Shri Mehendipur Balaji Enterprises Private Limited, New Delhi v. Deputy Commissioner of Income Tax, Central Circle-II, Kanpur

ITSSA 114/LKW/2019 | 2013-2014
Pronouncement Date: 27-05-2021 | Result: Partly Allowed

Appeal Details

RSA Number 11423716 RSA 2019
Assessee PAN AADHA3608R
Bench Lucknow
Appeal Number ITSSA 114/LKW/2019
Duration Of Justice 2 year(s) 3 month(s) 23 day(s)
Appellant Shri Mehendipur Balaji Enterprises Private Limited, New Delhi
Respondent Deputy Commissioner of Income Tax, Central Circle-II, Kanpur
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 27-05-2021
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 27-05-2021
Date Of Final Hearing 18-03-2021
Next Hearing Date 18-03-2021
Last Hearing Date 06-11-2019
First Hearing Date 17-03-2021
Assessment Year 2013-2014
Appeal Filed On 04-02-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B LUCKNOW BEFORE SHRI A.D JAIN VICE PRESIDENT AND SHRI T.S. KAPOOR ACCOUNTANT MEMBER IT(SS) NO. 551/LKW/2019 ASSESSMENT YEAR 2011-12 DCIT CENTRAL CIRCLE-II KANPUR VS. ASHISH KUMAR CHAURASIA HUF B-2 SURYA NAGAR GHAZIABAD PAN AADHA 3608R IT(SS) NO. 553 & 554/LKW/2019 ASSESSMENT YEARS 2013-14 & 2014-15 DCIT CENTRAL CIRCLE-II KANPUR VS. SMT. DIVYA AGARWAL 14/75 3B CIVIL LINES KANPUR PAN ACUPG 5212E IT(SS) NO. 99 & 100/LKW/2019 A.YS 2012-13 & 2013-14 DCIT CENTRAL CIRCLE-II KANPUR VS. M/S MEHDIPUR BALAJI IMPEX PVT. LTD. 51/56 SITA RAM MARKET SHAKKERPATTI KANPUR 208001 PAN AAECM 7300C IT(SS) NO. 113 & 115/LKW/2019 A.YS 2012-13 & 2014-15 DCIT CENTRAL CIRCLE-II KANPUR VS. M/S MEHDIPUR BALAJI ENTERPRISES PVT. LTD. 4743/23 ANSARI ROAD DARYA GANJ NEW DELHI 110002 PAN AANCS 6462Q 2 IT(SS) NO. 95 & 96/LKW/2019 A.YS. 2013-14 & 2014-15 DCIT CENTRAL CIRCLE-II KANPUR VS. M/S MEHDIPUR BALAJI TRADERS PVT. LTD. 4743/23 ANSARI ROAD DARYA GANJ NEW DELHI 110002 PAN AANCS 6462Q IT(SS) NO. 92 TO 94 /LKW/2019 A.YS 2011-12 TO 2013-14 DCIT CENTRAL CIRCLE-II KANPUR VS. M/S GHATA MEHENDIPUR BALAJI GRINDING WORKS PVT. LTD. 133/188 TRANSPORT NAGAR KANPUR 208023 PAN AADCG 4368D IT(SS) NO. 104 /LKW/2019 A.YS 2012-13 DCIT CENTRAL CIRCLE-II KANPUR VS. SHRI BALAJI BETAL NUTS PVT. LTD. 2/40 GALI NO.2 ND FLOOR ANSARI DARIYAGANJ NEW DELHI PAN AACPS 1393A IT(SS) NO. 109/LKW/2019 A.Y.2013-14 DCIT CENTRAL CIRCLE-II KANPUR VS. M/S GHATA MEHENDIPUR BALAJI AGRI EXTRACTION PVT. LTD. 4743/23 ANSARI ROAD DARIYAGANJ NEW DELHI 110002 PAN AAECG 3438K (RESPONDENT) (APPELLANT) SHRI P.K. KAPOOR CA APPELLANT BY SMT. ABHA KALA CHANDA CIT DR RESPONDENT BY 17/03/2021 DATE OF HEARING 27/05/2021 DATE OF PRONOUNCEMENT 3 O R D E R PER BENCH : THIS IS A GROUP OF FOURTEEN APPEALS FILED BY THE DIFFERENT ASSESSEES BELONGING TO THE SAME GROUP RELATING TO DIFFERENT ASSESSMENT YEARS AGAINST THE ORDERS OF LD. CIT(A)-IV KANPUR DATED 22.07.2019 AND 29.11.2018. THE LD. CIT(A) HAS PASSED THESE ORDERS AGAINST THE ORDERS OF ASSESSMENT PASSED BY ASSESSING OFFICER U/S. 153A/153C OF THE ACT. THE LD. COUNSEL OF THE ASSESSEES AT THE TIME OF HEARING ARGUED ONLY GROUND NO.2 IN THESE APPEALS WHICH FOR THE SAKE OF COMPLETENESS IS REPRODUCED BELOW: 2. BECAUSE THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE ASSESSMENT IGNORING THE SETTLED POSITION OF LAW THAT PROVISIONS OF SECTION 153A IN CASE WHERE PROCEEDINGS ARE NOT PENDING COULD NOT BE APPLIED IN ABSENCE OF ANY INCRIMINATING MATERIAL. 