I . T. . N o s . 8 5 3 & 8 5 4 / KO L . / 2 0 1 6 Assessment years: 2006-2007 & I . T. . N o s . 8 5 5 & 8 5 6 / KO L / 2 0 1 6 s s e s s m e n t Ye r : 2 0 0 7 - 2 0 0 8 Page 1 of 20 IN INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA Before Shri P.M. Jagtap, Accountant Member and Shri S.S. Vishwanethra Ravi, Judicial Member I.T .A. Nos. 853 & 854 /KOL/ 2016 Assessment Year: 2006-2007 & I.T .A. Nos. 855 & 856 /KOL/2016 Assessment Year: 2007-2008 Shri Bishwanath Garodia,...........................................................Appellant 9, Dover Park, 2 n d Floor, Kolkata-700 019 [PAN: ADGPG 4384 E ] -Vs.- Deputy Commissioner of Income Tax,........ ...............................Respondent Central Ci rcle-3 (3), Kolkata, Aayakar Bhawan, Po orva, 110, Shantipally, Kolkata-700 017 Appearances by: Shri D.S. Damle, FCA, for assessee Shri Niraj Kumar. CIT, D.R. & Shri Pinaki Mukherjee , JCIT, Sr. D.R., for Department Date of concluding th e hearing : Ju ly 20, 2016 Date of pronouncing order : September 21, 2016 O R D E R Per Shri P.M. Jagtap, A.M.: These two appeals being ITA Nos. 854 & 856/KOL/2016 filed by assessee against two separate orders passed by ld. Commissioner of Income Tax (Appeals)-21, Kolkata both dated 11.03.2016 involve common issues and same, therefore, are being disposed of by single composite order along with corresponding penalty appeals being ITA Nos. 853 & 855/KOL/2016 for sake of convenience. I . T. . N o s . 8 5 3 & 8 5 4 / KO L . / 2 0 1 6 Assessment years: 2006-2007 & I . T. . N o s . 8 5 5 & 8 5 6 / KO L / 2 0 1 6 s s e s s m e n t Ye r : 2 0 0 7 - 2 0 0 8 Page 2 of 20 2. relevant facts of case giving rise to these appeals are as follow:- assessee in present case is individual, who belongs to Mangal Steel Group. As per information received by Government of India from Foreign Government under provision of Exchange of Information Clauses of Bilateral Double Taxation Agreement with that country, assessee had Bank Account in HSBC, Geneva, Switzerland showing sum of US Dollars 10,23,210 in December, 2005 relating to A.Y. 2006-07 and two other sums of US Dollars 10,74,837 in May, 2006 and US Dollars 10,64,993 in December, 2006 relating to A.Y. 2007-08. On basis of this information, search and seizure action under section 132 of Income Tax Act, 1961 was conducted in case of assessee as well as in other cases belonging to Mangal Steel Group on 28.07.2011 as well as subsequent dates. During course of search, books of account, jewellery, etc. were found besides some cash. statement of assessee was recorded under section 131 of Act, wherein he admitted of having maintained Bank Account in HSBC, Geneva, Switzerland. He also admitted that said Bank Account was opened on 07.06.1999 and his wife Smt. Usha Garodia was authorized person to operate said account maintained in his name. He further accepted that money deposited in said account represented proceeds of his export business and agreed to pay income-tax, if any, due thereon. He also pointed out that said Bank Account was closed sometime ago and there was no balance in said account on date of recording of his statement. Pursuant to search, notices under section 153A of Act were issued by Assessing Officer for both years under consideration, in response to which his returns of income for years under consideration were filed by assessee on 23.08.2012 declaring total income of Rs.5,18,435/- and Rs.5,49,810/- for A.Y. 2006-07 and 2007-08 respectively. In said returns, assessee had not offered to tax amounts found deposited in his Bank account with HSBC, Geneva, I . T. . N o s . 8 5 3 & 8 5 4 / KO L . / 2 0 1 6 Assessment years: 2006-2007 & I . T. . N o s . 8 5 5 & 8 5 6 / KO L / 2 0 1 6 s s e s s m e n t Ye r : 2 0 0 7 - 2 0 0 8 Page 3 of 20 Switzerland. In reply to query raised by Assessing Officer in this regard, assessee denied of having any Bank account with HSBC, Geneva, Switzerland by stating that he had no knowledge about such Ban k account. He also stated that he was under extreme pressure and duress as result of search and seizure action and signed whatsoever was dictated by DDIT (Inv.)/Additional DIT (Inv.) in statement recorded under section 131 on 30.07.2011. In his statement recorded under section 131 during course of assessment proceedings on 17.06.2014 and 12.12.2014, assessee again denied of having any Bank account in HSBC, Geneva, Switzerland. This denial of assessee was found to be after-thought by Assessing Officer keeping in view specific information received from foreign Government as well as admission of assessee in his statement recorded on 30.07.2011 accepting ownership of relevant Bank account. He also noted that allegation of pressure and coercion during course of search and seizure action as made by assessee was not backed by any evidence of any sort. Accordingly, relying on admission of assessee as made in his statement recorded on 30.07.2011, which was duly supported by information received by Government of India from foreign Government, sums of Rs.4,61,16,074/- (equivalent to US Dollars 10,23,210) and Rs.9,70,73,651/- (equivalent to US Dollars 10,64,993 and 10,74,837) were added by him to total income of assessee for A.Ys. 2006-07 and 2007-08 in assessments completed under section 153A/143(3) of Act vide orders dated 31.12.2014. 