M/s Ujjal Transport Agency, Asansol v. C.I.T Central - II,Kolkata, Kolkata

ITSSA 58/KOL/2013 | 2007-2008
Pronouncement Date: 19-10-2016

Appeal Details

RSA Number 5823516 RSA 2013
Assessee PAN AAAFU6732H
Bench Kolkata
Appeal Number ITSSA 58/KOL/2013
Duration Of Justice 3 year(s) 5 month(s) 4 day(s)
Appellant M/s Ujjal Transport Agency, Asansol
Respondent C.I.T Central - II,Kolkata, Kolkata
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 19-10-2016
Appeal Filed By Assessee
Bench Allotted C
Tribunal Order Date 19-10-2016
Date Of Final Hearing 22-09-2016
Next Hearing Date 22-09-2016
Assessment Year 2007-2008
Appeal Filed On 15-05-2013
Judgment Text
ITSS.NO.58/KOL/2013-M/S. UJJAL TRANSPORT AGENCY A.Y .2007-08 1 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH C KOLKATA (BEFORE SHRI N. V. VASUDEVAN J.M. & SHRI M. BALAGAN ESH A.M.) ITA(SS) NO.58/KOL/2013 : ASSTT. YEAR : 2007-08 M/S. UJJAL TRANSPORT AGENCY G. T. ROAD(EAST ) MURGASOL ASANSOL. PAN: AAAFU6732H VS CIT CENTRAL-II KOLKATA. (APPELLANT) (RESPONDENT) ASSESSEE BY :A. K. TIBREWAL FCA. REVENUE BY : SHRI G. MALLIKARJUNA CIT DR DATE OF HEARING : 22.09.2016 DATE OF PRONOUNCEMENT : 19-10-2016 ORDER PER SHRI N. V. VASUDEVAN J.M . THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORD ER DATED 21/03/2013 OF CIT CENTRAL-II KOLKATA PASSED U/S.263 OF THE INCOME-TA X ACT 1961(ACT) RELATING TO ASSESSMENT YEAR 2007-08. 2. GROUNDS OF APPEAL READ AS UNDER: 1. THE ORDER PASSED BY THE LD. CIT U/S. 263 IS ILL EGAL AND BAD IN LAW. 2. THE LD. CIT FAILED TO APPRECIATE THAT NO INCRIM INATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH. AS SUCH IT WAS NOT OP EN TO THE ASSESSING OFFICER IN PROCEEDING U/S.153A READ WITH SECTION 143(3) TO MAK E ANY ADDITION IN THE CONCLUDED ASSESSMENT. 3. THE LD. CIT IS HIMSELF UNSURE OF HIS ACTION IN S ETTING ASIDE THE ASSESSMENT U/S.153A READ WITH SECTION 143(3) WHEN SEEN IN THE CONTEXT THAT HE DIRECTS THE ASSESSING OFFICER TO EXAMINE THE APPLICABILITY OF S ECTION147. ITSS.NO.58/KOL/2013-M/S. UJJAL TRANSPORT AGENCY A.Y .2007-08 2 3. THE ASSESSEE IS A PARTNERSHIP FIRM AND IS ENGAGE D IN THE BUSINESS OF EXCAVATION TRANSPORTATION OF COAL AND OTHER ALLIED ACTIVITIES. FOR ASSESSMENT YEAR 2007-08 THE ASSESSEE FILED RETURN OF THE INCOME ON 30.10.2007 D ECLARING A TOTAL INCOME OF RS.82 47 737/-. THE SAID RETURN WAS ACCEPTED U/S.14 3 (1) OF THE INCOME TAX ACT 1961 (ACT). 4. THERE WAS A SEARCH AND SEIZURE OPERATION CARRIE D BY THE REVENUE U/S.132 OF THE INCOME TAX ACT 1961 (ACT) IN THE EMTA GROUP OF CAS ES ON 15.02.2009. THE ASSESSEE WAS ALSO SEARCHED. A NOTICE U/S.153A OF THE ACT DA TED 29.09.2009 WAS ISSUED FOR ASSESSMENT YEAR 2007-08. THE ASSESSEE BY LETTER DAT ED 25.01.2010 REQUESTED THE AO TO TREAT THE RETURN OF INCOME ALREADY FILED ON 30.10.2 007 AS A RETURN FILED IN RESPONSE TO THE NOTICE U/S.153A OF THE ACT. THE AO PASSED AN ORDER U/S. 153A READ WITH SECTION 143(3) OF THE ACT DATED 31.12.2010 WHEREIN THE AO DETERM INED THE TOTAL INCOME OF THE ASSESSEE AT RS.84 35 250/-. WHILE CONCLUDING THE ASSESSMENT ONE OF THE CLAIM MADE BY THE ASSESSEE THAT WAS CONSIDERED BY THE AO WAS WITH REG ARD TO GRANT OF ADDITIONAL DEPRECIATION IN RESPECT OF DUMPERS AND TIPPERS ETC. THE AO MADE THE FOLLOWING OBSERVATION WHILE ALLOWING THE CLAIM OF THE ASSESSE E FOR ADDITIONAL DEPRECIATION: DEPRECIATION: A QUESTION WAS RAISED AS TO THE ALLO WABILITY OF DEPRECIATION IN RESPECT OF DUMPERS TIPPERS ETC WHEREIN DEPRECIATION @ 30% W AS CLAIMED INSTEAD O F THE PRESCRIBED DEPRECIATION RATE OF 15% ON PLANT AND MA CHINERY. THE ISSUE WAS DISCUSSED WITH THE A/R AT LENGTH. IT IS EMPHASIZED THAT DUMPE RS TIPPERS ETC. WHICH ARE USED BY THE ASSESSEE FIRM ARE TO BE CONSIDERED AS HEAVY VEHICLE S OR EARTH MOVING MACHINERY INSTEAD OF CONSIDERING IT AS PLANT & MACHINERY. A C OPY OF RELEVANT PART OF THE SUBMISSION IS REPRODUCED HEREUNDER:- WITH REGARD TO YOUR QUERY OF CLAIM OF HIGHER RATE OF DEPRECIATION ON DUMPERS TIPPERS ETC INSTEAD OF PRESCRIBED DEPRECIATION RATE ON PLANT & MACHINERY- AT THE VERY OUTSET REFERENCE BE DRAWN TO NATURE OF BUSINESS ACTIVITIES OF THE ASSESSEE AND NATURE OF TRANSPORTATION USED. AS A MA TTER OF FACT THE MACHINERY AND VEHICLES INVOLVED ARE EITHER HEAVY VEHICLES OR EART H MOVING MACHINERY. THE CASE IS FULLY COVERED BY FOLLOWING CASES DECIDED BY VARI OUS COURTS WHEREIN UPON SIMILAR FACTS IT WAS HELD BY COURTS THAT THE ASSESS EE IS ELIGIBLE FOR HIGHER RATES OF DEPRECIATION. ITSS.NO.58/KOL/2013-M/S. UJJAL TRANSPORT AGENCY A.Y .2007-08 3 COMMISSIONER OF INCOME-TAX COCHIN V. GAYLORD CONST RUCTIONS(2010) 190 TAXMAN 406(KER.) COMMISSIONER OF INCOME-TAX V. DEVI ENTERPRISES [200 1] 118 TAXMAN 158 (MAD.) COMMISSIONER OF INCOME-TAX V. POPULAR