M/s. Allied Perfumers Pvt. Ltd., Delhi V. DCIT, New Delhi

ITA 3991/DEL/2015

AI Insights

The case involves multiple appeals by M/s Allied Perfumers Pvt. Ltd. against the orders of the Commissioner of Income Tax (Appeals) which upheld the assessments made under sections 153A/143(3) of the Income Tax Act, 1961. The primary contention was that no incriminating material was found during the search operations that could justify the additions made to the income of the assessee for the assessment years in question. The Tribunal examined the legality of the proceedings initiated under section 153A, the rejection of the books of account, and the additions made on account of alleged bogus sales to Dharampal Satyapal Ltd.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 115962 (ITAT-DELHI)
• Duration Of Justice: 7 year(s) 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 13-02-2023
• Assessment Year: 2008-2009
• Appeal Filed On: 14-06-2015
• Other Referred Cases: CIT vs. Kabul Chawla, All Cargo Global Logistics Limited Vs. DCIT, ACIT, Central Circle-16, New Delhi vs. Vinita Chaurasia, ACIT, Central Circle-4, New Delhi vs. M/s. Moolchand Steels Pvt. Ltd., Pr. CIT vs. Meeta Gutgutia, PCIT Vs. Subhash Khattar
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Source of fund
• Section: 32; 145; 271(1)(c); 142(1); 153A; 143(1); 143(2); 72; 153; 145(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’, NEW DELHI Before Sh. C. M. Garg, Judicial Member Dr. B. R. R. Kumar, Accountant Member ITA No. 3989/Del/2015 : Asstt. Year : 2005-06 ITA No. 3990/Del/2015 : Asstt. Year : 2006-07 ITA No. 5179/Del/2015 : Asstt. Year : 2007-08 ITA No. 3991/Del/2015 : Asstt. Year : 2008-09 ITA No. 3992/Del/2015 : Asstt. Year : 2010-11 M/s Allied Perfumers Pvt. Ltd., Rajiv Saxena & Co. Adv. & Solictors, H.O. 318-D, Mayur Vihar, Phase-II, New Delhi-110091 Vs DCIT, Central Circle-1, New Delhi (APPELLANT) (RESPONDENT) PAN No. AACCA4321K Assessee by : Sh. Rajeev Saxena, Adv. & Sh. Shyam Sunder, Adv. Revenue by : Sh. P. Praveen Sidharth, CIT DR Date of Hearing: 14.02.2023 Date of Pronouncement: 28.04.2023 ORDER Per Dr. B. R. R. Kumar, Accountant Member: The present appeals have been filed by the assessee against the orders of ld. CIT(A)-25, New Delhi dated 20.03.2015 and 31.03.2015. 2. Since, the issues involved in these appeals in ITA Nos. 3989 to 3992/Del/2015 are similar, they were heard together and being adjudicated by a common order. The assessee has raised the following grounds of appeal: “1. That the learned Commissioner of Income Tax (Appeals) has grossly erred both in law and on facts in ITA Nos. 3989 to 3992 & 5179/Del/2015 Allied Perfumers Pvt. Ltd. 2 upholding the order of assessment framed under section 153A/143(3) of the Income Tax Act, determining the total income of the appellant company at Rs. 1,45,59,303/-. 2. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in failing to appreciate that during the course of search, admittedly no incriminating material was found as a result of search conducted under section 132(1) of the Act, as such, learned Deputy Commissioner of Income Tax has no jurisdiction to initiate the proceedings under section 153 A of the Act. 3. That the learned Commissioner of Income Tax (Appeals) has erred in upholding the order of assessment failing to appreciate that since for valid initiation of proceedings under section 153A of the Act, the preconditions as envisaged u/s 153A of the Act has not been satisfied, as such, initiation of proceedings u/s 153A of the act as also the assessment made u/s 153A/143(3) of the Act are without jurisdiction. 4. That while upholding the order of assessment, learned Commissioner of Income Tax (Appeals) has failed to appreciate that since on the date of search, no proceedings were pending which could be held to be abated, as such, unless some incriminating material was found as a result of search, addition made is outside the scope of section 153A of the Act. 5. That the learned Commissioner of Income Tax (Appeals) has grossly erred in upholding the rejection of books of account under section 145 of the Act, failing to appreciate that appellant is maintaining complete books of account and same was also duly verified during the course of search conducted on 21.03.2007 and also in the assessment framed under section 153A/143(3) dated 24.12.2009 in pursuance thereto. 5.1 That the learned Commissioner of Income tax (Appeals) has grossly erred in upholding the rejection of the books of account failing to appreciate that ITA Nos. 3989 to 3992 & 5179/Del/2015 Allied Perfumers Pvt. Ltd. 3 appellant on 10.03.2011 duly produced the books of account maintained in the pendrive and also the hard copy of the books of account and the pendrive after forensic examination was found to be maintained before the date of search. 