Mr. Shiv Kumar Sharma,, Delhi v. ITO, New Delhi

ITA 4675/DEL/2016 | 2007-2008
Pronouncement Date: 31-10-2016 | Result: Allowed

Appeal Details

RSA Number 467520114 RSA 2016
Bench Delhi
Appeal Number ITA 4675/DEL/2016
Duration Of Justice 1 month(s) 29 day(s)
Appellant Mr. Shiv Kumar Sharma,, Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 31-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC 1
Tribunal Order Date 31-10-2016
Date Of Final Hearing 31-10-2016
Next Hearing Date 31-10-2016
Assessment Year 2007-2008
Appeal Filed On 01-09-2016
Judgment Text
INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A: NEW DELHI BEFORE SHRI I.C. SUDHIR JUDICIAL MEMBER SHRI PRADIP KUMAR KEDIA ACCOUNTANT MEMBER ITA NOS. 4715 4716 & 4717/DEL/2011 ASSESSMENT YEAR: 2003-04 2004-05 & 2005-06 ACIT CENTRAL CIRCLE - 22 NEW DELHI VS BRIJ MOHAN MAHAJAN 2 AVENUE CASSIA WESTEND GREENS RAJOKARI NEW DELHI ITA NOS. 4675 4676 4677 /DEL/2011 ASSESSMENT YEARS: 2003-04 2004-05 2005-06 ACIT CENTRAL CIRCLE - 22 NEW DELHI VS SANJEEV MAHAJAN 2 AVENUE CASSIA WESTEND GREENS RAJOKARI NEW DELHI ITA NO.4860/DEL/2011 ASSESSMENT YEAR: 2003-04 SANJEEV MAHAJAN 2 AVENUE CASSIA WESTEND GREENS RAJOKARI NEW DELHI VS ACIT CENTRAL CIRCLE - 22 NEW DELHI ITA NOS. 4864/DEL/2011 ASSESSMENT YEAR: 2003-04 BRIJ MOHAN MAHAJAN 2 AVENUE CASSIA WESTEND GREENS RAJOKARI NEW DELHI. VS ACIT CENTRAL CIRCLE - 22 NEW DELHI (RESPONDENT) (APPELLANT) ITA NOS.4675 TO 4677 4860 4715 TO 4717 & 4864/DE L/2011 2 APPELLANT BY SHRI SALIL KAPOOR CA AND MS.ANANYA ADVOCATE RESPONDENT BY SHRI RAVI JAIN CIT DR DATE OF HEARING 05.10.2016 DATE OF PRONOUNCEMENT 07.10.2016 O R D E R PER: PRADIP KUMAR KEDIA AM THE ABOVE CAPTIONED APPEALS ARE FILED BY INTERCONN ECTED ASSESSEES AS WELL AS BY THE REVENUE AGAINST THE SEPARATE ORDE RS OF THE CIT(A) NEW DELHI RELEVANT TO DIFFERENT ASSESSMENT YEARS N OTED ABOVE. SINCE THE ISSUES INVOLVED IN ALL THESE CASES ARE SIMILAR ALL THESE APPEALS WERE HEARD TOGETHER AND DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF BREVITY. THE APPEAL FILED BY ASSESSEE SHRI BRIJMOHAN MAHAJAN AND CORRESPONDING REVENUE APPEAL RELEVANT TO ASSESSMENT YEAR 2003-04 HAS BEEN TAKEN AS A LEAD APPEAL FOR THE PURPOSES OF ADJU DICATION. ITA NO.4715/DEL/2011: AY 2003-04 2. THE RELEVANT GROUNDS OF APPEAL RAISED BY THE ASS ESSEE AGAINST THE ORDER OF THE CIT(A) DATED 18.8.2011 READS AS UNDER: - 1. THAT THE LEARNED CIT(A) ERRED IN DISMISSING THE APPEAL AS PER GROUND OF APPEAL NO. 2 WHEREIN HE CALCULATED T HE ADDITION OF