TaxTMI 
TaxTMI 
2015 (6) TMI 598
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....Income Tax Act (hereinafter called the "Act") was issued to the assessee on 23.10.2001 for the block period with effect from 1.4.89 to 4.2.2000. This notice was served on 26.10.2011. On assessee's request, the assessee was allowed time for filing of return till 3.12.2001. The assessee has filed the return of income on 3.12.2011 in Form 2B in which he disclosed his income (which is mentioned in AO's order at Page No. 1). In this case the assessee is sole proprietor of M/s Avinash Oil Company which holds the distributorship of Kerosene Oil. Notices u/s. 143(2) and u/s. 142(1) were issued to assessee on 4.12.2011. Another notice u/s. 142(1) was issued on 28.12.2001. In response to three notices and various other notices issued from time to time, the Authorised Representative of the Assessee attended the proceedings and made various submissions, in response to the above notices and also the queries raised in the order sheet from time to time. Thereafter, Ld. AO made various additions including the addition in dispute and completed the assessment u/s. 158BC of the Act, vide his order dated 26.2.2002 for the Block Period 1.4.89 to 4.2.2000. 3. Being aggrieved with the assessment....
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....remium was computing at Rs. 45,60,881/-. He requested that the impugned order passed by the Ld. CIT(A) may be cancelled and the assessment order may be upheld. 6. Ld. Counsels of the assessee Shri V.K. Tulsian, FCA & Shri Hemant Arora, CA controverted the arguments advanced by the Ld. CIT(DR) and relied upon the impugned order passed by the Ld. CIT(A). Ld. Counsel of the assessee filed the Written Submissions in the form of Synopsis as well as the two Paper Book s one containing pages 27 to 94 having the details of remand report; notice u/s 14(1); statement u/132(4) and another Paper Book containing pages 1 to 100 having the copy of submissions before the CIT(A); copy of assessment order; remand report etc. Ld. Counsel of the assessee stated that in view of the written submissions and other documentary evidences filed by him in the shape of Paper Book, may be considered and Appeal filed by the Revenue may be dismissed. For the sake of convenience, we hereby reproduce the Synopsis as under:- "Initially there was action u/s 132 on 25.11.1998 upon third parties like Kumar Oil and M/s Shyam Lal Bala both were in the business of transporters on the roll of IOC as well as dealer in Ker....
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.... allegations are just based upon a search that took place on another assessee sometime ago i.e Kumar Oil from whose possession a sheet in jotting and dotting form was recovered and on that basis the Assessing Officer has treated the goods sold at a premium and that premium income has not been disclosed to the Department. There is no' corroborative evidence found or recovered from the premises of the respondent nor any direct evidence or any circumstantial evidence to suggest that the respondent sold goods at a premium During the statement, the appellant was asked, about Annexure A-1 and the diary. The appellant clearly explained as appears in the answer to Q.No. 64, 65 and 67 on PB No.31. The respondent is a license holder and the goods are being supplied by IOC through their own transporter i.e. contractor Kumar Oil. Basically these two firms are contractor firms lifting goods from the godowns of lOC and they are also in the business of kerosene oil as a quota holder and a license holder. There are no scope for any premium because this commodity is covered under the Essential Commodities Act, regularly monitored by the various Govt. authorities like DM, SDM, SDO During the a....
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....en when the assessee covered for the special provision for assessment under Chapter XIV-B u/s 158B(b) are any scope for additions based upon assumption and presumption. The Assessing Officer has accepted the appellate book version. He accepted the turnover, NP and GP rate and completed the assessment u/s 143(3)/157BC without rejection of books of a/Thus it is clear that he has accepted the trading and profit and loss account of the respondent. During the course of search not even a word has been whispered by the search party regarding receipt of premium to the assessee. It is important to note that the addition on account of premium has been made on the basis of loose papers found from the premises of M/s Kumar Oil and M/s. Shyam Lal Bala Prasad. The height of the thing is that no alleged addition on account of premium has been made in the case of m/s Kumar Oil. In whose case the search was conducted and order was passed u/s.158BC. Then how when there is no purchase by M/s Kumar Oil on what account the said company is giving the premium on kerosene oil to us. It may also be noted that M/s.Kumar Oil has changed its stand and retracted its statements at various levels as per page ....