5.2 That the learned Commissioner of Income Tax (Appeals) has grossly erred in upholding the rejection of the books of account failing to appreciate that while rejecting the books of account no defect whatsoever has been pointed out, hence rejection of books of account is unsustainable in law. 6. That the learned Commissioner ok Income 'lax (Appeals) has grossly erred in upholding the addition of Rs. 87,53,363/- by holding that sales made of Rs. 25,75,40,089/- to Dharmpal Satyapal is bogus failing to appreciate that aforesaid sum has been received by account payee cheques and has also been duly recorded in the books of the appellant. 7. That the learned Commissioner of income Tax (Appeals) has grossly erred in failing to appreciate that sales made by the appellant a has duly been disclosed in VAT/Sales Tax Returns as well as Excise tax returns and has also been transported to the premises of the purchaser through proper transport channels. 8. That the learned Commissioner of Income Tax (Appeals) has grossly erred in failing to appreciate that aforesaid addition made amounts to double addition as sale made has duly been offered for taxation as such, addition of GP in respect of the aforesaid alleged bogus sales amounts to double addition and hence-is liable to be deleted. 9. That while upholding the aforesaid addition, learned Commissioner of income Tax (Appeals) has failed to appreciate that no proper and meaningful opportunity was granted to the assessee. 10. That learned Commissioner of Income Tax (Appeals) has erred in upholding the disallowance by ITA Nos. 3989 to 3992 & 5179/Del/2015 Allied Perfumers Pvt. Ltd. 4 placing reliance on the judgments which are distinguishable and without considering the factual position and submissions made by the appellant.” 3. In ITA No. 5179/Del/2015, the assessee has raised the following grounds of appeal: “1. That the learned Commissioner of Income Tax (Appeals) has grossly erred both in law and on facts in upholding the order of assessment framed under section 153A/143(3) of the Income Tax Act, determining the total income of the appellant company at Rs. 1,54,00,217/- as against income returned at Rs. 1,35,72,310/-. 2. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in failing to appreciate that during the course of search, admittedly no incriminating material was found as a result of search conducted under section 132(1) of the Act, as such, learned Deputy Commissioner of Income Tax has no jurisdiction to initiate the proceedings under section 153A of the Act. a. That the learned Commissioner of Income Tax (Appeals) has erred in upholding the order of assessment failing to appreciate that since for valid initiation of proceedings under section 153A of the Act, the preconditions as envisaged u/s 153A of the Act has not been satisfied, as such, initiation of proceedings u/s 153A of the act as also the assessment made u/s 153A/143(3) of the Act are without jurisdiction. b. That while upholding the order of assessment, learned Commissioner of Income Tax (Appeals) has failed to appreciate that since no incriminating material was found as a result of search, as such, addition made is outside the scope of section 153A of the Act. 3. That the learned Commissioner of Income Tax (Appeals) has grossly erred in upholding an adhoc addition of Rs. 17,84,787/- on account of alleged ITA Nos. 3989 to 3992 & 5179/Del/2015 Allied Perfumers Pvt. Ltd. 5 commission on the alleged bogus sales made of Rs. 4,14,10,385/- to Dharmpal Satyapal Ltd. failing to appreciate that sales made by the appellant is genuine and sales consideration declared in the books of account has been received by account payee cheques and has also been duly recorded in the books of the appellant because. a. That the learned Commissioner of Income Tax (Appeals) has grossly erred in holding that sales made by the assessee of Rs.4,14,10,385/- to Dharmpal Satyapal Ltd. is outside the books of account as sales made to the Dharmpal Satyapal Ltd. has duly been recorded in the books of the assessee as such, finding of the learned Commissioner of Income Tax (Appeals) is highly arbitrary, erroneous and perverse and hence liable to be deleted. b. That the learned Commissioner of Income Tax (Appeals) has grossly erred in failing to appreciate that sales made by the appellant a has duly been- disclosed in VAT/Sales Tax Returns as well as Excise tax returns and has also been transported to the premises of the purchaser through proper transport channels. c. That the learned Commissioner of Income Tax (Appeals) has grossly erred in failing to appreciate that aforesaid addition made amounts to double addition as sale made has duly been offered for taxation as such, addition of GP in respect of the aforesaid alleged bogus sales amounts to double addition and hence is liable to be deleted. 