. THE ITA NOS.1789 TO 1798/AHD/2016 (SHRI ABHISHEK J SHAH & 3 ORS.) - 17 - ASSESSEE AND OTHER THREE MEMBERS OF THE HUF THEREAF TER EXECUTED A PARTITION DEED TO THE EXTENT OF 1/4 TH SHARE EACH OUT OF THE 1/4 TH SHARE HEREINABOVE ON 24.09.2010. THEY SOLD THESE ASSETS FOR RS.29 11 89 494/- ON 01.11.2010. THIS ASSESSEES SHARE THEREIN CAME TO BE RS.7 27 97 356/-. HE ADOPTED VALUE OF HIS SHARE OF LAND AS ON 01.04.1981 TO BE RS.9 85 875/- ARRIVED AT INDEXED COST OF RS.65 82 971/- RESULTING IN LONG TERM CAPIT AL GAINS OF RS. 1 14 64 578/-. THE ASSESSEE THEREAFTER CLAIMED TO HAVE INVESTED A SUM OF RS.70LACS FOR THE PURPOSE OF CLAIMING SECTION 54EC DEDUCTION. HE WOULD OFFER NET LONG TERM CAPITAL GAINS OF RS.44 64 578/- . THE ASSESSING OFFICER TOOK NOTE OF THE ABOVE HUFS WEALTH TAX RETURNS FOR A.YS. 1988-89 AND 2010- 11 STATING FAIR MARKET VALUE OF THE ASSETS AS RS.54 000/-. HE THUS SOUGHT TO ADOPT FAIR MARKET VALUE THEREOF AS ON 01.04.1981 TO BE RS.13 500/-. 19. THE ASSESSEES REPLY FILED ON 14.03.2014 INTER ALIA PLEADED TO HAVE PURCHASED THE LAND IN QUESTION IN 1975 I.E. WELL BE FORE 01.04.1981 FOR THE PURPOSE OF COST INDEXATION. HE FURTHER HIGHLIGHTED THE FACT THAT A GOVERNMENT APPROVED VALUER HAS ADOPTED VALUE OF THE ASSET IN Q UESTION AS RS.1500/- PER SQ. MTR. FORMING BASIS OF HIS LONG TERM CAPITAL GAI N COMPUTATION. THE ASSESSING OFFICER HEAVILY RELIED ON THE ABOVE TWO W EALTH TAX RETURNS. HE INVOKED ESTOPPEL PRINCIPLE AGAINST THE ASSESSEE. T HE ASSESSING AUTHORITY FURTHER OBSERVE THAT THE ASSESSEES DEFINITE SHARE IN THE ASSETS SOLD CAME TO BE DEVOLVED UPON HIM ONLY AFTER HUF PARTITION ON 24.09 .2010 (SUPRA) AND THEREFORE COST INDEXATION WOULD START FROM THIS CR UCIAL DATE. HE FURTHER OBSERVED THAT THE VALUATION OFFICER U/S.55A HAD DET ERMINED VALUE AS ON 01.04.1981 OF THE ASSETS IN QUESTION TO BE MUCH LOW ER THAN ASSESSEES VALUATION. THE ASSESSING OFFICER ACCORDINGLY RE-CO MPUTED ASSESSEES LONG TERM CAPITAL GAIN OF RS.1 09 51 564/- IN QUESTION. THE CIT(A) AFFIRMS THE SAME. ITA NOS.1789 TO 1798/AHD/2016 (SHRI ABHISHEK J SHAH & 3 ORS.) - 18 - 20. WE HAVE HEARD BOTH THE PARTIES REITERATING THEI R RESPECTIVE STANDS. THERE IS NO ISSUE THAT BOTH THE LOWER AUTHORITIES H AVE PROCEEDED TO REJECT ASSESSEES LONG TERM CAPITAL GAINS COMPUTATION MAIN LY ON THE BASIS OF THE ABOVE STATE HUFS WEALTH TAX RETURNS FILED FOR A.YS . 1988-89 AND 2010-11 (SUPRA). WE FIND THAT HONBLE KARNATKA HIGH COURT IN (2014) 267 CTR (KAR) 172 LATE SMT. KRISHNA BAJAJ VS. ACIT REJECT THIS PA RAMETER OF VALUATION TO HOLD THAT THERE IS ADEQUATE MECHANISM PROVIDED IN T HE ACT U/S.2(22B) FOR DETERMINING FAIR MARKET VALUE OF CAPITAL ASSET. TH EIR LORDSHIPS FURTHER CONCLUDE THAT WEALTH TAX VALUATIONS ARE NOT EVEN AD MISSIBLE IN THE INCOME TAX LAW. LD. DEPARTMENTAL REPRESENTATIVE FAILS TO REBU T CORRECTNESS THEREOF. WE FURTHER NOTICE FROM PAGES 31 TO 40 OF THE PAPER BOO K AS POINTED OUT AT ASSESSEES BEHEST THAT BOTH THE LOWER AUTHORITIES H AVE ACCEPTED SIMILAR VALUATION DECLARED BY ONE OF THE CO-OWNER NAMELY AB HISHEK J. SHAH (HUF). WE HOLD IN VIEW OF ALL THESE FACTS THAT THE VERY FO UNDATION AVAILABLE WITH THE LOWER AUTHORITIES FOR PROCEEDINGS AGAINST THE ASSES SEE IS NO MORE SUSTAINABLE. WE THUS ACCEPT THIS FIRST SUBSTANTIVE GROUND. ITA NO.1795/AHD/2016 IS PARTLY ALLOWED. 