3. Against orders passed by Assessing Officer under section 153A/143(3) for both years under consideration, appeals were preferred by assessee before ld. CIT(Appeals) challenging therein validity of said assessments as well as disputing additions made therein on account of transactions reflected in Bank account with HSBC Bank, Geneva, Switzerland. As regards preliminary issue I . T. . N o s . 8 5 3 & 8 5 4 / KO L . / 2 0 1 6 Assessment years: 2006-2007 & I . T. . N o s . 8 5 5 & 8 5 6 / KO L / 2 0 1 6 s s e s s m e n t Ye r : 2 0 0 7 - 2 0 0 8 Page 4 of 20 relating to validity of assessments made by Assessing Officer, main contention raised by assessee before ld. CIT(Appeals) was that in absence of any incriminating material or document found in course of search, Assessing Officer had no jurisdiction to initiate and frame assessments under section 153A of Act. This stand of assessee was not found acceptable by ld. CIT(Appeals) and he proceeded to uphold validity of assessments made by Assessing Officer under section 153A/143(3) of Act for both years under consideration for following reasons given in paragraph no. 3.2 of his impugned orders:- 3.2. contentio n of assessee that in absence of any incriminating material or document found in course of search action, assessment co uld not be framed u/s. 153A of Act. Ld. AR referred some case l aws in. support of h is arguments. There are decisio ns stating assessments can be made u/s. 153A even if no material found during search . Reliance is placed upon judgments in case of Shivnath Rai Harnarain (India) Ltd. Vs. DC IT (ITAT, Delhi), 304 lTR (AT) 271 and Shyam Lat Kaushik Vs. AC IT (ITAT, Delhi), 114 ITD 305. However, fact s in this case are different. In this case, apart from inventory of jewellery and other materials, cash of Rs.5 ,00,000/- was seized. Besides, at time of search actio n, Revenue was in possession of authenticat ed info rmation that assessee had undisclosed bank account with HSBC Bank, Geneva, Swit zerland. In fact, one of main reasons for initiation of search action was that undisclosed fo reign bank account . Thus at time of issuance o f notice u/s 153A by AO, there indeed some incriminating materials and document s were in possession o f AO in form of seized cash and undiscl osed bank account and AO made addition of Rs.4.61 crores on examinatio n of undiscl osed bank accounts as well. Moreover, assessee never objected to proceedings initiated u/s. 153A during th e assessme nt proceedings. He filed fresh ret urn in response to notice u/s 153A and thereafter complied with requirements of assessment by att ending hearings fro m time to time and filing requisit e det ails and made several submissions. materials on reco rd suggest th at before AO, not even once appellant had objected to initiation or continuance of assessment proceeding Vis. 153A of Act. Therefo re, th e case is dist inguish able on facts from judicial prono uncements referred to. It is well settled legal position that every case depends o n its own fact s. Even slighte st change in factual scenario alters entire conspectus of matter and makes one case dist inguish able fro m anoth er. crux of matter I . T. . N o s . 8 5 3 & 8 5 4 / KO L . / 2 0 1 6 Assessment years: 2006-2007 & I . T. . N o s . 8 5 5 & 8 5 6 / KO L / 2 0 1 6 s s e s s m e n t Ye r : 2 0 0 7 - 2 0 0 8 Page 5 of 20 is that ratio of any judgment cannot be seen divo rced fro m its facts. Further section 92BB of Act pro vides th at- where assessee h as appeared in any proceeding or co-operated in any inquiry relating to assessment o r reassessment , it shall be deemed that any notice under any provisions of th is Act , which is required to be served upo n him, h as been duly served upo n him in time in acco rdance with t he provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding o r inquiry under this Act --- ' In this case, as stated hereinabove, that t he assessee had accepted notice issued U/s. 153A of Act and filed fresh return without any object ion. No objectio n was raised also during assessment proceedings, rather assessee co-operat ed with AO. addit ion of Rs.4.61 crores were also made on account of undiscl osed Swiss Bank acco unt , which was subject matter of search action. Therefo re, I do not find any merit on facts and und er th e law, in objection raised by th e assessee during this appeal proceeding. This grounds of appeal are therefore, dismissed . 4. As regards issue relating to additions made by Assessing Officer on account of relevant transactions reflected in Bank account with HSBC Bank, Geneva, Switzerland, affidavit was filed by assessee before ld. CIT(Appeals) stating that said Bank account with HSBC, Geneva, Switzerland was opened in his name by one Mr. Onn Sithawalla, owner of MSN International PTE Limited, Singapore in connection with proposed joint venture. It was also stated in said affidavit that proposed joint venture was between MSM Enterprises PTE Limited owned and controlled by family members of Mr. On Sithawalla, permanent resident of Singapore and Mangal Group owned by assessee. It was further stated that said MSN International PTE Limited had made certain deposits in Bank account with HSBC Bank, Geneva, Switzerland opened in name of assessee and ultimately entire balance lying in said Bank account was remitted back to Singapore as per directions given by Mr. Onn Sithawalla of MSM Enterprises PTE Limited in favour of Donald Mcarthy I . T. . N o s . 