TaxTMI 
TaxTMI 
2014 (5) TMI 427
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....Rules, 1962." 2.1. Assessee in its cross-objections has raised common grounds, excepting difference in quantum, in cross-objections as under: "1. That notice issued u/s 153C of the Act and assessment framed u/s 153A/144 of the Act without satisfying the statutory preconditions contained in the Act were without jurisdiction and therefore, deserves to be quashed as such. 2. That while upholding the assumption of jurisdiction the learned Commissioner of Income Tax (Appeals) has failed to appreciate that since no money, bullion jewellery or other valuable article or thing or books of accounts or documents belonging to the appellant were seized as a result of search on Rajdarbar Group, notice issued u/s 153C of the Act was illegal, invalid and unsustainable. 3. That addition made of Rs. 22,17,375 (A.Y. 2003-04) & 23,37,125 (A.Y. 2004-05) by the learned Deputy Commissioner of Income Tax is perse without jurisdiction since the same is not based on any material found as a result of search on Rajdarbar Group of cases as has been held by Special Bench of Tribunal in the case of M/s All Cargo Global Logistics Ltd. Vs. DCIT reported in 18 ITR (Trib) 106." 3. Brief facts are: Search & seiz....
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....se. - Kailash Auto Finance reported at 320 SOT 80 (AT)(Lucknow) - Pannalal Bajaj Vs. Union of India (1957) 31 ITR 565 (SC) - CIT Vs. Simon Carves Ltd. (1976) 105 ITR 212 (SC) - CIT V. Rameshwar Prasad Bagla (1968) 68 ITR 653 (All). 3.2. The CIT(A), however, rejected the assessee's contention on legality of additions by holding that block assessment envisaged concept of dual assessment - one for undisclosed income found as a result of search and the other regular assessment as per the normal provisions of the Act. U/s 153C both the assessment proceedings are merged together and the additions, therefore, cannot be restricted only to undisclosed income relatable to incriminating material, detected as a result of search. In support CIT(A) relied on the ratio of decisions in the cases of: - Taru Lata Shyam vs. CIT 108 ITR 345; - Keshavji Raoji & Co. Vs. CIT 183 ITR 1; - Guru Devdutta VKSS Maryadit Vs. State of Maharastra IR 2001 SC 1980; - CIT Vs. Anjum M.H. Ghaswala 252 ITR (Constitution Bench); - Mr. Gopal Lal Bhadruka Vs. DCIT 2012-TIOL- 357-HC-AP-IT. 3.3. CIT(A) thus upheld the legality of additions and in framing the assessment based on no incriminating material. 3.4. A....
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....ved till the date of passing of the order." 3.6. CIT(A) on merits allowed the claim of the assessee by following observations: "5.32 In the present situation, I find that the appellant has submitted the documents, evidences of purchase and sales along with bank statement, reflecting the necessary entries in the bank account, a tax audit report by a chartered accountant along with a copy of statutory audit report. The provisions of computing profit and gains on presumptive basis u/s 44AF(5) for retail business mentions that "Notwithstanding anything contained in the foregoing provisions of this section an assessee may claim lower profits and gains than the profits and gains specified in sub-section (1), if he keeps and maintains such books of account and other documents as required under sub-section (2) of section 44AA and gets his accounts audited and furnishes a report of such audit as required under section 44AB" The appellant has maintained proper books of account and has got them audited u/s 44AE3 of the Act. The provision would have been applicable if* the turnover of the appellant would have been lower than the limits specified u/s 44AB of the act. In the case of the appel....
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....rs of additions is not restricted only to the incriminating material. Order of CIT(A) on the issue of legality of additions is relied on. 4.1. Apropos relief on merits, ld. DR relies on the order of A.O. and contends that CIT(A) has admitted the additional evidence without proper justification, therefore, no cognizance thereof should be taken. Besides CIT(A) has not given any cogent reasons for deletion of the addition. When the assessee does not produce documents in original proceedings in that case assessing officer can make an estimate of the income. This power of estimate has been exercised by the ld. Assessing officer in a reasonable manner which cannot be found fault with. 5. Ld. Counsel for the assessee on the other hand while addressing to assessee's cross-objections contends that the issue of legality of addition during the course of block assessment proceedings u/s 153A or 153B is decided by catena of judgments mentioned above including the judgments of Hon'ble Delhi High Court in the cases of CIT Vs. Anil Kumar Bhatia (supra); and SSP Aviation 346 ITR 177 as well as the judgment of Hon'ble Rajasthan High Court in the case of Jai Steels 259 CTR 281 besides, the judgment....
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....dings of the CIT(A) while admitting the additional evidence except raising some vague and general objections. Thus the order of CIT(A) admitting additional evidence is perfectly justified and within the four corners of the law. 5.2. Since assessee's books of accounts are duly audited and no specific or general fault has been found therein, ld. CIT(A) has rightly held that there is no scope for rejecting the books and estimating the profits without any incriminating evidence or giving any cogent reasons in this behalf. Thus, the order of CIT(A) on the issue of relief on merits is relied on. 6. We have heard rival contentions and perused the material available on record. First addressing to the cross objections filed by the assessee we find merit in the argument of ld. Counsel, from the record it clearly emerges that assessing officer has not referred and least of all not indicated to any incriminating material for rejecting the books and estimating the profits. Thus, the additions in questions are bereft of any support or relevance to any incriminating material whatsoever. Such additions are not permissible u/s 153C as per the settled proposition enunciated by catena of ITAT judgm....