Tribunal quashes assessment orders under Income-tax Act, 1961. Assessee appeals allowed, revenue appeals dismissed.

The tribunal quashed the assessment orders framed under Section 143(3) read with Section 153A of the Income-tax Act, 1961, as they were not based on any incriminating material found during the search. All appeals of the assessee were allowed, and those of the revenue were dismissed.

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Issues Involved:
1. Validity of assessment order framed under Section 143(3) read with Section 153A of the Income-tax Act, 1961.
2. Addition on account of treating the purchase of milk in cash under the head 'Milk Purchases Tanki'.
3. Disallowance made under Section 37 of the Income-tax Act towards payment of commission.
4. Disallowance on account of alleged unexplained balances of sundry creditors.
5. Addition on account of recharacterizing agricultural income as income from other sources.
6. Addition on account of alleged unexplained salary expenditure.

Issue-wise Detailed Analysis:

1. Validity of Assessment Order:
The primary challenge was regarding the validity of the assessment order framed under Section 143(3) read with Section 153A of the Income-tax Act, 1961. The assessee argued that the assessment orders were void ab initio, bad in law, and without jurisdiction as the additions were not based on any incriminating material found during the search. The assessee relied on the decisions of the Hon'ble High Court of Delhi in the case of Kabul Chawla (380 ITR 573) and the Hon'ble Supreme Court in the case of Singhad Technical Educational Society (397 ITR 344). The tribunal noted that the assessments for the years 2008-09 and 2009-10 were completed under Section 143(3) before the search, and the additions were based on entries already present in the audited financial statements, which were not incriminating materials found during the search. The tribunal held that the assessment orders were bad in law and quashed them.

2. Addition on Account of Milk Purchases Tanki:
The Assessing Officer added the amount under the head 'Milk Purchases Tanki' based on the details extracted from the ledger heads. The tribunal found that these entries were already part of the audited financial statements and were scrutinized during the original assessment. Since these entries were not based on any incriminating material found during the search, the tribunal held that such additions could not be accepted.

3. Disallowance under Section 37 Towards Payment of Commission:
The Assessing Officer disallowed the commission expenses of Rs. 11,72,488/-. The tribunal observed that the commission expenses were part of the administrative expenses in the audited financial statements. As these details were already examined during the original assessment and were not based on any incriminating material found during the search, the tribunal held that the disallowance was not justified.

4. Disallowance on Account of Alleged Unexplained Balances of Sundry Creditors:
The tribunal noted that the details of sundry creditors were already part of the audited financial statements. Since these details were not based on any incriminating material found during the search, the tribunal held that the disallowance was not justified.

5. Addition on Account of Recharacterizing Agricultural Income as Income from Other Sources:
The tribunal observed that the details regarding agricultural income were already part of the audited financial statements. As these details were not based on any incriminating material found during the search, the tribunal held that the addition was not justified.

6. Addition on Account of Alleged Unexplained Salary Expenditure:
The Assessing Officer made an addition of Rs. 6,66,916/- based on a seized document. The tribunal found that the document was a "dumb document" as it did not contain full details about the dates of payments, the recipient of the payments, or the name of the employee. The tribunal held that no addition could be made on the basis of such a document and directed the deletion of the addition.

Conclusion:
The tribunal quashed the assessment orders framed under Section 143(3) read with Section 153A of the Income-tax Act, 1961, as they were not based on any incriminating material found during the search. All appeals of the assessee were allowed, and those of the revenue were dismissed. The order was pronounced in the open court on 19.11.2019.

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