8 5 3 & 8 5 4 / KO L . / 2 0 1 6 Assessment years: 2006-2007 & I . T. . N o s . 8 5 5 & 8 5 6 / KO L / 2 0 1 6 s s e s s m e n t Ye r : 2 0 0 7 - 2 0 0 8 Page 6 of 20 Trading PTE Limited, associated concern of MSM Enterprises PTE Limited. affidavit of Mr. Onn Sithawalla, owner of MSM Enterprises PTE Limited was also filed by assessee before ld. CIT(Appeals) affirming all these facts on oath and request was made to admit said affidavit as well as his own affidavit as additional evidence on ground he could not place same before Assessing Officer in course of assessment proceedings. This additional evidence filed by assessee was admitted by ld. CIT(Appeals) and after obtaining comments of Assessing Officer thereon in form of remand report and also counter-comments of assessee in form of rejoinder to remand report, ld. CIT(Appeals) proceeded to decide this issue on merit. In this regard, he recorded his observations/findings in paragraphs no. 4.4.1 to 4.4.5 of his impugned order, which read as under:- 4:4.1, I have read submission of Ld. AR and seen papers filed. I have also gone through departmental records. issue relates to ownership of bank account [Code Profile No. 5091276522 and Identificants Internes No. BUP_SIFIC_PER_ID 5090147737] with HSBC, Geneva, Switzerland' [henceforth. referred to as Swiss Bank account] and deposits and transactions therein. account was opened 'in year 1999, in .name of assessee and his wife Smt. Usha Garodia was made 'nominee'. In this respect, four sworn statements of assessee were recorded U/s. 131 of by Revenue at three different stages -' (i) Statement dated 3010712011 recorded by DDIT(Inv.) in course of search action, (ii) Statement dated 25106/2014 recorded by AO during assessment proceeding, (iii) Another statement dated 1511212014 recorded by AO during assessment proceeding, and (iv) Statement dated 05105/2015, recorded by my predecessor CIT(A)'in office after receipt of Form No. 35. Iri first statement recorded by DDIT(Inv,), assessee owned up Swiss Bank account. In next two statements recorded by AO during assessment proceedings, assessee flatly denied to have had any Swiss Bank account. In Forth statement recorded by CIT(A), he though accepted that he opened that Swiss Bank account but contended that bank account had been handled by one Onn Sithawalla, citizen of Singapore and owner of MSM Enterprises P . in I . T. . N o s . 8 5 3 & 8 5 4 / KO L . / 2 0 1 6 Assessment years: 2006-2007 & I . T. . N o s . 8 5 5 & 8 5 6 / KO L / 2 0 1 6 s s e s s m e n t Ye r : 2 0 0 7 - 2 0 0 8 Page 7 of 20 connection with proposed Joint Venture. He stated that all deposits in Swiss B account were made by MSM Enterprises PTE Ltd. and all actions were handled by Onn Sithawalla. In this regard, assessee filed copy of his own affidavit dated 03/02/2015 and copy of Affidavit of Onn Sithawala alongwith Form No. 35. 4.2. cursory look in contain of statements given by assessee would reveal that he had at times made vague, roundabout, self-contradictory as well as false statements under 'oath', to suppress facts. In his 2nd and 3rd statements recorded by AO, assessee made false statements by denying to' have had any Swiss Bank account. However, his first statement can be considered as close to truth. Here he admitted that one. Bank a/c was opened in Swiss Bank in his name and his wife was authorized to operate account(answer to Q.3). He also stated that no one approached me for opening of account, I myself approached bank to get account opened.'(Answer to Q. 4). He further stated that 'except deposits made at time of-opening of account I do not remember exact number of times deposits or Withdrawals in this account. However, I have operated this account 'only few times.' (Answer to Q. 1O). On being asked about source of deposits in Swiss Bank account, assessee categorically stated that 'the money deposited in this account represents proceeds of my export business as far as I remember.' (Answer to Q.12). Thus, in first statement, which has got immense evidentiary value in eyes of law, assessee admitted vital points that the, Swiss Bank account was opened by him and at his own behest; made few deposits and withdrawals (factually correct); and deposits were made from his export proceeds. It is well settled law that admission is best evidence that opposing party can rely upon and decisive of matter, unless proved erroneous. Reliance is placed on decision in cases of Narayan Bhagwantrao Gosavi Batajiwale Vs. Gopal, AIT 1960 100 (SC) and Pranav Construction. Co. -Vs. ACIT (ITAT, Mumbai) 61 ITJ 145. 4.4.3. name of MS M Enterprises PTE Ltd. (MSM), company owned by one Onn Sithawalla, Singapore citizen and proposed Joint venture between assessee and MSM surfaced for first time in form of Affidavit, dated 03/02/2015 Jiled in this office alongwith Form No. 35., i.e. I . T. . N o s . 8 5 3 & 8 5 4 / KO L . / 2 0 1 6 Assessment years: 2006-2007 & I . T. . N o s . 