RS. 1 09 660/- BY TAKING INTO CONSIDERATION LAND R ATES AS PER VALUATION OFFICER (DVO) WHICH IS DETERMINED BY HIM BY REDUCING THE COST OF CONSTRUCTION. THE RATE SO DETERMINED BY THE LD. CIT ITA NOS.4675 TO 4677 4860 4715 TO 4717 & 4864/DE L/2011 3 (A) WAS APPLIED TO DETERMINE THE COST OF PURCHASE O F AGRICULTURE LAND KNOWN AS 2A AVENUE CASSIA WESTEND GREEN VI LLAGE RAJOKARI NEW DELHI WHICH WAS PURCHASED BY THE APP ELLANT IN THREE DIFFERENT FINANCIAL YEARS JOINTLY WITH HIS S ON MR. SANJEEV MAHAJAN. 2. THAT THE LEARNED CIT (A) FURTHER ERRED IN LAW AN D ON FACTS IGNORING THE FACT THAT THE PRICES PAID FOR PURCHASE OF AGRICULTURE LAND WAS HIGHER THAN THE RATES PRESCRIBED BY THE ST ATE GOVERNMENT FOR THE PURPOSE OF STAMP DUTY AND MISGU IDED HIMSELF WITH EXTRANEOUS CONSIDERATION THAT SINCE TH E AGRICULTURE LAND IS AN ADJACENT TO THE AGRICULTURE LAND ALREADY OWNED BY THE APPELLANT THE APPELLANT MUST HAVE PAID THE PRICE O F LAND AT THE RATES DETERMINED BY THE DVO FOR 2 AVENUE CASSIA WE STEND GREENS VILLAGE RAJOKARI NEW DELHI. THE LD. CIT (A ) ALSO IGNORED THE FACT THAT THIS LAND WAS PURCHASED BY THE APPELL ANT GROUP IN THREE CONSECUTIVE FINANCIAL YEAR IN SMALL PARTS HA VING 66KVA AND 220 KVA ELECTRICITY LINE ADJACENT TO GRAM SABHA LA ND. 3. THE APPELLANT CRAVES LEAVE TO ADD TO ALTER VAR Y MODIFY OR OTHERWISE AMEND THE GROUNDS OF APPEAL BEFORE THE AP PEAL IS FINALLY DISPOSED OF. 3. THE ASSESSEE HAS ALSO RAISED ADDITIONAL GROUNDS OF APPEAL IN TERMS OF RULE 11 OF INCOME TAX (APPELLATE TRIBUNAL) RULES 1963 VIDE PETITION DATED 17.2.2014 WHEREIN IT WAS CONTENDED THAT THE ADDITIONAL GROUNDS OF APPEAL ARE PURELY LEGAL IN NATURE AND NO NEW FAC TS ARE REQUIRED TO BE INVESTIGATED TO ADJUDICATE THIS APPEAL AS ALL THE RE LEVANT FACTS ARE AVAILABLE ON RECORD. RELIANCE WAS PLACED ON THE DE CISION OF THE APEX COURT IN THE CASE OF NTPC VS. CIT 229 ITR 383 (SC) FOR ADMISSION OF THE ADDITIONAL GROUNDS WHICH ARE LEGAL IN NATURE. WE FI ND MERIT IN THE AFORESAID PLEA OF THE ASSESSEE AND ACCORDINGLY THE ADDITIONAL GROUNDS STANDS ADMITTED FOR ADJUDICATION WHICH READ AS UNDER :- ITA NOS.4675 TO 4677 4860 4715 TO 4717 & 4864/DE L/2011 4 4. THAT THE ADDITION MADE AND THE ASSESSMENT ORDER PASSED BY THE AO ARE ILLEGAL AND BAD IN LAW AND IS ALSO WITH OUT JURISDICTION AS NO INCRIMINATING MATERIAL WAS FOUND DURING THE C OURSE OF SEARCH. HENCE THE ADDITION MADE ON ACCOUNT OF ALLE GED UNACCOUNTED INVESTMENT IN THE PROPERTY IS LIABLE TO BE DELETED. 