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TMI Blog2025 (5) TMI 434X X X X Extracts X X X X X X X X Extracts X X X X ..... arshaben Bharatbhai Popat KSD & Associates, Chartered Accountsnts Versus Deputy Commissioner of Income Tax, Central Circle-1(3), Ahmedabad And Assistant Commissioner of Income Tax, Central Cricle-1(3), Ahmedabad Versus Smt. Harshaben B. Popat Shri Siddhartha Nautiyal, Judicial Member And Shri Narendra Prasad Sinha, Accountant Member For the Assessee : Shri Tushar Hemani, Sr. Advocate And Shri Parimalsinh B. Parmar, A.R. For the Revenue : Adjournment Application filed ORDER PER BENCH: These 14 appeals were originally heard by the Division Bench consisting of Hon'ble Judicial Member and Hon'ble Accountant Member. On account of a difference of opinion between the Hon'ble Members on certain issues arising in these appeals, the following point(s) of difference were framed and referred to the Hon'ble President of the Tribunal under Section 255(4) of the Income Tax Act, 1961: "1. Whether in the facts and circumstances of the case, the assessment u/s 153A of the Act in the case of unabated / completed year(s) is to be completed only on the basis of incriminating material found during the search, or, once some incriminating materials are found during the course of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8BB was to be made on the basis of evidence found as a result of search or requisition of books of accounts, there is no such stipulation in sec.153A and sec.153Bl specifically states that the provisions of Chapter-XIV-B, under which sec.158BB falls, would not be applied where a search was initiated u/s. 132 after 31/5/2003. 4. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in not appreciating that assessment in relation to certain issues not related to the search and seizure may arise in any of the said six assessment years after the search u/s. 132 is conducted in the case of the assessee, and that if the interpretation of the Id. CIT(A) were to hold it will not be possible to assess such income in the 153A proceedings, while no other parallel proceedings to assess such other income can be initiated, leading to no possibility of assessing such other income, which could not have been the intention of the legislature. 5. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that addition of Rs. 1,49,39,000/- being unexplained cash deposits in bank accounts, addition of Rs. 4,56,927/- made on account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ief granted by Ld. CIT(A) with respect to each of the additions. Addition of Rs. 1,49,39,000/- being unexplained cash deposits in the bank accounts 7. The brief facts of the case in relation to this ground of appeal are that the assessee company is engaged in the business of building supply material, TMT bar, steel etc. A search and seizure action was carried out in the case of Shri Mahendra Shantilal Patel (in short "MSP") and his group concerns on 06.02.2017, and his statement was also recorded under Section 132(4) of the Act. The search action resulted in collection of evidences which brought to the knowledge of the Department that MSP through a web a various concerns was engaged in providing bogus accommodation entries and bogus bills to various parties. This was also admitted by him in his statement under Section 132(4) of the Act. The Department observed that MSP was holding five PAN numbers in which four different dates of birth had been mentioned. However, MSP had not filed it's return of income. On carrying out further investigation, the Department found that all entities run by MSP were non-existent. The various concerns of MSP were only paper concerns created for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artment also impounded letter heads and bills books of MSPs various bogus concerns from the premises of M/s. Tile Touch Ceramics (associated concern of the assessee) in the search carried out at 4, Baba Ramdev Complex. The assessee also filed letter dated 22.08.2018 during the course of assessment proceedings and stated that assessee has neither carried out any business nor provided any services and he was only engaged in providing accommodation bills / accommodation entries to the interested parties in exchange for a commission ranging from 0.50% to 2%. Further, on 17.04.2017 MSP filed an affidavit to the effect that he had provided accommodation entries of bogus bills for commission. The pre-search investigation carried out by the Department revealed that significant part of unaccounted cash received in bank accounts of MSP group was finally landing in the bank accounts of Benefit Tradelink and associated group companies namely Benefit Tradelinks Ltd. and Ellegance Reality Ltd. The Benefit group is headed by Shri Bharat Popat. During the course of search conducted at the premises of Shri Bharat Popat, Benefit Tradelinks Ltd. and Ellegance Reality Ltd. at Benefit House, City Bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thereafter, notice under Section 142(1) of the Act was issued to the assessee and as many as 13 dates of hearing during the period 27.09.2017 to 18.12.2018, were given and the assessee sought adjournments on most of the occasions and only filed partial / irrelevant submissions. Finally, the Department issued show-cause notice dated 17.12.2018, in which the entire modus operandi was confronted to the assessee, wherein it was pointed out that on the basis of incriminating documents seized during the course of search at office cum residence of Shri Bharat Popat, (document dated 07.12.2016), it was found that substantial cash was first deposited in the bank account of Vishal Pandya and thereafter the funds was immidiately transferred to Benefit Tradelink Ltd. Further, substantial cash was also deposited in the firms belong to MSP group from which substantial amount was also transferred to the bank account of Benefit Tradelink. The Department, on analysis of the bank account of SVP Corporation (proprietorship concern of Shri Vishal Pandya) observed that the assessee and his group concerns are the beneficiaries of such bank account operated by Shri Vishal Pandya. Mr. Pandya had filed af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or various assessment years under consideration and asked the assessee to furnish the detail explanation alongwith documentary evidences for cash deposits: A.Y. Cash Credit Total Credit Debit 2011-12 14939000 95157488 91677873 2012-13 11872000 144652441 144667967 2013-14 1183782 32105865 32110031 2015-16 6760500 220044456 233133364 2016-17 3923000 261518917 297065200 2017-18 172953000 289350452 261806814 Total 211631282 1042829619 1060461249 12. However, despite issuance of notices to the assessee, the assessee did not furnish any explanation regarding the sources of cash deposits in his bank account. Accordingly, in absence of any explanation from the assessee, the Ld. Assessing Officer held that the cash deposits of Rs. 1,49,39,000/- remained unexplained and accordingly, the same were added to the income of the assessee. 13. In appeal, Ld. CIT(A) allowed the appeal of the assessee on this ground by holding that the additions have not been made on the basis of any incriminating material and the basis of addition is on the basis of facts which are coming from ITS data, Audited accounts etc. The CIT(A) held that the aforesaid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und during the course of search. The additions are made on the basis of ITS DATA, verification of Profit and Loss account and Balance sheet filed along with return of income. 5.2 I have duly considered the assessment order, written submission and relevant provisions and case laws relied upon. The appellant has filed original return on 02/01/2012 and therefore considering the provision of section 153A of the IT. Act, assessment proceedings for the year under consideration were unabated. The principles which are being laid down by the Jurisdictional High court outlines the ambit and scope of powers conferred by section 153A. On plain reading of section 153A it becomes clear that on initiation of the proceedings under section 153A, in respect of the six assessment years is only for the assessments which are pending on the date of search under section 132 or making requisition under section 132A, stand abated and not the assessments which are already finalized. Therefore, the principle that has emerged is that in those years where assessments are not abated, additions can be made only on the basis of loose material in terms of incriminating documents found during the course of search ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstruction (P.) Ltd. [2017] 81 taxmann.com 271(Gujarat) IV. In the case of Principal Commissioner of Income Tax-1 V. Devangi [2017] 88 taxmann.com 610 (Gujarat) V. Principal Commissioner of Income-tax V. Sunrise Finlease (P.) Ltd. [2018] 89 taxmann.com 1 (Gujarat) VI. Commissioner of lncome-tax-1 V, Jayaben Ratilal Sorathia [2013] 40 taxmann.com 436(Gujarat) VII. Pr.CIT v. Meeta Gutgutia [2018] 96 taxmann.com 468/257 Taxman 441(SC) VIII. PC1T v. Kurele Paper Mills P. Ltd. (2016) 380 ITR 571 (Delhi)(HC) IX. Commissioner of Income tax-II, Thane V. Continental Warehousing Corporation (Nava Sheva) Ltd. [2015] 58 taxmann.com 78 (Bombay) X. Commissioner of Income-tax, Central - I V. Manish Build Well (P.) Ltd. [2C11]16 127 (Delhi XI. Principal Commissioner of Income-tax - 18 V. Ms. tata Jam [2O17181 taxmann.com 83(Delhi) XII. Principal Commissioner of income-tax, Delhi-2 V. Best infrastructure (India) (P.) Ltd. [2017]84 taxmann.com 2S7(Delhi) XIII. Principal Commissioner of income-tax v/s Vikas Gutgutia [2017] 88 taxmann.com 605 (Delhi) XIV. Commissioner of Income Tax-20 V. Deepak Kumar Agarwal [2017] 86 taxmann.com 3 (Bombay) XV. Commissioner of Income-tax, Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of search action, the Department found a number of excel sheets, took on oath statements of various concerned persons and on the basis thereof it was found that a complex web of fraudulent and bogus operations of providing accommodation entries / accommodation bills was being carried out by the assessee for earning commission income. On the basis of data unearthed during the course of search operations, the Department has found that substantial cash was first deposited in the bank account of MSP and his group concerns and thereafter, this cash had subsequently flown to the bank account of either the assessee or his associates, who on sworn have admitted that the bank accounts in their names were in fact being operated by Shri Bharat Popat, who is the key person running various concerns like M/s. Benefit Tradelink, M/s. Elegance Realty Ltd. The Department on the basis of excel sheets during the course of search operations have found that the assessee has been operating several bank accounts with the purpose of providing accommodation bills / entries, without actually taking delivery of goods. Shri Bharat Popat in his sworn affidavit also admitted to having been engaged in the busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of the assessee on this issue. 