8 5 5 & 8 5 6 / KO L / 2 0 1 6 s s e s s m e n t Ye r : 2 0 0 7 - 2 0 0 8 Page 8 of 20 after 3 years and 6 months from date of recording first statement on 30/07/2011. In this Affidavit, it is stated that assessee though opened Swiss Bank account but neither remitted any money in that account nor operated same. All deposits were made by MSM and neither assessee nor his wife had any beneficial interest therein. Ld. AR in his submission has given high emphasis on this affidavit. However, he failed to explain why assessee bad not stated about purported JV with MSM in his first statement; In his first statement, assessee unequivocally admitted that not only Swiss Bank account was opened by him but de posits were made by him and source of such deposits was proceeds from his export business. It is not that first statement was recorded under threat or coercion. No such allegation has ever been made by 'assessee during or after search action. When statement was made voluntary and was not alleged to have been obtained under threat or coercion, onus was on assessee to prove that said declaration was made under any misconception of facts. Since assessee had not taken any steps to rectify his declaration before authorities before whom such declaration was made, there could not be any valid reason for retraction of same after gap of three' and half years. Reliance is placed in case of Carpenters Classics (Exim) Pvt. Ltd. Vs- DCIT, ITAT, Bang) 108 ITD 142, Further, Ld, AR could not explain but assessee had given false statements before AO during assessment proceedings by denying to have had any Swiss Bank account. 4.4.4. Ld. Ld. AR has also given some emphasis on statement given by assessee on 05/05/2015 before my predecessor CIT(A) in office. However, I find that contents of statement do not support cause of assessee, rather it goes against assessee. Here assessee fumbled to answer some of queries raised. On being asked to produce copy of JV where capital and profit sharing between assessee and MSM was 30:70, assessee stated that there was no formal IV agreement (Answer to Q.26). InQ.28; it was asked if bank account with HSBC, Switzedrland was to open for purpose of proposed Joint venture, why it was condition that bank account should be opened only in your name and that your wife Smt. Usha Garodia would be nominee, whereas 70% of capital was to be contributed by MSM Enterprises PTE Limited? Assessee s reply was because name of I . T. . N o s . 8 5 3 & 8 5 4 / KO L . / 2 0 1 6 Assessment years: 2006-2007 & I . T. . N o s . 8 5 5 & 8 5 6 / KO L / 2 0 1 6 s s e s s m e n t Ye r : 2 0 0 7 - 2 0 0 8 Page 9 of 20 joint venture was not decided and therefore, Onn Sithawalla asked me to open bank account in HSBC...In Q. 29, assessee was asked in proposed joint venture share of MSM Enterprises PTE Ltd. was 70%. If name of Joint Venture was not decided, then why Mr. Sithawalla was not willing to have joint account with you or at least nominee in said bank account?' Assessee's answer was - 'I do not know.' In Q. 33, assessee was asked to reply - 'Whether Mr. Onn Sithatvalla or MSM Enterprises PTE Ltd were having any control over that bank account to issue any direction to bank about utilization of balance or withdrawal of money?' Assesse's reply was that they were not having any control over it [emphasis given]. In Q. 42, assessee was asked to produce copy of bank statement of MSM and assessee s reply was M/s. MSM Enterprises is not able to provide its bank statement of relevant period as ABN AMRO Bank was merged withy RBS Bank in 2006 and thereafter RBS Bank was taken over by ANZ Bank. Thus it emerges from assessee's statement' dated. 05/05/2015, that there was no actual-Joint Venture between assessee and MSM. Though MSM and assessee had capital and profit share ratio of 70: 30, Swiss Bank account was opened only in name of assessee and his wife was made nominee, who alone could operate bank account in case of eventuality, MSM and its owner Mr. Onn Sithawala though had no control over bank account to issue any difrection for utilization or withdrawl of money but still withdrew money in account of M/s. Donald Mcarthy Trading PTE Limited of Singapore, as associate concern of MSM. Thus this statement of assessee was far from truth. Ld. AR could not explain these self-contradictions in assessee s statement. 4.4.5. In landmark judgment of CIT Vs. Durga Prasad More (SC) 82 ITR 540, Hon'ble Apex Court held that in case where party relied on self-servicing recitals in documents, it was-for party to establish truth of these recitals: taxing authorities were entitled to look into surrounding' circumstances' and find . out reality of such recitals. In this case, assessee 'produced some self-servicing documents after three and half years from date of search, in form of Affidavit and some purported correspondence from MSM, Singapore and its owner Mr. Onn Sithawala, for shifting ownership of his own black money which was parked in Swiss Bank account, which cannot be considered as genuine. In case of Sri Krishna vs.- CIT (All.) 142 ITR 618, I . T. . N o s . 8 5 3 & 8 5 4 / KO L . / 2 0 1 6 Assessment years: 2006-2007 & I . T. . N o s . 