5. THAT THE REFERENCE TO THE DEPARTMENT VALUATION O FFICER (DVO) IS ILLEGAL AND BAD IN LAW. THAT THE ADDITION MADE ON THE BASIS OF SUCH VALUATION REPORT IS UNCALLED FOR. IN ANY CASE THE ADDITION MADE U/S 69B OF THE INCOME TAX ACT IS WRO NGLY AND ILLEGALLY MADE. 4. BRIEFLY STATED THE ASSESSEE IS AN INDIVIDUAL. A SEARCH AND SEIZURE ACTION WAS INITIATED ON THE ASSESSEE TOGETHER WITH OTHER CONNECTED PARTIES ON 6.11.2008 U/S 132 OF THE INCOME TAX ACT 1961 (THE ACT) AND A SEARCH WARRANT WAS ALSO ISSUED AND EXECUTED I N THE NAME OF THE ASSESSEE. THE ORIGINAL RETURN OF INCOME WAS EARLIE R FILED UNDER SECTION 139 OF THE ACT BY THE ASSESSEE ON 4.8.2003 PRIOR TO SEARCH. THEREAFTER PURSUANT TO THE SEARCH AS NOTED ABOVE A NOTICE UN DER SECTION 153A OF THE ACT WAS ISSUED ON 8.7.2009. THE ASSESSEE FILED THE RETURN OF INCOME U/S 153A OF THE ACT ON 4.8.2009 AND STATED TO HAVE DECLARED THE INCOME AS REPORTED IN THE ORIGINAL RETURN. DURING THE YEAR UNDER APPEAL THE ASSESSEE HAD DERIVED INCOME FROM SALARY FORM PARTNE RSHIP FIRM PROFITS FROM PARTNERSHIP AND ALSO INTEREST INCOME. RETURN DECLARING INCOME OF RS.2 45 000/- WAS FILED ON 4.8.2009 UNDER SECTION 1 53A OF THE ACT. THE ASSESSING OFFICER HOWEVER COMPUTED THE ASSESSED I NCOME AT RS.4 57 34 195/-. A PERUSAL OF THE ASSESSMENT ORDER REVEALS THAT CERTAIN ADDITIONS WERE MADE TO THE RETURNED INCOME U/S 153A TOWARDS UNACCOUNTED INVESTMENT IN PROPERTY BEARING NO.2 AV ENUE CASSIA WESTEND GREENS RAJOKARI NEW DELHI ON THE BASIS O F CERTAIN BANK ITA NOS.4675 TO 4677 4860 4715 TO 4717 & 4864/DE L/2011 5 VALUATIONS OF THE PROPERTY. SIMILAR ADDITIONS WERE MADE TOWARDS UNACCOUNTED INVESTMENTS IN ANOTHER PROPERTY BEARING NO.2A AVENUE CASSIA WESTEND GREENS RAJOKARI NEW DELHI FOR AN AMOUNT OF RS.3 64 695/-. YET ANOTHER ADDITIONS WERE MADE ON A CCOUNT OF ESTIMATED HOUSEHOLD WITHDRAWALS OF RS.3 74 500/-. T HUS INCOME WAS THUS ASSESSED AT RS.4 57 34 195/- AS NOTED ABOVE. 5. THE ASSESSEE ASSAILED THE ACTION OF THE AO BEFOR E THE CIT(A) IN FIRST APPEAL. THE CIT(A) GRANTED SUBSTANTIAL RELIE F TOWARDS ADDITIONS SO MADE ON ACCOUNT OF UNACCOUNTED INVESTMENT IN PROPER TY AND RETAINED SOME MINOR ADDITIONS WHICH HAS BEEN CARRIED IN SECO ND APPEAL BY THE ASSESSEE BEFORE THE TRIBUNAL. LIKEWISE THE CIT(A) GRANTED RELIEF AS SOUGHT TOWARDS LOW HOUSEHOLD WITHDRAWALS. 