2. THE LD. AR AT THE OUTSET SUBMITTED THAT THE ASSESSMENTS IN THESE CASES WERE COMPLETED U/S. 153A/153C OF THE ACT IN VIEW OF A SEARCH AND SEIZURE ON THE GROUP ON 27.11.2015. THE LD. AR SUBMITTED THAT SIX ASSESSMENT YEARS WERE REOPENED AND THE ASSESSING OFFICER HAS NOT MADE ANY ADDITION ON THE BASIS OF ANY INCRIMINATING MATERIAL AND THEREFORE THE CONCLUDED ASSESSMENTS COULD NOT HAVE BEEN 4 DISTURBED AS HAS BEEN HELD BY VARIOUS HIGH COURTS AND CONFIRMED BY THE HON'BLE SUPREME COURT. 3. THE LD. AR OF THE ASSESSEES IN THIS RESPECT FILED A CHART SHOWING THEREIN THE SERIAL NUMBER OF APPEALS ALONG WITH RELATED ASSESSMENT YEARS AND DATE OF FILING OF ORIGINAL RETURN. THE CHART ALSO INDICATED AS TO WHETHER THE ASSESSMENT HAS BEEN COMPLETED U/S. 143(1) OR 143(3) OF THE ACT AND IN THE CASE OF ASSESSMENT U/S. 143(1) WHETHER THE TIME FOR ISSUING OF NOTICE U/S. 143(2) HAD EXPIRED OR NOT. FOR THE SAKE OF COMPLETENESS THE CHART FILED BY THE LD. AR IS REPRODUCED BELOW: 5 4. THE LD. AR OF THE ASSESSEE INVITING OUR ATTENTION TO THIS CHART SUBMITTED THAT THE ASSESSMENT IN THESE CASES WERE MADE U/S. 153A OF THE ACT ON ACCOUNT OF SEARCH ON THE GROUP ON 27.11.2015 AND THE ASSESSMENTS IN THE YEARS INDICATED IN THE CHART STOOD COMPLETED AND THEREFORE ADDITION IF ANY COULD HAVE BEEN MADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING SEARCH. INVITING OUR ATTENTION TO THE 6 COPIES OF ASSESSMENT ORDERS IN THESE CASES THE LD. AR SUBMITTED THAT ASSESSING OFFICER HAS MADE THE ADDITIONS ON THE BASIS OF ENTRIES IN THE BOOKS OF ACCOUNT AND THERE IS NO WHISPER OF ANY INCRIMINATING MATERIAL ON THE BASIS OF WHICH THE ASSESSING OFFICER HAD MADE THE ADDITION. INVITING OUR ATTENTION TO THE LD. CIT(A)S ORDERS THE LD. AR SUBMITTED THAT BEFORE LD. CIT(A) THIS GROUND OF CONCLUDED ASSESSMENTS WAS TAKEN BUT HE DISMISSED THIS GROUND BY HOLDING THAT ONCE THE ASSESSMENTS ARE REOPENED U/S. 153A OF THE ACT THERE IS NO REQUIREMENT OF MAKING ADDITION ONLY ON THE BASIS OF INCRIMINATING MATERIAL. THE LD.AR SUBMITTED THAT IN A NUMBER OF CASES IT HAS BEEN HELD THAT IN THE CASE OF CONCLUDED ASSESSMENTS ADDITIONS CAN ONLY BE MADE ON THE BASIS OF INCRIMINATING MATERIAL. IN THIS RESPECT RELIANCE WAS PLACED ON THE FOLLOWING CASE LAWS: 1. CIT (CENTRAL)-III VS. KABUL CHAWLA IN ITA NO. 707 709 & 713 OF 2014 REPORTED IN 380 ITR 573 [2015] (DEL). 2. PR. CIT-1 VS. DEVANGI IN ITA NOS. 54 TO 57 OF 2017 REPORTED IN 394 ITR 184 (GUJ). 3. PR. CIT-2 NEW DELHI VS. MEETA GUTGUTIA IN ITA NOS. 306 TO 310 OF 2017 REPORTED IN 395 ITR 526 [2017] (DEL). 4. PR. CIT CENTRAL IT NEW DELHI VS. MEETA GUTGUTIA IN SLP (CIVIL) DIARY NOS. 18121 OF 2018 REPORTED IN 257 TAXMAN 441 (SC). 