8 5 5 & 8 5 6 / KO L / 2 0 1 6 s s e s s m e n t Ye r : 2 0 0 7 - 2 0 0 8 Page 10 of 20 it is held that affidavit need not always be accepted as genuine. Going by facts of case considering self- contradictory, evasive and false statements of assessee and circumstantial evidences as discussed hereinabove, Affidavit filed by assessee cannot be accepted as genuine. It is well settled law that person in whose name bank account is opened, is owner, and he is responsible to explain .source of all deposits and withdrawals with supporting evidences, Mere saying or procuring some papers from foreign concern would not come into rescue of explaining assessee's undisclosed income stashed in Swiss Bank. Moreover, MSM, Singapore or his owner Mr. Onn Sithawalla, with whom assessee had no official business activity in this particular matter are non entities in eyes of Indian Income Tax Law, especially when assessee failed to file even relevant bank statement of MSM, Singapore. fact that all initial deposits in assessee's Swiss Bank account came from bank account of MSM, is going to prove that assessee had channelized his undisclosed money in Swiss Bank account through bank account of MSM, Singapore, company owned and managed by Mr. Onn Sithawalla, old business associate of assessee, who probably played role of conduit in matter . On basis of above findings/observations recorded by him, ld. CIT(Appeals) held that relevant Bank account with HSBC, Geneva, Switzerland was undisclosed Bank account of assessee and source of all deposits made in said Bank account was assessee s own undisclosed funds, which were channelized through MSM Enterprises PTE Limited, Singapore. He also held that entire income generated, accrued and accreted in that Bank account was unaccounted income of assessee. Having arrived at this conclusion, ld. CIT(Appeals), however, found that there were no deposits made in said Bank account of assessee during years under consideration and such deposits were actually made in said Bank account in earlier years. He, therefore, held that additions made by Assessing Officer in both years under consideration on account of such deposits were not sustainable as same could be made only in relevant years when deposits were actually made for which assessments had already I . T. . N o s . 8 5 3 & 8 5 4 / KO L . / 2 0 1 6 Assessment years: 2006-2007 & I . T. . N o s . 8 5 5 & 8 5 6 / KO L / 2 0 1 6 s s e s s m e n t Ye r : 2 0 0 7 - 2 0 0 8 Page 11 of 20 been reopened by Assessing Officer. He, however, found that there was accretion of US Dollars 4,246.42 and US Dollars 55,414 in Bank account of assessee with HSBC, Geneva, Switzerland in previous year relevant to A.Ys. 2006-07 and 2007-08 respectively and same represented earnings of assessee on investment made out of initial deposits in Bank account in various forms like Fixed Deposits, Bonds, etc. Accordingly, he directed Assessing Officer to add equal Indian rupee of US Dollars 4,246.42 and US Dollars 55,414 to total income of assessee for assessment years 2006-07 and 2007-08 respectively. Still aggrieved by orders of ld. CIT(Appeals) for both years under consideration, i.e. A.Ys. 2006-07 and 2007-08, assessee has preferred these appeals before Tribunal. 5. preliminary issue involved in this case as raised in Ground Nos. 1 to 4 of assessee s appeal for A.Ys. 2006-07 and 2007-08 and further argued by ld. counsel for assessee at time of hearing before us is that there was no incriminating material found during course of search in relation to transactions reflected in Bank account of assessee with HSBC, Geneva, Switzerland and since assessments for both years under consideration had become final before initiation of search, no additions on account of said transactions or income arising therefrom were permissible in assessments completed under section 153 of Act. 6. ld. counsel for assessee submitted that returns of income filed by assessee for both years under consideration, i.e. A.Ys. 2006-07 and 2007-08 were processed by Assessing Officer under section 143(1) prior to date of search and since no notices under section 143(2) were issued by him for said two years and even period available to issue such notices had already lapsed even prior to date of search, assessments for said two years were deemed to I . T. . N o s . 8 5 3 & 8 5 4 / KO L . / 2 0 1 6 Assessment years: 2006-2007 & I . T. . N o s . 8 5 5 & 8 5 6 / KO L / 2 0 1 6 s s e s s m e n t Ye r : 2 0 0 7 - 2 0 0 8 Page 12 of 20 have been completed. He submitted that information relating to undisclosed Bank account maintained by assessee with HSBC, Geneva, Switzerland was available with Assessing Officer prior to date of search and although search was conducted on basis of said information, no incriminating material whatsoever was found during course of search relating to transactions reflected in said Bank account or income arising to assessee relating thereto. He contended that scope of assessment made by Assessing Officer under section 153A for both years under consideration pursuant to search, therefore, was limited to income unearthed during course of search on basis of incriminating material found and in absence of any such incriminating material found during course of search, addition on account of HSBC Bank transactions or income relating thereto was beyond scope of assessment made under section 153A. He contended that when this issue was specifically