6. AGGRIEVED BY THE PARTIAL RELIEF GIVEN IN RESPECT OF PROPERTY NO.2A AVENUE CASSIA WESTEND GREENS RAJOKARI NEW DELHI NOTED ABOVE THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNA L. 7. SIMILARLY THE REVENUE IS ALSO IN APPEAL AGAINST THE SUBSTANTIAL RELIEF GRANTED BY THE CIT(A) TOWARDS UNACCOUNTED IN VESTMENT IN PROPERTY. THE RELEVANT GROUNDS OF APPEAL RAISED BY THE REVENUE ARE REPRODUCED HEREUNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDIT ION OF RS.4 47 50 000/- MADE BY THE ASSESSING OFFICER ON A CCOUNT OF UNACCOUNTED INVESTMENT IN THE PROPERTY NAMELY 2 AV ENUE CASSIA WESTEND GREENS RAJOKARI NEW DELHI. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING THE AD DITION TO RS. ITA NOS.4675 TO 4677 4860 4715 TO 4717 & 4864/DE L/2011 6 109 660/- OUT OF TOTAL ADDITION OF RS.3 64 695/- MA DE BY THE ASSESSING OFFICER U/S 69B OF THE INCOME TAX ACT 19 61 ON ACCOUNT OF UNACCOUNTED INVESTMENT IN THE PROPERTY NAMELY 2A AVENUE CASSIA WESTEND GREENS RAJOKARI NEW DELHI. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDIT ION OF RS.3 74 500/- MADE BY THE ASSESSING OFFICER ON ACCO UNT OF LOWER HOUSEHOLD WITHDRAWALS. 4. THE ORDER OF THE CIT(A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW 5. THE APPELLANT CRAVES LEAVE TO ADD ALTER OR AME ND ANY/ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE O F THE HEARING OF THE APPEAL. 8. THE LD. AR FOR THE ASSESSEE AT THE OUTSET SUBM ITTED THAT THE APPEAL OF THE ASSESSEE AS WELL AS THAT OF REVENUE R EQUIRES TO DECIDED IN THE LIGHT OF QUESTION AS TO WHETHER THE IMPUGNED AD DITIONS AND DISALLOWANCES IN APPEAL CAN BE SUSTAINED IN THE ABS ENCE ANY INCRIMINATING DOCUMENTS FOUND AS A RESULT OF SEARCH IN A 153A ASSESSMENT. ON THIS PREMISE THE LD. AR QUESTIONED THE LEGALITY OF ADDITIONS MADE IN THE RETURN OF INCOME FILED PURSUA NT TO SECTION 153A ON THE GROUND THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE SEARCH. HE ADVERTED OUR ATTENTION TO THE ORDER OF THE CIT(A ) AT PAGE 26 PARA 14 AND CONTENDED THAT THE CIT(A) HAS RECORDED A CATEGO RICAL FINDING OF FACT THAT NO INCRIMINATING DOCUMENTS IN RESPECT OF PURCH ASE OF PROPERTY NO.2 AVENUE CASSIA WESTEND GREENS RAJOKARI NEW DELHI WITH REFERENCE TO IMPUGNED ADDITION TOWARDS UNACCOUNTED INVESTMENT IN THE SAID LAND PURCHASED WERE FOUND/SEIZED DURING THE CO URSE OF SEARCH. THE LD. AR THEREAFTER CANVASSED THAT NONE OF THE ADDITI ONS MADE IN THE RETURN FILED PURSUANT TO SEARCH ACTION IS SUSTAINAB LE IN LAW OWING TO THE ITA NOS.4675 TO 4677 4860 4715 TO 4717 & 4864/DE L/2011 7 FACT THAT IN SPITE OF SEARCH NO INCRIMINATING DOCUM ENTS/MATERIAL WERE FOUND AGAINST THE ASSESSEE. THE ADDITIONS AND DISAL LOWANCES HAVE BEEN MADE OF THE ASSESSMENTS WHICH WERE COMPLETED EITHER UNDER S. 143(1) OR