BOREWELL SERV ICE [1992] 194 ITR 12 [MAD.] IT IS STATED THAT THE ASSESSEE HAS CLAIMED PROPER D EPRECIATION ON DUMPER AND TIPPERS AND NO EXTRA DEPRECIATION HAS BEEN CLAIMED ON ANY VEHICLE AS POINTED OUT BY YOUR GOOD SELF AND THE MATTER WHETHER SUCH MACHI NERY IS COVERED BY EARTH MOVERS HAVE ALREADY BEEN EXAMINED BY COURTS AND HEL D IN ASSESSES FAVOUR. IN THIS CONNECTION REFERENCE BE DRAWN IN THE CASE OF CIT V. SIBSON CONSTRUCTION AND CO. EARTHMOVING MACHINERY FOR PURPOSES OF DEPRECIATION. AS PER SEC 32 OF THE INCOME-TAX ACT 1961 DEPRECIAT ION IS ALLOWABLE AT THE PRESCRIBED RATE. THE PROVISO UNDER CLAUSE II OF THE SUB-SEC 1 OF SECTION 32 STATED AS UNDER: PROVIDED ALSO THAT WHERE AN ASSET BEING COMMERCIAL VEHICLE IS ACQUIRED BY THE ASSESSEE ON OR AFTER THE 1 ST DAY OF APRIL 1999 AND IN PUT TO USE BEFORE THE 1 ST DAY OF APRIL 1999 FOR THE PURPOSE OF BUSINESS OR PROFESSION THE DEDUCTION IN RESPECT OF SUCH ASSET SHALL BE ALLOWED ON SUCH PERCENTAGE ON THE WRITTEN DOWN VALUE THEREOF AS MAY BE PRESCRIBED. EXPLANATION- FOR THE PURPOSES OF THIS PROVISO- (A) THE EXPRESSION COMMERCIAL VEHICLE MEANS HEAVY GOODS VEHICLE HEAVY PASSENGER MOTOR VEHICLE MEDIUM GOODS VEHICLE AN D MEDIUM PASSENGER MOTOR VEHICLE BUT DOES NOT INCLUDE MAXI-CAB TR ACTOR AND ROAD ROLLER; (B) THE EXPRESSIONS HEAVY GOODS VEHICLE MEDIUM PASS ENGER MOTOR VEHICLE LIGHT MOTOR VEHICLE MEDIUM PASSENGER MOTOR VEHI CLEMAXI-CAB MOTOR-CAB AND ROAD-ROLLER SHALL HAVE THE MEA NINGS RESPECTIVELY AS ASSIGNED TO THEM IN SECTION 2 OF THE MOTOR VEHICLES ACT 1988 (59 OF 1988) FURTHER WE ARE TO STATE THAT WE HAVE CLAIMED DEPREC IATION OF DUMPERS AND TIPPERS WHICH ARE REGISTERED UNDER THE MOTOR VEHICLES ACT 1 988 ( 59 OF 1988) AS PUBLIC CARRIER AND FOR READY REFERENCE WE ARE ENCLOSING HE REWITH THE XEROX COPIES OF SOME OF THE R. C. BOOKS FOR READY REFERENCE ALONG W ITH SAMPLE COPIES OF ROAD TAX CHALLAN DULY PAID ON SUCH VEHICLES FOR YOUR PER USAL AND TO SUBSTANTIATE OUR SUBMISSION AS TO PROPER DEPRECIATION CLAIMED BY US. THE ASSESSEE FIRM HAS ALSO FURNISHED COPIES OF REGI STRATION CERTIFICATE ISSUED BY THE MOTOR VEHICLES AUTHORITIES ON WHICH DEPRECIATION HA S BEEN CLAIMED. IT IS SEEN FROM THE EXAMINATION OF REGISTRATION CERTIFICATE THAT SUCH V EHICLES ARE DESCRIBED AS HGV OR HCV. THE A/ R HAS STATED THAT HGV STANDS FOR HEAVY GOODS VEHICLE AND HCV FOR HEAVY COMMERCIAL VEHICLE. AT THE COURSE OF ASSESSMENT PROCEEDINGS IT IS EXPL AINED BY THE A/R THAT DEPRECIATION SCHEDULE FOR THE PRESENT YEAR FURNISHED ALONG WITH FORM NO.3CD REVEALS THAT ITSS.NO.58/KOL/2013-M/S. UJJAL TRANSPORT AGENCY A.Y .2007-08 4 DEPRECIATION ON DUMPERS TIPPERS ETC WHICH ARE BROU GHT FORWARD FROM EARLIER YEARS AND ARE PUT TO USE PRIOR TO 1 ST DAY OF APRIL 1999 ARE CLAIMED @ 30% BY TREATING THEM AS COMMERCIAL VEHICLE ON THE RATIO AS LAID DOWN IN THE DECISIONS OF APPELLATE AUTHORITIES MENTIONED IN THEIR SUBMISSION. DEPRECIATION ON THE SAID ASSETS HAS BEEN CLAIMED @ 30% IN SUBSEQUENT YEARS ALSO KIPPING PARITY OF THE CLAI M AS PER SCHEDULE. HOWEVER THE ASSESSEE HAS ITSELF CLAIMED DEPRECIATION ON DUMPERS AND TRIPPERS @ 15% BY CONSIDERING IT AS PLANT & MACHINERY IN RESPECT OF ADDITIONS MAD E ON SUCH ITEMS DURING THE CURRENT YEAR. IT IS SEEN DURING THE YEAR THE ASSESSEE FIRM HAS CL AIMED ADDITIONAL DEPRECIATION @ 20% AND QUESTION WAS PUT TO EXPLAIN THE REASON FOR SUCH ADDITIONAL DEPRECIATION. THE A/R HAS DRAWN ATTENTION TO THE SUBMISSION GIVEN IN THE A.Y 200902010 IN THIS RESPECT WHEREIN THE CLAIM OF ADDITIONAL DEPRECIATION ON THE NEWLY PURCH ASED ASSETS HAS BEEN EXPLAINED. THEREFORE IN LIGHT OF THE FACTS AS NARRATED ABOVE AND CONSIDERING THE DOCUMENTS FILED BY THE ASSESSEE IN SUPPORT OF ITS CLAIM AS ALSO THE SETTLED POSITION OF LAW NO ADVERSE INFERENCE IS DRAWN AS TO THE CLAIM OF DEPRECIATION OF THE ASSESSEE FIRM .(EMPHASIS SUPPLIED) 5. THE COMMISSIONER OF INCOME TAX (CIT) IN EXERCISE OF HIS POWERS U/S.263 OF THE ACT WAS OF THE VIEW THAT THE ACTION OF THE AO IN AL LOWING ADDITIONAL DEPRECIATION AS STATED ABOVE WAS ERRONEOUS AND PREJUDICIAL TO THE I NTEREST OF THE REVENUE. ACCORDING TO THE CIT THE ASSESSEE WAS ONLY ENGAGED IN CARRYING OUT JOB WORK RELATING TO EXCAVATION TRANSPORTATION EXTRACTION AND MINING OF COAL. ACCO RDING TO THE CIT AS PER THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF LUCKY MINING P VT. LTD. VS. CIT REPORTED IN 116 TAXMANN. 