raised by assessee during course of appellate proceedings before ld. CIT(Appeals), concerned Assessing Officer had appeared before ld. CIT(Appeals) on 21.12.2015 and agreed vide order-sheet entry dated 21.12.2015 recorded by ld. CIT(Appeals) (copy at page no. 22 of paper book) that information regarding undisclosed HSBC bank account maintained by assessee was duly received from CBDT and there was no incriminating documents/ books of account that were found during course of search, which had been used in making additions to income of assessee under section 153A of Act. ld. counsel for assesese reiterated that in absence of such incriminating material, additions as made to total income of assessee on account of transactions reflected in Bank account of assessee with HSBC Bank, Geneva, Switzerland as well as income relating thereto in assessments completed under section 153A for both years under consideration are not maintainable. In support of this contention, he relied on decision of Mumbai Special Bench of I . T. . N o s . 8 5 3 & 8 5 4 / KO L . / 2 0 1 6 Assessment years: 2006-2007 & I . T. . N o s . 8 5 5 & 8 5 6 / KO L / 2 0 1 6 s s e s s m e n t Ye r : 2 0 0 7 - 2 0 0 8 Page 13 of 20 Tribunal in case of All Cargo Global Logistics Limited vs.- DCIT reported in 137 ITD 287 as well as decision of Division Bench of this Tribunal in case of ACIT vs.-Pratibha Industries reported in 141 ITD 151. 7. ld. D.R., on other hand, strongly relied on impugned orders of ld. CIT(Appeals) in support of Revenue s case on this issue. He contended that there is no such requirement of any incriminating material having been found during search to initiate proceedings under section 153A and fact that search is conducted and concluded in case of assessee alone is sufficient to give jurisdiction to Assessing Officer to initiate proceedings under section 153A against assessee for preceding six years. He contended that scope of section 153A is very wide and it talks about total income, which includes income on basis of incriminating material as well as without incriminating material. He also contended that proceedings under section 143(1) are not assessment at all and since assessment proceedings for both years under consideration had not been completed prior to date of search, scope of proceedings under section 153A was wide to assess and reassess total income of assessee. In support of this contention, he relied on decision of Hon ble Delhi High Court in case of CIT vs.- Anil Kumar Bhatia (Income Tax Appeal No. 1626 of 2010 & Others dated 14.05.2012) as well as decision of Delhi Bench of this Tribunal in case of Shivnath Rai Harnarain (India) Limited-vs.- DCIT [117 TTJ (Del.) 480]. 8. We have considered rival submissions and also perused relevant material available on record. It is observed that returns of income originally filed by assessee for both years under consideration were duly processed by Assessing Officer under section I . T. . N o s . 8 5 3 & 8 5 4 / KO L . / 2 0 1 6 Assessment years: 2006-2007 & I . T. . N o s . 8 5 5 & 8 5 6 / KO L / 2 0 1 6 s s e s s m e n t Ye r : 2 0 0 7 - 2 0 0 8 Page 14 of 20 143(1) well before date of search conducted on 28.07.2011. said search was conducted in case of assessee on basis of information received by Assessing Officer from CBDT relating to undisclosed account maintained by assesese with HSBC Bank, Geneva, Switzerland. During course of search, no incriminating material, however, was found relating to transactions reflected in said Bank account of assessee with HSBC Bank or any income relating thereto and this position was categorically admitted by Assessing Officer during course of appellate proceedings before ld. CIT(Appeals) as is evident from relevant order-sheet entry dated 21.12.2015 recorded by ld. CIT(Appeals) (copy at page no. 22 of paper book). question that arises now is whether in absence of such incriminating material, any addition to total income of assessee can be made on account of transactions reflected in Bank account of assessee with HSBC Bank or any income relating thereto in assessments completed under section 153A of Act for both years under consideration. 9. As per provisions contained in Section 153A, if search or requisition is initiated after 31.03.2003, Assessing Officer is under obligation to initiate proceedings under section 153A for six years immediately preceding year of search. Assessing Officer is then required to assess or reassess total income of said six years and if any assessment or reassessment out of said six years is pending on date of initiation of search, same would abate, i.e. pending proceeding qua said assessment year would not proceed thereafter and assessment has to be made under section 153A(1)(b) of Act read with 1 s t Proviso thereunder. As regards other years for which assessments have already been completed and assessment orders determining assessee s total income are subsisting at time when search or requisition is made, scope of assessment under I . T. . N o s . 8 5 3 & 8 5 4 / KO L . / 2 0 1 6 Assessment years: 2006-2007 & I . T. . N o s . 8 5 5 & 8 5 6 / KO L / 2 0 1 6 s s e s s m e n t Ye r : 2 0 0 7 - 2 0 0 8 Page 15 of 20 section 153A is limited to reassess income of assessee on basis of incriminating material found during course of search. 