7 5. BESIDES THE ABOVE CASE LAWS RELIANCE WAS ALSO PLACED ON THE JUDGMENT DATED 16.12.2020 OF LUCKNOW BENCH IN THE CASE OF M/S SIGMA CASTINGS LTD. VS. DCIT IN ITA NO. 510 TO 512/LKW/2019 WHEREIN THE HON'BLE TRIBUNAL HAD DECIDED A SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE AFTER TAKING INTO ACCOUNT THE WRITTEN SUBMISSIONS FILED BY THE REVENUE WHEREIN THE REVENUE HAD RELIED ON A NUMBER OF CASE LAWS. 6. THE LD. CIT (DR) ON THE OTHER HAND SUBMITTED THAT IN A NUMBER OF CASES THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE REVENUE ALSO AND IN A FEW CASES AGAINST THE ORDER OF HIGH COURTS SPECIAL LEAVE PETITION HAS BEEN ADMITTED BY HON'BLE SUPREME COURT AND IN THIS RESPECT HEAVILY PLACED RELIANCE ON THE WRITTEN SUBMISSIONS FILED IN THE CASE OF M/S SIGMA CASTINGS LTD. VS. DCIT (SUPRA) AND ALSO RELIED ON THE CASE LAWS RELIED ON BY THE LD. CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT A SEARCH TOOK PLACE ON 27.11.2015 AND THE CASES BELONGING TO VARIOUS ASSESSEES OF THE GROUP WERE REOPENED U/S. 153A/153C OF THE ACT AND VARIOUS ADDITIONS WERE MADE. THE ADDITIONS MADE BY THE ASSESSING OFFICER DOES NOT RELATE TO ANY INCRIMINATING MATERIAL FOUND DURING SEARCH AND RATHER THE 8 ASSESSING OFFICER HAS MADE THE ADDITIONS ON THE BASIS OF EXAMINATION OF BOOKS OF ACCOUNT. FOR THE SAKE OF COMPLETENESS THE FINDINGS OF ASSESSING OFFICER IN IT(SS) NO. 551/LKW/2019 ARE REPRODUCED BELOW: DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS RAISED UNSECURED LOANS OF RS. 30 00 000/- FROM M/S NEIL INDUSTRIES LTD.. THE ASSESSEE WAS REQUIRED TO FURNISH THE IDENTITY GENUINENESS AND CREDITWORTHINESS OF THE LENDER. HOWEVER THE FACT IS THAT M/S NEIL INDUSTRIES LTD. IS ENGAGED IN PROVIDING ACCOMMODATION ENTRY IN THE FORM OF UNSECURED LOANS/SHARE CAPITAL/SHARE PREMIUM ETC. WHICH IS EVIDENT FROM THE COPY OF ASSESSMENT ORDER OF M/S NEIL INDUSTRIES LTD. ALL THE FACTS HAVE ALREADY BEEN CONFRONTED WITH THE ASSESSEE AND NO PROPER AND SATISFACTORY EXPLANATION HAS BEEN FURNISHED BY THE ASSESSEE. IN VIEW OF ABOVE DOCUMENTARY AND CIRCUMSTANTIAL EVIDENCE THE SO CALLED UNSECURED LOAN OF RS. 30 00 000/- IS NOTHING BUT THE UNEXPLAINED INCOME OF THE ASSESSEE WHICH HAS BEEN RECEIVED IN THE FORM OF UNSECURED LOANS THEREFORE THE SO CALLED UNSECURED LOAN OF RS. 30 00 000/- IS BEING ADDED TO THE TOTAL INCOME OF THE ASSESSEE U/S 68 OF THE I T ACT 1961. FURTHER COMMISSION PAID FOR OBTAINING ENTRY @5% ON 30 00 000/- WHICH CONIES TO RS. 1 50 000/- IS ALSO BANG ADDED TO THE TOTAL INCOME OF THE ASSESSEE U/S 69 OF THE I.T. ACT 1961. PENALTY PROCEEDINGS U/S 271(1)(C) OF THE I.T. ACT 1961 ARE BEING INITIATED SEPARATELY FOR CONCEALMENT OF INCOME BY FURNISHING IN ACCURATE PARTICULARS OF INCOME. (ADDITION OF RS. 31.50.000/-) 8. BEFORE LD. CIT(A) A SPECIFIC GROUND WAS TAKEN REGARDING COMPLETED ASSESSMENT WHEREIN THE ADDITIONS COULD HAVE BEEN MADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL IF ANY FOUND DURING SEARCH. THE LD. CIT(A) HOWEVER DISMISSED THIS GROUND OF APPEAL BY HOLDING 9 THAT ONCE THE CASES ARE REOPENED U/S. 153A OF THE ACT THE ASSESSING OFFICER CAN MAKE THE ADDITION EVEN IN THE ABSENCE OF ANY INCRIMINATING MATERIAL. THE LD. CIT(A) HAS MADE SIMILAR