15. In response, the Counsel for the assessee filed written submissions and submitted that the document which was found during the course of search operations cannot be categorized as incriminating material. He further submitted that the details of cash deposited in November 2016 is pertaining to A.Y. 2017-18 and the years under consideration is A.Y. 2011-12 to A.Y. 2015-16 and therefore, information regarding cash deposited relevant for the year under consideration. Accordingly, the Counsel for the assessee none of the additions are made on the basis of incriminating material found during the course of search operations. Further, the Counsel for the assessee submitted that the modus operandi highlighted in the assessment order does not constitute incriminating material and no additions can be based on the basis of such modus operandi highlighted in the assessment order. Accordingly, the Counsel for the assessee relied on observations made by the CIT(A) in the appellate order. 16. We have heard the rival contentions and perused the material on record. 17. On going through the contents of the order passed by Ld. CIT(A) there are certain noteworthy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee in which it has been clearly found that assessee has been using several bank accounts for the purpose of providing accommodation bills / entries to various parties in lieu of commission. On the basis of search carried out at the premises of the assessee, and other concerns, it has been found that money was first deposited in the bank accounts of MSP and his group concerns and thereafter, such money was transferred to the bank accounts operated by the assessee and associated concerns. The assessee has not been able to give any plausible explanation whatsoever regarding the substantial cash deposits which were made in his bank account and further, the return of income filed by the assessee for the impugned years under consideration also do not lend any support or basis to the substantial amount of cash deposited in the bank account held by the assessee and it's associated concerns. Therefore, in our considered view, the substantial amount of information / data / material unearthed by the Department by carrying out search at various premises of MSP group, their associated personnels involved in such operations, search at premises of Shri Bharat Popat and associated co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served by us earlier, the assessee has neither challenged the contents of the material discovered during the course of extensive search operation carried out by the Department and neither has Ld. CIT(A), on merit ever examined any material which was found during the course of search operation. As noted by us earlier the Ld. CIT(A) has not given any finding whether "any incriminating material" was found during the course of search and the Ld. CIT(A) in his order has never examined or commented upon why the substantial material found during the course of search operations does not qualify as "incriminating material". Another important point which we have observed is that for A.Y. 2015-16, the Ld. CIT(A) has relied upon the material i.e. the excel sheet working found during the course of search operations of the assessee and it's group concerns and has held that such material qualifies as "incriminating material" and accordingly, sustained addition of Rs. 15 lakhs in the hands of the assessee. While confirming the additions in the hands of the assessee the Ld. CIT(A) has held that since the assessee could not prove the genuineness of the transaction, in terms of identity, creditworthi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he addition in the hands of the assessee. Therefore, clearly in our considered view, Ld. CIT(A) has been taken contradictory views on the same set of facts and information available with the file of the Assessing Officer. 19. Accordingly, looking into the facts of the instant case the material found during the course of search operations carried out by the Department, the affidavits of various concerned parties and the entire modus opearndi of the assessee, we are of the considered view that Ld. CIT(A) has erred in facts and in law in deleting the addition with respect to this ground of appeal. This is particularly in light of the fact that there is no discussion in the appellate order as to why the information / material found during the course of search does not qualify as "incriminating material" and further on the basis of similar material in the assessment order, the Ld. CIT(A) has taken a contradictory view and sustained the additions made in the hands of the assessee for A.Y. 2015- 16. 20. In the result, this addition of Rs. 14,93,900/- in the hands of the assessee is liable to be sustained. Accordingly, the appeal of the Department with respect to this addition is allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not abated, additions under Section 153A of the Act r.w.s. 143(3) of the Act can be made only on the basis of loose materials in terms of incriminating documents found during the course of search. The following decisions have consistently laid down the above proposition, which have been reproduce below: (i) Saumya Construction 81 taxmann.com 292 (Gujarat - HC) (ii) Kabul Chawla 61 taxmann.com 412 (Delhi) 25. Accordingly, we find no infirmity in the order of Ld. CIT(A) in deleting the disallowances / additions made by the Assessing Officer. Since the aforesaid additions were not made on the basis of any incriminating material found during the course of search. Additions of Rs. 88,00,000/- on account of amount received from Benefit Information Ltd. 26. The brief facts in relation to this ground of appeal are that the Assessing Officer received information from the office of DDIT (Investigation), Rajkot on 22.03.2018 that M/s. Aryavat Pvt. Ltd. received accommodation entries in his bank account maintained with Social Cooperative Bank Ltd. through the conduit of bank account of M/s. Benefit Information Ltd., which converted it's name as M/s. Benefit Tradelink Ltd. On further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iving relief to the assessee on this issue, so as to call for any interference. 32. In the result, Department's appeal with respect to addition of Rs. 88,00,000/- is hereby dismissed. Benefit Tradelink Ltd. (IT(SS)A No. 506/Ahd/2019 A.Y. 2012-13) (Department's Appeal) 33. The Department has raised the following Grounds of Appeal: "1. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in holding that any addition during the assessment u/s. 153A has to be confined to the incriminating material found during the course of search u/s. 132(1) of the Act, even though, there is no such stipulation in sec.153A of the Act. 2. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in not appreciating that sec.153A requires a notice to be issued requiring the assessee to furnish his return of income in respect of each assessment year falling within six assessment years and to assess or re-assess the total income of those six assessment years, and that the scheme of assessment or re-assessment of the total income of a person searched will be brought to naught if no addition is allowed to be made for those six assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) ought to have upheld the order of the AO. 9. It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent." 34. Ground Nos. 1 to 4 of the Department's appeal are general in nature and do not require any specific adjudication. 35. The addition amounting to Rs. 1,18,72,000/- under Section 68 of the Act is on identical set of facts as for A.Y. 2011-12 (where we have held that addition of Rs. 1,49,39,000/- is liable to be sustained since the same was on the basis of incriminating material found during the course of search), we are of the considered view that this addition is liable to be upheld, since the same is on the basis of "incriminating material" found during the course of search and Ld. CIT(A) has erred in facts and in law allowing the appeal of the assessee on this issue. 36. With regards to balance additions amounting to Rs. 2,00,55,981/- under Section 68 of the Act and Rs. 88,33,599/- on account of non-deduction of TDS, we are of the considered view that since the same are not on the basis of any "incriminating material" found during the course of search and therefore, Ld. CIT(A) has not erred in facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture. 5. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that addition of Rs. 11,83,782/- being unexplained cash deposits in bank accounts Rs. 10,21,41,570/- being unexplained credit entries u/s. 68 of the Act and disallowance of Rs. Rs. 44,10,353/- on non-deduction of TDS u/s 40(a)(ia) of the Act are beyond the scope of section 153A of the Act and thus deleting the said additions/disallowances. 6. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that no incriminating documents were found relating to additions made overlooking the facts that the AO has taken into cognizance of seized material for making additions on the issue of unexplained cash deposits in bank accounts and unexplained credits. 7. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in not considering the material facts and evidences brought on record by the AO for making addition of Rs. 11,83,782/- being unexplained cash deposits in bank accounts, addition of Rs. 10,21,41,570/- made on account of unexplained credit entries u/s 68 of the Act and disallowance of Rs. 44,10,353/- on non-deduction of T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t or re-assessment of the total income of a person searched will be brought to naught if no addition is allowed to be made for those six assessment years in the absence of any seized incriminating material. 3. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in not appreciating that while computation of undisclosed income of the block period u/s. 158BB was to be made on the basis of evidence found as a result of search or requisition of books of accounts, there is no such stipulation in sec.153A and sec.153BI specifically states that the provisions of Chapter-XIV-B, under which sec.158BB falls, would not be applied where a search was initiated u/s. 132 after 31/5/2003. 4. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in not appreciating that assessment in relation to certain issues not related to the search and seizure may arise in any of the said six assessment years after the search u/s. 132 is conducted in the case of the assessee, and that if the interpretation of the lId. CIT(A) were to hold it will not be possible to assess such income in the 153A proceedings, while no other parallel proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h u/s. 132(1) of the Act, even though, there is no such stipulation in sec.153A of the Act. 2. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in not appreciating that sec.153A requires a notice to be issued requiring the assessee to furnish his return of income in respect of each assessment year falling within six assessment years and to assess or re-assess the total income of those six assessment years, and that the scheme of assessment or re-assessment of the total income of a person searched will be brought to naught if no addition is allowed to be made for those six assessment years in the absence of any seized incriminating material. 3. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in not appreciating that while computation of undisclosed income of the block period u/s. 158BB was to be made on the basis of evidence found as a result of search or requisition of books of accounts, there is no such stipulation in sec.153A and sec.153BI specifically states that the provisions of Chapter-XIV-B, under which sec.158BB falls, would not be applied where a search was initiated u/s. 132 after 31/5/2003. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. CIT(A) has erred in not considering the material facts and evidences brought on record by the AO for making addition of Rs. 55,35,489/- made on account of unexplained entries contained in seized material Rs. 67,60,500/- on account of unexplained cash deposits in bank accounts Rs. 6,24,95,734/- on account of unexplained credit entry u/s 68 of the Act and disallowance of Rs. 9,35,652/- on account of disallowance u/s 14A of the Act and Rs. 1,38,78,273/- on account of non- deduction of TDS u/s 40(a)(ia) of the Act. 12. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the A.O. 13. It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent." 47.1 The assessee has raised the Grounds of Appeal in IT(SS)A No. 558/Ahd/2019 for A.Y. 2015-16. "1. That, the Ld. CIT(A) has wrongly confirmed the addition amounting to Rs. 15,00,000/- on account of working found in excel file. 2. That, the findings of the Ld. CIT(A) are not justified and are bad-in-law. 3. That, the appellant craves to add, amend, alter or delete any of the above grounds of appeals." The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted" assessment year. In this case, notice under Section 143(2) of the Act was issued dated 19.09.2016, however, the assessment proceedings were abated as per the provisions of the Act as the search was conducted in this case vide Warrant No. 6252 on 06.02.2017. Therefore, this is a case where the assessment proceedings had "abated" and the time limit for completing the assessments had not expired as on the date of search. 53. Having observed the above, we are of the considered view that Ld. CIT(A) has erred in facts and in law in taking contrary position, wherein additions of Rs. 67,60,500/- was deleted by holding that it was not on the basis of any incriminating material, whereas addition of Rs. 15 lakhs was sustained on the ground that this addition was on the basis of "incriminating material" found during the course of search. 54. In this case, two things are noteworthy, firstly, Ld. CIT(A) has allowed relief to the assessee on the legal ground with respect to the addition of Rs. 67,60,500/- on the ground that in case of "unabated assessment year", i.e. where the time limit for completion of assessment has expired, only on the basis of incriminating materials found during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f incriminating materials found during the course of search but was at liberty to conduct necessary enquiries and thereafter make appropriate additions, in case the assessee could not give any explanation with regards to enquiries made during the course of assessment proceedings, in accordance with law. 57. With regards to addition of Rs. 6,24,95,734/- (fresh credit entries in the books of account), despite multiple opportunities to the assessee, the assessee failed to provide any explanation / evidence with respect to identity, creditworthiness and genuineness of transaction for the above mentioned credit entries in the books of accounts. Accordingly, the Assessing Officer confirmed the additions in the hands of the assessee. With regards to disallowance of Rs. 9,35,652/- under Section 14A of the Act, the Assessing Officer made the addition by observing that the assessee has failed to submit any bifurcation of his expenses incurred for earning exempt income and taxable income. With regards to addition of Rs. 1,38,78,273/- under Section 40(a)(ia) of the Act, the Assessing Officer made the addition by observing that despite being given a number of opportunities, since the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny addition during the assessment u/s. 153A has to be confined to the incriminating material found during the course of search u/s. 132(1) of the Act, even though, there is no such stipulation in sec.153A of the Act. 2. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in not appreciating that sec.153A requires a notice to be issued requiring the assessee to furnish his return of income in respect of each assessment year falling within six assessment years and to assess or re-assess the total income of those six assessment years, and that the scheme of assessment or re-assessment of the total income of a person searched will be brought to naught if no addition is allowed to be made for those six assessment years in the absence of any seized incriminating material. 3. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in not appreciating that while computation of undisclosed income of the block period u/s. 158BB was to be made on the basis of evidence found as a result of search or requisition of books of accounts, there is no such stipulation in sec.153A and sec.153BI specifically states that the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f incriminating documents found during the course of search. 65. In the preceding paragraphs of our order, in case of search action in the case of M/s. Benefit Tradelink Ltd., we have discussed in detail as to why the material on the basis of which addition has been made in the hands of the assessee qualifies as "incriminating material". Accordingly, in light of the observations in the preceding paragraphs, we are hereby allowing the appeal of the Department on this issue, since we are of the considered view that the addition of Rs. 1,00,000/- under Section 68 of the Act has been made on the basis of "incriminating material" unearthed and the entire gamut of modus operandi of giving accommodation entries / bills discussed in the assessment order. 66. In the result, the ground relating to addition of Rs. 1,00,000/- is allowed in favour of the Department. 67. The balance additions during the course of assessment pertained to addition on account of unexplained credit entries of Rs. 53,70,400/-, addition under Section 40(a)(ia) of the Act (Rs. 15,63,174/-), addition of Rs. 43,22,500/- on account of unexplained source for purchase of immovable property and addition of Rs. 98,78,640/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even the material which was not found during the course of search action. 73. It would be useful to produce the relevant extract of the decision of Abhisar Buildwell, which have dealt with this issue: "12. If the submission on behalf of the Revenue that in case of search even where no incriminating material is found during the course of search, even in case of unabated/completed assessment, the AO can assess or reassess the income/total income taking into consideration the other material is accepted, in that case, there will be two assessment orders, which shall not be permissible under the law. At the cost of repetition, it is observed that the assessment under Section 153A of the Act is linked with the search and requisition under Sections 132 and 132A of the Act. The object of Section 153A is to bring under tax the undisclosed income which is found during the course of search or pursuant to search or requisition. Therefore, only in a case where the undisclosed income is found on the basis of incriminating material, the AO would assume the jurisdiction to assess or reassess the total income for the entire six years block assessment period even in case of completed/unabated as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equires a notice to be issued requiring the assessee to furnish his return of income in respect of each assessment year falling within six assessment years and to assess or re-assess the total income of those six assessment years, and that the scheme of assessment or re-assessment of the total income of a person searched will be brought to naught if no addition is allowed to be made for those six assessment years in the absence of any seized incriminating material. 3. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in not appreciating that while computation of undisclosed income of the block period u/s. 158BB was to be made on the basis of evidence found as a result of search or requisition of books of accounts, there is no such stipulation in sec.153A and sec.153BI specifically states that the provisions of Chapter-XIV-B, under which sec.158BB falls, would not be applied where a search was initiated u/s. 132 after 31/5/2003. 4. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in not appreciating that assessment in relation to certain issues not related to the search and seizure may arise in any of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... odation entries / accommodation bills mentioned in the body of the assessment order, the Ld. CIT(A) has simply allowed the appeal of the assessee with respect to this addition by summarily holding that no addition was made by the Assessing Officer on the basis of incriminating material found during the course of search. While allowing the appeal of the assessee, neither has the Ld. CIT(A) discussed / mentioned the material which was found during the course of search and neither was any observation given by Ld. CIT(A) as to why such material is not "incriminating material", looking into the assessee's set of facts. 78. In the result, the Department's appeal with respect to relief of Rs. 23,31,000/- given by the Ld. CIT(A) is allowed. 79. However, with regard to the balance additions of Rs. 1,88,54,354/- (addition on account of unexplained credit entries), addition of Rs. 80,30,000/- (addition under Section 40(a)(ia) of the Act), and addition of Rs. 44,82,150/- (addition on account of unexplained sale of immovable properties), we observe that all the above additions have not been made on the basis of any incriminating material found during the course of search action on the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. CIT(A) has erred in not appreciating that while computation of undisclosed income of the block period u/s. 158BB was to be made on the basis of evidence found as a result of search or requisition of books of accounts, there is no such stipulation in sec.153A and sec.153BI specifically states that the provisions of Chapter-XIV-B, under which sec. 158BB falls, would not be applied where a search was initiated u/s. 132 after 31/5/2003. 4. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in not appreciating that assessment in relation to certain issues not related to the search and seizure may arise in any of the said six assessment years after the search u/s. 132 is conducted in the case of the assessee, and that if the interpretation of the ld. CIT(A) were to hold it will not be possible to assess such income in the 153A proceedings, while no other parallel proceedings to assess such other income can be initiated, leading to no possibility of assessing such other income, which could not have been the intention of the legislature. 5. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that addition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the paper book. The excel sheet is found during the course of search, the AO has issued show cause notice dated 17/12/2018 requiring detailed explanation and documentary evidence to show whether transactions are reflected in the books of accounts and offered to tax. The assessee vide letter dated 21/12/2018 submitted its reply, however, the AO held that the assessee failed to provide the supporting documents or bring any facts to the notice that such transactions are done in normal course of business and merely because the transactions existed in the books of accounts will not make it genuine or for the purpose of business. The AR of the appellant has made submissions on 17/12/2018 and explained the nature of transactions related to the computer sheet. The appellant explained that it has carried out business transactions with various parties namely M/s Balaji Infrastructure Pvt. Ltd, Mr. Ashish Gandhi and M/s Hetvi Developers on various dates and accordingly made payment to the said parties. The transactions have been recorded in the books of accounts. However, since the appellant could not prove the genuineness of transactions in terms of identity, creditworthiness and genuineness ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the case and in law, the ld. CIT(A) has erred in not appreciating that sec.153A requires a notice to be issued requiring the assessee to furnish his return of income in respect of each assessment year falling within six assessment years and to assess or re-assess the total income of those six assessment years, and that the scheme of assessment or re-assessment of the total income of a person searched will be brought to naught if no addition is allowed to be made for those six assessment years in the absence of any seized incriminating material. 3. On the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in not appreciating that while computation of undisclosed income of the block period u/s. 158BB was to be made on the basis of evidence found as a result of search or requisition of books of accounts, there is no such stipulation in sec.153A and sec. 153BI specifically states that the provisions of Chapter-XIV-B, under which sec.158BB falls, would not be applied where a search was initiated u/s. 132 after 31/5/2003. 4. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in not appreciating that assessment in r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere involved in providing bogus entries / bogus accommodation bills to various persons in lieu of commission income. 92. After detailed findings in the assessment order, the Assessing Officer made addition of Rs. 51,44,000/- in the hands of the assessee under Section 68 of the Act since the assessee was unable to explain the source of cash deposit of the above amount in his bank account. Besides the above, the Assessing Officer also made various other disallowances in the assessment order. 93. In appeal, Ld. CIT(A) deleted the entire additions made by the Assessing Officer on the ground that this being an unabated assessment year, since the additions were not made on the basis of any incriminating material found during the course of search, the additions are liable to be deleted. 94. The Department is in appeal before us against the aforesaid order passed by the Ld. CIT(A). 95. In view of the discussion in the preceding part of the order, we are of the considered view that the addition of Rs. 51,44,000/- deleted by the Ld. CIT(A) is on an incorrect premise that the same not on the basis of incriminating materials found during the course of search. We are of the considered view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the decision of Saumya Construction and various other judicial precedents on the subject, in case of unabated assessment year, additions can be made in the hands of the assessee only on the basis of incriminating material found during the course of search. 101. In the result, Department's appeal with respect to various other additions, with respect to which relief was granted by Ld. CIT(A), is dismissed. 102. In the result, the Department's appeal for A.Y. 2012-13 is partly allowed for statistical purposes. Smt. Harshaben B. Popat (IT(SS)A No. 504/Ahd/2019 A.Y. 2013-14) (Department's Appeal) 103. The Department has raised the following grounds of appeal: "1. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in holding that any addition during the assessment u/s,153A has to be confined to the incriminating material found during the course of search u/s. 132(1) of the Act, even though, there is no such stipulation in sec.153A of the Act. 2. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in not appreciating that sec.153A requires a notice to be issued requiring the assessee to furnish his ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d circumstances of the case and in law, the Ld. CIT(A) has erred in holding that not considering the material facts and evidences brought on record by the AO in the assessment order and thus wrongly concluded that the additions are not based on seized materials. 7. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the AO. 8. It is, therefore, prayed that the order of the Ld. CIT(A) be set aside and that of the A.O. be restored to the above extent." 104. The facts for A.Y. 2013-14 are similar to A.Y. 2012-13 and accordingly, the same are not being repeated. With regards to the addition of Rs. 12,80,100/-, we are of the considered view that the addition has been made on the basis of incriminating materials found during the course of search (as per our detailed discussion in the preceding paragraphs). 105. However, the assessee has raised the additions ground / arguments that out of the above sum, addition of Rs. 11,84,100/- has already been made in the hands of the husband of the assessee and accordingly, it would amount to double addition if this amount is again added in the hands of the assessee. 106. Accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n account of working in excel file in the name of HETVI group. The said addition has been dealt with by the appellant in Ground no. 9 of the paper book. The excel sheet is found during the course of search, the AO has issued show cause notice dated 17/12/2018 requiring detailed explanation and documentary evidence to show whether transactions are reflected in the books of accounts and offered to tax. The assessee vide letter dated 21/12/2018 submitted its reply, however, the AO held that the assessee failed to provide the supporting documents or bring any facts to the notice that such transaction are done in normal course of business and merely because the transactions existed in the books of accounts will not make it genuine or for the purpose of business. The AR of the appellant has made submissions on 17/12/2018 and explained the nature of transactions related to the computer sheet. The appellant explained that it has carried out business transactions with M/s Balaji Infrastructure Pvt. Ltd on various dates and accordingly made payment to the said party. The transactions have been recorded in the books-of accounts. However, since the appellant could not prove the genuineness of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case and in law, the ld. CIT(A) has erred in not appreciating that assessment in relation to certain issues not related to the search and seizure may arise in any of the said six assessment years after the search u/s. 132 is conducted in the case of the assessee, and that if the interpretation of the ld. CIT(A) were to hold it will not be possible to assess such income in the 153A proceedings, while no other parallel proceedings to assess such other income can be initiated, leading to no possibility of assessing such other income, which could not have been the intention of the legislature. 5. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that additions of Rs. 21,13,500/- on account of unexplained cash deposits in bank accounts, addition of Rs. 21,07,313/- on account of disallowance of interest expenses, addition of Rs. 21,50,92,000/- on account of unexplained source of purchase of properties and additions of Rs. 1,06,70,696/- on account of undisclosed receipts based on 26AS are beyond the scope of section 153A of the Act and thus deleting the said additions/disallowances. 6. On the facts and circumstances of the case and in la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. Brother Judicial Member and have given my thought to the reasoning, view and finding of the learned brother. However, I could not agree and concur with his views and findings on the issue of completion of search assessment u/s 153A of the Income Tax Act (hereinafter referred to as 'the Act') in respect of unabated year. The difference is primarily owing to the interpretation of the judgement of Hon'ble Supreme Court in the case of PCIT v. Abhisar Buildwell (P.) Ltd. [2023] 149 taxmann.com 399 (SC). 3. In the course of hearing, the Revenue had taken a legal argument before us that in view of the decision of Hon'ble Supreme Court in the case of Abhisar Buildwell (supra), if certain additions are made on the basis of incriminating material found during search in respect of unabated year, then the entire assessment proceedings can be subjected to scrutiny and the AO would be at liberty to make appropriate addition even on the basis of the material not found during the course of search. The Ld. Brother has discussed this aspect in paras 71 to 74 of the order and is of the opinion that the judgment in the case of Abhisar Buildwell (supra) doesn't lay down any such proposition. Acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total income' taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and (iv) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO in absence of any incriminating material found during the course of search under section 132 or requisition under section 132A of the Act, 1961. However, the completed/unabated assessments can be re-opened by the AO in exercise of powers under sections 147/148 of the Act, subject to fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved. (emphasis supplied) 6. It is evident from the ratio of this decision as enumerated in Para 14(iii) that the scope of unabated / completed assessment is not confined only to the incriminating material found during search. The Hon'ble Apex Court has categorically held that the AO would assume the juris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompleted year(s). However, once the jurisdiction is assumed by the AO on the strength of incriminating material found during the search, the AO has to assess or reassess the 'total income' of the unabated year not only on the basis of incriminating material found during the search but also taking into account the 'other material' as available with him as well as the return of income. 8. The Supreme Court has also taken note of the discordant view of Hon'ble Allahabad High Court in the case of Mehndipur Balaji (supra) and upheld the order of the Hon'ble Court. The relevant portion of the judgement in para 15.1 is found to be as under: 15.1 In view of the discussion hereinabove, once during search undisclosed income is found on unearthing the incriminating material during the search, the AO would assume jurisdiction to assess or reassess the total income even in case of completed/unabated assessments. Therefore, the impugned judgment(s) and order(s) passed by the High Court taking the view that the AO has the power to reassess the return of the assessee not only for the undisclosed income, which was found during the search operation but also with regard to material that was availa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... completed year(s). 12. As a result of this difference of opinion, we also differ in respect of conclusion arrived by the Ld. Brother in respect of final outcome of these appeals. In my considered opinion, the AO was empowered to make additions by taking into account the 'other materials' as available with him and, therefore, the additions as made by the AO cannot be faulted. Accordingly, all the additions made on the basis of 'other material' are sustained in all the appeals, except in the cases where no addition was based on any incriminating material found during the search. However, the Ld. CIT(A) had deleted the additions on the technical ground that no addition can be made in the absence of any incriminating material and in his opinion no incriminating material was found during the search. I agree with the detailed finding of the Ld. Brother that incriminating materials were indeed found in the course of search, based on which he has sustained certain additions. Nevertheless, the fact remains that the merit of the additions based on the incriminating material as well as on the basis of 'other materials' was not looked into and examined by the Ld. CIT(A). Therefore, all the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra Shantilal Patel (in short "MS Patel") and his group concerns on 06.02.2017 who are engaged in the business of building supply material, TMT bar, steel etc. As briefed in the order of the Ld. Judicial Member, the search action resulted in collection of evidences proving that the assessee was engaged in providing bogus accommodation entries and bogus bills to various parties through a web of different concerns floated by him. This fact was clearly admitted by him in his statement recorded under Section 132(4) of the Act. Revenue observed that MS Patel was holding five PAN numbers with four different dates of birth and also had not filed any return of income. The Revenue held that the 27 entities of MS Patel were only paper concerns created for the purpose of providing bogus bills / accommodation entries. All the 27 entities have only one address namely 58, Saket Row House, Sulabh Cooperative Housing Society Ltd., Memnagar. MS Patel in his statement also admitted that no business activities were being carried out by the assessee from this address. In the statement given by MS Patel, he explained his modus operandi of providing accommodation entries in detail. He provided bogus bill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the course of search conducted at the premises of Shri Bharat Popat, Benefit Tradelinks Ltd. and Ellegance Reality Ltd. at Benefit House, City Bank Street, Nr. Municipal Market, C.G. Road, Navrangpura, Ahmedabad, several incriminating documents were found and seized by the Department. On analyzing the documents during the course of search, several documents were found where information about unaccounted transactions made in either cash or through banking channel by the assessee alongwith his proprietorship concerns to the other person/companies/firm/ proprietorship concerns was seen. During the course of search operation, the Department found books of accounts on various concerns which were being maintained in tally software at Benefit House. Issue 1 6. During the course of search, a MS Excel file named "Cheque Book Data Base" was found from the laptop used by Mr. Bharat Popat. On perusal of the Excel sheet, the Department observed that the said sheet contains details of bank accounts of various parties having live nexus with Benefit group. From the contents of the Excel sheet, the Department observed that Shri Bharat Popat is actually controlling these bank accounts. The Departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s details of cash, RTGS, barter and trading transactions. The Department also found various other Excel sheet files from the laptop of Shri Bharat Popat and Harsha Popat containing details of various accommodation entries / bogus bills and other transactions which were being carried out by Shri Bharat Popat and his group concerns. As per extensive information, which was unearthed from the search and seizure operation carried out by the Department, it was noticed that assessee had deposited huge amount of cash for various years in his bank accounts. The Department observed that on verification of ITR, the assessee had declared meager income between A.Y. 2011-12 to A.Y. 2017-18 or booked losses which did not support the substantial cash deposits in the bank accounts of the assessee. Accordingly, the Assessing Officer prepared the following chart for various assessment years under consideration and asked the assessee to furnish detailed explanation alongwith documentary evidences for cash deposits: A.Y. Cash Credit Total Credit Debit 2011-12 14939000 95157488 91677873 2012-13 11872000 144652441 144667967 2013-14 1183782 32105865 32110031 2015-16 6760500 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... office of DDIT (Investigation), Rajkot on 22.03.2018 that M/s. Aryavat Pvt. Ltd. received accommodation entries in his bank account maintained with Social Cooperative Bank Ltd. through the conduit of bank account of M/s. Benefit Information Ltd., which converted its name as M/s. Benefit Tradelink Ltd. On further investigation, the Assessing Officer observed that the assessee has not been able to establish the identity, creditworthiness and genuineness of the transactions. The Hon'ble JM held that the addition has been made by the Assessing Officer on the basis of information received from DDIT (Investigation), at a date later / subsequent to date of search action. Relying on the orders in the case of Rajat Minerals Pvt. Ltd., 114 taxmann.com 536 (Ranchi - Tribunal), Smt. Jami Nirmala, 132 taxmann.com 267 (Orissa) and Oxygen Business Park Pvt. Ltd., 157 taxmann.com 175 (Delhi), Hon'ble JM held that since the addition has been made by the Assessing Officer based on the subsequent information received but not based on any incriminating material found during the course of search, the action of the Assessing Officer cannot be sustained. 