UNDER S. 143(3) ON THE BASIS OF MATERIAL ALREADY AVAILABLE ON RECORD WHICH IS ALREADY ENTERED IN THE BOOKS OF ACCOUNT AN D RETURN FILED PURSUANT THERETO. THE LD. AR NEXT ASSERTED THAT THE ADDITIONS WERE MADE ON THE BASIS OF SOME DVO REPORT ON MERE REAPPR ECIATION OF EXISTING FACTS WHICH IS NOT TENABLE IN LAW IN SO FA R AS THE IMPUGNED ASSESSMENT UNDER S. 153A IS CONCERNED. THE LD. AR A LSO CONTENDED ON MERITS THAT REFERENCE TO DVO IS ILLEGAL AND BAD IN LAW AND ADDITIONS MADE ON THE BASIS OF THE SAID REPORT UNDER S. 69B I S ALSO BAD IN LAW. THE LD. AR SUBMITTED THAT THE AO IS UNDER STATUTORY OBLIGATION TO RECORD A FINDING AND IS OBLIGATED TO PRIMA FACIE SATISFY H IMSELF THAT SOME UNACCOUNTED INVESTMENT HAS BEEN MADE BY THE ASSESSE E OVER AND ABOVE THE AMOUNT REFLECTED IN THE SALE DEED BEFORE MAKING THE REFERENCE TO THE DVO IN THIS REGARD. THE LD. AR FOR THE ASSESSEE CONTENDED THAT AS PER THE ADDITIONAL GROUNDS OF APP EAL RAISED BY THE ASSESSEE THE ADDITIONS MADE ARE ILLEGAL AND BAD IN LAW AND IS WITHOUT JURISDICTION AS NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH. THE LD. AR ASSERTED THAT THE ISSUE IS SQUA RELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE JURISDICTIONA L HIGH COURT PASSED IN THE CASE OF CIT (CENTRAL)-III VS. KABUL CHAWLA REP ORTED IN 380 ITR 573 (DEL) WHEREIN THE HONBLE HIGH COURT HAS HELD THAT IF THE ADDITIONS ARE MADE BUT NOT BASED ON ANY INCRIMINATING MATERIAL FOUND AS A RESULT OF SEARCH OPERATIONS THEN SUCH ADDITIONS ARE NOT SUS TAINABLE IN THE EYES OF LAW. THE LD. AR FURTHER STATED THAT THE IMPUGNE D ADDITIONS / DISALLOWANCES HAVE NO RELATION WITH ANY INCRIMINATI NG MATERIAL FOUND OR ITA NOS.4675 TO 4677 4860 4715 TO 4717 & 4864/DE L/2011 8 UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE CO URSE OF SEARCH AND AS SUCH THE IMPUGNED ACTION IS BAD IN LAW BEING BE YOND THE SCOPE OF JURISDICTION UNDER SECTION 153A OF THE ACT. THE LD. AR SUBMITTED THAT CO- ORDINATE BENCHES OF TRIBUNAL ARE CONSISTENTLY TAKIN G VIEW IN FAVOUR OF THE ASSESSEE HAVING REGARD TO THE DECISION OF JURIS DICTIONAL HIGH COURT IN THE CASE OF KABUL CHAWLA (SUPRA). THE LD. AR ALSO P OINTED OUT THAT THE CO-ORDINATE BENCH OF THE ITAT HAS ALSO DELETED THE ADDITION MADE BY THE AO ON THE BASIS OF THE BANK VALUATION REPORT IN THE CASE OF ACIT VS. EXPRESS EARTH MOVERS AND EQUIPMENTS PVT. LTD. IN IT A NO.505 & 506/DEL/2012 (COPY PLACED ON RECORD) VIDE ORDER DAT ED 29 TH JUNE 2015 WHICH IS ALSO SQUARELY APPLICABLE TO THE FACTS OF T HE CASE. SIMILARLY