10. At time of hearing before us, ld. D.R. has contended that processing of returns of income filed by assessee as made by Assessing Officer under section 143(1) could not be regarded as assessment and it is, therefore, not case where assessments for both years under consideration could be said to have been completed. He has also contended that conclusion of such alone is sufficient to give jurisdiction to Assessing Officer to proceed against assessee under section 153A of Act. In support of this contention, he has relied on unreported decision of Hon ble Delhi High Court in case of Anil Kumar Bhatia (supra). In said case, question was posed by Hon ble Delhi High Court in paragraph no. 12 of its order as to whether Assessing Officer was empowered to reopen proceedings and reassess total income taking note of undisclosed income, if any, unearthed during search where assessment order had already been passed in respect of all or any of those six assessment years either under section 143(1) or section 143(3) of Act and such order was already in existence having been passed prior to initiation of search/ requisition. Although this question was not finally answered by Hon ble Delhi High Court in case of Anil Kumar Bhatia (supra), it is quite clear from said question raised by Hon ble Delhi High Court that there was no distinction made by Their Lordships in assessments completed under section 143(1) and section 143(3) for determining scope of proceedings under section 153A. However, said question arose specifically for consideration of Mumbai Bench of this Tribunal in case of ACIT vs.- Pratibha Industries reported in 141 ITD 151 and after referring to discussion made by Hon ble Delhi High Court in this context in case of Anil Kumar Bhatia (supra), Tribunal held that only logical conclusion which could be traced out by harmonizing I . T. . N o s . 8 5 3 & 8 5 4 / KO L . / 2 0 1 6 Assessment years: 2006-2007 & I . T. . N o s . 8 5 5 & 8 5 6 / KO L / 2 0 1 6 s s e s s m e n t Ye r : 2 0 0 7 - 2 0 0 8 Page 16 of 20 legislative intendment and judicial decision was that where assessments had already become final prior to date of search, total income has to be determined under section 153A by clubbing together income already determined in original assessments and income that is found to have escaped assessment on basis of incriminating material found during course of search. To arrive at this conclusion, reliance was placed by Tribunal on decision of Special Bench, Mumbai in case of All Cargo Global Logistic Limited (supra), wherein it was held that even though all six years shall become subject matter of assessment under section 153A as result of search, Assessing Officer shall get free hand through abatement only on proceedings that are pending. But in case or in circumstances where proceedings have reached finality, assessment under section 143(3) read with section 153(3) has to be made as was originally made and in case certain incriminating documents were found indicating undisclosed income, then addition shall only be restricted to those documents/incriminating material. 11. Keeping in view discussion made above, we hold that additions as finally made to total income of assessee on account of transactions reflected in Bank account of assessee with HSBC, Geneva, Switzerland and income relating thereto for both years under consideration are beyond scope of section 153A as assessments for said years had become final prior to date of search and there was no incriminating material found during course of search to support and substantiate said addition. said additions made for both years under consideration are, therefore, deleted allowing relevant grounds of assessee s appeals. 12. In Grounds No. 5 to 8 of his appeals for both years under consideration, assessee has mainly objected to findings recorded I . T. . N o s . 8 5 3 & 8 5 4 / KO L . / 2 0 1 6 Assessment years: 2006-2007 & I . T. . N o s . 8 5 5 & 8 5 6 / KO L / 2 0 1 6 s s e s s m e n t Ye r : 2 0 0 7 - 2 0 0 8 Page 17 of 20 by ld. CIT(Appeals) that he had channelized his undisclosed money through Bank account of MSM Enterprises PTE Limited and that source of monies deposited in HSBC Bank Account was his undisclosed money. 13. In support of assessee s case on issues raised in Grounds No. 5 to 8, ld. counsel for assessee has made detailed submission, gist of which is given below:- (i) Although account with HSBC Bank, Geneva, Switzerland was opened on 07.06.1999, there was no money deposited in said account initially for period of about one year. (ii) first deposit in said account was made only on 22.06.2000 and same was originated from MSN International PTE Limited, Company belonging to Mr. Onn Sithawalla as per description given in Bank statement itself. (iii) entire deposits made in said account amounting to US Dollars 8,99,812 were in name of MSM Enterprises PTE Limited as per description given in Bank statement itself. Mr. Onn Sithawalla and his family members were promoters/shareholders of MSM Enterprises PTE Limited, Singapore and assessee had regular business transactions for import of goods with MSM Enterprises PTE Limited from 1993. (iv) MSM Enterprises PTE Limited was independent Company having substantial business and it was in existence for several years having substantial funds of its own. (v) There was no material brought on record by Revenue Authorities to show that Mr. Onn Sithawala or MSM Enterprises PTE Limited acted in concern with appellant-assessee or under dictates of assessee. I . T. . N o s . 