TaxTMI 
TaxTMI 
2018 (8) TMI 1629
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....- made by the Assessing Officer to the income of the assessee on account of unaccounted production of Gutka Pouches. 4. The following cross-objection has been raised by the assessee. "1. Because, additions as made in assessment were not based on any incriminating material, found as a result of search. Thus, the additions made under section 153A of the Act were beyond jurisdiction, illegal and bad in law. " 5. Heard. The issue involved in the cross objections is that where the addition made is not based on any incriminating material found during search, such addition made u/s 153C of the IT Act is not legally sustainable. This being a legal issue going to the root of the matter, it is being decided first. 6. The matter is squarely covered in favour of the assessee by 'CIT vs. Kabul Chawla', 380 ITR 573 (Del), as followed by us in our order dated 11. 09. 2017, passed in ITA Nos. 159 & 160/Agra/2012, in 'Shri Mahendra Kumar Jain vs. ACIT', (copy at APB 1-9). Our observations are as follows: "6. We have heard both the parties and have perused the relevant material on record. In "Meeta Gutgutia" (supra), the main contention of the Department before the Hon'ble....
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....00-01 to AYs 2003-04. 9. In the present case, there is no dispute about the fact that no incriminating material / evidence was found in the search qua the year under consideration. 10. The assessee is a resident of Gwalior in M. P. The impugned order was passed by the ld. CIT(A), Gwalior. Therefore, neither "Meeta Gutgutia" (supra), by the Hon'ble Delhi High Court, nor "Kesarwani" (supra) by the Hon'ble Allahabad High Court, is by the Jurisdictional High Court qua the assessee. Now, it is well settled that where on an issue there are divergent opinions of different High Courts, which are nonjurisdictional High Courts so far as regards the assessee, the view in favour of the assessee needs to be followed. 11. Hence, following "Meeta Gutgutia" (supra), we hold that the assessee is correct in contending, by way of the additional ground raised, that in the assessment completed u/s 153A of the Act, no addition can be made, which is not related to documents seized during the search. Accordingly, there admittedly being no incriminating material/documents relating to the year under consideration seized during the search, the addition of Rs. 61, 404/- made for the....
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....d out by the AO (AO, page 2, para 4. 3), on the basis of Excise Notification dated 01. 07. 2008. Again, this Notification does not pertain to the years before us. It was applicable for A. Y. 2009-10. 11. The Department has also sought to place reliance on 'JRD Stock Brokers (P) Ltd. vs. CIT', order dated 04. 03. 2015 passed by the Hon'ble Delhi High Court in ITA 134/2014, in C. M. -Appl. 5666/2014. In that case, the Hon'ble High Court was dealing with the question as to whether penalty u/s 158BFA(2) of the IT Act could be levied in respect of income which was not undisclosed income, but was determined on the basis of estimation on the application of weight formula of gross credit in various bank statements, considered as turnover. The Hon'ble High Court held that in the search proceedings u/s 132(4) of the Act, the assessee had admitted that the amount originally claimed entirely to have been derived from share business, also included sums forming part of the turnover on account of providing accommodation entries. The Hon'ble High Court held that this certainly formed the basis for material discovered during the course of search proceedings; and that having regard to this admiss....
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....neness of the transactions as required u/s 68 of the Act. " 17. Thus, it remains undisputed that the addition was not made on the basis of any incriminating material found during the search. 18. The matter, again, is covered in favour of the assessee of 'Kabul Chawla', (supra). Respectfully following the same, the addition is deleted. I. T. A No. 57/Agra/2015 A. Y. 2011-12 19. This is assessee's appeal for A. Y. 2011-12, contending that the ld. CIT(A) has erred in confirming the addition of Rs. 19, 41, 786/- on account of difference in stock value. 20. Excess stock amounting to Rs. 19, 41, 786/- was found from the premises of the assessee. This was added u/s 69 of the IT Act. The search party, during the search, had prepared a stock inventory. A trading account as on 06. 10. 2010 was also prepared. Stock available with the assessee on the date of the search, i. e. , 07. 10. 2010, was arrived at. The stock found was of Rs. 58, 55, 915/-. The stock, as per the assessee's accounts, amounted to Rs. 39, 14, 136/-. The addition represented the difference between the two. 21. The assessee contended before the ld. CIT(A) that as per the statement of Anil Kumar Gupta, Dire....