RELIANCE WAS ALSO PLACED ON THE CASE ACIT VS. ANITA RANI DECIDED BY THE DELHI ITAT IN ITA NO.5212/DEL/2011 VIDE ORDER DATED 18.8.2016 (COPY PLACED ON RECORD). HE ACCORDINGLY PRAYED FOR GRANT ING RELIEF IN TERMS OF GROUNDS OF APPEAL RAISED BY THE ASSESSEE AND SOUGHT DISMISSAL OF REVENUE APPEAL IN TOTO. 9. THE LD. DR APPEARING FOR THE REVENUE ON THE OTH ER HAND RELIED UPON THE ORDER OF THE AUTHORITIES BELOW AND SUBMITT ED THAT THE PROVISIONS OF SECTION 153A WERE RIGHTLY APPLIED IN THE CASE OF THE ASSESSEE ON THE BASIS OF MATERIAL AVAILABLE BEFORE THEM. 10. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND PERUSED THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICE R AND APPELLATE ORDER PASSED BY THE CIT(A). THE APPEAL OF THE ASSES SEE AS WELL AS THE REVENUE HINGES AROUND ONLY ONE PERTINENT POINT AS T O WHETHER WHILE MAKING ASSESSMENT UNDER S. 153A THE REVENUE IS ENT ITLED TO INTERFERE WITH THE ASSESSMENT COMPLETED EITHER UNDER S.143(1) OR UNDER S. 143(3) ITA NOS.4675 TO 4677 4860 4715 TO 4717 & 4864/DE L/2011 9 AND NOT PENDING AT THE TIME OF SEARCH IN THE ABSENC E OF ANY INCRIMINATING DOCUMENTS UNEARTHED AS A RESULT OF SE ARCH OR NOT. ON FACTS ON PERUSAL OF ORDER OF THE CIT(A) WE NOTICE THAT THE CIT(A) WITH REFERENCE TO ADDITION OF RS.4 47 50 000/- TOWARDS U NACCOUNTED INVESTMENT ON THE BASIS OF BANK VALUATION OF THE PR OPERTY HAS GIVEN A CATEGORICAL FINDING AT PARA NO.4 AT PAGE 26 OF HIS ORDER THAT NO INCRIMINATING DOCUMENT WITH REFERENCE TO THE AFORES AID UNACCOUNTED INVESTMENT WAS FOUND DURING THE COURSE OF SEARCH. SIMILAR OBSERVATIONS WERE MADE AT PAGE 31 AND 38 OF THE ORDER OF THE CIT (A). THE AFORESAID FINDING OF THE CIT(A) OF THE TOTAL ABSENCE OF INCRI MINATING DOCUMENT HAS REMAINED UNCONTESTED BY THE REVENUE. THUS AS A COR OLLARY IT IS MANIFEST THAT THE ADDITIONS/DISALLOWANCES HAVE BEEN MADE WITHOUT REFERENCE TO ANY INCRIMINATING MATERIAL/DOCUMENT FO UND AS A RESULT OF THE SEARCH AND SEIZURE ACTION UNDER 132 OF THE ACT. WE ALSO NOTE THAT THE INCOME-TAX RETURN FOR THE RELEVANT ASSESSMENT Y EAR WAS FILED PRIOR TO THE SEARCH IN THE NORMAL COURSE SUO MOTU DISCLOSING THE PURCHASE CONSIDERATION OF THE PROPERTY IN QUESTION. THE RETU RN SO FILED IN THE ORDINARY COURSE WERE ACCEPTED U/S 143(1) OF THE ACT AND AS SUCH NO ASSESSMENT WAS PENDING ON THE DATE OF INITIATION OF SEARCH WHICH MAY ABATE IN CONSEQUENCE OF SEARCH. ACCORDINGLY WE ARE OF THE VIEW THAT VARIOUS ADDITIONS/ DISALLOWANCES MADE BY THE AO ARE CLEARLY BEYOND THE SCOPE OF AUTHORITY