IN INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE S/SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND AMARJIT SINGH, JUDICIAL MEMBER I.T.A. No.6303/Mum/2014 ( Assessment Year: 2005-06) Assistant Commissioner of M/s. Welspun Power & Steel Income Tax Central Circle 22 Vs. Ltd. (Now known as M/s. & 30 Central Range 5 Welspun Steel Ltd.) th Room No.404, 4 Floor, Welspun House, 4 t h Floor, Aayakar Bhavan, B-Wing, Kamala City, Mumbai - 400020 S.B.Marg, Lower Parel (W) Mumbai - 400013 C.O. No.51/Mum/2016 (I.T.A. No. 6303/Mum/2014) (Assessment Year: 2005-06) M/s. Welspun Power & Steel Assistant Commissioner of Ltd. (Now known as M/s. Vs. Income Tax Central Circle Welspun Steel Ltd.) 22 & 30 Central Range 5 th Welspun House, 4 Floor, B- Room No.404, 4 t h Floor, Wing, Kamala City, Aayakar Bhavan, S.B.Marg, Lower Parel (W) Mumbai - 400020 Mumbai - 400013 PAN/GIR No. : AAACW5308G ( Appellant) ( Respondent) Assessee by: Shri Mithesh Shah Department by: Mrs. Vidisha Kalra (CIT-DR) Date of Hearing: 23.06.2016 Date of Pronouncement: 05.10.2016 O R D E R ITA No.6303/Mum/2014 & CO.51/M/16 Assessment Year: 2005-06 PER AMARJIT SINGH, JM: revenue has filed present appeal against order dated 21.07.2014 passed by Commissioner of Income Tax (Appeals)-39, Mumbai [hereinafter referred to as CIT(A) ] relevant to A.Y.2005-06. assessee has also filed Cross Objection. ITA NO.6303/MUM/2014:- 2. assessee has raised following grounds:- Whether on facts and circumstances of case and in law, Ld. CIT(A) has erred in deleting addition made by AO of Rs.5,00,00,000/- to income of assessee on account of alleged unexplained cash credit. Whether on facts and circumstances of case and in law, Ld. CIT(A) has erred in deciding that completion of assessment u/s.143(3) r.w.s. 153A is without jurisdiction. 3. brief facts of case are that search operation u/s.132 of Income Tax Act, 1961 ( in short Act ) was conducted on 13.10.2010 in Welspun Group of cases. assessee company was, inter alia, covered in said search operations. These cases were centralized in this circle. notice u/s.153A of Act was issued on 04.08.2011 and served upon assessee. assessee filed its return of income on 09.09.2011 declaring total loss to tune of Rs.5,60,83,847/-. income as per original return and that of return u/s.153A of Act remained same. Thereafter, notice u/s.143(2) and 142(1) of Act were issued and served upon assessee. Thereafter by giving 2 ITA No.6303/Mum/2014 & CO.51/M/16 Assessment Year: 2005-06 opportunity of being heard to assessee income in nature of loss of assessee was assessed to tune of Rs.(-)60,83,847/. Feeling aggrieved assessee has filed appeal before CIT(A) who set aside order passed u/s.143(3) r.w.s.153A of Act. Therefore, feeling aggrieved revenue has filed present appeal before us. 4. We have heard arguments advanced by learned representative of parties and perused record. learned representative of revenue has argued that CIT(A) was erred in declaring assessment u/s.143(3) r.w.s.153A of Act without jurisdiction and was also erred in deleting addition made by Assessing Officer to tune of Rs.5,00,00,000/-. Therefore, in said circumstances order dated 21.07.2014 passed by CIT(A)-39 is wrong against law and facts and is liable to be set aside. However, on other hand learned representative of assessee has placed reliance upon order passed by CIT(A) in question. 5. It is specifically argued that Assessing Officer invoked power u/s.153A of Act by reopening assessment whereas no material of any kind was found during search conducted on 13.10.2010. Therefore, in said circumstances CIT(A) has rightly passed order dated 25.03.2013 which is not liable to be interfered with at this appellate stage. order dated 25.03.2013 perused which speaks about search upon assessee on 13.10.2010, said order nowhere speaks about 3 ITA No.6303/Mum/2014 & CO.51/M/16 Assessment Year: 2005-06 material found for re-assessment u/s.153A of Act. After search, Assessing Officer invoked provision u/s.153A of Act and dealt matter on merits and held that assessee had issued 50,00,000 shares worth Rs.5,00,00,000/- to Nextgen Far East Ltd. assessee had also submitted address of Nextgen Far East Ltd. which was foreign entity. assessee also received USS $ 1150000 equivalent to Rs.5,02,92,375 towards share application money and they were allotted 5,00,000 equity shares of Rs.10 each. identity of foreign company was not established, therefore share application money treated as explained cash credit and treated income of assessee. On perusal of said order nothing came to notice that any material found during search was taken into consideration while reopening this issue. It is not in dispute that search was conducted on 13.10.2010 whereas assessee had already filed return of income on 28.10.2005. It is necessary to advert finding of CIT(A) on record to know about fact that how this issue was dealt:- 5. I have considered facts of case, assessment order passed by Assessing Officer and contentions as raised by appellant. Admittedly in making regular assessment under s.143(3) dated 13.12.2007, Assessing Officer had enquired into genuineness of share