TaxTMI 
TaxTMI 
2024 (12) TMI 895
X X X X Extracts X X X X
X X X X Extracts X X X X
.... for the assessment years 2011-12 to AY: 2019-20, (both years inclusive), against the orders of the Ld. CIT (A) - 5, Ludhiana, passed u/s 250 of the Act 61, which has emanated from the orders of the ACIT- Central Circle - 1, Jalandhar, passed u/s 153A of the Act 61. 2. The factual aspect of the matter are almost identical in all the years, and for the sake of convenience, all the appeals and cross appeals, are taken up together for disposal. Assessment year 2011-12, is taken as the lead case. 3. The facts of this case in brief are that a search was conducted u/s 132 of the Act 61, at the business and residential premises of the assessee on 29th October, 2020 located at Noormahal, Jalandhar, Ludhiana, Phagwara, Mohali, Patiala, Moga, and Ferozpur. 4. The assessee is a business man engaged in the business of real estate, as promoter developer and engaged in other trading activities, and is regularly assessed to tax. Regular return has been filed u/s 139(1) along with copies of audited accounts and assessed accordingly. However, it is pertinent to note that in-spite of a thorough search being conducted at the business and residential premises of the assessee (Sh Chander Sheikhar M....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essee and should be brought to tax in the hands of the assessee alone on substantive basis. 7. It is seen that the premises on which the four cigarette manufacturing units, were installed, are legally owned by the assessee, but the said premises where already let out / leased out to the above four concerns, vide rental agreements, since their inception of business, and the assessee derived rental income from such concerns, and the said rental income has been duly disclosed by the assessee, in his regular returns, year to year, under the head " income from house property ", which proves the fact that, the said premises are let out/leased out, on rent to the above tenants/ lessees, are already in the knowledge of the department, since inception, and the rental income disclosed in regular returns are duly accepted by the department in normal course. 8. It is also seen that all the above four concerns, are legally owned by the respective persons, under respective PAN, and cigarette manufacturing being under the control of Central excise authorities, all the above persons are separately registered before the said authorities and also under the VAT, and later under GST authorities, as ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oks of accounts, and it has been further alleged that the said goods are transported out of the premises, and sold, without compliance with central excise guidelines and GST compliance. 11.1 In the back drop of such facts, proceedings were initiated against the assessee u/s 153A of the Act 61, on 22nd November, 2021, in response to which return of income was filed on 12th December, 2021, declaring total income of Rs. 21,55,210/-. 11.2 During course of assessment proceedings, in response to notice u/s 142(1) of the Act 61, full compliance has been made by the assessee, and all documents and explanations, as called for has been filed before the AO, without giving any cognizance to such explanations and submissions, proceeded to determine the total income, in his own way. 11.3 In course of assessment proceedings the AO, made his own workings and computations as contained in the body of the assessment order, on the basis of statements and depositions of the employees and the other persons, recorded, during search u/s 132 and survey u/s 133A of the Act 61, referred to in above paragraphs, and estimated the unaccounted sales of cigarettes and cigarette filter and went on to make an ad....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t addition made on the basis of statement of employees and other persons recorded during the course of search which are not corroborated with any evidence cannot be said to be based on incriminating material, is in contradiction to the decision of Hon'ble Gujrat High Court in the case of Saumya Construction (P) Ltd. [2017] 81 taxmann.com 292 (Gujarat) where the Hon'ble Court has defined incriminating material to be material found during search or requisition which reveals undisclosed income? 3. Whether the statement of employees and other persons recorded during the course of search constitutes incriminating material as defined by Hon'ble Gujarat High Court in the case of Saumya Construction (P) Ltd. (2017] 81 taxmann.com 292 (Gujarat) where the Hon'ble Court has defined incriminating material to be material found during search or requisition which reveals undisclosed income? 4. Whether on facts and circumstances of the case and in law, the Id. C1T(A) was justified in deleting the addition made by AO u/s 153 A of the Act for the A.Y. 2011- 12 where the addition has been made on the basis of incriminating material in the A. Y. 2021-22 and ignoring the decision of Hon'ble....