4. That the learned Commissioner of Income Tax (Appeals) has grossly erred in upholding the rejection of books of account under section 145(3) of the Act failing to appreciate that books of the account of the appellant are duly audited and books of account of the appellant has been rejected even without pointing out any specific defect in the books of the assessee as such, rejection of the books by the learned Assessing officer was wholly unjustified in law. ITA Nos. 3989 to 3992 & 5179/Del/2015 Allied Perfumers Pvt. Ltd. 6 5. That the learned Commissioner of Income Tax (Appeals) has grossly erred in failing to appreciate that impugned addition has been made solely on the basis of the suspicion, surmises and conjectures and was not based on any incriminating material found as a result of the search as such addition made is liable to be deleted. 6. That the learned Commissioner of Income Tax (Appeals) has further erred in failing to appreciate that learned Assessing officer has made the addition on the basis of the material found from the premises of the Dharmpal Satyapal Ltd. who is a third party as such, unless such party is confronted to the assessee for the cross examination of the assessee addition made is wholly unsustainable in law and hence liable to be deleted. 7. That the learned Commissioner of Income Tax (Appeals) has grossly erred in recording adverse findings which are perverse and have been recorded with preconceived notions and without considering the factual substratum of the case and hence such findings are vitiated and deserves to be deleted.” 4. The assessee filed return of income on 31.10.2005 declaring total income at Rs.56,98,795/-. The assessee company is engaged in the business of manufacturing of perfumery, compounds & trading of herbs, aromatics, chemicals, essential oils & perfumery compounds. A search u/s 132 has been conducted on 03.03.2021 in the case of the assessee. ITA Nos. 3989 to 3992 & 5179/Del/2015 Allied Perfumers Pvt. Ltd. 7 5. For the Assessment Years before us, the details of the filing of ITRs are as under: Sl. No. A.Y. Date of filing of the return Due date of issue of notice u/s 143(2) Returned income 1. 2005-06 31.10.2005 30.09.2006 Rs.58,02,940 2. 2006-07 29.10.2006 30.09.2007 Rs.89,08,880 3. 2007-08 29.10.2007 30.09.2008 Rs.1,35,72,310 4. 2008-09 26.09.2008 30.09.2009 Rs.2,95,50,990 6. During the proceedings u/s 153A, the AO made addition on account of commission on bogus sales to DS Ltd. @ 3.18%, 4.31%, 8% and 3.4% for various years that are under appeal before us. The said bogus sales have been treated as undisclosed income in the hands of Dharampal Satyapal Ltd. wherein the additions stands deleted. 7. During the hearing, it has been specifically argued by the ld. AR that the addition has been made bereft of any seized material. Rebutting the arguments of the ld. AR, the revenue submitted that during the course of search u/s 132(1) on 04.03.2011 in the case of SVIL and APPL, as per page no. 54, 55, & 56 of Annexure A-1 party AB-2 certain loose papers containing the details of transactions entered into with the DS group were found and seized. It was argued by the revenue that these papers also consist the details of excess amount taken from DS group which was to be repaid. The documents seized from the SVIL group as well as the DS group clearly indicate that both the parties were indulged into overbilling of the sales and the excess payment received through cheque was being reverted to the DS group. ITA Nos. 3989 to 3992 & 5179/Del/2015 Allied Perfumers Pvt. Ltd. 8 8. We find that the seized material pertains to the Assessment Year 2011-12. Further, we have gone through the Assessment Order to find out whether there was any reference to seized material considered by the AO while making the addition. For the sake of ready reference, the order of the AO for the A.Y. 2005-06 is reproduced in toto: “In this case, a return of income for the assessment year 2005-06 was filed showing total income at Rs. 56,98,705/- on 31.10.2005. The same was processed u/s 143(1) of the Income Tax Act. 1961. The scrutiny assessment order u/s 153C/143(3) was passed on 24.12.2009 determining the total income at Rs.58,02,940/-. Subsequently a search and seizure operation u/s 1 32 of the Act was carried out on 03.03.2011 in the Surya Vinayak group of cases and also in the case of the assessee. Notice u/s 153(A) of the Income Tax Act, 1961 dated 08.02.2012 was issued by the ACIT, CC- 25, New Delhi to the assessee requiring him to tile return of income within 20 days of service of this notice. Thereafter, the case of the assessee was centralized to this charge vide order u/s 127 vide letter No. CTT(C)-1/Del/Centralization/2012-13/17 dated 03.04.2012 passed by the jurisdictional CIT for transferring the jurisdiction of present case. In response to notice u/s 153A, the assessee filed return of income on 24.02.2012 declaring a net taxable income of Rs. 56,98,795/-. Notices u/s 143(2) and 142(1) dated 20.06.2012 along with the questionnaire were issued and served to the assessee. 