FINDINGS IN ALL THE CASES. FOR THE SAKE OF COMPLETENESS THE FINDINGS OF LD. CIT(A) IN ITA NO. 551/LKW/2019 IS REPRODUCED BELOW: 5.2 UNDERSIGNED HAS CAREFULLY CONSIDERED THE SUBMISSION AND THE CASE LAWS CITED BY THE APPELLANT. HOWEVER CONSIDERING THE EXPRESS PROVISIONS OF SECTION153A OF THE ACT UNDERSIGNED WOULD LIKE TO DIFFER WITH THE SUBMISSION OF THE APPELLANT BECAUSE SECTION 153A OF THE ACT CLEARLY PROVIDES THE POWER TO AO TO ASSESS/REASSESS THE CASES OF PERSON SEARCHED U/S 132(1) OF THE ACT FOR IMMEDIATELY SIX PRECEDING YEARS. SECTION 153A OF THE ACT DOES NOT PROVIDE EXISTENCE OF INCRIMINATING MATERIAL AS ESSENTIAL REQUIREMENT. IN THE OPINION OF THE UNDERSIGNED THE ACTION U/S 132/132A OF THE ACT WOULD AUTOMATICALLY TRIGGER THE PROVISIONS OF SECTION 153A OF THE ACT FOR COMPUTATION OF TOTAL INCOME OF THE APPELLANT. THIS PROVISION DOES NOT RESTRICT THE ASSESSING OFFICER TO TAKE ACTION IN THOSE CASES WHERE ASSESSMENT HAS ALREADY BEEN COMPLETED. SINCE THE AO HAS RIGHTLY EXERCISED HIS POWERS TO ASSESS/REASSESS THE CASE U/S 153A OF THE ACT. THE UNDERSIGNED FIND NO FORCE IN THE SUBMISSION OF THE APPELLANT AND THEREFORE THIS GROUND IS DISMISSED. 9. THE ABOVE FINDINGS OF BOTH AUTHORITIES CLEARLY DEMONSTRATE THAT ASSESSING OFFICER HAD NOT MADE THE ADDITION ON THE BASIS OF ANY INCRIMINATING MATERIAL AND RATHER HE HAS MADE THE ADDITION ON THE BASIS OF ENTRIES IN THE BOOKS OF ACCOUNT WHICH IS NOT IN ACCORDANCE WITH THE SETTLED LAW AS IN A NUMBER OF CASES IT HAS BEEN HELD BY 10 VARIOUS HIGH COURTS THAT IN CASE OF CONCLUDED ASSESSMENTS THE ADDITION CAN BE MADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING SEARCH. EVEN HON'BLE SUPREME COURT IN THE CASE OF KABUL CHAWLA (SUPRA) AND MEETA GUTGUTIA (SUPRA) HAS DISMISSED THE SLP FILED BY THE DEPARTMENT AGAINST THE ORDER OF HON'BLE HIGH COURTS. THE LUCKNOW BENCH VIDE ORDER DATED 16.12.2020 IN A CONSOLIDATED ORDER AFTER CONSIDERING THE WRITTEN SUBMISSIONS OF REVENUE HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER: 5. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE THROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE FIRST ARGUMENT OF LEARNED COUNSEL FOR THE ASSESSEE WAS THAT IN CASE OF COMPLETED ASSESSMENTS THE ADDITION CANNOT BE MADE IF THERE IS NO INCRIMINATING MATERIAL. IN THIS REGARD LEARNED COUNSEL FOR THE ASSESSEE HAD SUBMITTED THAT IN THE YEAR 2013-14 AND 2015-16 THE ASSESSMENTS STOOD COMPLETED AND THERE WAS NO INCRIMINATING MATERIAL FOUND DURING THE SEARCH. IN THIS RESPECT THE BENCH HAD ASKED BOTH THE PARTIES TO FURNISH THE MATERIAL WHICH WAS IMPOUNDED DURING THE SEARCH AND WHICH BOTH THE PARTIES HAD FILED WITH THE BENCH WHICH WE HAVE EXAMINED AND HAVE COMPARED WITH THE MATERIAL USED BY ASSESSING OFFICER IN ASSESSMENT ORDER. WE FOUND THAT NONE OF THE MATERIAL SEIZED DURING THE SEARCH WAS USED BY THE ASSESSING OFFICER FOR MAKING ADDITION AND INSTEAD HAD RELIED ON A DOCUMENT MARKED AS BK-2 WHICH WAS SEIZED DURING A SEARCH OPERATION ON A DIFFERENT GROUP OF COMPANY AND THAT TOO ON 28/04/2015 THAT IS MORE THAN ONE YEAR BEFORE THE DATE OF SEARCH