application money and after taking into consideration details as furnished 4 ITA No.6303/Mum/2014 & CO.51/M/16 Assessment Year: 2005-06 before Assessing Officer, claim had been accepted. law requires that only pending assessment proceedings abate. In case of appellant, addition as made with respect to share application money is not tenable since regular return had been filed and particulars pertaining to said addition had been disclosed and same had been accepted in assessment made under s. 143(3). As per law, completed assessments do not abate. It is fact that in impugned case, assessment had been completed under s. 143(3); no proceedings were pending on date of search and no material with regard to share application money that was discovered during search, if any, has been brought on record so as to justify said addition. Where transactions are disclosed in regular books of account prior to search and no incriminating documents have been found discovered during course of search and if no proceedings are pending as on date of search, such matter is beyond scope of assessment to be made under s. 153A. Section 153A provides that where search is initiated under s. 132, Assessing Officer shall assess or reassess total income of six assessment years immediately preceding assessment year relevant to previous year in which search is conducted or requisition is 5 ITA No.6303/Mum/2014 & CO.51/M/16 Assessment Year: 2005-06 made. 1st Proviso states that Assessment Officer shall assess or reassess total income in respect of each assessment year falling with such six assessment years while 2nd Proviso states that assessment or reassessment relating to said six assessment years pending on date of initiation of search under 132 shall abate . While under 1st Proviso, Assessing Officer is empowered to frame assessment for six years, under 2nd Proviso, only assessment had been completed under s. 143(3); no proceedings were pending on date of search and no material was found during search as regards share application money received by appellant. 5.1 Hon ble Mumbai ITAT Special Bench in case of All Cargo Global Logistics Ltd. Vs. DCIT 137 ITD 287 has held, on subject matter as under: a) In assessments that are abated, Assessing Officer retains original jurisdiction as well as jurisdiction conferred on him under s. 153A for which assessments shall be made for each of six assessment year separately; b) In other cases, in addition to income that has already been assessed, assessment under s. 153A will be made on basis of incriminating material, 6 ITA No.6303/Mum/2014 & CO.51/M/16 Assessment Year: 2005-06 which in context of relevant provisions means (i) books of account, other documents, found in course of search but not produced in course of original assessment, and (ii) undisclosed income or property discovered in course of search. 5.2 Recently in case of Jai Steel (India) V/s. Asst. CIT 219 Taxman 223 (Raj) it is held that in absence of any incriminating material, completed assessment can be reiterated. 5.3 In view of above discussion, following decision of Special Bench of Hon ble Mumbai Tribunal in case of All Cargo Global Logistics Ltd. Vs. Deputy CIT 18 ITR 106 (Mumbai)(SB) it is held that in instant case Assessing Officer did not have power to make any addition in absence of incriminating material. Therefore, it follows that addition made by Assessing Officer to income on account of cash credit is beyond scope of section 153A. Ground 1 is decided in favour of appellant. Having decided on validity of assessment, if am not adjudicating on rest of grounds i.e. Grounds 3, 4 and 5. 6. On appraisal of order passed by Assessing Officer dated 25.03.2013 we are of view that no material was found with regard to Share Application Money during search. 7 ITA No.6303/Mum/2014 & CO.51/M/16 Assessment Year: 2005-06 provision of law has duly been discussed by CIT(A) in his order which is not required to be discussed again. Since no material of any kind was found during search, therefore in said circumstances CIT(A) has passed order in question judiciously and correctly which does not require to be interfere with at this appellate stage. decision by Special Bench in All Cargo Global Logistics Ltd. (Supra) has in fact been subsequently applied by Hon ble Jurisdictional High Court. Therefore in said circumstances appeal of revenue is Dismissed C.O.51/M/2016 7. Since appeal filed by revenue has been dismissed while deciding appeal No.6303/M/2014, therefore, there is no need to decide C.O. raised by assessee, because same would be academic in nature. 8. In result, appeal of revenue is hereby ordered to be dismissed. Order pronounced in open court on 5th October, 2016 Sd/- Sd/- (SANJAY ARORA) (AMARJIT SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated : 5th October, 2016 MP 8 ITA No.6303/Mum/2014 & CO.51/M/16 Assessment Year: 2005-06 Copy of Order forwarded to : 1. Appellant 2. Respondent. 3. CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, Mumbai 9 Assistant Commissioner of Income Tax, Central Circle 22 & 30 Central Range-5, Mumbai v. M/s. Welspun Power & Steel Ltd. (Now known as M/s. Welspun Steel Ltd.)