2. In response to these notices, Sh. Arun Gupta, CA and AR of the assessee, attended the assessment proceedings from time to time and furnished various details which are placed on record. 3. The assessee company is engaged in the business of manufacturing of perfumery, compounds and trading of herbs, aromatics, chemicals, essential oils and perfumery compounds as per the 3CD report. During the assessment proceedings, relevant details tiled in connection with the sources of income have been examined. ITA Nos. 3989 to 3992 & 5179/Del/2015 Allied Perfumers Pvt. Ltd. 9 4. In the case of the assessee, the scrutiny assessment order u/s 153C/143(3) for the current assessment year was passed on 24.12.2009 and the total income was assessed at Rs.58,02,940/- after making various additions / disallowance. Against the order, the assessee filed appeal before the Ld. CIT(A)-I, New Delhi who vide his order dated 25.03.2011 confirmed the additions/ disallowances made in previous assessment order. Accordingly, total income for the year under consideration is taken at Rs. 58,02,940/-. 5. Bogus Sales made to Dharmpal Satyapal Ltd. 5.1. The search and seizure proceedings in the case of the assessee company were carried out on 03.03.2011 by the Investigation Wing of the Department, New Delhi and in the appraisal report prepared by the Investigation Wing, the bogus sales made by the assessee company i.e. Allied Perfumers Pvt. Ltd. to Dharmpal Satyapal Ltd. has been worked out for the assessment year 2005-06 relevant to financial year 2004-05 as under:- F.Y. Sale in Kgs Amount 2004-05 8001 25,75,40,089/- The above bogus sales has been worked out on the basis of the facts/findings/statements/ analysis of the records available in this office. In this regard, a show cause notice dated 04.03.2013 issued and duly served upon the assessee company asking why the commission earned on the bogus sales made to Dharmpal Satyapal Ltd. should not be estimated at the rate of 10% of amount of bogus sales of Rs. 25,75,40,089/- and added to the total income. 5.2 In response to the above, the assessee company vide letter dated 22.03.2013 tiled submission contending as under: "Your honour, in this regard, we hereby submit before your goodself that during the captioned assessment year, sale of Rs.25,75,40,0879/- has been made by the assessee company to M/s Dharampal Satyapal Ltd. and the said sale could not he termed as bogus because of the fact that all the sales made by the assessee company has been made through proper ITA Nos. 3989 to 3992 & 5179/Del/2015 Allied Perfumers Pvt. Ltd. 10 transport channels, all the sales has been made by charging the applicable sales tax and excise and all other applicable taxes on the sale of goods by the company. Your honour, alt the sales have been duly incorporated in the VAT/ Sales Tax Returns as well as Excise Returns filed with the respective government departments and all the said government departments whether it is Sales Tax Department or Excise Department has duly acknowledge the same as correct and assessed the same as they have been filed with these government departments. Your honour, all such VAT and Excise Returns has been even found can/ seized by the investigation wing during the search proceedings. Your honour, further it has been submitted that all the sales made by the assessee company has been duly accounted for as purchases by the M/s Dharampal Satyapal Ltd. and the said fact has been duly acknowledged by the Investigation wing during the post search proceedings also, further, your honour, all the sale proceeds have been received by the assessee company through account payee cheques only and the same has been duly credited to the Bank Accounts of the assessee company which has been already submitted before your goodself. Your honour, since all the material sold to M/s Dharampal Satyapal Ltd. have been duly transferred through the proper transport channel, all the sale proceeds have been duly received by the assessee company through account payee cheques, all the sales have been duly accepted by the Sales fax/ Excise Departments, then how such sales be termed as bogus. Your honour, further it has been submitted that the above working made by the Investigation wing has been made by the investigation wing only on the basis of something found at the premises of M/s Dharampal Satyapal Ltd., a third party and nothing incriminatory material has been found at the premises of assessee company; therefore the sales made by the assessee company to M/s Dharampal Stayapal Ltd. could not he termed as bogus and addition of commission (a) 10% on the sales made will be completely unjustified and against the provisions of law." 5.3 The reply filed by the assessee company has been carefully examined and the same is not found to be