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he undisclosed quantity of production and subsequent sales of such goods and for determination of suppressed income on such undisclosed sales, which is the subject matter of addition in the assessment order. 17. In other words the crux of his argument is that, even though no incriminating materials has been found in this search at the premises of the assessee, the deposition and the statements, as recorded by the search and survey team at the premises of the assessee and other four parties, given by the employees and other person, present at the search and survey premises, can be considered as incriminating material, for the purpose of initiating proceedings u/s 153A of the Act 61, and the Ld CIT(A) was not legally justified in deleting the addition of Rs. 22.41 crores, relying on the judgment of the Hon'ble Supreme court in the case of " Abhisar Buildwell Pvt Ltd ", and in support of his contention the Ld DR relied upon the judgment of the Honb'le Gujrat High court in the case of PCIT vs Saumya Constructions (P) Ltd. 387 ITR 529 (Gujrat) dated 14th march, 2016, (which incidently is much earlier to the Hon'ble Apex court judgment in Abhisar Buildwell Pvt Ltd passed on 24th April, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fore the date of search. 24. A search /seizure operation was conducted on business as well as at the residential premises of IJM Group wherein the contention was raised against the assessee that he is engaged in the alleged business of manufacturing cigarettes / filters during the year and the same has been unaccounted by the assessee in his returned income. Sir it is submitted that no incriminating material was found during the course of search. The addition is made on the basis of estimation and assumption and on the basis of alleged statement of employees of the assessee recorded at the time of search during the FY. 2020-21 whereas no documents pertaining the years under consideration were found during the search and seizure operation. Sir, the entire addition was made on account of alleged unaccounted production of cigarettes/filter that too on the basis of the statement of the various persons recorded at the time of survey /search operation conducted on 29.10.2020, wherein no documents or evidence were found in respect to any products / manufacturing for sale for cigarettes / filter. Moreover statements of the employees were taken under pressure as they were continuously ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....assessment under Section 153 A only on basis of some incriminating material unearthed during course of search or requisition of documents or undisclosed income or property discovered in course of search which were not produced or not already disclosed or made known in course of original assessment-Assessment in respect of each of six assessment years was separate and distinct assessment-U/s.153A, assessment had to be made in relation to search or requisition, namely, in relation to material disclosed during search or requisition-If in relation to any assessment year, no incriminating material was found, no addition or disallowance could be made in relation to that assessment year in exercise of powers under section 153A and earlier assessment should have to be reiterated-There was no such statement in present case which said to constitute an admission by Assessee of failure to record any transaction in accounts of Assessee for Ays in question-Court was of view that ITAT was justified in holding that invocation of Section 153A by Revenue for Ays 2000-01 to 2003-04 was without any legal basis as there was no incriminating material qua each of those Ays. 26. CIT-II, Thane vs. Contine....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... case of CIT, Salem v. M/s.S.Khader Khan Son (2012) 254 CTR (SC) 228 : (2013) 352 ITR 480 (SC) : (2012) 210 TAXMAN 248 (SC) wherein the Bench stated that the word "may" used in Section 133A(3)(iii) of the Act, viz., "record the statement of any person which may be useful for, or relevant to, any proceeding under this Act, made it clear that the materials collected and the statement recorded during the survey under Section 133A were not conclusive piece of evidence by itself. Following the circular F.No.286/2/2003 of the Central Board of Direct Taxes dated 10.3.2003, it was concluded that the materials collected and the statement obtained under Section 133A would not automatically bind the assessee. 27. In the instant case there was not a shread of material apart from the statement recorded during search. 27.1 In this regard the law is very clear in this respect and CBDT has issued instruction with regard to confession of additional income during the course of search and seized and survey operations. Instruction no. F.No. 286/2/2003-IT(Inv.II), dated 10.03.2003 give some reflection about such confession of additional income without any credible evidence during the course of search....