ON ASSESSEES. THIS FACT IS FURTHER STRENGTHENED FROM THE ASSESSMENT ORDER WHEREIN THE ASSESSING OFFICER AT PAGE 8 HAS OBSERVED AS UNDER: 'IN THIS CONTEXT IT IS NOTEWORTHY THAT A SEARCH & SEIZURE OPERATION U/S 132 OF THE I. T. ACT 1961 CONDUCTED UPON THE COMPANIES OF SHASHWAT AGARWAL ON 28.04.2015 BY THE INVESTIGATION WING KANPUR. THE INCRIMINATING DOCUMENTS WHICH WERE FOUND AND SEIZED ARE THE PREMISES ALSO INCLUDE A DIARY IDENTIFIED AS BK-2 CONTAINING LEDGERS OF DIFFERENT PARTIES. ON GOING THROUGH 11 PAGES OF THESE LEDGERS IT WAS FOUND THAT THE COMPANIES OF SRI SHASHWAT AGARWAL ARE PAPER COMPANIES AND ARE ENGAGED IN PROVIDING THE ACCOMMODATION ENTRIES OF BOGUS LTCG UNSECURED LOAN ETC TO VARIOUS PARTIES BY ACCEPTING UNDISCLOSED CASH FROM BENEFICIARIES. NAME OF SUCH BENEFICIARIES DATE-WISE RECEIPT OF CASH AND ISSUANCE OF CHEQUES FROM AND TO THEM IS RECORDED IN THIS DIARY VERY VIVIDLY. THE NAME OF SRI NAVIN JAIN AND HIS FAMILY MEMBERS SUCH AS HIS FATHER SRI NARESH KIUNAR JAIN NARESH KUMAR JAIN HUF HIS MOTHER SMT SHRIMATI JAIN AND HIS WIFE NEETU JAIN ALSO FIGURE IN THIS DIARY. SHRI NAVIN JAIN AND HIS AFOREMENTIONED FAMILY MEMBERS HAVE TAKEN ACCOMMODATION ENTRIES OF TAX EXEMPT LONG TERM CAPITAL GAIN BY THE WAY OF PRE- ARRANGED AND MANIPULATIVE TRADING IN THE SHARES CITYON SYSTEMS (INDIA) LIMITED. THIS SALE WAS STAGE MANAGED BY SH. SHASHWAT AGARWAL AND HIS BROTHERS AS ALL THE SHARES WERE PURCHASED BY THE COMPANIES CONTROLLED BY SH. SHASHWAT AGARWAL.' 5.1 THE ABOVE OBSERVATIONS NOTED BY THE ASSESSING OFFICER CLEARLY DEMONSTRATE THAT A DIARY IDENTIFIED AS BK-2 WAS IMPOUNDED DURING SEARCH & SEIZURE OPERATION ON 28/04/2015 IN THE CASE OF SEARCH ON THE COMPANIES BELONGING TO SHRI SHASHWAT AGARWAL WHEREIN THE NAME OF SHRI NAVIN JAIN AND HIS FAMILY MEMBERS WERE MENTIONED. THE ASSESSING OFFICER NOWHERE NOTED THAT THE NAMES OF THE ASSESSEES WAS ALSO MENTIONED IN SUCH DIARY. MOREOVER FROM THE FINDINGS OF THE ASSESSING OFFICER WE FIND THAT THE COMPANIES OF SHRI SHASHWAT AGARWAL WERE ENGAGED IN PROVIDING ACCOMMODATION ENTRIES OF BOGUS LONG TERM CAPITAL GAIN UNSECURED LOANS ETC. TO VARIOUS PARTIES AND THERE IS NO MENTION OF BOGUS TRANSACTIONS OF CLOTH. MOREOVER THE ABOVE FINDINGS CLEARLY INDICATE THAT THE ACCOMMODATION ENTRIES OF LONG TERM CAPITAL GAIN AND UNSECURED LOANS WERE OBTAINED BY THE INDIVIDUALS MENTIONED IN THE ASSESSMENT ORDER AND THERE IS NO MENTION THAT THE ASSESSEES HAD TAKEN ANY ENTRY OF LONG TERM CAPITAL GAIN OR UNSECURED LOANS FROM THE COMPANIES OF SHRI SHASHWAT AGARWAL. THIS FACT IS FURTHER CORROBORATED FROM THE FACT THAT THE ASSESSING OFFICER IN THE CASE OF THE ASSESSEES DID NOT MAKE ANY ADDITION ON ACCOUNT OF LONG TERM CAPITAL GAIN OR UNSECURED LOANS BUT HE MADE THE ADDITIONS BY HOLDING THE SALE AND PURCHASE OF CLOTH WHICH WAS PURCHASED FROM RICH GROUP OF COMPANIES TO BE BOGUS. ALL THESE FACTS DEMONSTRATE THAT THE ASSESSING OFFICER HAD NOT MADE THE ADDITION ON THE BASIS OF ANY INCRIMINATING DOCUMENT BUT HAD MADE THE ADDITION ON ACCOUNT OF BOGUS SALE AND PURCHASE OF 12 CLOTH FOR WHICH NO DOCUMENT WAS