TaxTMI 
TaxTMI 
2023 (5) TMI 789
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....of import and export of precious stones, import and export of pulses, pharma, polymers, dyes and chemicals. The assessee is also a manufacturer, trader and exporter of rice. For the assessment years under dispute, the assessee had filed its return of income under section 139(1) of the Income-tax Act, 1961 (for short 'the Act') in regular course. For assessment years 2005- 06, 2006-07 and 2008-09, the assessments were originally completed under section 143(3) of the Act. Whereas, for assessment years 2007-08 and 2009-10, there were no scrutiny assessment but returns were processed under section 143(1) of the Act. Be that as it may, a search and seizure operation under section 132 of the Act was conducted in case of the assessee and other related parties on 16.03.2011. Consequent to search and seizure operation proceedings under section 153A of the Act were initiated for the impugned assessment years. In course of assessment proceedings under section 153A of the Act, the Assessing Officer, based on materials available on record, found that in the relevant assessment years, amongst others, the assessee had sold chemicals/polymers and wax to M/s. Dee Kay Trade Centre and M/s. J.S. Ente....
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....in the nature of unexplained cash credit under section 68 of the Act. Thus, after rejecting the books of account, the Assessing Officer proceeded to compute the profit of the assessee. From the materials placed before him, the Assessing officer noticed that the gross profit rate shown by the assessee in different assessment years are as under: Assessment Year 2005-06 3.41% Assessment Year 2006-07 2.59% Assessment Year 2007-08 4.09% Assessment Year 2008-09 3.70% Assessment Year 2009-10 3.43% 5. The Assessing Officer observed, as per data collected from capitaline database, the GP rate in respect of chemical industries comes to 6.75%. Thus, applying the said GP rate of 6.75% on entire sales turnover of the assessee, the Assessing Officer computed the profit of the assessee and made additions in different assessment years, as under: Assessment Year 2005-06 3,49,06,000/- Assessment Year 2006-07 5,88,14,000/- Assessment Year 2007-08 3,80,14,000/- Assessment Year 2008-09 6,08,84,000/- Assessment Year 2009-10 5,32,26,000/- 6. Being aggrieved with the aforesaid additions, the assessee filed appeals before learned Commissioner (Appeals). After considering the....
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.... both the entities are non-existent/ untraceable. He submitted, when the proprietor of the concerned entities was having a valid PAN, filing return of income and has a number of bank accounts, doubt regarding the existence of the parties, cannot be entertained. He submitted, even assessments in case of the proprietary concerns have been made under section 144 of the Act for assessment years 2006-07 and 2007-08, which establishes the fact that the parties are in existence. Proceeding further, he submitted, when the first appellate authority has accepted the GP rate shown by the assessee in respect of sales effected to all other parties, there is no valid reason to apply a different GP rate to the sales effected to the two parties, when the closing stock has been accepted. Thus, he submitted, the additions sustained by learned Commissioner (Appeals) should be deleted. 10. Learned Departmental Representative submitted that simultaneously with the search and seizure operation conducted on the assessee, a survey authorization was also issued in case of M/s. Dee Kay Trade Centre. However, the party was not found at the given address. She submitted, efforts of the Assessing Officer to tr....
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....ion to assess or reassess the 'total income' in respect of each assessment year falling within six assessment years. However, it is required to be noted that as per the second proviso to Section 153A, the assessment or re-assessment, if any, relating to any assessment year falling within the period of six assessment years pending on the date of initiation of the search under Section 132 or making of requisition under Section 132A, as the case may be, shall abate. As per sub-section (2) of Section 153A, if any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to subsection (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner. Therefore, the intention of the legislation seems to be that in case of search only the pending assessment/reassessment proceedings shall abate and the AO would assume the jurisdiction to assess or reassess the 'to....
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....he jurisdiction to assess or reassess the total income for the entire six years block assessment period even in case of completed/unabated assessment. As per the second proviso to Section 153A, only pending assessment/reassessment shall stand abated and the AO would assume the jurisdiction with respect to such abated assessments. It does not provide that all completed/unabated assessments shall abate. If the submission on behalf of the Revenue is accepted, in that case, second proviso to section 153A and subsection (2) of Section 153A would be redundant and/or rewriting the said provisions, which is not permissible under the law. 13. For the reasons stated hereinabove, we are in complete agreement with the view taken by the Delhi High Court in the case of Kabul Chawla (supra) and the Gujarat High Court in the case of Saumya Construction (supra) and the decisions of the other High Courts taking the view that no addition can be made in respect of the completed assessments in absence of any incriminating material. 14. In view of the above and for the reasons stated above, it is concluded as under: i) that in case of search under Section 132 or requisition under Section 132A, the....
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....r, we are not convinced. Merely because simultaneously with the search and seizure operation conducted in case of the assessee, a survey authorization was issued in the name of M/s. Dee Kay Trade Centre, it will not mean that the survey authorization was based on any incriminating material found during the search and seizure operation. At least, the aforesaid fact is not borne out from the assessment orders. 14. In any case of the matter, out of the entire sales turnover of the assessee in the relevant assessment years, the doubt/suspicion of the Assessing Officer is only with regard to sales effected to two parties, viz., M/s. Dee Kay Trade Centre and M/s. J.S. Enterprises. As regards the other purchasing parties, no adverse material or information has been collected by the Assessing Officer. Even, with regard to these two parties also, there is no incriminating material found as a result of search. Because of this fact only, the Assessing Officer instead of disallowing the entire sales effected to the parties, has proceeded to make additions enhancing the GP rate. In any case of the matter, the additions made by the Assessing Officer by enhancing the GP rate is purely based on e....