1(SC) MINING ACTIVITY DOES NOT MEAN MANUF ACTURE OR PRODUCTION AND OBVIOUSLY A PERSON DOING CONTRACT OF MINING ACTIVIT Y CANNOT BE SAID TO BE ENGAGED IN MANUFACTURE OR PRODUCTION OF ANY ARTICLE OR THING. ACCORDING TO CIT THE ASSESSEE WAS THEREFORE NOT ENTITLED TO ADDITIONAL DEPRECIATION U/S32(1) (IIA) OF THE ACT SINCE THE CONDITION FOR CLAIMING ADDITIONAL DEPRECIATION IS T HAT THE ASSESSEE SHOULD BE ENGAGED IN ACTIVITY OF MANUFACTURE OF PRODUCTION. ACCORDINGLY THE CIT ISSUED SHOW CAUSE NOTICE U/S.263 OF THE ACT CALLING UPON THE ASSESSEE TO SHO W CAUSE AS TO WHY THE ORDER OF THE AO SHOULD NOT BE REVISED U/S.263 OF THE ACT. 6. THE ASSESSEE IN RESPONSE TO THE SHOW CAUSE NOTI CE U/S. 263 OF THE ACT SUBMITTED THAT THE ISSUE WITH REGARD TO ALLOWING ADDITIONAL DEPREC IATION CANNOT BE SUBJECT MATTER OF ITSS.NO.58/KOL/2013-M/S. UJJAL TRANSPORT AGENCY A.Y .2007-08 5 ASSESSMENT PROCEEDINGS U/S.153A OF THE ACT BECAUSE NO INCRIMINATING DOCUMENT WHATSOEVER WAS FOUND IN THE COURSE OF SEARCH SO AS TO DISALLOW THE CLAIM OF THE ASSESSEE FOR ADDITIONAL DEPRECIATION. THE ASSESSEE SUBMITTED THAT THE RETURN OF INCOME FILED U/S.139(1) OF THE ACT WAS ACCEPTED BY THE REVENUE A ND NO NOTICE U/S.143(2) OF THE ACT WAS ISSUED WITHIN THE TIME LIMIT CONTEMPLATED BY LA W. THEREFORE THE CLAIM FOR ADDITIONAL DEPRECIATION ALREADY ALLOWED CANNOT BE DISALLOWED I N THE ASSESSMENT U/S.153C OF THE ACT WITHOUT THERE BEING INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH. THE ASSESSEE ALSO SUBMITTED THAT EVEN A PERSON DOING MINING ACTI VITY CAN BE CONSIDERED TO BE ENGAGED IN MANUFACTURE AND ADDITIONAL DEPRECIATION CAN BE A LLOWED. 7. THE CIT HOWEVER DID NOT AGREE WITH THE SUBMISSI ONS OF THE ASSESSEE AND HE HELD AS UNDER: THE FACTS OF THIS CASE ARE SIMPLE. THE ORIGINAL E -RETURN WAS FILED FOR A. Y. 2007-08 ON 30.10.2007 DULY SELF ASSESSED U/S. 140A BY THE ASSE SSEE. THIS WAS PROCESSED U/S.143(1)(A) CHECKING ONLY ARITHMETICAL ERRORS AND CLAIMS IN RE SPECT OF INCOMES AND TAXES AND 143(1) (A) ASSESSMENT BY THE AO AS HE IS PRECLUDED FROM A NY APPLICATION OF MIND AS PER LAW. THIS CAN BE DONE ONLY U/S.143(2) /142(1). THEREFORE WHAT WAS ON RECORD WAS ONLY SELF ASSESSMENT OF INCOME DONE BY THE ASSESSEE U/S.140A OF THE ACT. THE PREMISES OF THE ASSESSEE WERE SEARCHED ON 15.01 .2009 WITH SEIZURE OF BOOKS AND DOCUMENTS FOR VARIOUS YEARS INCLUDING FOR THIS A. Y . 2007-08 AND NOTICES U/S.153A WERE ISSUED. FOR THIS YEAR THE ASSESSEE FILED A LETTER THAT THE ORIGINAL E-RETURN MAY BE TREATES AS RETURN U/S.153A. THEREFORE TILL STAGE THERE EXI STED ONLY RETURNS FILED U/S.139(1)/153A DULY SELF ASSESSED U/S.140A BY THE ASSESSEE HIMSELF . WITHIN THE MEANING OF SECTION 153A THE AO HAD NOT MADE ANY ASSESSMENT OR RE-ASSESSMENT IN THIS CASE TILL THE DATE OF SEARCH U/S.132. THE FIRST ASSESSMENT PROCEEDINGS WERE COMMENCED FOR THIS YEAR BY ISSUE OF NOTICE U/S.143(2)/142(1) R.W.S. 153A RESULTING IN THE FIR ST AND ONLY ASSESSMENT ORDER U/S.143(3)/ 153A DATED 31.12.2010. THE SAID ASSESSMENT ORDER BE COME FINAL AS NO APPEALS WERE FILED BY THE ASSESSEE. WHILE IT IS TRUE THAT BOOKS AND DO CUMENTS WERE SEIZED FOR A NUMBER OF YEARS INCLUDING THIS YEAR YET IT IS A FACT THAT NO SEPARATE ADDITIONS WERE MADE TO RETURNED INCOME BASED ON SUCH SEIZURE. THE ONLY FACT THAT C AME ON RECORD WAS THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRANSPORT CONTRACTOR TO FIRMS/COMPANIES WHICH ARE ENGAGED IN THE BUSINESS OF MINING AND EXCAVATION (THE SECTOR T HAT IS HELD TO BE NOT IN THE BUSINESS OF MANUFACTURE OF PRODUCTION). THIS BEING SO THE AO ER RED IN ALLOWING EXTRA DEPRECIATION IN HIS ORDER DATED 31.12.2010 AND THE SAID ORDER IS E RRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. ITSS.NO.58/KOL/2013-M/S. UJJAL TRANSPORT AGENCY A.Y .2007-08 6 IT IS FURTHER EVIDENT THAT THE CONTENTION OF THE A/ R THAT SUCH ACTION COULD NOT BE TAKEN U/S152A IS ENTIRELY UNTENABLE BECAUSE IT CAME TO NO TICE FOR THE FIRST TIME AFTER SEARCH. IN THE ONLY ASSESSMENT DONE IN THIS CASE AS TO WHAT I S ITS BUSINESS( AND THEREFORE CONSEQUENCES REGARDING WRONG CLAIM OF DEPRECIATION) . I THEREFORE HOLD THAT THE ORDER PASSED BY THE AO U/S. 153A/143(3) ON 31.12.2010 IS ERRONEOUS IS SO FAR AS IT IS PREJUDICIAL TO THE INT EREST OF REVENUE AS HE FAILED TO UNDERSTAND SETTLED POSITION OF LAW IN THIS RESPECT AND THEREBY REACHED A WRONG CONCLUSION AND ALLOWED THE CLAIM OF ADDITIONAL DEPR ECIATION. FOR THIS REASON THE ASSESSMENT ORDER DATED 31.12.20 10 IS SET ASIDE WITH THE DIRECTION THAT THE AO SHALL PASS APPROPRIATE ORDER AFTER GIVING OP PORTUNITY OF HEARING TO THE ASSESSEE. 