acceptable. Before dealing with the reply of the assessee as quoted above, it is relevant to refer to the ITA Nos. 3989 to 3992 & 5179/Del/2015 Allied Perfumers Pvt. Ltd. 11 findings given in the appraisal report regarding non-production of books of accounts during the search and post search proceedings. The findings with respect to books of accounts given in the appraisal report are reproduced hereunder:- "Absence of Books of accounts of SVIL Group on the day of search On the date of search & seizure operation on 03.03.2011, the books of account of the Floriana Group of companies were not found at the office at 11, Prem Sudan, Rajendra Place, New Delhi. Also, a survey was conducted in office of the Chartered Accountant cum Auditor of the Firm M/s Agarwal Kamal Kishore at Daryaganj. He also confirmed that no books of accounts are available with him. Despite repeated requests hooks of accounts were not furnished to the search party for verification. On the date of search, statement of Shri Satish Jain, Director was recorded. He was asked to produce the hooks of accounts hut he failed to produce hooks of accounts though he admitted that the same are maintained in this office only. As per report of Computer Expert called for cloning the computers of group companies during the search operation, the server was old and new hard discs were installed on 10.02.2011. Server for busy accounting software was also found empty. After this, a pen drive containing books of account was produced on 04.03.2011. Examination of this pen drive revealed that this pen drive contain files created on 10.02.2011. Shri Sanjay Jain was asked to explain, where the books of account were kept prior to their transfer in pen drive on 10.02.2011, but he could not give any convincing reply. Further, Shri Sanjay Jain was asked to produce the hard disc or the pen drive in which the accounts were kept prior to 10.02.2011. On 10.03.2011 Shri Sanjay Jain, Chairman of Floriana Group produced a pen drive and hard copies of hooks of account. This pen drive was sent for forensic examination in special cell. It was reported by the expert that this pen drive was last operated on 09.02.2011. ITA Nos. 3989 to 3992 & 5179/Del/2015 Allied Perfumers Pvt. Ltd. 12 In view of the above discussions observations a very safe and sound conclusion can be drawn that the hooks of accounts of Perfumery Division of Surya Vinayak Industries Limited and Allied Perfumers Pvt. Ltd. are not reliable at all." 5.4 Further, during the course of search proceedings and post search investigations, it was found that M/s Allied Perfumers Private Limited had sold Sandalwood Oil (SU) to M/s Dharampal Satyapal Limited in the year under consideration. This sandalwood oil (SU) is stated to be a perfumery compound with base of sandalwood oil and other perfumery compounds. And when it was investigated as to what these perfumery compounds are, nothing could be gathered with regard to their existence. Findings of survey conducted on the suppliers of perfumery compounds fully buttress the finding. And more importantly, when the balance sheets of APPL were examined, it is seen that there is no sandalwood oil available with the company so as to enable it to produce the so called sandalwood oil (SU). M/s APPL is making sales out of the compounds purchases either from M/s SVIL or any other intermediary entities as mentioned above. These transactions are bogus and no products are manufactured out of these. As, such no actual sales can be made by this company to M/s DSL. Moreover whatever sandalwood oil is included in these compounds, received from M/s SVIL directly or indirectly, credit for tire same has already been given in, the case of M/s SVIL, which is the total production of sandalwood oil as reduced by oil sold to third parties, in view of these facts/finding s. the entire sales of APPL made to DSL in the year under consideration is bogus. From the above findings, which have emerged pursuant to survey operations conducted by the Investigation Wing of the department, it is clear that the so called 'perfumery compounds’ are nothing but an artificial/bogus item of raw material being devised by SVIL / APPL to enhance their turnovers and to enable them to issue bogus bills of sandalwood oil/sandalwood oil [C]/ sandalwood oil [SU]. 5.5 Now coming to the submission of the assessee, it is seen that the assessee has not given specific reply and it has only been submitted that the sales made to Dharmpal Satypal Ltd. have been accounted for as purchases in the books of Dharmpal Satypal Ltd. and the sales have been ITA Nos. 3989 to 3992 & 5179/Del/2015 Allied Perfumers Pvt. Ltd. 13 made through proper transport channels. The general reply given by the assessee is not supported by the any documentary evidences / bills / vouchers/transport related documents as the assessee has not produced any books of accounts/documents/bills/vouchers etc. during the course of entire assessment proceedings and therefore submission of the assessee is not verifiable with any cogent evidences, which could support his submissions. 