FOUND DURING THE COURSE OF SEARCH. EVEN OTHERWISE THE DOCUMENTS RELIED ON BY THE ASSESSING OFFICER WERE FOUND AT THE PREMISES OF THE COMPANIES OF SHRI SHASHWAT AGARWAL WHEREIN THE SEARCH WAS CARRIED OUT ON 28/04/2015 AND THERE TOO THE INCRIMINATING MATERIAL AS MENTIONED IN THE ASSESSMENT ORDER WAS A DIARY IDENTIFIED AS BK-2 WHEREIN THE NAMES OF SOME PROMOTERS/DIRECTORS OF THE ASSESSEES WERE MENTIONED. NOWHERE THEREIN THE NAMES OF THE ASSESSEES HAVE BEEN MENTIONED. LEARNED COUNSEL FOR THE ASSESSEE HAD RELIED ON A NUMBER OF CASE LAWS FOR THE PROPOSITION THAT IN CASE NO INCRIMINATING MATERIAL IS FOUND THE ADDITIONS CANNOT BE MADE IN THE CASE OF COMPLETED ASSESSMENTS. PARTICULAR RELIANCE WAS PLACED ON THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF KABUL CHAWLA (SUPRA) WHEREIN THE SLP FILED BY THE DEPARTMENT WAS DISMISSED BY HON'BLE SUPREME COURT. LEARNED COUNSEL FOR THE ASSESSEE HAD ALSO RELIED ON CASE LAW OF PR. CIT VS. MEETA GUTGUTIA (SUPRA) THE SLP OF WHICH HAS ALSO BEEN DISMISSED BY HON'BLE SUPREME COURT. THOUGH THE SLP IN THE CASE OF KABUL CHAWLA WAS DISMISSED DUE TO LOW TAX EFFECT BUT THE SLP IN THE CASE OF MEETA GUTGUTIA WAS NOT DISMISSED DUE TO LOW TAX EFFECT BUT WAS DISMISSED ON MERITS. FOR THE SAKE OF COMPLETENESS THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN THE CASE OF MEETA GUTGUTIA IS REPRODUCED BELOW: 'A SEARCH AND SEIZURE UNDER SECTION 132 URNS CONDUCTED IN THE PREMISES OF THE FNP GROUP WHICH COMPRISED OF VARIOUS COMPANIES PARTNERSHIPS AND PROPRIETORSHIP CONCERNS. THE STATEMENT OF AN EMPLOYEE PG WAS RECORDED ON OATH UNDER SECTION 133A. THE ASSESSEE WAS A DIRECTOR/PARTNER/ SHAREHOLDER IN THE GROUP OF COMPANIES/CONCERNS. SHE WAS THE PROPRIETOR OF THE CONCERN FNP. ON THE BASIS OF DOCUMENTS RECOVERED DURING THE SEARCH OPERATION A NOTICE UNDER SECTION 153A WAS ISSUED TO THE ASSESSEE. THEREAFTER A NOTICE AND QUESTIONNAIRE UNDER SECTIONS 143(2) AND 142(1) WERE ALSO ISSUED. THE ASSESSING OFFICER PASSED SEPARATE ORDERS IN RESPECT OF THE ASSESSMENT YEARS 2000-01 TO 2003-04. FOR THE ASSESSMENT YEAR 2004-05 AS IN THE PRECEDING YEARS THE ASSESSEE HAD CLAIMED DEDUCTION ON ACCOUNT OF FRANCHISEE COMMISSIONS PAID TO VARIOUS PARTIES. THE ASSESSING OFFICER HELD THAT THE ADDRESSES OF THE FRANCHISEES WERE NOT REVEALED AND THAT THERE WERE DISCREPANCIES IN THE DETAILS OF THE ACCOUNTS OF THE FRANCHISEES FILED BY THE ASSESSEE. CONSEQUENTLY THE FRANCHISEE COMMISSION PAYMENTS CLAIMED BY THE ASSESSEE WERE ADDED BACK TO HER 13 INCOME. FOR THE ASSESSMENT YEAR 2004-05 THE ASSESSING OFFICER ALSO MADE AN ADDITION ON ACCOUNT OF STOCK. THE ASSESSING OFFICER ESTIMATED THE UNDISCLOSED INCOME ON ACCOUNT OF FRANCHISEE FEE AT A CERTAIN PERCENTAGE FOR THE ASSESSMENT YEARS 2001 -02 TO 2006- 07. NO ADDITION WAS MADE FOR THE ASSESSMENT YEAR 2006-07 ALTHOUGH A DISCLOSURE WAS MADE. BEFORE THE COMMISSIONER (APPEALS) THE ASSESSEE PRODUCED ADDITIONAL EVIDENCE UNDER RULE 46A OF THE INCOME-TAX RULES 1962 WHICH INCLUDED COPIES OF FRANCHISEE AGREEMENTS. A REJOINDER WAS FILED BY THE ASSESSEE. ON ANALYSIS OF THE ADDITIONAL