8. AGGRIEVED BY THE ORDER OF THE CIT THE ASSESSEE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. WE HAVE HEARD THE RIVAL SUBMI SSIONS OF THE LD. COUNSEL FOR THE ASSESSEE AND THE LD. DR. THE LD. COUNSEL FOR THE AS SESSEE FIRSTLY SUBMITTED THAT THE RETURN ORIGINALLY FILED BY THE ASSESSEE U/S.139(1) OF THE ACT WAS ACCEPTED U/S.143(1) OF THE ACT AND NO NOTICE U/S 143(2) WAS ISSUED WITHIN THE TIME REQUIRED IN LAW AND THEREFORE THE CLAIM OF THE ASSESSEE IS DEEMED TO HAVE BEEN ACCEPT ED IN AN ASSESSMENT. THEREFORE WITHOUT ANY INCRIMINATING MATERIAL FOUND IN THE COU RSE OF SEARCH DISALLOWANCE OF ADDITIONAL DEPRECIATION CANNOT BE MADE BY THE AO. S INCE THE AO DOES NOT HAVE POWER TO DISALLOW THE DEPRECIATION THE CIT IN EXERCISE OF H IS POWERS U/S. 263 OF THE ACT CANNOT DIRECT THE AO TO DISALLOW DEPRECIATION. IT WAS FURT HER SUBMITTED BY HIM THAT A PERSON ENGAGED IN MINING ACTIVITY IS ENTITLED TO ADDITIONA L DEPRECIATION. IN THIS REGARD OUR ATTENTION WAS DRAWN TO A DECISION OF THE HONBLE KO LKATA HIGH COURT IN THE CASE OF CIT VS. G.S ATWAL REPORTED AT 128 TAXMAN 520(KOL) IN TH E AFORESAID DECISION THE HONBLE HIGH COURT AFTER CONSIDERING THE DECISION OF THE HO NBLE SUPREME COURT IN THE CASE OF LUCKY MINMAT REPORTED AT 245 ITR 830(SC) HELD THAT ACTIVITY OF MINING COAL IS AN ACTIVITY OF PRODUCTION OF COAL AND THE ASSESSEE IS ENTITLED TO INVESTMENT ALLOWANCE. LD. COUNSEL ALSO PLACED RELIANCE ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF ANIL KR. BHATIA (INFRA) FOR THE PROPOSITION THAT WITHOUT INCRIMINATING MATERIAL NO ADDITION CAN BE MADE IN ASSESSMENT U/S. 153A OF THE ACT. ITSS.NO.58/KOL/2013-M/S. UJJAL TRANSPORT AGENCY A.Y .2007-08 7 9. LD. DR PLACED RELIANCE ON THE ORDER OF THE CIT A ND SUBMITTED THAT SINCE THE RETURN OF INCOME ORIGINALLY FILED BY THE ASSESSEE U/S.139( 1) OF THE ACT WERE ACCEPTED IN PROCEEDINGS U/S 143(1) OF THE ACT THERE WAS NO OC CASION FOR THE AO TO INVESTIGATE THE QUESTION REGARDING GRANT OF ADDITIONAL DEPRECIATION . THEREFORE IN PROCEEDINGS U/S.153A OF THE ACT THE AO COULD GO INTO THE QUESTION REGAR DING GRANT OF ADDITIONAL DEPRECIATION. SINCE THE AO HAS JURISDICTION TO DECIDE THE QUESTI ON THE CIT IN EXERCISE OF HIS POWERS U/S.263 OF THE ACT HAS JURISDICTION TO GIVE DIRECTI ONS AS CONTAINED IN THE IMPUGNED ORDER. IT WAS FURTHER SUBMITTED BY HIM THAT FOR MAKING U/S 153 A OF THE ACT INCRIMINATING MATERIAL IS NOT REQUIRED AND IN THIS REGARD RELIED ON THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF KANARA HOUSING(INFRA). IT WAS FURTHER SUBMITTED BY HIM THAT THE ASSESSEE WAS NOT INVOLVED IN MANUFACTURE OF ARTICLE AND WAS ONLY A CONTRACTOR CARRYING OUT MINING ACTIVITY. IT WAS A SUBMISSION THAT THE A SSESSEES ACTIVITY DOES NOT FALL WITHIN THE DESCRIPTION OF THE DEFINITION OF MANUFACTURE AS GIVEN IN SECTION 2 (29BA) OF THE ACT. 10. WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE RI VAL SUBMISSIONS. IT IS NOT IN DISPUTE BEFORE US THAT WITH RESPECT TO THE ADDITIONS MADE D URING THE COURSE OF ASSESSMENT PROCEEDINGS U/S.153A OF THE ACT THERE WAS NO INCRI MINATING MATERIAL FOUND AT THE TIME OF SEARCH AND THAT THE AO WHILE CONCLUDING THE ASSESS MENT U/S.153A OF THE ACT DEALT WITH THE CLAIM OF THE ADDITIONAL DEPRECIATION IN THE COU RSE OF VERIFICATION OF VARIOUS CLAIMS MADE IN THE RETURN OF INCOME FILED IN RESPONSE TO T HE NOTICE U/S.153A OF THE ACT. IT IS ALSO NOT DISPUTED THAT WITH REFERENCE TO THE ORIGIN AL RETURN OF INCOME FILED UNDER SECTION 139(1) OF THE ACT ON 30.10.2007 NO NOTICE UNDER SE CTION 143(2) OF THE ACT WAS ISSUED WITHIN THE TIME LIMIT PRESCRIBED U/S.143(2) OF THE ACT AND THEREFORE SUCH ASSESSMENT PROCEEDINGS STOOD COMPLETED AND THAT IN ANY CASE ON THE DATE OF SEARCH I.E. ON 15.1.2009 THE ASSESSMENT FOR THE IMPUGNED ASSESSMENT YEAR OF 2007-08 WAS NOT PENDING. THEREFORE THE ASSESSMENT U/S.143(1) OF THE ACT FOR AY 2007-0 8 DOES NOT ABATE IN TERMS OF THE SECOND PROVISO TO SECTION 153A(1) OF THE ACT. IT I S THE PLEA OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE IMPUGNED ADDITIONS MADE BY THE AS SESSING OFFICER COULD NOT HAVE BEEN MADE IN THE IMPUGNED ASSESSMENT PROCEEDINGS AS THEY ARE NOT BASED ON ANY MATERIAL ITSS.NO.58/KOL/2013-M/S. UJJAL TRANSPORT AGENCY A.Y .2007-08 8 SEIZED OR FOUND DURING THE COURSE OF SEARCH AT THE BUSINESS PREMISES OF THE ASSESSEE. THE LEARNED DR HAS HOWEVER ARGUED WHERE AN ORIGINAL ASS ESSMENT HAS NOT BEEN FINALIZED UNDER SECTION 143(3) OF THE ACT THERE IS NO QUESTI ON OF ABATEMENT AND THAT IN THE PRESENT CASE ORIGINAL ASSESSMENT HAS BEEN MADE UNDER SECTIO N 143(1) OF THE ACT. AS PER THE LD. DEPARTMENTAL REPRESENTATIVE THE PROVISIONS OF SECTI ON 153A EMPOWER THE ASSESSING OFFICER TO ASSESS OR REASSESS THE TOTAL INCOME OF S IX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVI OUS YEAR IN WHICH A SEARCH WAS CONDUCTED AND THEREFORE UNDER THESE CIRCUMSTANCES THE ASSESSING OFFICER WAS DUTY BOUND TO ASSESS OR REASSESS TOTAL INCOME OF SUCH ASSESSMENT YEARS AND THEREFORE THE IMPUGNED ADDITIONS WERE JUSTIFIABLY MADE IN THE ASS ESSMENT MADE UNDER SECTION 143(3) R.W.S. 153A(1) OF THE ACT. 11. WE SHALL FIRST EXAMINE THE SCOPE OF THE PROCEE DINGS U/S.153A OF THE ACT. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ANI L KUMAR BHATIA [2013] 352 ITR 493 (DELHI).THE HONOURABLE DELHI HIGH COURT IN THE CASE OF ANIL KUMAR BHATIA (SUPRA) AFTER EXAMINING THE SCHEME OF SEC.153A OF T HE ACT EXPLAINED THE PROVISIONS AS FOLLOWS: 18. A PERUSAL OF SECTION 153A SHOWS THAT IT STARTS WITH A NON OBSTANTE CLAUSE RELATING TO NORMAL ASSESSMENT PROCEDURE WHICH IS COVERED BY SEC TIONS 139 147 148 149 151 AND 153 IN RESPECT OF SEARCHES MADE AFTER 31.5.2003. TH ESE SECTIONS THE APPLICABILITY OF WHICH HAS BEEN EXCLUDED RELATE TO RETURNS ASSESSM ENT AND REASSESSMENT PROVISIONS. PRIOR TO THE INTRODUCTION OF THESE THREE SECTIONS THERE WAS CHAPTER XIV-B OF THE ACT WHICH TOOK CARE OF THE ASSESSMENT TO BE MADE IN CASES OF SEARCH AND SEIZURE. SUCH AN ASSESSMENT WAS POPULARLY KNOWN AS 'BLOCK ASSESSMENT ' BECAUSE THE CHAPTER PROVIDED FOR A SINGLE ASSESSMENT TO BE MADE IN RESPECT OF A PERI OD OF A BLOCK OF TEN ASSESSMENT YEARS PRIOR TO THE ASSESSMENT YEAR IN WHICH THE SEARCH WA S MADE. IN ADDITION TO THESE TEN ASSESSMENT YEARS THE BROKEN PERIOD UP TO THE DATE ON WHICH THE SEARCH WAS CONDUCTED WAS ALSO INCLUDED IN WHAT WAS KNOWN AS 'BLOCK PERIO D'. THOUGH A SINGLE ASSESSMENT ORDER WAS TO BE PASSED THE UNDISCLOSED INCOME WAS TO BE ASSESSED IN THE DIFFERENT ASSESSMENT YEARS TO WHICH IT RELATED. BUT ALL THIS HAD TO BE M ADE IN A SINGLE ASSESSMENT ORDER. THE BLOCK ASSESSMENT SO MADE WAS INDEPENDENT OF AND IN ADDITION TO THE NORMAL ASSESSMENT PROCEEDINGS AS CLARIFIED BY THE EXPLANATION BELOW S ECTION 158BA(2). AFTER THE INTRODUCTION OF THE GROUP OF SECTIONS NAMELY 153A TO 153C THE SINGLE BLOCK ASSESSMENT CONCEPT WAS GIVEN A GO-BY. UNDER THE NEW SECTION 15 3A IN A CASE WHERE A SEARCH IS INITIATED UNDER SECTION 132 OR REQUISITION OF BOOKS OF ACCOUNT DOCUMENTS OR ASSETS IS ITSS.NO.58/KOL/2013-M/S. UJJAL TRANSPORT AGENCY A.Y .2007-08 9 MADE UNDER SECTION 132A AFTER 31.5.2003 THE ASSESS ING OFFICER IS OBLIGED TO ISSUE NOTICES CALLING UPON THE SEARCHED PERSON TO FURNISH RETURNS FOR THE SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH WAS CONDUCTED OR REQUISITION WAS MADE. THE O THER DIFFERENCE IS THAT THERE IS NO BROKEN PERIOD FROM THE FIRST DAY OF APRIL OF THE FI NANCIAL YEAR IN WHICH THE SEARCH TOOK PLACE OR THE REQUISITION WAS MADE AND ENDING WITH T HE DATE OF SEARCH/REQUISITION. UNDER SECTION 153A AND THE NEW SCHEME PROVIDED FOR THE A O IS REQUIRED TO EXERCISE THE NORMAL ASSESSMENT POWERS IN RESPECT OF THE PREVIOUS YEAR IN WHICH THE SEARCH TOOK PLACE. 19. UNDER THE PROVISIONS OF SECTION 153A AS WE HAV E ALREADY NOTICED THE ASSESSING OFFICER IS BOUND TO ISSUE NOTICE TO THE ASSESSEE TO FURNISH RETURNS FOR EACH ASSESSMENT YEAR FALLING WITHIN THE SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEARCH O R REQUISITION WAS MADE. ANOTHER SIGNIFICANT FEATURE OF THIS SECTION IS THAT THE ASS ESSING OFFICER IS EMPOWERED TO ASSESS OR REASSESS THE 'TOTAL INCOME' OF THE AFORESAID YEARS. THIS IS A SIGNIFICANT DEPARTURE FROM THE EARLIER BLOCK ASSESSMENT SCHEME IN WHICH THE BLOCK ASSESSMENT ROPED IN ONLY THE UNDISCLOSED INCOME AND THE REGULAR ASSESSMENT PROCE EDINGS WERE PRESERVED RESULTING IN MULTIPLE ASSESSMENTS. UNDER SECTION 153A HOWEVER THE ASSESSING OFFICER HAS BEEN GIVEN THE POWER TO ASSESS OR REASSESS THE 'TOTAL IN COME' OF THE SIX ASSESSMENT YEARS IN QUESTION IN SEPARATE ASSESSMENT ORDERS. THIS MEANS THAT THERE CAN BE ONLY ONE ASSESSMENT ORDER IN RESPECT OF EACH OF THE SIX ASSESSMENT YEAR S IN WHICH BOTH THE DISCLOSED AND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX. 20. A QUESTION MAY ARISE AS TO HOW THIS IS SOUGHT T O BE ACHIEVED WHERE AN ASSESSMENT ORDER HAD ALREADY BEEN PASSED IN RESPECT OF ALL OR ANY OF THOSE SIX ASSESSMENT YEARS EITHER UNDER SECTION 143(1)(A) OR SECTION 143(3) OF THE AC T. IF SUCH AN ORDER IS ALREADY IN EXISTENCE HAVING OBVIOUSLY BEEN PASSED PRIOR TO TH E INITIATION OF THE SEARCH/REQUISITION THE ASSESSING OFFICER IS EMPOWERED TO REOPEN THOSE PROCEEDINGS AND REASSESS THE TOTAL INCOME TAKING NOTE OF THE UNDISCLOSED INCOME IF A NY UNEARTHED DURING THE SEARCH. FOR THIS PURPOSE THE FETTERS IMPOSED UPON THE ASSESSIN G OFFICER BY THE STRICT PROCEDURE TO ASSUME JURISDICTION TO REOPEN THE ASSESSMENT UNDER SECTIONS 147 AND 148 HAVE BEEN REMOVED BY THE NON OBSTANTE CLAUSE WITH WHICH SUB S ECTION (1) OF SECTION 153A OPENS. THE TIME-LIMIT WITHIN WHICH THE NOTICE UNDER SECTIO N 148 CAN BE ISSUED AS PROVIDED IN SECTION 149 HAS ALSO BEEN MADE INAPPLICABLE BY THE NON OBSTANTE CLAUSE. SECTION 151 WHICH REQUIRES SANCTION TO BE OBTAINED BY THE ASSES SING OFFICER BY ISSUE OF NOTICE TO REOPEN THE ASSESSMENT UNDER SECTION 148 HAS ALSO BE EN EXCLUDED IN A CASE COVERED BY SECTION 153A. THE