X X X X Extracts X X X X
X X X X Extracts X X X X
....idence on record to show which particular transaction of land in the name of minor sons resulted in income disclosed by the assessee under s. 132(4). This only shows that the assessee was indeed in a confused state of mind. Further, the Revenue has not placed any material or evidence to show that income disclosed in the names of minor sons was based on positive evidence found during the course of search. Thus, in the absence of evidence, the CIT(A) was justified in referring to the investments made in the names of minor sons during the relevant assessment years and restricting the addition to the amounts equal of such investment. In fact, the assessee had even contested these additions before the CIT(A), but such submission of the assessee was rejected. In the light of these facts and circumstances of the case and in the absence of any supportive material, CIT(A) was justified in reducing the additions made by relying on the statement recorded under s. 132(4). The income disclosed under s. 132(4) in respect of remaining amount was not based on any evidence or material and, therefore, the same was rightly deleted by the CIT(A).- (1973) 91 ITR 18 (SC) relied on...." ACIT Vs. Anoop ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....3) SUBMISSIONS ON LEGAL ISSUE THAT NO EXPLORATION CAN BE MADE IN SEARCH CASES: 29. It is submitted that addition is made on the basis of statement of employees recorded during search and there is no other incriminating material against the assessee and the same is evident from the assessment order itself which refers to only statements of employees recorded during search. Sir, the statements recorded in the year 2020 has been utilized for making addition for AY 2011-12 (FY 2010-11) and other years. Even in the year 2020 there is no material against the assessee which could lead to the conclusion that there is unaccounted production/receipt/sale in the hands of assessee or family, which is totally against the principles of natural justice. 30. As regards the extrapolation concept, it is submitted that it was a search case in which a search party is supposed to and expected to find out all the incriminating documents, and materials as also undisclosed assets. A search assessment much less a block assessment, therefore, stands on different footing than a normal assessment or an assessment based on the best judgment of the Assessing Officer. In the instant case, the assessee was se....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tances giving rise to a finding indicate discrepancy for the other period. The Hon'ble Allahabad High Court in the case of Ashok Kumar Rastogi v. CIT 100 CTR (All) 204 in support of the finding of the CIT(A) that in the absence of any corroborating evidence no addition u/s. 69 could be made as unexplained investment in the sales estimated on discovery of certain documents. In the case of Anjaneya Brick Works v. ACIT (Inv) 74 TTJ (Bang) 921 for the proposition that mere existence of evidence to support concealment of income in the next assessment year cannot be made a basis to estimate the income for the current year or any other assessment year for that matter. In the case of Dolphin Builders Pvt. Ltd (356 ITR 420), Hon'ble High Court of Madhya Pradesh held that making addition merely on the basis of seized documents without cogent evidence that excess amount mentioned in seized document was actually passed on to the assessee was not sustainable where books of account of assessee were duly audited. In the case of D. N. Kamani HUF (70 ITD 77) Hon'ble ITAT Patna Bench held that documents regarding receipt of on-money by assesses having been found in respect of sale of fla....
X X X X Extracts X X X X
X X X X Extracts X X X X
....urmises. The Revenue could not demonstrate any material except unsupported statements of two persons. Such unverified statements without any proof towards its assertions are not a good evidence and do not raise any estoppel against the assessee. Therefore, the addition made by the AO is in the realm of speculation without any basis whatsoever. Hence, we decline to interfere with the order of the CIT(A) in so far as appeal of the Revenue is concerned." The Hon'ble High Court of Delhi in the case of Principal Commissioner of Income Tax vs. Pilot Industries Ltd. reported at [2023] 146 taxmann.com 233 (Delhi), wherein, it has been held as under: "Where assessment of assessee for relevant assessment years was completed under section 143(3), however, Assessing Officer framed assessments for relevant years under section 153A and made additions on account of gross profit suppressed by obtaining bogus purchase bills after rejecting account books, since there was no evidence found during search with respect to suppression of gross profit by obtaining bogus purchase bills by assessee and Assessing Officer had merely relied upon documents seized during course of search for other financial ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s across all units sold by assessee in its project on account of on-monies alleged to have been received against sale of flat and sale of car park to SB (HUF) - However, Assessing Officer had made independent enquiries from all flat purchasers in assessee's project and despite such enquiries, Assessing Officer did not find any statement/material or transaction which would in any manner suggest let alone prove that other flat purchasers had paid any part of consideration in cash/on-monies over and above declared sale consideration - Whether in absence of any such material Commissioner (Appeals) rightly deleted addition made on ground that extrapolation made by Assessing Officer was per se arbitrary and un-reasonable - Held, yes[Para 38] [In favour of assessee]" 33. Therefore, in view of the aforementioned discussion and judicial precedents mentioned above, the application of the extrapolation technique shall depend on facts and circumstances of each case and there can be no universal law on this issue. In the present case, no documents have been found and seized during the search and Ld. AO is merely relying on the statement of employees only, and as such application of extrapolati....