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....d ration dealers as per directions of district supply authorities, who have endorsed the figures by giving the certified details of receipt and supply as per their records which tally with the records of the appellant and nothing adverse have been found during the course of the assessment proceeding nor during the course of remand report therefore, no addition is called for. The cumulative effect of the above facts reveals that assumption of premium without any seized materials or any other evidence suggest for assumption or in any manner any assets found to the extent of the income calculated by the Department particularly when the assessment framed under Chapter XIV-B. The law is very clear that undisclosed income for the Block period should be Sec.158 BB (1) Le on the basis of evidence found as a result of search and such other material as are available with the AO and relatable to such evidence. The case does not fall in the above framework of the law. There are acatena of authorities which are being given after all the grounds. Therefore, the additions are liable to be quashed/deleted because not only on the above submission but under the constitutional provision that no noti....
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....to Sec. 4 of the Act. As regards the computation of income u/s 15S BB which deals with the computation of undisclosed income for Block period it has to. be read with computation of Total Income under Chapter IV of the Act and also undisclosed income for Chapter XIV-B relates to different accounting years in which the income is earned. The Apex Court in the case of Saraswati Industrial Syndicate 237 ITR 1. The Delhi High Court in the case of DK Gupta 308 ITR 230, 233 has held that if no corroborative or direct evidence to presume that noting or jotting had materialized into transaction, income cannot be assessed on the basis of dumb documents. Delhi H. C in the case of Ravi Kant Jain 117 Taxman 28,33 (Para 8 & 9) 250 ITR 141 where it was held that the scope and ambit of Chapter XIV-B limited to the materials unearthed during the search Delhi H. C in the case of Balaji Wires (2007) 164 Taxman 559, 565 (Para 12) has held that in the absence of any incriminating material found during the search / requisition nothing is to be considered for the purpose of Block Assessment under Chapter XIV-B. Delhi H. C in the case of Vishal Aggarwal reported in 283 ITR 326, 328 Although the judgment....
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....e AO, relatable to such evidence, the assessment can be made. In the present case when no evidence found /seized from the premises of the resp. about any premium except information available through 3rd parties but nowhere those parties alleged as regards the payment of premium, by whom and to what extent made, mode nor any single piece of evidence found during the surveyor the search. Therefore, the Special Bench's judgement (instead of helping the Department) which was in favour of the Department in Mange Ram's case does not go in its favour in the present case and circumstances and therefore the additions which has been rightly deleted by CIT(A) to be upheld. The Delhi High Court in the case of Mohinder Haryanvi reported in 172 Taxman 223 has held that if the seized document did not mention any particular date and year and therefore its existence could not be attributed to the Block Period under consideration and moreover on asking (for) a comment from the AO in this regard) and if he keeps silent on a (that) particular issue then it also shows an adverse reference against the Department. The Delhi High Court in the case of S.M.Aggarwal 162 Taxman 3, 8 has held that th....
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....RA 86), 85 (para93), (Undisclosed Income should be computed on the basis of evidence found during search / direct nexus with the search proceedings Pg.No. 78 - 79 Para 86 Hon'ble Mumbai Tribunal in case of Sigma Securities reported in 286 ITR 80,87,96,99/-. The Hon'ble bench is of the view that there should be some evidence collected during the course of search exhibiting the falsity of the claim. In the present case nothing was found or any other information correlated with the evidence gathered during the search. Mumbai Tribunal C. J Shah & Co. reported in 118 Taxman magazine 183,184. It was held that for assumption of the income at least something by way of kuccha chithha should be seized for estimating the income. In the present case not a single piece of evidence was found or seized to correlate the assumption purported to be made. Accordingly the order is liable to be quashed. The Mumbai Bench in the case of Shailesh S.Shah reported in 63 ITD 153 the ratio of the case that the assessee's income should be on the basis of documents seized and the onus is on the Department to prove that alleged receipts were assessee's income and therefore the addition being me....
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....hat case it was held in para. 21 that definition clause in Sec. 158 B is in two parts. First is inclusive one which enlarges the natural meaning of undisclosed income while the second is a restrictive one which specifies its boundaries inasmuch as the Legislature has used the words "has not been or would not have been disclosed". It was also held that scope of these two had to be considered with reference to DOS. In para. 23 at Pg. 416, the Tribunal considered the natural meaning of the word undisclosed income after referring to various dictionary meanings:- In the light of the arguments on facts and law and a number of precedents relied upon the Departmental appeal may kindly be dismissed." 7. We have heard both the counsel and perused the relevant records available with us, especially the impugned orders passed by the Revenue Authorities; written submissions filed by the assessee alongwith the Paper Books and the arguments advanced by the Ld. DR who has strongly the opposed the arguments advanced by the Ld. Counsel of the assessee with the support of the assessment order. We are of the considered view that the issue involved in ground no. 2 regarding deletion of addition of Rs.....