TIME-LIMIT PRESCRIBED FOR COMPLET ION OF AN ASSESSMENT OR REASSESSMENT BY SECTION 153 HAS ALSO BEEN DONE AWAY WITH IN A CA SE COVERED BY SECTION 153A. WITH ALL THE STOPS HAVING BEEN PULLED OUT THE ASSESSING OFF ICER UNDER SECTION 153A HAS BEEN ENTRUSTED WITH THE DUTY OF BRINGING TO TAX THE TOTA L INCOME OF AN ASSESSEE WHOSE CASE IS COVERED BY SECTION 153A BY EVEN MAKING REASSESSMEN TS WITHOUT ANY FETTERS IF NEED BE. 21. NOW THERE CAN BE CASES WHERE AT THE TIME WHEN THE S EARCH IS INITIATED OR REQUISITION IS MADE THE ASSESSMENT OR REASSESSMENT PROCEEDINGS RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF THE SI X ASSESSMENT YEARS MENTIONED ABOVE MAY BE PENDING. IN SUCH A CASE THE SECOND P ROVISO TO SUB SECTION (1) OF ITSS.NO.58/KOL/2013-M/S. UJJAL TRANSPORT AGENCY A.Y .2007-08 10 SECTION 153A SAYS THAT SUCH PROCEEDINGS 'SHALL ABAT E'. THE REASON IS NOT FAR TO SEEK. UNDER SECTION 153A THERE IS NO ROOM FOR MULTIPLE A SSESSMENT ORDERS IN RESPECT OF ANY OF THE SIX ASSESSMENT YEARS UNDER CONSIDERATION . THAT IS BECAUSE THE ASSESSING OFFICER HAS TO DETERMINE NOT MERELY THE UNDISCLOSED INCOME OF THE ASSESSEE BUT ALSO THE 'TOTAL INCOME' OF THE ASSESSEE IN WHOSE CASE A SEARCH OR REQUISITION HAS BEEN INITIATED. OBVIOUSLY THERE CANNOT BE SEVERAL ORDERS FOR THE SAME ASSESSMENT YEAR DETERMINING THE TOTAL INCOME OF THE ASSESSEE. IN OR DER TO ENSURE THIS STATE OF AFFAIRS NAMELY THAT IN RESPECT OF THE SIX ASSESSMENT YEARS PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE YEAR IN WHICH THE SEARCH TOOK PLACE THERE IS ONLY ONE DETERMINATION OF THE TOTAL INCOME IT HAS BEEN PROVIDED IN THE SE COND PROVISO OF SUB SECTION (1) OF SECTION 153A THAT ANY PROCEEDINGS FOR ASSESSMENT OR REASSESSMENT OF THE ASSESSEE WHICH ARE PENDING ON THE DATE OF INITIATION OF THE SEARCH OR MAKING REQUISITION 'SHALL ABATE'. ONCE THOSE PROCEEDINGS ABATE THE DE CKS ARE CLEARED FOR THE ASSESSING OFFICER TO PASS ASSESSMENT ORDERS FOR EACH OF THOSE SIX YEARS DETERMINING THE TOTAL INCOME OF THE ASSESSEE WHICH WOULD INCLUDE BOTH THE INCOME DECLARED IN THE RETURNS IF ANY FURNISHED BY THE ASSESSEE AS WELL AS THE UN DISCLOSED INCOME IF ANY UNEARTHED DURING THE SEARCH OR REQUISITION. THE POSITION THUS EMERGING IS THAT WHERE ASSESSMEN T OR REASSESSMENT PROCEEDINGS ARE PENDING COMPLETION WHEN THE SEARCH IS INITIATED OR REQUISITION IS MADE THEY WILL ABATE MAKING WAY FOR THE ASSESSING OFFICER TO DETERMINE THE TOTAL INCOME OF THE ASSESSEE IN WHICH THE UNDIS CLOSED INCOME WOULD ALSO BE INCLUDED BUT IN CASES WHERE THE ASSESSMENT OR REASSESSMENT P ROCEEDINGS HAVE ALREADY BEEN COMPLETED AND ASSESSMENT ORDERS HAVE BEEN PASSED DE TERMINING THE ASSESSEE'S TOTAL INCOME AND SUCH ORDERS ARE SUBSISTING AT THE TIME W HEN THE SEARCH OR THE REQUISITION IS MADE THERE IS NO QUESTION OF ANY ABATEMENT SINCE N O PROCEEDINGS ARE PENDING. IN THIS LATTER SITUATION THE ASSESSING OFFICER WILL REOPEN THE ASSESSMENTS OR REASSESSMENTS ALREADY MADE (WITHOUT HAVING THE NEED TO FOLLOW THE STRICT PROVISIONS OR COMPLYING WITH THE STRICT CONDITIONS OF SECTIONS 147 148 AND 151) AND DETERMINE THE TOTAL INCOME OF THE ASSESSEE. SUCH DETERMINATION IN THE ORDERS PASSED U NDER SECTION 153A WOULD BE SIMILAR TO THE ORDERS PASSED IN ANY REASSESSMENT WHERE THE TOTAL INCOME DETERMINED IN THE ORIGINAL ASSESSMENT ORDER AND THE INCOME THAT ESCAP ED ASSESSMENT ARE CLUBBED TOGETHER AND ASSESSED AS THE TOTAL INCOME. IN SUCH A CASE T O REITERATE THERE IS NO QUESTION OF ANY ABATEMENT OF THE EARLIER PROCEEDINGS FOR THE SIMPLE REASON THAT NO PROCEEDINGS FOR ASSESSMENT OR REASSESSMENT WERE PENDING SINCE THEY HAD ALREADY CULMINATED IN ASSESSMENT OR REASSESSMENT ORDERS WHEN THE SEARCH W AS INITIATED OR THE REQUISITION WAS MADE. (EMPHASIS SUPPLIED) 12. IN CANARA HOUSING DEVELOPMENT COMPANY VS. DCIT (2014) 114 DTR 162 (KARN) THE HONBLE KARNATAKA HIGH COURT TOOK THE FOLLOWIN G VIEW: SECTION 153A STARTS WITH A NON OBSTANTE CLAUSE. TH E FETTERS IMPOSED UPON THE ASSESSING OFFICER BY THE STRICT PROCEDURE TO ASSUME JURISDICT ION TO REOPEN THE ASSESSMENT UNDER SECTIONS 147 AND 148 HAVE BEEN REMOVED BY THE NON OBSTANTE CLAUSE WITH WHICH SUB SECTION (1) OF SECTION 153A OPENS. THE TIME-LIMIT W ITHIN WHICH THE NOTICE UNDER SECTION 148 CAN BE ISSUED AS PROVIDED IN SECTION 149 HAS A LSO BEEN MADE INAPPLICABLE BY THE NON OBSTANTE CLAUSE. SECTION 151 WHICH REQUIRES SAN CTION TO BE OBTAINED BY THE ASSESSING OFFICER BY ISSUE OF NOTICE TO REOPEN THE ASSESSMENT UNDER SECTION 148 HAS ALSO BEEN ITSS.NO.58/KOL/2013-M/S. UJJAL TRANSPORT AGENCY A.Y .2007-08 11 EXCLUDED IN A CASE COVERED BY SECTION 153A. THE TIM E-LIMIT PRESCRIBED FOR COMPLETION OF AN ASSESSMENT OR REASSESSMENT BY SECTION 153 HAS AL SO BEEN DONE AWAY WITH