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ch communication. 2. In order to prevent such instances and to maintain proper audit trail of all communication, the Board in exercise of power under Section 119 of the Income Tax Act, 1961 (hereinafter referred to as "the Act"), has decided that no communication shall be issued by any income tax authority relating to assessment, appeals, orders, statutory or otherwise, exemptions, enquiry, investigation, verification of information, penalty, prosecution, rectification, approval etc. to the assessee or any other person, on or after the 1st day of October, 20 19 unless a computer-generated Document Identification Number (DIN) has been allotted and is duly quoted in the body of' such communication. 3. In exceptional circumstances such as, - (i) when there are technical difficulties in generating/ allotting/ quoting the DIN and issuance of communication electronically; or (ii) when communication regarding enquiry, verification etc. is required to be issued by an income-tax authority, who is outside the office, for discharging his official duties; or (iii) when due to delay in PAN migration, PAN is lying with non-jurisdictional Assessing Officer; or (iv) when PAN of ass....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... circumstances where the aforementioned mandatory requirement may not be adhered to, but requires that if an order/communication is to be issued without a DIN, it can be done only after recording reasons in writing in the file and with the prior written approval of the Chief Commissioner/Director General of Income Tax. Further, paragraph 3 requires that if such exceptional circumstances are claimed, the orders/communication issued without a DIN must state this fact in a specific format set out in paragraph 3 of the Circular. In the present case, no such reason/format is stated in the communication i.e. either in the assessment order or in the approval u/s 153D of the Act 39. Similarly, paragraph 4 of the Circular provides that any order/ communication which is not in conformity with paragraphs 2 and 3 of the Circular shall be treated as invalid and shall be deemed to have never been issued. 40. It is indisputable that the assessment order/demand notice/approval u/s 153D does not bear a DIN and further that the said order issued without a DIN does not bear the required format set out in paragraph 3 of the Circular and, therefore, the impugned assessment order is ought to be treate....
X X X X Extracts X X X X
X X X X Extracts X X X X
....raph 4 of the CBDT Circular and will be held as invalid and never been issued." Reliance is also placed on the decision of Hon'ble Amritsar ITAT in the case of M/s Shreeji Bihariji Colonisers and Builders pvt ltd. v/s ACIT, dated 22.07.2024, ITA48/ASR/2023 in which it was held as under: 14. We find that there are certain factual and legal distinguishing features in case of matters before Hon'ble Allahabad High Court, Hon'ble Kerela High Court and Hon'ble Jharkhand High Court relied by the department and therefore, these decisions stand distinguishable and cannot come to the aid of the Revenue or be held against the assessee unlike the decisions rendered by the Hon'ble Delhi High Court in the case of CIT (International Taxation) v. Brandix Mauritius Holdings Ltd. (supra), Hon'ble Calcutta High Court in the case of Principal Commissioner of Income Tax v. Tata Medical Centre Trust, (supra) and the Bombay High Court in the case of Teleperformance Global Services (P) Ltd. v. ACIT (supra) which have a clear bearing on the matter under consideration and supports the case of the assessee. Having said that, we have a situation where contrary views have been expressed by the non-juri....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ear under consideration. There was no material found during the search which could prove/show that assessee carried unaccounted production. Sir, during the course of assessment proceedings notices were issued to the assessee to which assessee stated as under: "Neither I nor my family have any business interest in the companies/firm dealing in manufacturing of cigarettes. In this connection it is submitted as follows: * It is fact that my family own business premises of the factory where the business of manufacturing of cigarette has been conducted. * The person to whom we have rented out the property is running the business. * The Excise license /GST number/VAT number is in the name of the person who is running the business * The rent deed of the premises is already available with your goodself in the seized record and there is also an affidavit confirming the fact that the same person is running business in his own name and we do not have any business connection with him." Sir, it is submitted that addition has been made in the hands of assessee for the reason that as per Ld. AO assessee carried unaccounted production of cigarettes/filter during the year under conside....