11. In the instant case, the Hon'ble JM has held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to pick out a word or a sentence from the judgment of Hon'ble Apex Court, divorced from the context of the question under consideration, and treat the same to be the complete 'law' declared by Hon'ble Apex Court. Placing reliance on the judgment of Hon'ble Apex Court in the case of 'CIT vs. Sun Engineering Works P. Ltd. -198 ITR 297 (SC)', the Ld. Sr. Advocate argued that an interpretation of a judgment should not be out of context in which the questions arose for decision in that case. He argued that it is neither desirable nor permissible to pick out a word or a sentence from the judgment of Court, divorced from the context of the question under consideration, and treat it to be the complete 'law' declared by the Court. Relying on the judgment, the Ld. Counsel argued that any judgment has to be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before the Court. It was relied that a decision of the Court takes its colour from the questions involved in that case in which it is rendered and while applying the decision to a latter case, the Courts must carefully try to ascertain the true principle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly the incriminating material found during the search and is precluded from considering any other material derived from any other source or it may be framed like unabated year where all material other than incriminating material can also be taken into consideration. Para 3.1 (iv) Section 158B(b) defines "Undisclosed Income": "undisclosed income" includes any money, bullion, jewellery or other valuable article or thing or any income based on any entry in the books of account or other documents or transactions, where such money, bullion, jewellery, valuable article, thing, entry in the books of account or other document or transaction represents wholly or partly income or property which has not been or would not have been disclosed for the purposes of this Act, or any expense, deduction or allowance claimed under this Act which is found to be false * This para contains definition' of 'undisclosed income', as envisaged under 'section 158B(b)' that strictly includes 'only the material unearthed during search. Para 5 We have heard learned counsel for the respective parties at length. The question which is posed for consideration in the present set of appeals is, as to whether in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nitiated or any order of assessment or reassessment made under subsection (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in subsection (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to subsection (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner. Therefore, the intention of the legislation seems to be that in case of search only the pending assessment/reassessment proceedings shall abate and the AO would assume the jurisdiction to assess or reassess the 'total income' for the entire six years period/block assessment period. The intention does not seem to be to re-open the completed/unabated assessments, unless any incriminating material is found with respect to concerned assessment year falling within last six years preceding the search. Therefore, on true interpretation of Section 153A of the Act, 1961, in case of a search under section 132 or requisition under section 132A and during the search any incriminating material is found, even in case of unabated/completed assessment, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the following items: ■ 'incriminating material' found during the course of search; & ■ 'other material' which would include 'income declared in the returns if any, furnished by assessee as well as 'undisclosed income '. * Perusal of Para 11 further makes it clear that insofar as 'unabated / completed assessments' are concerned, addition cannot be made in respect of every item under the Sun. Rather, 'addition' can be made 'only in respect of any something unearthed during the course of search '. Para 12 If the submission on behalf of the Revenue that in case of search even where no incriminating material is found during the course of search, even in case of unabated/completed assessment, the AO can assess or reassess the income/total income taking into consideration the other material is accepted, in that case, there will be two assessment orders, which shall not be permissible under the law. At the cost of repetition, it is observed that the assessment under section 153A of the Act is linked with the search and requisition under sections 132 and 132A of the Act. The object of Section 153A is to bring under tax the undisclosed income which is found during the cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O would assume the jurisdiction to assess or reassess the 'total income' taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and XXX... * Para 14 merely summarizes the 'conclusion' of Hon'ble the Apex Court. * The 'categorical findings' of Hon'ble the Apex Court as well as the meaning of the term 'other material' appear in Para 11. * 'Para 14' cannot be read into isolation. Rather, such 'conclusion' has to be read with the 'elaborate reasons/findings' of Hon'ble the Apex Court in 'Para 11'. * Accordingly, by simply relying on Para 14(iii), it is not proper to say that the scope of 'other material' is wide enough to empower AO to make addition in respect of any item irrespective of the fact as to whether the same is based on any seized material or not. * Para 14(iii) r. w. Para 11 of the decision makes is clear beyond any stretch of imagination that in case of 'completed / unabated assessment', 'no addition' can be made dehors the 'incriminating material' found during search as well as 'other material' (which has already been defined in Para 11 and wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 'undisclosed' income too at the normal rate of tax as against any special rate. Thus, after introduction of Section 153A and in case of search, there shall be block assessment for six years. Search assessments/block assessments under section 153A are triggered by conducting of a valid search under section 132 of the Act, 1961. The very purpose of search, which is a prerequisite/trigger for invoking the provisions of sections 153A/153C is detection of undisclosed income by undertaking extraordinary power of search and seizure, i.e., the income which cannot be detected in ordinary course of regular assessment. Thus, the foundation for making search assessments under sections 153A/153C can be said to be the existence of incriminating material showing undisclosed income detected as a result of search." 17. The Ld. DR argued that the provisions of section 153A of the Act also provide that the assessment / reassessment proceedings pending as on the date of initiation of the search under section 132 or making of requisition under section 132A shall abate. Therefore, the Assessing Officer assumes jurisdiction to make assessment/ re-assessment for that relevant year under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te the purpose of the second proviso to Section 153A(1) of the Act and will not satisfy the rule of "Harmonious Interpretation of Statutes". The Ld. DR argued that restriction of meaning of "total income" under section 153A of the Act to mean only "undisclosed income" unearthed during the course of search proceedings u/s 132 of the Act or found in the books of account, other documents or assets are requisitioned u/s 132A of the Act would amount to reading down the provisions of the Act. The Hon'ble Supreme Court in the case of Calcutta Guj. Education Society & Anr. Vs. Calcutta Municipal Corporation & Ors, Case No.: Appeal (Civil) 5203 of 2000, date of judgment: 25.08.2003, has defined the scope of reading down in interpretation of Statutes and the relevant part of the said decision is as under: "The rule of "reading down" a provision of law is now well recognized. It is a rule of harmonious construction in a different name. It is resorted to smoothen the crudities or ironing the creases found in a statute to make it workable. In the garb of 'reading down', however, it is not open to read words and expressions not found in it and thus venture into a kind of judicial legislation. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or unbridled power." [Emphasis Supplied)] 19. Referring to the judgement of Hon'ble Apex Court in the case of UoI Vs. M/s. Ind Swift Laboratories Ltd in CA No. 1976 of 2011, Ld. DR argued that a taxing statute must be interpreted in the light of what is clearly expressed. He relied on the part of the judgement wherein it was held that "a taxing statute must be interpreted in the light of what is clearly expressed. It is not permissible to import provisions in a taxing statute so as to supply any assumed deficiency". Ld. DR argued that taxing statute cannot be interpreted on presumptions and assumptions and one must interpret in the light of what is clearly expressed in the statute. Taking a cue from the above judgement, Ld. DR submitted that the meaning of "total Income" mentioned under section 153A(1)(b) of the Act cannot be restricted to mean only "undisclosed income'' in the case of unabated assessment if the Assessing Officer had assumed jurisdiction to assess / re-assess the relevant unabated assessment year based on incriminating material seized. 20. The other issue argued by the Ld. DR was that the provisions of section 153A of the Act have substituted the erstwhile scheme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of the completed assessments in absence of any incriminating material but also the issue raised by the Assessee regarding whether in case any incriminating material is found during search then even completed assessments can be assessed or reassessed taking into consideration the incriminating material and other material in possession of the Assessing Officer. This is evident from para 1 of the order of the Court, which reads as under: "1. As common question of law and facts arise in this group of appeals, they are being disposed of by this common judgment and order. Civil Appeal No. 6580 of 2021 and other connected appeals as mentioned above have been preferred by the Revenue. However Civil Appeal No. 15617 of 2017 and other allied appeals as mentioned above have been preferred by the respective assessee's challenging the order passed by the respective High Courts taking the view that in case any incriminating material is found during search then even completed assessments can be assessed or reassessed taking into consideration the incriminating material and other material in possession of the Assessing Officer." [Emphasis Supplied] b) Further, the issue questions of l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fulfilment of the conditions as envisaged/mentioned under sections 147/148 of the Act and those powers are saved." [Emphasis Supplied] d) Hon'ble Supreme Court had clearly answered the scope of assessment in the case of unabated assessments where incriminating material is found in Para 14(iii) of its order and held that the Assessing Officer gets jurisdiction to assess 'total income' taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns. Further, the Hon'ble Supreme Court has also not limited the meaning of 'total income' u/s 153A of the Act to mean only 'undisclosed income'. e) Further, Hon'ble Supreme Court had answered the legal question raised by the Assessee before it in Civil Appeal Nos.7738- 7739/2021, 7736-7737/2021, 7732-7735/2021 and 7740-7743/2021 on the issue of jurisdiction of Assessing Officer to assess total income in unabated assessments when incriminating material is seized and held vide para 15 & 15.1 as under: '15. Insofar as the aforesaid Civil Appeals preferred by the assessee M/s Kesarwani Zarda Bhandar Sahson, Allahabad are concerned, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he jurisdiction to assess u/s 153 A of the Act is for assessment of "total Income" as per the provisions of the Act. The expression "total Income" is defined in Section 2(45) of the Act read with section 5 of the Act is an inclusion definition and includes all income from whatever source derived. Hence, the meaning of "total income" u/s 153A of the Act cannot be restricted. c) Restriction of meaning of "total Income" u/s 153A of the Act to mean only "undisclosed income" would be contrary to the law laid by Hon'ble Supreme Court with regard to principles of reading down the provisions of Statute. d) Restriction of meaning of "total Income" in the case of unabated assessments would lead to existence of parallel assessments for the same assessment year which is not permissible under the Act. This is clearly evident from the provisions of section 153 A of the Act as well as from the decision of Hon'ble Supreme Court in the case of Abhisar Buildwell (P.) Ltd. (Supra). In conclusion, the Ld. DR argued that Hon'ble Supreme Court in the case of Abhisar Buildwell (P.) Ltd. (Supra) had answered the said question at para numbers 14, 15 & 15.1 of the decision and the same be followed. 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent u/s 153A of the Act in abated assessment is concluded by taking into consideration the seized material and all other material available to the Assessing Officer and culminates into passing of single order with a uniform tax rate for the additions made on account of incriminating materials found and seized and any other material. In case of unabated assessment, the assessment is completed u/s 153A and no addition ought to have been made in the absence of any incriminating material. There is a third situation where in case of unabated assessment, some incriminating material is available which was found and sized during search and some other information is available which is not a part of the search, in that situation can there be more than two assessments, one under section 153A and the other u/s 153C or u/s 148 of the Act. 26. I have perused the arguments of Ld. Sr. Counsel with reference to para 2 of the order of the Hon'ble Apex Court in the case of Abhisar Buildwell Pvt Ltd (supra) which dealt with the core issue with respect to scope of unabated assessment years post search u/s 153A of the Act. The para 2 of the order reads "the core issue involved in the present batch of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of jurisdiction u/s 153A of the Act and issue of notice for all the years, whether there is any incriminating material seized or not, and then expecting the assessee to reply that there was no incriminating material and consequently completing the assessment without making any addition as there was no incriminating material is akin to dropping of the proceedings. Shouldn't the Revenue Authorities determine the availability of any incriminating material seized or not before issue of notice u/s 153A of the Act? It is found that the assumption of jurisdiction u/s 153A is automatic and is mandatory in the scheme of the Act. However, for the purpose of making any addition in an unabated assessment some incriminating material found and seized during the search is a sine qua non. What is to be determined u/s 153A is the 'total income'. In the absence of any incriminating material, no undisclosed income is determinable in an unabated assessment and hence the total income remains same as disclosed in the return of income. There is no dispute between the judgment of the Hon'ble Apex Court, the case of Kabul Chawla and the case of Saumya Construction as far as assessment devoid of incrim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for the relevant assessment year or years : Provided further that assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years and for the relevant assessment year or years referred to in this subsection pending on the date of initiation of the search under section 132 or making of requisition under section 132A, as the case may be, shall abate : Section 132 reads as under:- Search and seizure. 132. (1) Where the [Principal Director General or] Director General or [Principal Director or] Director or the [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner or Additional Director or Additional Commissioner or Joint Director or Joint Commissioner in consequence of information in his possession, has reason to believe that- (a) any person to whom a summons under sub-section (1) of section 37 of the Indian Income-tax Act, 1922 (11 of 1922), or under sub-section (1) of section 131 of this Act, or a notice under sub-section (4) of section 22 of the Indian Income-tax Act, 1922, or under sub-section (1) of section 142 of this Act was issued to produce, or cause to be produced, any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellery or other valuable article or thing; (iib) require any person who is found to be in possession or control of any books of account or other documents maintained in the form of electronic record as defined in clause (t) of sub-section (1) of section 2 of the Information Technology Act, 2000 (21 of 2000), to afford the authorised officer the necessary facility to inspect such books of account or other documents; (iii) seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing found as a result of such search: Provided that bullion, jewellery or other valuable article or thing, being stock-in-trade of the business, found as a result of such search shall not be seized but the authorised officer shall make a note or inventory of such stock-in-trade of the business; (iv) place marks of identification on any books of account or other documents or make or cause to be made extracts or copies therefrom; (v) make a note or an inventory of any such money, bullion, jewellery or other valuable article or thing : Provided that where any building, place, vessel, vehicle or aircraft referred to in clause (i) is within the area of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction under clauses (i) to (v) of sub-section (1) are or is kept in any building, place, vessel, vehicle or aircraft not mentioned in the authorisation under sub-section (1), such [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner may, notwithstanding anything contained in section 120, authorise the said officer to take action under any of the clauses aforesaid in respect of such building, place, vessel, vehicle or aircraft.] (2) The authorised officer may requisition the services of any police officer or of any officer of the Central Government, or of both, to assist him for all or any of the purposes specified in sub-section (1) or sub-section (1A) and it shall be the duty of every such officer to comply with such requisition. (3) The authorised officer may, where it is not practicable to seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing, for reasons other than those mentioned in the second proviso to sub-section (1), serve an order on the owner or the person who is in immediate possession or control thereof that he shall not remove, part with or otherwise deal with it e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the authorised officer for a period exceeding thirty days from the date of the order of assessment under section 153A or clause (c) of section 158BC unless the reasons for retaining the same are recorded by him in writing and the approval of the [Principal Chief Commissioner or] Chief Commissioner, [Principal Commissioner or] Commissioner, [Principal Director General or] Director General or [Principal Director or] Director for such retention is obtained : Provided that the [Principal Chief Commissioner or] Chief Commissioner, [Principal Commissioner or] Commissioner, [Principal Director General or] Director General or [Principal Director or] Director shall not authorise the retention of the books of account and other documents for a period exceeding thirty days after all the proceedings under the Indian Income-tax Act, 1922 (11 of 1922), or this Act in respect of the years for which the books of account or other documents are relevant are completed. (8A) An order under sub-section (3) shall not be in force for a period exceeding sixty days from the date of the order. (9) The person from whose custody any books of account or other documents are seized under sub-section (1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... poses of sub-section (9A), "execution of an authorisation for search" shall have the same meaning as assigned to it in Explanation 2 to section 158BE. Explanation 2.-In this section, the word "proceeding" means any proceeding in respect of any year, whether under the Indian Income-tax Act, 1922 (11 of 1922), or this Act, which may be pending on the date on which a search is authorised under this section or which may have been completed on or before such date and includes also all proceedings under this Act which may be commenced after such date in respect of any year. 30. What was the purpose of abatement of all pending assessments on the date of initiation of search? The pending assessments could be assessment u/s 143(3), 153C or 148 of the Act. As rightly argued by the Ld. Sr. Counsel, the Legislature has consciously provided for abatement of assessment, it is to obviate a necessity of making two assessments in respect of one year for which proceedings are pending, the second proviso provides that pending assessments shall abate, which means that only one assessment under Section 153A shall be made comprising of all the assessments which have been pending. The Legislature does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be found. Provisions of Section 153A stipulates automatic issue of notice and completion of assessment determining total income. The Hon'ble Supreme Court in the case of Prakash Nath Khanna v. CIT has held that "the first and foremost rule of construction is that the intention has to be found from the words used by the legislature itself. The Courts interpret the law and do not legislate the law..." Only when the literal interpretation of the statutory provision leads to unjust result contrary to intension of the legislature, the Court might adapt the language used by the legislature so as to meet the intention of the legislature resulting in a rational and compatible construction. The provisions have to be read harmoniously keeping in view the intend and purpose. The Hon'ble Supreme Court of India held that "Statutes should be construed, not as theorems of Euclid, but with some imagination of the purposes which lie behind them." Hence, I am in agreement with the argument of the Ld. CIT(DR) that the first proviso should be read in harmony with the second proviso under Section 153A. The second proviso expressly states that only the proceedings pending at the time of search or s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s resident includes all income from 'whatever source' derived. Hence, the meaning of "total income" is clearly defined under the Income Tax Act and the same includes all incomes including undisclosed income unearthed during the course of search proceedings u/s 132 of the Act or found in the books of account, other documents or assets are requisitioned u/s 132A of the Act. If the meaning of "total income" under section 153A of the Act is restricted to assessment of only "undisclosed income" unearthed during the course of search proceedings u/s 132 of the Act or found in the books of account other documents or assets are requisitioned u/s 132A of the Act, it would also mean that even in the case of abated assessments under second proviso to Section 153A(1) of the Act, only undisclosed income can be assessed. Such an interpretation would negate the purpose of the second proviso to Section 153A(1) of the Act and will not satisfy the rule of "Harmonious Interpretation of Statutes". 32. With regard to the issue of parallel assessment, the judgement of the Hon'ble Apex Court in the case of Abhisar Buildwell Pvt Ltd (supra) has been perused. It could be found that the provisions of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y with the introduction of Section 153A. 34. With regard to the controversy between the determination of undisclosed income and the total income in the case of unabated assessment has been rightly explained by the Ld. DR which is as under:- "i) If a search action is conducted on an Assessee on 01.01.2022, then the assessment years covered u/s 153A of the Act would be from 2017-18 to 2022-23. ii) In the course of the search proceedings, incriminating material is gathered for all the assessment years from 2017-18 to 2022-23. iii) Further, subsequent to the search action on 01.01.2022, the Assessing Officer received information from third party with regard to huge cash deposits exceeding Rs. 1 crore in the Bank account of the Account of the Assessee which was not disclosed to the department in the returns of income filed by the Assessee. iv) As there are no proceedings pending u/s 147 of the Act for the AY 2017- 18 as on the date of the search, the assessment for the AY 2017-18 would be unabated assessment. v) Therefore, if in the assessment made u/s 153A of the Act, only the undisclosed income unearthed during the course of search proceedings can assessed, then the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material includes return of income and any other information or material. The word 'other material' cannot be restricted only to the income declared in the return. 38. The interplay between Sections 153A, 153C, 147, undisclosed income, total income, abatement, unabated assessments, incriminating material, other material has to be treaded with utmost diligence and crucial in understanding how the principle against multiple assessments is upheld in the context of search and reassessment proceedings. One potential scenario for multiple assessments could arise if the Assessing Officer initiates proceedings u/s 147 for assessment years that are already covered under the block period of Section 153A, particularly based on the other material and facts emanated from the search proceedings during the assessment u/s 153A of the Act. Judicial pronouncements have aimed to clarify that once an assessment is made under Section 153A for a particular assessment year within the block period, the scope for reopening that assessment under Section 147 is limited. The Legislature do not aim to burden its own citizens with multiplicity of proceedings under various assessments for the same year. 39. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y followed and approved by the other High Courts, referred to hereinabove. One another lead judgment on the issue is the decision of the Gujarat High Court in the case of Saumya Construction (supra), which has been followed by the Gujarat High Court in the subsequent decisions, referred to hereinabove. Only the Allahabad High Court in the case of Pr. Commissioner Of Income Tax v. Mehndipur Balaji, 2022 SCC OnLine All 444 : (2022) 447 ITR 517 has taken a contrary view." Having examined various judgements of High Courts, the Hon'ble Apex Court held as under:- Finding 1 :- For the reasons stated hereinbelow, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction (supra), taking the view that no addition can be made in respect of completed assessment in absence of any incriminating material. Finding-2 :- 11. As per the provisions of Section 153A, in case of a search under Section 132 or requisition under Section 132A, the AO gets the jurisdiction to assess or reassess the 'total income' in respect of each assessment year falling within six assessment years. However ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating material is found during the search, the power of the Revenue to have the reassessment under sections 147/148 of the Act has to be saved, otherwise the Revenue would be left without remedy. Finding 3:- 12. If the submission on behalf of the Revenue that in case of search even where no incriminating material is found during the course of search, even in case of unabated/completed assessment, the AO can assess or reassess the income/total income taking into consideration the other material is accepted, in that case, there will be two assessment orders, which shall not be permissible under the law. At the cost of repetition, it is observed that the assessment under Section 153A of the Act is linked with the search and requisition under Sections 132 and 132A of the Act. The object of Section 153A is to bring under tax the undisclosed income which is found during the course of search or pursuant to search or requisition. Therefore, only in a case where the undisclosed income is found on the basis of incriminating material, the AO would assume the jurisdiction to assess or reassess the total income for the entire six years block assessment period even in case of completed/unabat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; which leaves no scope of further interpretation or analysis on the core issue raised at para 4.1 (iv). 40. In view of the foregoing discussion, I agree with the Hon'ble AM that there is no legal impediment in making an addition, the basis of 'other material' found during search, in an assessment u/s 153A for a year whose assessment was not pending on the date of search. 41. Before I close, I must place on record my sincere appreciation to the Ld. Sr. Advocate Shri Tushar Hemani and the Ld. PCIT (DR) Shri H. Phani Raju for their erudite presentation and in-depth analysis of the intricate and nuanced issues of jurisprudence involved in these appeals. 42. The Registry of the Tribunal is directed to list this matter before the Division Bench for passing an order in accordance with the majority view. Sd/- (DR. BRR KUMAR) VICE PRESIDENT Ahmedabad; Dated 07/04/2025" 6. Final Disposal of the Appeal: In accordance with the majority opinion, comprising the opinion of the Hon'ble Accountant Member and the Hon'ble Third Member, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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