IN A CASE COVERED BY SECTION 153A. WITH ALL THE STOPS HAVING BEEN PULLED OUT THE ASSESSING OFFICER UNDER SECTION 153A HAS BEEN ENTRUSTED WITH THE DUTY OF BRINGING TO TAX THE TOTAL INCOME OF AN ASSESSEE WHOSE CASE IS COVERED BY SECTION 153A BY EVEN MAKING REASSESSMENTS WITHOUT ANY FETTERS IF NEED BE. THEREFORE IT IS C LEAR EVEN IF AN ASSESSMENT ORDER IS PASSED UNDER SECTION 143(1) OR 143(3) OF THE ACT THE ASSE SSING OFFICER IS EMPOWERED TO REOPEN THOSE PROCEEDINGS AND REASSESS THE TOTAL INCOME TAK ING NOTE OF THE UNDISCLOSED INCOME IF ANY UNEARTHED DURING THE SEARCH. AFTER SUCH REOPEN ING OF THE ASSESSMENT THE ASSESSING OFFICER IS EMPOWERED TO ASSESS OR REASSESS THE TOTA L INCOME OF THE AFORESAID YEARS. THE CONDITION PRECEDENT FOR APPLICATION OF SECTION 153A IS THERE SHOULD BE A SEARCH UNDER SECTION 132. INITIATION OF PROCEEDINGS UNDER SECTIO N 153A IS NOT DEPENDENT ON ANY UNDISCLOSED INCOME BEING UNEARTHED DURING SUCH SEAR CH. THE PROVISO TO THE AFORESAID SECTION MAKES IT CLEAR THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SUCH SIX ASSESSMENT YEARS. IF ANY ASSESSMENT PROCEEDINGS ARE PENDING WITHIN THE PERIO D OF SIX ASSESSMENT YEARS REFERRED TO IN THE AFORESAID SUB-SECTION ON THE DATE OF INITIAT ION OF THE SEARCH UNDER SECTION 132 THE SAID PROCEEDING SHALL ABATE. IF SUCH PROCEEDINGS AR E ALREADY CONCLUDED BY THE ASSESSING OFFICER BY INITIATION OF PROCEEDINGS UNDER SECTION 153A THE LEGAL EFFECT IS THE ASSESSMENT GETS REOPENED. THE BLOCK ASSESSMENT ROPED IN ONLY T HE UNDISCLOSED INCOME AND THE REGULAR ASSESSMENT PROCEEDINGS WERE PRESERVED RESU LTING IN MULTIPLE ASSESSMENTS. UNDER SECTION 153A HOWEVER THE ASSESSING OFFICER HAS BE EN GIVEN THE POWER TO ASSESS OR REASSESS THE TOTAL INCOME OF THE SIX ASSESSMENT Y EARS IN QUESTION IN SEPARATE ASSESSMENT ORDERS. THE ASSESSING OFFICER IS EMPOWERED TO REOPE N THOSE PROCEEDINGS AND REASSESS THE TOTAL INCOME TAKING NOTE OF THE UNDISCLOSED INCOME IF ANY UNEARTHED DURING THE SEARCH. HE HAS BEEN ENTRUSTED WITH THE DUTY OF BRINGING TO TAX THE TOTAL INCOME OF AN ASSESSEE WHOSE CASE IS COVERED BY SECTION 153A BY EVEN MAKI NG REASSESSMENTS WITHOUT ANY FETTERS. THIS MEANS THAT THERE CAN BE ONLY ONE ASSE SSMENT ORDER IN RESPECT OF EACH OF THE SIX ASSESSMENT YEARS IN WHICH BOTH THE DISCLOSED A ND THE UNDISCLOSED INCOME WOULD BE BROUGHT TO TAX. WHEN ONCE THE PROCEEDINGS ARE INITI ATED UNDER SECTION 153A OF THE ACT THE LEGAL EFFECT IS EVEN IN CASE WHERE THE ASSESSME NT ORDER IS PASSED IT STANDS REOPENED. IN THE EYE OF LAW THERE IS NO ORDER OF ASSESSMENT. RE-OPENED MEANS TO DEAL WITH OR BEGIN WITH AGAIN. IT MEANS THE ASSESSING OFFICER SHALL AS SESS OR REASSESS THE TOTAL INCOME OF SIX ASSESSMENT YEARS. ONCE THE ASSESSMENT IS REOPENED THE ASSESSING AUTHORITY CAN TAKE NOTE OF THE INCOME DISCLOSED IN THE EARLIER RETURN ANY UNDISCLOSED INCOME FOUND DURING SEARCH OR AND ALSO ANY OTHER INCOME WHICH IS NOT DISCLOSED IN THE EARLIER RETURN OR WHICH IS NOT UNEARTHENED DURING THE SEARCH IN ORDER TO FIND OUT WHAT IS THE TOTAL INCOME OF EACH YEAR AND THEN PASS THE ASSESSMENT ORDER. THEREFORE THE COMMISSIONER BY VIRTUE OF THE POWER CONFERRED UNDER SECTION 263 OF THE ACT GETS N O JURISDICTION TO INITIATE PROCEEDINGS UNDER THE SAID PROVISION BECAUSE THE CONDITION PREC EDENT FOR INITIATING PROCEEDINGS UNDER SECTION 263 IS ANY ORDER PASSED UNDER THE ACT BY TH E ASSESSING OFFICER IS ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. ONCE THE ORDER PASSED BY THE ASSESSING OFFICER GETS REOPENED THERE IS NO ORDER WHICH CAN BE SAID TO BE ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE WHICH CONFERS JURISDICTION ON THE COMMISSIONER TO EXERCISE THE POWER OF THE JURISDICT ION. ITSS.NO.58/KOL/2013-M/S. UJJAL TRANSPORT AGENCY A.Y .2007-08 12 13. THE SPECIAL BENCH OF ITAT MUMBAI IN THE CASE O F ALL CARGO GLOBAL LOGISTICS LTD. (2012) 16 ITR (TRIB.) 380 (MUM)(SB) HAD TO CONSIDER THE FOLLOWING QUESTION: 1. WHETHER ON THE FACTS AND IN LAW THE SCOPE OF ASSESSMENT U/S 153A ENCOMPASSES ADDITIONS NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH'? THE SPECIAL BENCH ANSWERED THE QUESTION BY HOLDING THAT: (A) IN SO FAR AS PENDING ASSESSMENTS ARE CONCERNED THE JURISDICTION TO MAKE ORIGINAL ASSESSMENT AND ASSESSMENT U/S 153A MERGE INTO ONE A ND ONLY ONE ASSESSMENT FOR EACH ASSESSMENT YEAR SHALL BE MADE SEPARATELY ON THE BAS IS OF THE FINDINGS OF THE SEARCH AND ANY OTHER MATERIAL EXISTING OR BROUGHT ON THE RECOR D OF THE AO (B) IN RESPECT OF NON-ABATED ASSESSMENTS THE ASSES SMENT 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 UNDISCLOSED INCOME OR UNDISCLOSED PROPERTY DISCOVERED IN THE COURSE OF SEARCH 14. IN THE LIGHT OF THE ABOVE RULING OF THE SPECIA L BENCH IF AN ASSESSMENT