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s Inayat Global Pvt. Ltd, M/s Karsh Enterprises, M/s Nagahia Sons were in cigarette manufacturing and since beginning of this there was round the clock presence of Central Excise Officer, so that there is no unauthorized removal of goods and there is proper supervision and control over operations of the these concerns. Thus unaccounted sales/production is not possible as the premises were thoroughly checked by the Excise department and was totally under the control of Excise department. The circular dated 01.05.2017 no.1055/04/2017-CX is enclosed herewith which justifies the claim of assessee. Thus there is no possibility of unauthorized/unaccounted production. * The copy of RG-1 which reflects daily production and bears the signature of excise authority/officer who is supervising the production of the respective concerns along with other relevant details with respect to machinery etc which was filed before the assessment and appellate proceedings. These registers are part of seized material also and this fact can be verified from the Ld. AO also. * That the premises were totally under the control of excise department. The goods were removed with the authorization of the Superi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uctions dated 24.12.2008 issued vide F. No. 224/37/2005 by CBEC that round the clock presence of central excise office in the factory is required to control and supervise the operation of cigarettes. Copy of said circular is enclosed herewith. * Had assessee or family were having any interest in the said business then the officer sitting all the time there and the officer monitoring production from time to time must have pointed out that the real owner are not the same who are running the business. 45. Thus, considering the fact that no unaccounted production was undertaken by assessee and other facts stated above and following case laws cited above, it is requested that no adverse inference may kindly be drawn against the assessee and addition made in the hands of assessee may kindly be deleted. Assessee submission for AY 2012-13 and AY 2013-14, in respect of addition of Rs. 10,00,000/-: The Ld. AO. has made an addition amounting to Rs 10,00,000/-in the hands of assessee on account of expenses incurred by the assessee on his son's marriage i.e. first son Sh. Ankush in AY 2012-13 and second son Sh. Ankur in AY 2013-14 without considering the following facts: * That at the t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ee has actually incurred expenses of Rs 2,00,000/- on his foreign tour. * That assessee during his response at the time of assessment proceedings has clarified that the source of such expenditure is out of cash savings. * That the addition made by Ld. AO. without any supporting evidence and documents is not valid in the eyes of law. Sir, considering the above facts, the addition amounting to Rs 2,00,000/- made u/s 69C, on account of unexplained expenditure, without proving or bringing on record any evidence that the assessee has incurred said expenditure on foreign tour, may kindly be deleted. AY 2012-13 to AY 2019-20 Submission regarding addition of Unexplained receipts amounting to Rs. 1,05,53,458/- in AY 2012-13 and all subsequent years 2019-20. It is submitted that the AO has made an addition amounting to Rs 1,05,53,458/- on account of unaccounted money without considering the following facts : * That the assessee has already disclosed the sale / gross receipts on account of sale and purchase of property amounting to Rs 1,06,35,600/- in trading profit and loss account prepared during the year. * That the assessee has also disclosed the same in his original income t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....business, as per the choice of anybody else. In our case A.O tried to twist the arm of the assessee by twisting his sales and forgot that whatever he has done, he has done as per his business exigency and wisdom at any given time and no hypothesis can be applied by A.O just sitting on his chair". Sir, the Ld. AO has not followed the principle of consistency that in one year i.e AY.2011-12 and AY.2017-18 he is accepting the receipts of the assessee on account of sale and purchase of property and for other year i.e AY. 2012-13 and subsequent years he is rejecting the same. Sir, it not a case wherein assessee has not disclosed his receipts from such business in his original return. Assessee year on year basis is filing his return and regularly disclosing true and actual income including the receipts earned on account of sale and purchase of property which is also accepted in the AY. 2011-12 and AY. 2017-18. Thus, the addition made on account of unexplained deposits may kindly be deleted. Asst year : 2019-20 : Submission of the assessee in respect of addition of Rs. 2,00,00,000/- Sir, as regards addition of Rs. 2,00,00,000/-, it is submitted that in the list of Sundry creditors, the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion 68 of the Act. The assessee had proved the genuineness and creditworthiness of the company in the aforementioned paras, so the transaction should not be treated as unexplained u/s 68 of the Act. Sir, it is further submitted that assessee has explained the source of transaction along with documentary proof substantiated by the evidences stated above. The assessee is not required to explain the source of source. The source of source can be questioned from them only and not from the assessee. Once it is proved and accepted by them that they made payments to assessee, the transaction stands explained in the hands of assessee. Sir, it is stated that once the assessee furnishes CIN no., proof of address, confirmation, it is presumed that identity and creditworthiness is proved. Ld. AO made addition on the surmises, conjectures and assumptions and without any corroborative evidences. 