VESTED UNDER SECTION 153A OF THE ACT OWING TO ABSENCE OF ANY INCRIMINATING MATERIAL OR EVIDENCE D ETECTED AS A RESULT OF SEARCH. NO REFERENCE TO SUCH INCRIMINATING MATERIAL IS FOUND IN THE ORDERS OF THE AUTHORITIES BELOW FOR THE PURPOSES OF MAKING VARIOUS ADDITIONS AND DISALLOWANCES. THIS LEGAL ISSUE EMANA TING IN THE PRESENT CASE THAT IN THE ABSENCE OF ANY INCRIMINATING DOCUM ENT OR MATERIAL NO ITA NOS.4675 TO 4677 4860 4715 TO 4717 & 4864/DE L/2011 10 ADDITION CAN BE SUSTAINED UNDER 153A PROCEEDINGS IS NO LONGER RES INTEGRA IN VIEW OF THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAWLA (SUPRA) WHEREIN THE HONBLE DELHI HIGH COURT HAS 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 ITA NOS. 707 709 AND 713 OF 2014 OF DECISIONS THE LEGAL POSITIO N THAT EMERGES IS AS UNDER: I. ONCE A SEARCH TAKES PLACE UNDER SECTION 132 OF T HE ACT NOTICE UNDER SECTION 153 A (1) WILL HAVE TO BE MANDATORILY ISSUED TO THE PERSON SEARCHED REQUIRING HIM TO FILE RETURNS FOR SIX AYS IMMEDIATELY PRECEDING T HE PREVIOUS YEAR RELEVANT TO THE AY IN WHICH THE SEARCH TAKES PLACE. II. ASSESSMENTS AND REASSESSMENTS PENDING ON THE DA TE OF THE SEARCH SHALL ABATE. THE TOTAL INCOME FOR SUCH AYS WILL HAVE TO BE COMPU TED BY THE AOS AS A FRESH EXERCISE. III. THE AO WILL EXERCISE NORMAL ASSESSMENT POWERS IN RESPECT OF THE SIX YEARS PREVIOUS TO THE RELEVANT AY IN WHICH THE SEARCH TAK ES PLACE. THE AO HAS THE POWER TO ASSESS AND REASSESS THE 'TOTAL INCOME' OF THE AFOREMENTIONED SIX YEARS IN SEPARATE ASSESSMENT ORDERS FOR EACH OF THE SIX Y EARS. 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 BROUG HT TO TAX. IV. ALTHOUGH SECTION 153 A 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 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 MATE RIAL. OBVIOUSLY AN ITA NOS. 707 709 AND 713 OF 2014 OF ASSESSMENT HAS TO BE MA DE UNDER THIS SECTION ONLY ON THE BASIS OF SEIZED MATERIAL. V. IN ABSENCE OF ANY INCRIMINATING MATERIAL THE CO MPLETED ASSESSMENT CAN BE REITERATED AND THE ABATED ASSESSMENT OR REASSESSMEN T CAN BE MADE. 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 COMP LETED ASSESSMENT PROCEEDINGS. VI. INSOFAR AS PENDING ASSESSMENTS ARE CONCERNED T HE 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 EXIST ING OR BROUGHT ON THE RECORD OF THE AO. VII. COMPLETED ASSESSMENTS CAN BE INTERFERED WITH B Y THE AO WHILE MAKING THE ASSESSMENT UNDER SECTION 153 A ONLY ON THE BASIS OF SOME INCRIMINATING MATERIAL UNEARTHED DURING THE COURSE OF SEARCH OR REQUISITIO N OF DOCUMENTS OR UNDISCLOSED INCOME OR PROPERTY DISCOVERED IN THE COURSE OF SEAR CH WHICH WERE NOT PRODUCED OR NOT ALREADY DISCLOSED OR MADE KNOWN IN THE COURS E OF ORIGINAL ASSESSMENT. 