EVIDENCE THE COMMISSIONER (APPEALS) HELD THAT THE ACCOUNTS OF THE ASSESSEE HAD BEEN TAX AUDITED AND THAT NO ADVERSE REMARKS HAD BEEN MADE BY THE TAX AUDITORS. HE FURTHER HELD THAT THE ASSESSING OFFICER HAD NOT REJECTED THE BOOKS OF ACCOUNT OF THE ASSESSEE. ACCORDINGLY HE HELD THAT THE DISALLOWANCE OF THE FRANCHISEE COMMISSIONS PAID WERE UNSUSTAINABLE AND DELETED THE ADDITIONS MADE. HE DELETED THE ADDITIONS MADE ON ACCOUNT OF PAYMENT OF RENT NON-REFUNDABLE SECURITY INCOME FROM SELF- CONTROLLED OUTLETS AND REDUCED THE ADDITION MADE ON ACCOUNT OF CLOSING STOCK. HE ALSO DELETED THE ADDITIONS OF UNDISCLOSED INCOME MADE ON ACCOUNT OF FRANCHISEE FEE ACCEPTING THE CONTENTION OF THE ASSESSEE THAT THERE WAS NO DISCLOSURE MADE FOR EARLIER YEARS OR ANY EVIDENCE UNEARTHED DURING THE SEARCH BY THE DEPARTMENT THAT SUCH FRANCHISEE FEE INCOME WAS NOT DISCLOSED BY HER. BOTH THE DEPARTMENT AND THE ASSESSEE FILED APPEALS BEFORE THE APPELLATE TRIBUNAL. ACCEPTING THE CONTENTION OF THE ASSESSEE THAT FOR THE ASSESSMENT YEARS 2000-01 TO 2003-04 THERE WAS NO INCRIMINATING MATERIAL SEIZED DURING THE COURSE OF SEARCH AND THEREFORE THE ASSESSMENT ORDERS IN RESPECT OF THOSE YEARS OUGHT TO BE QUASHED THE APPELLATE TRIBUNAL HELD THAT THE ASSUMPTION OF JURISDICTION UNDER SECTION 153 A FOR THOSE ASSESSMENT YEARS WAS ILLEGAL. IN RESPECT OF THE ASSESSMENT YEAR 2004-05 THE APPELLATE TRIBUNAL HELD THAT THE ADDITIONS MADE WERE BASED ON SEIZED DOCUMENTS AND THEREFORE THE ASSESSMENT UNDER SECTION 153A WAS VALID. IT DISMISSED THE APPEALS FILED BY THE DEPARTMENT IN RESPECT OF THE DELETIONS MADE BY THE COMMISSIONER (APPEALS) AND DISMISSED THE ASSESSEE'S APPEAL FOR NON-PROSECUTION. ON APPEALS: 14 HELD DISMISSING THE APPEALS (I) THAT IT WAS ONLY IF DURING THE COURSE OF SEARCH UNDER SECTION 132 INCRIMINATING MATERIAL JUSTIFYING THE REOPENING OF THE ASSESSMENTS FOR SIX PREVIOUS YEARS WAS FOUND THAT THE INVOCATION OF SECTION 153 A QUA EACH OF THE ASSESSMENT YEAR WOULD BE JUSTIFIED.' 5.2 THE ABOVE JUDGMENT OF HON'BLE DELHI HIGH COURT HAS BEEN UPHELD BY HON'BLE SUPREME COURT AS THE SLP FILED BY REVENUE HAS BEEN DISMISSED WHICH IS REPORTED AT 96 TAXMANN.COM 468. HON'BLE DELHI HIGH COURT IN ABOVE CASE HAS DISTINGUISHED THE CASE LAW OF DAYAWANTI GUPTA VS. CIT 390 ITR 496 (DEL) WHICH LEARNED D. R. HAD HEAVILY RELIED. THE CASE LAW OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF RAJ KUMAR ARORA 367 ITR 517 THOUGH SUPPORTS THE CONTENTIONS OF THE REVENUE BUT SINCE HON'BLE SUPREME COURT HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE IN THE CASE OF MEETA GUTGUTIA THEREFORE THE JUDGMENT OF JURISDICTIONAL HIGH COURT WILL NOT HELP THE REVENUE. THE CONTENTION OF THE REVENUE THAT SINCE THE DEPARTMENT HAS NOT ACCEPTED THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF KABUL CHAWLA AND MEETA GUTGUTIA AS SLP IN THE CASE OF CIT VS. CONTINENTAL WAREHOUSING CORPORATION 235 TAXMAN 568 (SC) HAS BEEN ADMITTED IS ALSO OF NO HELP TO REVENUE. THEREFORE IN VIEW OF THE ABOVE CASE LAWS WE HOLD THAT IN CASE OF COMPLETED ASSESSMENTS THE ADDITION CAN BE MADE ONLY ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING SEARCH. WE HAVE ALREADY HELD THAT NO INCRIMINATING MATERIAL WAS FOUND FROM THE PREMISES OF THE ASSESSEE THEREFORE THE ADDITIONS CANNOT BE MADE IN THE CASE OF COMPLETED ASSESSMENTS WHICH IN THIS CASE IS APPEAL FOR ASSESSMENT YEAR 2013-14 WHEREIN IN I.T.A. NO.510 THE ASSESSMENT ORDER WAS ALREADY PASSED U/S 143(3) ON 22/03/2016 WHICH IS BEFORE THE SEARCH DATE OF 23/08/2016 COPY OF ASSESSMENT ORDER IS PLACED AT PAGES 51 TO 54 OF THE PAPER BOOK. SIMILARLY IN I.T.A. NO. 515 THE ASSESSMENT WAS COMPLETED U/S 143(3) VIDE ORDER DATED 23/03/2016 THE COPY OF WHICH IS PLACED AT PAGES 54 TO 57 OF THE PAPER BOOK. SIMILARLY IN I.T.A. NO.517 RELATING TO ASSESSMENT YEAR 2013-14 THE ASSESSMENT ORDER U/S 143(3) DATED 30/03/2016 A COPY OF WHICH IS PLACED IN PAPER BOOK AT PAGES 52 TO 56. THEREFORE THE ASSESSMENTS IN THESE CASES STOOD COMPLETED. LEARNED COUNSEL FOR THE ASSESSEE HAD THOUGH ARGUED THAT THE ASSESSMENT FOR ASSESSMENT YEAR 2015-16 ALSO STOOD COMPLETED BUT IN OUR OPINION THE APPEALS FOR ASSESSMENT YEAR 2015-16 CANNOT BE SAID TO BE COMPLETED AS TIME FOR ISSUE OF NOTICE U/S 143(2) WAS STILL AVAILABLE TO THE DEPARTMENT WHICH WAS UPTO 30/09/2016 WHEREAS THE SEARCH TOOK PLACE ON 15 23/08/2016 WHICH MEANS THAT THERE WAS TIME AVAILABLE TO THE DEPARTMENT TO ISSUE NOTICE U/S 143(2) THEREFORE THE APPEALS FILED FOR ASSESSMENT YEAR 2015-16 CANNOT BE SAID TO HAVE COMPLETED. IN VIEW OF THE ABOVE DISCUSSION GROUND NO. 2 & 7 OF THE APPEALS IN I.T.A. NO.510 515 & 517 ARE ALLOWED. 10. NOW TO DETERMINE AS TO WHETHER THE ASSESSMENT YEARS UNDER QUESTION IN THESE APPEALS STOOD COMPLETED OR NOT IT HAS TO BE SEEN AS TO WHETHER THE ASSESSMENTS IN THESE YEARS WERE COMPLETED U/S. 143(3) OF THE ACT AND IF NOT WHETHER THE TIME FOR ISSUING NOTICES U/S. 143(2) OF THE ACT HAD EXPIRED OR NOT. THE LD. AR IN THIS RESPECT HAS FILED A CHART INDICATING THEREIN THE DATE OF FILING OF ORIGINAL RETURN AS WELL AS TIME LIMIT FOR THE ISSUE OF NOTICE U/S. 143(2) OF THE ACT AND ALSO THE CASES WERE ASSESSMENT HAS BEEN COMPLETED U/S. 143(3) OF THE ACT. THE DATA IN THE CHART HAS BEEN VERIFIED FROM THE COPY OF ACKNOWLEDGEMENT OF FILING OF RETURN AS PLACED IN RESPECTIVE PAPER BOOK AS INDICATED IN THE CHART AS REPRODUCED BELOW: 16 17 11. IT IS SEEN THAT ASSESSMENT IN THESE YEARS STOOD CONCLUDED AND ASSESSING OFFICER HAS NOT MADE ADDITIONS ON THE BASIS OF ANY INCRIMINATING MATERIAL AND THEREFORE THE ADDITIONS SUSTAINED BY THE LD. CIT(A) ARE NOT SUSTAINABLE AND THEREFORE GROUND NO.2 IN ALL THESE APPEALS IS ALLOWED. 12. WE HAVE ALLOWED THE APPEALS OF THE ASSESSEES ON GROUND NO.2 ONLY. THE OTHER GROUNDS OF APPEAL TAKEN BY THE ASSESSEE WERE NEITHER ARGUED NOR ADJUDICATED AND HENCE THEY ARE DISMISSED AS INFRUCTUOUS. 13. IN THE RESULT ALL THE APPEALS FILED BY THE ASSESSEES ARE PARTLY ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 27/05/2021) SD/- SD/- ( A. D. JAIN ) ( T. S. KAPOOR ) VICE PRESIDENT ACCOUNTANT MEMBER AKS DTD. 27/05/2021 18 COPY OF ORDER FORWARDED TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR