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TMI Blog2017 (4) TMI 470X X X X Extracts X X X X X X X X Extracts X X X X ..... search and seizure operation and the addition in this case was purely based on the material already available on record, which is not sustainable in the eyes of law. - Decided in favour of assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... /s.68 of the I.T. Act, 1961. 3. The Ld. CIT(A) erred in law and facts by confirmed the disallowing expenses of ₹ 70,156/- under the provisions of section 14A of the I.T. Act, 1961. 4. The Ld. CIT(A) erred in not considering the additional evidence filed. 5. The assessee craves leave for addition, notification, deletion, any of grounds of appeal either before the hearing of appeal or at the time of appeal. 6. The assesses have also filed the common legal additional grounds of appeal in all the 04 appeals. For the sake of convenience, we are reproducing the aditional grounds raised in ITA No. 1245/Del/2014 (AY 2005-06) as under:- 1. The Ld. CIT(A) has erred on facts and in law in confirming the assessment of the appellant passed without satisfying the substantive and procedural requirements under section 153C of the Income Tax Act. 2. Without prejudice to the other grounds of appeal, the Ld. CIT(A) has erred on facts and in law in confirming the additions which were not based on the incriminating material found and seized during the course of search. ITA NO. 1245/DEL/2014 (AY 2005-06) [GLOBAL REALTY CREATIONS LTD. VS. DCIT) 7. The brief facts of the case are that a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice dated 7.12.2010 was issued requiring it to prove the identity and creditworthiness of the parties as well as the genuineness of those transactions and in response to the same assesse filed only share application forms and apart from this nothing has been filed by the assessee in order to prove the genuineness of the transactions as well as identity and creditworthiness of the parties from which amounts have been claimed received. Thereafter, the AO completed the assessment at ₹ 1,10,00,000/- on account of unexplained cash credit u/s. 68 of the I.T. Act, 1961 vide his Order dated 27.12.2010 passed u/s. 153C r.w.s. Section 143(3) of the I.T. Act, 1961. 8. Against the aforesaid assessment order dated 27.12.2010, assessee preferred an appeal before the Ld. CIT(A), who vide impugned Order dated 30.1.2014 has dismissed the appeal of the asseseee. 9. Aggrieved with the order of the Ld. CIT(A), the Assessee is in appeal before the Tribunal. 10. Ld. Counsel of the assessee on the admission of additional ground has stated that the additional grounds are on the assumption of jurisdiction u/s.153C of the I.T. Act besides the scope of assessment u/s.153/153A of the Income Tax A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would inspire confidence in him that he may be sure of getting a square deal from the Department. Although, therefore, the responsibility for claiming refunds and reliefs rests with assessee on whom it is imposed by law, officers should :- (a) Draw their attention to any refunds or reliefs to which they appear to be clearly entitled but which they have omitted to claim for some reason or other; (b) Freely advise them when approached by them as to their rights and liabilities and as to the procedure to be adopted for claiming refunds and reliefs." 6. The intention of this circular is not that tax due should not be charged or that any favour should be shown to anybody in the matter of assessment, or that where investigations are called for, they should not be made. Whatever the legitimate tax it must be assessed and must be collected. The purpose of this circular is merely to emphasise that we should not take advantage of an assessee's ignorance to collect more tax out of him than is legitimately due from him." 10.2 It was argued that the above circular has been judicially noted and approved in many judgments and has been relied upon in support of the assessees& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct legal foundations. The following may kindly be noted:- i. Ld. AO doesn't really indicate how and whether the vaguely indicated documents in the satisfaction note were found to be belonging to the assessee within the meaning of section 153C of the Act. ii. No mention of these documents in the assessment order ultimately passed under section 153C further lead to the conclusion that these documents had no relevance or belongingness to the assessee. iii. Ld. AO doesn't even vaguely record the satisfaction under section 153C, except the words satisfaction in the heading satisfaction note for proceedings under section 153C, at no other place word satisfaction has been used. In the concluding line, Ld. AO merely mentions that "Thus the proceedings u/s 153C r.w.s. 153A of the Income Tax Act, 1961 are being initiated in the above case" iv. There is no recording/ reference about the contents of these documents allegedly pertaining to the appellant. Even in the assessment order, no such mention has been made. This indicates how irrelevant these documents were to the assessment of the appellant. v. No satisfaction note has been recorded by the assessing officer(s) of the entity/en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in which search is conducted or requisition is made except in cases where any assessment or reassessment has abated. (2) Where books of account or documents or assets seized or requisitioned as referred to in sub-section (1) has or have been received by the Assessing Officer having jurisdiction over such other person after the due date for furnishing the return of income for the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A and in respect of such assessment year- (a) no return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or (b) a return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or (c) assessment or reassessment, if any, has been made, before the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person, such Assessing Officer shall issue the notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfaction that the documents mentioned above belonged to the petitioners. 14. First of all we may point out, once again, that it is nobody"s case that the Jaipuria Group had disclaimed these documents as belonging to them. Unless and until it is established that the documents do not belong to the searched person, the provisions of Section 153C of the said Act do not get attracted because the very expression used in Section 153C of the said Act is that "where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A ...." In view of this phrase, it is necessary that before the provisions of Section 153C of the said Act can be invoked, the Assessing Officer of the searched person must be satisfied that the seized material (which includes documents) does not belong to the person referred to in Section 153A (i.e., the searched person). In the Satisfaction Note, which is the subject matter of these writ petitions, there is nothing therein to indicate that the seized documents do not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here are various other rulings addressing the requirements to be fulfilled before initiating valid action u/s 153C. In these cases, Hon'ble Courts & Tribunals have held that the conditions precedent for invoking process u/s 153C has to be strictly complied with. In three of the matters belonging to the assessee group namely M/s Nageshwar Investment Ltd. and M/s Natural Product Bio-Tech Ltd and M/s Global Heritage Venture Ltd in the identical circumstances Hon'ble Delhi Tribunal quashed the proceedings u/s 153C. Copies of these orders are attached in the paper book, as per the details below; Name of Assessee Page no. of paper book M/s Global Heritage Venture Ltd 3-17 M/s Natural Product Bio-Tech Ltd 19-34 M/s Nageshwar Investment Ltd. 38-47 Relevant Para from the ITAT order in the case of M/s Natural Product Bio-Tech Ltd are as below: "22. In the light of the case laws cited above and on a reading of Section 153A and 153C the exercise that is required to be done by the AO has been spelt out by the Coordinate Bench of this Tribunal in the case of DSL Properties Pvt. Ltd. Vs. DCIT 33 Taxman.com 420 vide para 15 has held that if the Assessing Officer is assessing the pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion of any valuable articles or things or any books of account or documents have been referred even in the assessment order for framing assessment under section 153C of the I.T. Act. Since for all these years, the returns were originally filed and processed and since no additional material is found pertaining to the assessee which it is held to be belonging to the assessee, the AO does not assume jurisdiction for framing assessment u/s. 153C read with section 153A of the I.T. Act. The AO lacks jurisdiction to initiate proceedings u/s. 153C against the assessee and therefore, the issuance of notice itself is null and void and therefore quashed. Consequently, the impugned assessment order passed u/s. 153C is also a nullity. 23. Since we have quashed the notice u/s 153C of the Act itself, the other grounds are not adjudicated being academic" Relevant Paras from the order in the case of M/s Nageshwar Investment Ltd. are as below: "24. In the light of the order of the co-ordinate bench in the case of M/s. V.K.Fiscal Services Pvt. Ltd (supra) and the ratio of the jurisdictional High Court in the case of Pepsico India Holiday (P) Ltd (supra), we hold that the AO lacks jurisdicti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... " Hon'ble High Court held as below in the group entity Global Heritage Venture Limited's's case has held; 1. "It is not disputed by learned counsel for the appellant that the matter stands covered against the Revenue by virtue of the judgment of this court in Pepsi India Holdings Pvt. Ltd. vs. ACIT (2014) 50 Taxmann.com 299 (Delhi). 2. Accordingly, the appeal is dismissed." Hon'ble High Court held as below in the group entity Natural Biotech's case has held; " These three appeals under section 260A of the Income Tax Act, 1961 are directed against the common order dated 28th November 2014 passed by the Income Tax Appellate Tribunal (ITAT) in ITA Nos. 3089, 3088 and 3087/Del/2013 for Assessment Years 2006-07,2007-08 and 2008-09 respectively. The question that arises in these appeals is whether the hard disc found in the premises of the searched entity i.e. Global Heritage Venture Pvt. Ltd. belonged to the Assessee for the purposes of section 153C of the Act as it stood prior approval to its amendment with effect from 1st June 2015? The ITAT has found, and in this view of this Court Correctly, that the AO failed to record his satisfaction in that regard in terms of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case, the AO of the searched person who has to handover the documents and the AO of the Assessee was one and the same person. In our view, this distinction is not relevant in the scheme of Section 153C of the Act and the CIT(A) erred in proceeding on the basis that the period of six years was to be reckoned from the end of the financial year preceding the financial year in which the search was conducted …… 18. It, plainly, follows that the recording of a satisfaction that the assets/documents seized belong to a person other than the person searched is necessarily the first step towards initiation of proceedings under Section 153C of the Act. In the case where the AO of the searched person as well as the other person is one and the same, the date on which such satisfaction is recorded would be the date on which the AO assumes possession of the seized assets/documents in his capacity as an AO of the person other than the one searched. …… 33. The record slip belongs to the Assessee and, therefore, the action of the AO of the searched persons recording that the same belongs to the Assessee cannot be faulted. However, the question then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A, then the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue notice and assess or reassess the income of the other person in accordance with the provisions of section 153A, if, that Assessing Officer is satisfied that the books of account or documents or assets seized or requisitioned have a bearing on the determination of the total income of such other person for the relevant assessment year or years referred to in sub-section (1) of section 153A "153C.(1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A, then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of other than the searched person. This view has been accepted by CBDT. 4. The guidelines of the Hon'ble Supreme Court as referred to in para 2 above, with regard to recording of satisfaction note, may be brought to the notice of all for strict compliance. It is further clarified that even if the AO of the searched person and the "other person" is one and the same, then also he is required to record his satisfaction as has been held by the Courts. 5. In view of the above, filing of appeals on the issue of recording of satisfaction note should also be decided in the light of the above judgment. Accordingly, the Board hereby directs that pending litigation with regard to recording of satisfaction note under section 158BD/153C should be withdrawn/not pressed if it does not meet the guidelines laid down by the Apex Court. Considering the aforesaid position of law, its interpretation by the jurisdictional High Court and the jurisdictional Tribunal and the Circular issued by the Board, the manner in which satisfaction note has been recorded and also the contents of the assessment order itself clearly establishes that the exercise of jurisdiction under section 153C by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch has been referred in the assessment order. Leave alone an incriminating document, no document whatsoever has been mentioned in the assessment order. We wish to refer to the following cases in support of our submission that the assessment u/s 153C should have been confined to the incriminating documents found during the course of search. As there is no incriminating document on which assessment/ additions have been based, entire additions made in the assessment order and all the conclusions drawn in the assessments need not be taken any cognizance of. For the aforesaid proposition we wish to place reliance on the following rulings:- i. Gurinder Singh Bawa (2012) 28 Taxmann.com 328 (Mum.) ii. Kusum Gupta ITA No. 4873/Del/2009 dated 28.03.2013 iii. Alcargo Global Logistics Ltd Vs DCIT (2012) 137 ITR 287/23 Taxmann.com-103 (Mum) (SB) iv. Anil Kumar Bhatia (2012) 211 Taxmann.com 453 (Delhi)/2013 352 ITR 493 v. ACIT v. Pratibha Industries (2012) 28 Taxmann.com (Mum.) vi. Pradeep Kumar Kumra ITA No. 4016/Delhi/2011 dated 07/11/2013 vii. MGF Automobiles Ltd ITA No 4212 & 4213/Del/2011 dated 28/06/2013 viii. Jai Steel (India) Jodhpur vs. ACIT ITA No. 53/2011 order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a fresh exercise. iii. The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax". iv. Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." v. In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd AY 2004-05 by the AO has been assumed by the AO on the same satisfaction notes and same facts and circumstances as for AY 2008-09 which has been quashed by the Hon'ble Tribunal and approved by the Hon'ble High Court. It was submitted that the matters in appeal (ITA 1335 & 1336/Del/2013) are, therefore, specifically and fully covered in favor of the appellant. With respect to the other two appeals also there is no difference in the facts of the matter. 10.6 The Ld AR has submitted that the Hon'ble jurisdictional High Court has given very substantive and detailed findings on various propositions of law concerning assessments under section 153C and 153A. 11. On the contrary, Ld. CIT(DR) strongly opposed the admission of additional grounds (legal) raised by the assessee. In support of his contention, he filed the WS on behalf of the Revenue (on admission of Additional ground) which read as under:- "1.1 There is no quarrel that courts have ruled that appellate authorities have powers to entertain new claim. However, this does not mean that it is a privilege of the assessee to get any claim entertained at any stage as per assessee's sweet will. 1.2 The basic jurisdiction of IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of Rule 11 of the Income-Tax (Appellate Tribunal) Rules, 1963 is in conformity to this fundamental rule and reads as under, "The appellant shall not, except by leave of the Tribunal, urge or be heard in support of any ground not set forth in the memorandum of appeal, but the Tribunal, in deciding the appeal, shall not be confined to the grounds set forth in the memorandum of appeal or taken by leave of the Tribunal under this rule: Provided that the Tribunal shall not rest its decision on any other ground unless the party who may be affected thereby has had a sufficient opportunity of being heard on that ground."(emphasis supplied). 3.4 The provisions of section 124(3) of the IT Act, 1961 is in conformity to this fundamental rule and reads as under, "(3) No person shall be entitled to call in question the jurisdiction of an Assessing Officer- (a) where he has made a return under sub-section (1) of section 115WD or under sub-section (1) of section 139~ after the expiry of one month from the date on which he was served with a notice under sub-section (l) of section 142 or sub-section (2) of section 115WE or sub-section (2) of section i43 or after the compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee to raise the points of law even before the Appellate Tribunal. The decision in question is that the power 'of the Tribunal under section 254 of the Income-tax Act, 1961, is to entertain for the first time a point of law provided the fact on the basis of which the issue of law can be raised before the Tribunal. The decision does not in any way relate to the power of the Assessing Officer to entertain a claim for deduction otherwise than by filing a revised return. In the circumstances of the case, we dismiss the civil appeal." 3.8 The ratio of Hon'ble Supreme Court in case of GKN Driveshafts (India) Ltd. Vs. Income-tax Officer [2002] 125 TAXMAN 963 (SC) is in conformity to this fundamental rule and the relevant portion reads as under, "……. However, we clarify that when a notice under section 148 of the Income Tax Act is issued, the proper course .of action for the noticee is to file return and if he so desires, to seek reasons for issuing notices. The Assessing Officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the noticee is entitled to file objections to issuance of notice and the Assessing Officer is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies might or might not entertain a ground not urged before the Income-tax Officer in the exercise of their judicial discretion. It cannot, however, tie said that they have no jurisdiction to do so."( emphasis supplied). 3.12 In this regard, Three judges Bench of Hon'ble SC has laid down the law while delivering the judgment in case of NATIONAL THERMAL POWER COMPANY LIMITED Vs CIT2002- TIOL-279-SC-IT-LB. The relevant portion of the judgement is reproduced as under:- " This court further observed that there may be several factors justifying the raising of a new plea in an appeal and each case has to be considered .on its own facts. The Appellate Assistant Commissioner must be satisfied that the ground raised was bona fide and that the same could 11ut nave been raised earlier for gaud reasons. The Appellate Assistant Commissioner should exercise his discretion in permitting or not permitting the assessee to raise an additional ground in accordance with Jaw and reason. The same observations would apply to appeals before the Tribunal also."(emphasis supplied). 3.13 From the above, it can be summarized that this power can be exercised in the cases where assessee pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould have taken recourse to further enquiry u/s 133(6)/147. b) examination of assesee's stand at earlier point would have lead to initiation of action in some other cases in terms of various sections of the IT Act, 1961. c) However, with the passage of time, the process evidence gathering becomes more and more difficult. Moreover, now powers of revenue authorities are circumvented by time limitation. 6.5.1 Therefore, it is certainly a case .where the assesee is asking the Hon'ble ITAT to go beyond normal and invoke exceptional powers and therefore, very heavy onus is upon the appellant to show (cumulatively) that i) There exist really exceptional circumstances where exercise of this power is necessary, ii) beyond any show of doubt, there were circumstances which prevented it from making such claim at earliest point of time, and iii) No prejudice shall be cast upon the revenue if such claim is entertained, now. 6.5.2 Assesee has failed to demonstrate that any of the above conditions is fulfilled (what to talk of fulfilling all). 7.1 Also, from the above, it is clear that the assessee has to demonstrate that fact on the basis 'of which the issue of law can be rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39;ble ITAT)." 11.1 Ld DR also brought to the notice of the Bench two recent cases decided by Hon'ble Delhi High Court. One is ITA number 58 of 2017 in the case of Nau Nidh Overseas Pvt Ltd by order dated Feb 03, 2017. Through this the Ld DR has sought to argue that Hon'ble Delhi High Court decided this case relying upon Super Malls Pvt Ltd 2016-TIOL-2953-HC-Del-IT dated 22/11/2016 to canvass the argument that if the AO of the searched party and the other party in whose case action under section 153C is taken then there should not be need of recording two satisfaction notes i.e. one by the AO of the searched person and other by the AO of the other person. Other point emphasized by the Ld DR was that in these judgements it has been held that the term 'belonged to' must not be too literally interpreted rather the meaning of 'belonged to' should be seen akin to related to. It was also stated that these rulings held that one should not be hyper technical with regard to satisfaction note. 11.2 Ld. DR reiterated the written submissions as mentioned above and further relied upon the orders of the authorities below and stated that the provision of section 153 has rightly been applied in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and exceptional circumstances, it appears; the Hon'ble Court held that the law should not be interpreted too literally. Hon'ble Court perhaps was also persuaded by the admission of the assessee's counsel that he did not want to insist on the need for recording of separate satisfaction when the AO of the searched person and the other person was the same. This concession made by the counsel of the assessee was against the Board Circular number 24/2015 dated 31/12/2015 and detailed ruling of the Hon'ble Delhi High Court in the case of PepsiCo India Holdings (P.) Ltd v ACIT [2014] 50 taxmann.com 299 (Delhi) & Pepsi Foods Pvt. Ltd v ACIT [W.P. (C) 415/2014 & CM 823/2014, RRJ Securities , CIT V/s Kabul Chawla 380 ITR 573. Law laid down by the aforesaid detailed rulings of the Hon'ble Court can be summed up as under; 1. It is necessary that the satisfaction is recorded by the assessing officer of the entity in whose case the document/ asset has been seized to the effect that the relevant document/ asset belong to the other person in whose case action under section 153C is contemplated. 2. It is essential to establish that the document belongs to the person in whose case action u/s 153C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Counsel of the assessee that the Law laid down by the Hon'ble jurisdictional court in the cases of PepsiCo India Holdings (P.) Ltd v ACIT [2014] 50 taxmann.com 299 (Delhi) & Pepsi Foods Pvt. Ltd v ACIT [W.P. (C) 415/2014 & CM 823/2014, RRJ Securities , CIT V/s Kabul Chawla 380 ITR 573 among other has by no stretch of imagination reviewed by the Hon'ble High Court by way of the judgements relied upon by Ld DR. Some of the very recent cases of the Hon'ble jurisdictional High Court which have followed /upheld the propositions/interpretation of law as detailed above are as under; 1. Rajeev Behl ( ITA- 84 to 86/2017) Date of order: 06/02/2017 2. Gurnam Arora ( ITA- 669/2016) Date of order: 10/02/2017 3. Baba Global Ltd ( ITA 938/2016) Date of order 23/12/2016 4. DMA Investments Pvt Ltd ( ITA-767-768/2016) Date of order 04/11/2016 5. Marichika Properties Pvt Ltd ( ITA 633/634/2016) date of order 19/10/2016 13. We have heard both the parties and perused the records and the case laws relied upon by both the parties, we are of the considered view that the additional grounds are on the assumption of jurisdiction u/s 153C of the Act besides the scope of assessment u/s 153A/153C of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee. In the instant case, therefore, the Tribunal had jurisdiction to examine a question of law which arose from the facts as found by the lower authorities and having a bearing on the tax liability of the assessee." 13.1 In view of the decision of the Hon'ble Supreme Court of India in the case of NTPC Limited 229 ITR 383 (Supra) and keeping in view of the facts and circumstances of the case circumstances of the case, we are of the view that the additional grounds raised by the assessee are purely legal grounds and do not require fresh facts which is to be investigated and goes to the root of the matter. In the interest of justice, we admit the following two common additional grounds raised by the assessee. 1. "The Ld. CIT(A) has erred on facts and in law in confirming the assessment of the appellant passed without satisfying the substantive and procedural requirements under section 153C of the Income Tax Act. 2. Without prejudice to the other grounds of appeal, the Ld. CIT(A) has erred on facts and in law in confirming the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear that in both the above cases, relied by Ld CIT(DR), Hon'ble High Court upheld the assumption of jurisdiction under section 153C on account very compelling specific facts evidencing that the documents/assets not only belonged to those person but those documents assets evidenced clear existence of undisclosed income. Confessional statement that the assets/document belonged to the person in whose case action under section 153C was taken was made by the directors of the very same companies who were subjected to the 153C proceedings. Also, there was no dispute in these two cases (either from the searched party or the other party) as to whom the documents/assets belonged to. On account of these compelling and exceptional circumstances, it appears; the Hon'ble Court held that the law should not be interpreted too literally. 13.7 After perusing the assessment order as well as appellate order, we find that in the present case the AO has completed the assessment u/s. 153C of the I.T. Act, 1961 and made the addition in dispute without any incriminating material found during the search and seizure operation and the addition in this case was purely based on the material already availabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sess' to completed assessment proceedings. vi. Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. 38. The present appeals concern AYs, 2002-03, 2005-06 and 2006-07.On the date of the search the said assessments already stood completed. Since no incriminating material was unearthed during the search, no additions could have been made to the income already assessed." 14. Respectfully following the precedent of the Hon'ble Jurisdictional High Court in the case of Kabul Chawal (Suar), we delete the addition in dispute and allo ..... 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