38. THE PRESENT APPEALS CONCERN AYS 2002-03 2005- 06 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. 11. THUS THE HONBLE HIGH COURT HAS UNDERSCORED TH E NEED FOR REVENUE TO UNEARTH MATERIAL AS A RESULT OF SEARCH JU STIFYING THE ITA NOS.4675 TO 4677 4860 4715 TO 4717 & 4864/DE L/2011 11 ASSESSMENT SOUGHT TO BE MADE. RESPECTFULLY FOLLOWIN G THE BINDING PRECEDENT OF THE HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF KABUL CHAWLA (SUPRA) THE LEGAL ISSUE STANDS ADJUDICATED I N FAVOUR OF THE ASSESSEE. ACCORDINGLY THE ADDITIONS AND DISALLOWAN CES MADE WITHOUT REFERENCE TO INCRIMINATING MATERIAL ARE NOT SUSTAIN ABLE IN LAW IN THE FACTS OF THE PRESENT CASE. ACCORDINGLY WE ALLOW THE APPE AL OF THE ASSESSEE. IN THE SIMILAR VAIN THE APPEAL FILED BY THE REVENUE C ONTESTING THE ACTION OF THE CIT(A) REQUIRED TO BE DISMISSED IN VIEW OF PROP OSITION OF LAW IN KABUL CHAWLA (SUPRA). 12. IN VIEW OF THE DIRECT DECISION OF THE HONBLE D ELHI HIGH COURT IN KABUL CHAWLA (SUPRA) WHICH IMPUGNS THE LEGAL VALIDI TY OF ADDITIONS MADE U/S 153A PROCEEDINGS WE DO NOT CONSIDER IT EXPEDIE NT TO EXAMINE THE ISSUES RAISED ON MERITS. 13. IN THE RESULT THE APPEAL OF THE ASSESSEE IS AL LOWED AND THE APPEAL OF THE REVENUE IS DISMISSED. ITA NOS.4675 4676 4677/DEL/2011 (ASSESSEES APPEALS FOR AYS 2003-04 2004-05 & 2005-06); ITA NO.4860/DEL/20 11 (REVENUES APPEAL FOR AY 2003-04); AND ITA NOS.4716 & 4717/DEL/2011 (ASSESSEES APPEALS FOR AYS 2004-05 & 2 005- 06). 14. BOTH THE SIDES CONSENTED THAT IDENTICAL LEGAL I SSUES ARE INVOLVED IN ALL THESE APPEALS TOO. THUS FOR PARITY OF REASONS NOTED ABOVE OUR VIEW IN ITA NO. 4715 & 4864 / DEL. / 2011 ABOVE SHALL AP PLY MUTATIS MUTANTIS TO ALL THE REMAINING APPEALS CAPTIONED ABOVE. AS A CONSEQUENCE THE ADDITIONS AND DISALLOWANCES MADE WITHOUT ANY REFERE NCE TO ANY ITA NOS.4675 TO 4677 4860 4715 TO 4717 & 4864/DE L/2011 12 INCRIMINATING MATERIAL FOUND AS A RESULT OF SEARCH IS NOT SUSTAINABLE IN LAW. 15. IN THE RESULT THE ALL THE APPEALS OF THE ASSES SEE ARE ALLOWED AND ALL THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 07/1 0/ 2016 SD/- SD/- (I.C. SUDHIR) (PRADIP KUMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 07/10/2016 DK COPY OF THE ORDER FORWARDED TO : COPY FORWARDED TO: APPELLANT RESPONDENT CIT CIT(A) DR ITAT TRUE COPY BY ORDER ASSISTANT REGISTRAR