21. WE NOW COME TO ITA NO.1797/AHD/2016 FILED BY AS SESSEE SMT. ASHABEN J. SHAH FOR A.Y. 2011-12. THIS APPELLANT R AISES THREE SUBSTANTIVE GROUNDS IN ASSAILING CORRECTNESS OF THE LOWER APPEL LATE ORDER CONFIRMING ASSESSMENT FINDINGS IN REJECTING HER CAPITAL GAINS DECLARED OF RS.42 14 578/- THEREBY ENHANCING THE SAME TO THE TUNE OF RS.1 07 0 1 564/- NOT GIVING INDEXATION BENEFIT FROM 01.04.1981 DEPSITE THE FACT THAT THE PREVIOUS OWNER HAD ACQUIRED THE PROPERTY BEFORE THE SAID DATE AND FURTHER IN NOT AGREEING WITH THE VALUE OF THE LAND AT RS 1500/- PER SQ.MTER . AS ON 01.04.1981 IN SPITE OF THE FACT THAT THE SAME WAS SUPPORTED BY A GOVERN MENT APPROVED VALUERS REPORT. ITA NOS.1789 TO 1798/AHD/2016 (SHRI ABHISHEK J SHAH & 3 ORS.) - 19 - 22. BOTH PARTIES INFORM US AT THE OUTSET THAT ALL T HREE SUBSTANTIVE GROUNDS RAISED IN THE INSTANT APPEAL ARE IDENTICAL BEING VE RY MUCH CONNECTED THE CORRESPONDING GROUNDS RAISED IN ITA NO.1795/AHD/201 6 DECIDED HEREINABOVE IN CASE OF JAYENDRA N. SHAH SINCE INVOL VING THE VERY CAPITAL ASSET. WE REFER TO OUR DISCUSSION HEREINABOVE AND ACCEPT ASSESSEES FIRST SUBSTANTIVE GROUND. LD. COUNSEL REPRESENTING ASSES SEE POINTS OUT THAT HE IS NOT PRESSING FOR SECOND SUBSTANTIVE GROUND AND THIR D SUBSTANTIVE GROUND IS VERY MUCH CONNECTED TO THE FIRST SUBSTANTIVE GROUND ALREADY ACCEPTED. WE APPRECIATE THIS FAIR STAND. THIS APPEAL ITA NO.179 7/AHD/2016 PARTLY SUCCEEDS. 23. THIS LEAVES US WITH THE LAST ASSESSEE SMT. SAJA NI J. SHAHS APPEAL ITA NO.1798/AHD/2016 FOR A.Y.2011-12. SHE RAISES THREE SUBSTANTIVE GROUNDS IN CHALLENGING THE CIT(A)S ORDER AFFIRMING ASSESSMENT FINDINGS COMPUTING LONG TERM CAPITAL GAINS OF RS.1 09 51 564/- INSTEAD OF RS.44 64 578/- NOT GRANTING COST INDEXATION BENEFIT FROM 01.04.1981 DE SPITE THE FACT THAT THE IMPUGNED CAPITAL ASSETS HAD BEEN ACQUIRED WELL BEFO RE THE SAID DATE AND FURTHER IN NOT ACCEPTING VALUE OF THE LAND SOLD AT RS.1500/- PER SQ. MTR. IN SPITE A GOVERNMENT APPROVED VALUERS REPORT; RESPE CTIVELY. 24. BOTH THE LEARNED REPRESENTATIVES INVITE OUR ATT ENTION TO ITA NO.1795/AHD/2016 IN CASE OF JAYENDRA J. SHAH DECIDE D HEREINABOVE ADJUDICATING IDENTICAL GROUNDS QUA THE VERY CAPITAL ASSETS IN ASSESSEES FAVOUR SO FAR AS FIRST ISSUE OF LONG TERM CAPITAL GAINS BE ING COMPUTED AS PER WEALTH TAX RETURNS (SUPRA) ARE CONCERNED. WE REFER TO OUR DISCUSSION IN PRECEDING PARAGRAPHS AND ACCEPT THE FIRST SUBSTANTIVE GROUND IN ASSESSEES FAVOUR. SHE DOES NOT PRESS FOR SECOND SUBSTANTIVE GROUND. SHE FURTHER STATES THAT HER THIRD SUBSTANTIVE GROUND ONLY SUPPLEMENTS THE FIRST SUBST ANTIVE GROUND ALREADY ACCEPTED. THE REVENUE DOES NOT CONTEST THE SAME. WE THUS DISMISS SECOND ITA NOS.1789 TO 1798/AHD/2016 (SHRI ABHISHEK J SHAH & 3 ORS.) - 20 - SUBSTANTIVE GROUND AS NOT PRESSED AND THIRD ONE IS HELD TO HAVE BEEN RENDERED ACADEMIC IN VIEW OF OUR FINDINGS QUA FIRST SUBSTANT IVE GROUND. THIS APPEAL ITA NO.1798/AHD/2016 IS PARTLY ALLOWED. 25. WE RELY ON OUR DISCUSSION HEREINABOVE TO ALLOW ITA NOS. 1789 1792 1790 AND 1796/AHD/2016. ITA NOS1795 1797 & 1798 / AHD/2016 ARE PARTLY ALLOWED. ITA NO.1794/AHD/2016 IS ALLOWED FOR STATI STICAL PURPOSES. ITA NOS. 1791 & 1793/AHD/2016 ARE PARTLY ALLOWED FOR ST ATISTICAL PURPOSES. [PRONOUNCED IN THE OPEN COURT ON THIS THE 21 ST DAY OF OCTOBER 2016.] SD/- SD/- (N. K. BILLAIYA) ( S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 21/10/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )* + --. . /0 / DR ITAT AHMEDABAD 1 + 23 4 5 / GUARD FILE. BY ORDER / . // . /0