IS COMPLETED PRIOR TO INITIATION OF SEARCH U/S.132 OF THE ACT AN D THEREFORE DOES NOT ABATE UNDER THE SECOND PROVISO TO SEC.153(1) OF THE ACT AND IF IN T HE COURSE OF SEARCH OF THE ASSESSEE INITIATION AFTER THE COMPLETION OF THE ASSESSMENT NO INCRIMINATING MATERIAL IS FOUND REGARDING A PARTICULAR ITEM OF INCOME THEN IN THE ASSESSMENT TO BE DONE U/S.153A OF THE ACT THE AO CANNOT MAKE AN ASSESSMENT OF SUCH INCOM E. 15. IT IS NO DOUBT TRUE THAT THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CANARA HOUSING (SUPRA) HAS NOT ACCEPTED THE RULING OF THE SPECIAL BENCH IN THE CASE OF ALCARGO LOGISTICS (SUPRA). THE HONBLE BOMBAY HIGH COURT I N THE CASE OF CIT VS. CONTINENTAL WAREHOUSING CORPORATION ITA NO.523/2013 JUDGMENT DA TED 21.4.2015 AFTER REFERRING TO THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF ANIL KUMAR BHATIA (SUPRA) AND OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CANARA HOUSING (SUPRA) HAS TAKEN THE VIEW THAT THE DECISION RENDERED BY THE SP ECIAL BENCH IS TO BE FOLLOWED. THERE IS NO DECISION OF THE HONBLE CALCUTTA HIGH COURT WHICH IS THE JURISDICTIONAL HIGH COURT ON THE ISSUE. WE ARE OF THE VIEW THAT THE VIEW EXP RESSED BY THE HONBLE BOMBAY HIGH COURT WHICH IS IN TUNE WITH THE DECISION RENDERED B Y THE SPECIAL BENCH IN THE CASE OF ALCARGO LOGISTICS (SUPRA) HAS TO BE FOLLOWED. ITSS.NO.58/KOL/2013-M/S. UJJAL TRANSPORT AGENCY A.Y .2007-08 13 16. HAVING HELD THAT THE SCOPE OF THE PROCEEDINGS U/S.153A IN RESPECT OF ASSESSMENT YEAR FOR WHICH ASSESSMENT HAVE ALREADY BEEN CONCLUDED AN D WHICH DO NOT ABATE U/S.153A OF THE ACT THAT THE ASSESSMENT WILL HAVE TO BE CONFIN ED TO ONLY INCRIMINATING MATERIAL FOUND AS A RESULT OF SEARCH THE QUESTION TO BE DECIDED I S AS TO WHETHER THE PROCEEDINGS U/S.143(1) OF THE ACT CAN BE SAID TO BE ASSESSMENT PROCEEDINGS CONCLUDED THAT HAVE NOT ABATED U/S.153A OF THE ACT. SECTION 153A OF THE AC T USES THE EXPRESSING PENDING ASSESSMENT OR REASSESSMENT'. WHEN A RETURN IS FILED AND ACKNOWLEDGEMENT OR INTIMATION ISSUED U/S.143(1) THE PROCEEDINGS INITIATED BY FIL ING THE RETURN ARE CLOSED UNLESS A NOTICE U/S 143(2) OF THE ACT IS ISSUED. IN THE PRESENT C ASE THE PERIOD FOR ISSUING THE NOTICE U/S 143(2) ELAPSED. THEREFORE THE PROCESS HAS ATTAINED THE FINALITY WHICH CAN ONLY BE ASSAILED U/S 148 OR 263 OF THE ACT. IT CAN THUS BE CONCLUD ED THAT MAKING OF AN ADDITION IN AN ASSESSMENT UNDER SECTION 153A OF THE ACT WITHOUT T HE BACKING OF INCRIMINATING MATERIAL IS UNSUSTAINABLE EVEN IN A CASE WHERE THE ORIGINAL ASSESSMENT ON THE DATE OF SEARCH STOOD COMPLETED UNDER SECTION 143(1) OF THE ACT THEREBY RESULTING IN NON-ABATEMENT OF SUCH ASSESSMENT IN TERMS OF THE SECOND PROVISO TO SECTIO N 153A(1) OF THE ACT. 17. IN THE LIGHT OF THE DISCUSSION ABOVE OUR CONC LUSION IS THAT IN THE PRESENT CASE THE ISSUE WITH REGARD TO ADDITIONAL DEPRECIATION COULD NOT AND OUGHT NOT TO HAVE BEEN EXAMINED BY THE AO IN THE ASSESSMENT PROCEEDINGS U/ S.153A OF THE ACT AS THE SAID ISSUE STOOD CONCLUDED WITH THE ASSESSEES RETURN OF INCOM E BEING ACCEPTED U/S.143(1) OF THE ACT PRIOR TO THE DATE OF SEARCH AND NO NOTICE HAVIN G BEEN ISSUED U/S.143(2) OF THE ACT WITHIN THE TIME LIMIT LAID DOWN IN THAT SECTION WHI CH TIME LIMIT AS PER THE LAW PREVAILING ON THE DATE WHEN THE ASSESSEE FILED RETURN OF INCOM E I.E. 30.10.2007 WOULD EXPIRE ON 31.12.2008. SUCH ASSESSMENT U/S.143(1) OF THE ACT D ID NOT ABATE ON THE DATE OF SEARCH WHICH TOOK PLACE ON 15.1.2009. IN RESPECT OF ASSESS MENTS COMPLETED PRIOR TO THE DATE OF SEARCH THAT HAVE NOT ABATED THE SCOPE OF PROCEEDIN GS U/S.153A OF THE ACT HAS TO BE CONFINED ONLY TO MATERIAL FOUND IN THE COURSE OF SE ARCH. SINCE NO MATERIAL WHATSOEVER WAS FOUND IN THE COURSE OF SEARCH THE QUESTION OF ALLOWING ADDITIONAL DEPRECIATION OR NOT COULD NOT HAVE BEEN SUBJECT MATTER OF PROCEEDINGS U /.S.153A OF THE ACT. CONSEQUENTLY ITSS.NO.58/KOL/2013-M/S. UJJAL TRANSPORT AGENCY A.Y .2007-08 14 THE CIT IN EXERCISE OF HIS POWERS U/S.263 OF THE AC T OUGHT NOT TO HAVE OR COULD NOT HAVE DIRECTED EXAMINATION OF THE SAID ISSUE AFRESH BY TH E AO. THUS GROUND NO.1 RAISED BY THE ASSESSEE IS ALLOWED. THE PROCEEDINGS U/S.263 OF TH E ACT IS ACCORDINGLY QUASHED. IN VIEW OF THE ABOVE CONCLUSION THE OTHER GROUND OF APPEAL RAISED BY THE ASSESSEE DOES NOT REQUIRE ANY CONSIDERATION. 18. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 19.10.2016 SD/- SD/- (M. BALAGANESH) (N. V. VASUDEVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19 /10/2016 S. SINHA(PS) COPY OF THE ORDER FORWARDED TO: 1. M/S. UJJAL TRANSPORT AGENCY G.T.ROAD (EAST) M URGASOL ASANSOL. 2 C.I.T. CENTRAL-II KOLKATA 3. CIT(DR) KOLKATA BENCHES KOLKATA. TRUE COPY BY ORDER ASST. REGISTRAR ITAT KOLKATA BENCHES