8 5 3 & 8 5 4 / KO L . / 2 0 1 6 Assessment years: 2006-2007 & I . T. . N o s . 8 5 5 & 8 5 6 / KO L / 2 0 1 6 s s e s s m e n t Ye r : 2 0 0 7 - 2 0 0 8 Page 18 of 20 (vi) entries in relevant Bank statement also proved that save and except deposits from MSM Enterprises PTE Limited, there was no other deposit made in HSBC Account, which was in assessee s name. (vii) entries in Bank statement made during 2000 to 2004 establish that monies deposited originated from MSM Enterprises PTE Limited and even Mr. Onn Sithawalla of MSM Enterprises PTE Limited admitted ownership of all funds so deposited. (viii) relevant Bank account was closed in year 2011 and total deposits made therein along with income accrued over years were remitted to account of M/s. Doland Mearthy Trading PTE Limited at instance of Mr. Onn Sithawalla. Not even part of monies withdrawn from said Bank account thus ever reached assessee or used for benefit of assessee. (ix) All above facts were sufficient to support and substantiate explanation of assessee that entire money found deposited in relevant Bank account of assessee belonged to MSM Enterprises PTE Limited, which was deposited in connection with setting of joint venture between said company and assessee s company and although there was no actual joint venture agreement entered into, relevant correspondence setting out terms and conditions of joint venture was brought on record. Even affidavits of assessee and Mr. Onn Sithawalla affirming relevant facts on oath were filed in support and there was nothing brought on record either by Assessing Officer or by ld. CIT(Appeals) to prove any factual infirmity or falsity therein. They also failed to dislodge or disprove ownership of funds claimed by Mr. Onn Sithawalla. I . T. . N o s . 8 5 3 & 8 5 4 / KO L . / 2 0 1 6 Assessment years: 2006-2007 & I . T. . N o s . 8 5 5 & 8 5 6 / KO L / 2 0 1 6 s s e s s m e n t Ye r : 2 0 0 7 - 2 0 0 8 Page 19 of 20 14. Although in reply to arguments raised by ld. counsel for assessee in support of assessee s case on this issue, ld. D.R. has also raised various contentions besides relying on impugned orders of ld. CIT(Appeals), wherein he has rejected case of assesese on this issue by recording various adverse observations/findings, we find that this issue has become infructuous or academic as result of decision rendered by us on preliminary issue raised in these appeals, holding that additions made to total income of assessee on account of income arising from relevant transactions reflected in HSBC Account are not sustainable in absence of any incriminating material found during course of search to support and substantiate same. We, therefore, do not consider it necessary or expedient to adjudicate upon this issue on merit. 15. In his appeals for A.Y. 2007-08 being ITA No. 856/KOL/2016, assessee has raised two new grounds. However, no material or specific contentions are raised by ld. counsel for assessee at time of hearing before us in support of issues raised therein. We, therefore, treat both these grounds as not pressed and dismiss same. 16. In remaining two appeals being ITA Nos. 853 & 855/KOL/2016, assessee has challenged levy of penalty imposed under section 271(1)(c) in respect of additions finally sustained by ld. CIT(Appeals) on account of accretion of income on basis of transactions reflected in Bank account of assessee with HSBC, Geneva, Switzerland for both years under consideration on various grounds. However, keeping in view decision rendered by us hereinabove while disposing of corresponding quantum appeals of assessee whereby we have deleted said additions, penalty imposed by Assessing Officer under section 271(1)(c) in respect of I . T. . N o s . 8 5 3 & 8 5 4 / KO L . / 2 0 1 6 Assessment years: 2006-2007 & I . T. . N o s . 8 5 5 & 8 5 6 / KO L / 2 0 1 6 s s e s s m e n t Ye r : 2 0 0 7 - 2 0 0 8 Page 20 of 20 said additions for both years under consideration is liable to be cancelled having no legs to stand. We, therefore, cancel penalty imposed under section 271(1)(c) for both years under consideration and allow appeals of assessee. 17. In result, appeals of assessee being ITA Nos. 853, 854 and 855/KOL/2016 are allowed, while assessee s appeal being ITA No. 856/KOL/2016 is partly allowed. Order pronounced in open Court on September 21, 2016. Sd/- Sd/- (S.S. Vishwanethra Ravi) (P.M. Jagtap) Judicial Member Accountant Member Kolkata, 21 s t day of September, 2016 Copies to : (1) Shri Bishwanath Garodia, 9, Dover Park, 2 n d Floor, Kolkata-700 019 (2 ) Deputy Commissioner of Income Tax, Central Ci rcle-3 (3), Kolkata, Aayakar Bhawan, Po orva, 110, Shantipally, Kolkata-700 017 (3) Commissioner of Income Tax (Appeals)-21, Kolkata; (4) Commissio ner of Income Tax- , (5) Depart ment al Represent ative (6) Guard File By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S. Bishwanath Garodia v. Deputy Commissioner of Income Tax, Central Circle-3(3), Kolkata