47. In this regard, reliance is placed on the following decisions: Debjyoti Dutta v/s ITO, ITAT Cuttack, ITA 390/Ctk/2014 in which it was held as under: Income-Cash credit-Discharge of burden of proof-Amount of Rs. 25,00,000 was taken by the assessee from M through the brother of the assessee-M i....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... fails to satisfy as to how he had actually received the said amount and happened to keep the same in the bank, the said amount cannot be treated as income of the assessee from undisclosed source. In other words, the genuineness as well as the creditworthiness of a creditor have to be adjudged vis-a-vis the transactions, which he has with the assessee. The reason why we have formed the opinion that it is not the business of the assessee to find out the actual source or sources from where the creditor has accumulated the amount, which he advances, as loan, to the assessee is that so far as an assessee is concerned, he has to prove the genuineness of the transaction and the creditworthiness of the creditor vis-a-vis the transactions, which had taken place between the assessee and the creditor and not between the creditor and the sub-creditors, for, it is not even required under the law for the assessee to try to find out as to what source or sources from where the creditor had received the amount, his special knowledge under s. 106 of the Evidence Act May very well remain confined only to the transactions, which he had with the creditor and he May not know what transaction(s) had tak....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iewed from this angle, we have no hesitation in holding that in the case at hand, the AO had failed to show that the amounts, which had come to the hands of the creditors from the hands of the sub-creditors, had actually been received by the sub-creditors from the assessee. In the absence of any such evidence on record, the AO could not have treated the said amounts as income derived by the appellant from undisclosed sources. The learned Tribunal seriously fell into error in treating the said amounts as income derived by the appellant from undisclosed sources merely on the failure of the sub-creditors to prove their creditworthiness. It is, no doubt, true that in the present case, the findings arrived at by the AO as well as the learned Tribunal are findings of fact, but since these findings are based on an wholly erroneous view of law, such findings cannot be said to be mere findings of facts. It is trite that no assessment can be made contrary to the provisions of law. In the case at hand, the very basis for making assessment is under challenge. If the assessment is based on a completely erroneous view of law, such findings cannot be regarded as mere findings of fact, but must ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....m which money was received along with its identity and also proved the credit worthiness of the creditor. 2. Assessee has discharged the burden so placed on him and shifted the burden to the Ld. AO. 3. There is no direct evidence or indirect/circumstantial evidence that the money which the assessee received from the creditor actually belongs to and was owned by the assessee himself. 52. Thus, considering the facts and circumstances of the case and case laws cited above, it is requested that no adverse inference may kindly be drawn against the assessee and addition made in the hands of assessee may kindly be deleted. 53. AY 2017-18 and AY 2018-19 and AY 2019-20 Submission of the assessee in respect of the alleged unexplained investments in construction of building located at 518 Model Town, Jalandhar, additions u/s 69B of the Act 61 : Rs 27,61,732/- in Asst Year: 2017-18, Rs. 1,05,974/- in Asst Year: 2018-19 Rs. 1,05,132/- in Asst Year: 2019-20 54. It is submitted that the entire additions u/s 69B of the Act 61, has been made on the basis of department valuation officers report only and it is submitted that addition has been made on the basis of valuation report and there....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ue or should be received by the assessee over and above declared by the assessee and the same should not be deemed to accrue or to be received which in fact never accrue or was never received. In the instant case, the AO has not brought on record any material to show that assessee paid higher consideration towards his investment in land and building then shown by him in his books of account. In absence of such material no addition can be made. learned CIT(A), therefore, has rightly deleted this addition of Rs. 40,24,460 based on the report of DVO and the order passed by him is hereby upheld. In the result, Revenue's appeal is dismissed." 8. Before us counsel for the Revenue vehemently contended that there was considerable gap between the valuation disclosed in the sale deed, which was also adopted for the purpose of assessee's books and what was estimated by the Stamp Duty Authority for the purpose of collecting stamp duty. He submitted that the AO, on the basis of DVO's report, found that the investment was much greater than what was reflected in the books made by the assessee in purchase of such property. counsel placed heavy reliance under s. 142A of the Act in sup....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d seizure-Block assessment-Computation of undisclosed income-Difference in the cost of construction cannot constitute undisclosed income for the block period-On verification of the revised report submitted by the DVO, the difference between the valuation of the assessee-firm and the DVO is less than 15 per cent-There is no specific finding by the AO with regard to any concealment-Further, there was no material found during the search indicating that there were expenses incurred on construction by the assessee that were not recorded in the books of accounts-In the absence of any seized material and solely on the basis of the report of the DVO, there cannot be any finding with regard to the undisclosed income" 61. Thus on the basis of above submissions and principles laid down by various Courts it is requested that addition made in the hands of assessee may kindly be deleted. 62. It is further submitted that till the date of search assessee has done only civil structure of the property and no sanitary / elevation has been done. The valuation officer has hypothetically estimated the figures on the basis of value of construction. No reliance has been placed upon the standard rates sp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the property the valuation officer has taken the rate as Rs. 2872/- per sqft against the normal rate for civil structure of Rs. 1300-1400 per sqft as per PWD standards. c) During the valuation of basement valuation officer has separately valued the basement wall at Rs. 12,00,000/- which is against the standard. The valuation of said wall should include in the PWD rates of Rs. 1300/- per sqft. So, the figures of valuation have been hypothetically overvalued. d) As regard valuation of ground floor it is stated that the valuation officer has taken the rate as Rs. 1552/- per sqft against the normal rate for complete construction of Rs. 700/- per sqft as per PWD standards. e) As regard valuation of first floor it is stated that the valuation officer has taken the rate as Rs. 1467/- per sqft against the normal rate for complete construction of Rs. 600/- per sqft as per PWD standards. It is further explained that till the date of search assessee has done only civil structure of the property and no sanitary / elevation has been done. The rates of complete construction as per PWD are Rs. 700/- and Rs. 600/- for ground floor & first floor respectively and we have incurred Rs. 157.71 l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and none found in course of search, the additions has been rightly deleted by the Ld. CIT (A) and the order of the Ld first appellate authority may please be upheld. 67. We have heard the rival submissions at length on all the issues and considered all the materials on record and the written arguments and submissions filed by the assessee, which is taken on record. 67.1 We are of the opinion that, in the instant case no incriminating materials has been found from the premises of the assessee in course of search and seizure carried out u/s 132 of the Act 61, in fact no materials has been found and the entire assessment has been based on estimation of alleged suppression of production of cigarette and filters, worked out on the sole basis of statements of employees and other persons recorded in course of survey u/s 133A carried out in adjoining premises of the four manufacturing units, which admittedly belongs to other parties, who are all legally distinct and separate entities, with separate PAN, Central Excise registration, GST registration, income tax returns and separate assessments. Any document impounded in form of registers and annexures as stated in the remand report, has b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ase of Abhisar Buildwell Pvt Ltd (supra), and initiation of proceedings by issue of notice u/s 153A, cannot be undertaken simply on the basis of recorded statement and depositions of employees of the assessee, in absence of any incriminating materials brought on record and statements of employees, cannot be considered as incriminating materials, unless supported by corroborative evidences. 69. Moreover, in the instant case the assessment proceedings for the Asst year was already completed / unabated proceedings, and in absence of any incriminating materials found in course of search, relating to the year, the same cannot be disturbed. 70. Before we conclude, we note that both the judgements referred to by the revenue in the grounds of appeal, namely Saumya Construction (P) Ltd, (Gujrat HC) 2017 / 81 taxmann.com 292 and the judgment in the case of M/s Kesarwani Zarda Bhandar Sahson, Allahabad, has already been considered by the Hon'ble Apex Court, in this order, and the law has been laid down by the Hon'ble court. 71. Relevant portion of the observation of the Hon;ble Apex court is reproduced for ready reference : "13. For the reasons stated here in above, we are in complete ag....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ears under appeal, with necessary changes in arithmetical figures. 74. Asst year : 2012-13 and 2013-14 : (Addition of Rs. 10,00,000/- u/s 69C) The addition of Rs. 10 lakh for each year, u/s 69C of the Act 61, made on account of wedding expenses of both the sons of the assessee, is again based on no evidence, simply on presumption and assumption, without any reference to any material at all. Moreover, the explanation of the assessee, regarding wedding expenses being a very small affair, the necessary expenses being borne out of personal drawings, also cannot be disbelieved, without any contradictory evidence or materials on record. As such these additions are also deleted. Asst years : 2013-14, 2017-18 and 2018-19 (Addition on account of Foreign Tour): 75. The addition of Rs. 2 lakhs, on account of foreign tour expenses, for each of the above three years, are also based on " no documentary evidence ", simply on estimation and presumption, and there is no incriminating materials on record. On the other hand the assessee has clarified and explained the same in course of normal assessment proceedings, which cannot be contradicted in absence of materials on record. As such these addi....