5.6 In view of the above facts, it is clear that the assessee has not produced books of accounts neither during the course of search, nor during the post search and not even the course of assessment proceeding, therefore, I am satisfied that the books of accounts of the assessee are not correct or complete and therefore; the assessee has not produced the same deliberately. Thus, the books of accounts of the assessee are liable to be rejected u/s 145 of the Act and accordingly the same are rejected u/s 145 of the IT Act. 5.7 Thus, under the facts and circumstances of the case as elaborated above and considering the submission of the assessee, it would be reasonable to base the estimation to the rate of gross profit as disclosed in the 3CD report by the assessee i.e. 3.4% for the purpose of estimation of commission on bogus sales made to Dharampal Satyapal Ltd. 5.8 In view of the submission of the assessee and considering the totality of the facts and circumstances of the case, commission on bogus sales of Rs. 25,75,40,089/- made to Dharampal Satyapal Ltd. is estimated 3.40%, the amount of commission on bogus sales works out to Rs. 87,56,363/- and the same is added to the total income of the assessee. From the above, it is evident that the assessee has concealed its income/furnished inaccurate particulars of income within the meaning of section 271(1)(c) of the IT Act, penalty proceedings u/s 271 (1)(c) is hereby initiated. (Addition : Rs. 87,56,363/-) 9. Thus, on going through the Assessment Order, no reference to the seized material could be deciphered. Further, ITA Nos. 3989 to 3992 & 5179/Del/2015 Allied Perfumers Pvt. Ltd. 14 the seized material relied upon by the ld. DR pertain to Assessment Year 2011-12. Since, the due date for issue of notice u/s 143(2) has already been expired, the assessments for these years cannot be treated as abated assessments. It is a settled position of law by this time that in the completed assessments, cannot be interfered u/s 153A bereft of any seized material. 10. Reliance is being placed on the following case laws:  CIT vs. Kabul Chawla (2016) 380 ITR 573  All Cargo Global Logistics Limited Vs. DCIT [2012] 18 ITR 106  ACIT, Central Circle-16, New Delhi vs. Vinita Chaurasia, ITA No. 5957/DEL/2015 dated 05.10.2018  ACIT, Central Circle-4, New Delhi vs. M/s. Moolchand Steels Pvt. Ltd., ITA No. 2544/DEL/2015 dated 10.10.2018 etc. 11. The Hon’ble Delhi High Court in the case of CIT Vs Kabul Chawla (supra) held as under: “vii. Completed assessments can be interfered with by the A.O. while making the assessment under section 153A only on the basis of some incriminating material unearthed during the course of search or requisition of documents or undisclosed income or property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment.” 12. The Hon'ble Delhi High Court in its recent decision in the case of Pr. CIT vs. Meeta Gutgutia (2017) 395 ITR 526 in paras 69 to 72 has held as under: ITA Nos. 3989 to 3992 & 5179/Del/2015 Allied Perfumers Pvt. Ltd. 15 “69. What weighed with the Court in the above decision was the “habitual concealing of income and indulging in clandestine operations” and that a person indulging in such activities “can hardly be accepted to maintain meticulous books or records for long.” These factors are absent in the present case. There was no justification at all for the AO to proceed on surmises and estimates without there being any incriminating material qua the AY for which he sought to make additions of franchisee commission. 70. The above distinguishing factors in Dayawanti Gupta (supra), therefore, do not detract from the settled legal position in Kabul Chawla (supra) which has been followed not only by this Court in its subsequent decisions but also by several other High Courts. 71. For all of the aforementioned reasons, the Court is of the view that the ITAT was justified in holding that the invocation of Section 153A by the Revenue for the AYs 2000-01 to 2003- 04 was without any legal basis as there was no incriminating material qua each of those AYs. Conclusion 72. To conclude: (i) Question (i) is answered in the negative i.e., in favour of the Assessee and against the Revenue. It is held that in the facts and circumstances, the Revenue was not justified in invoking Section 153A of the Act against the Assessee in relation to AYs 2000-01 to AYs 2003-04.” 13. The decisions of the Hon’ble Jurisdictional High Court are squarely applicable to the facts and circumstances of the case as no assessment was pending on the date of search and the ITA Nos. 3989 to 3992 & 5179/Del/2015 Allied Perfumers Pvt. Ltd. 16 addition has been made merely on the basis of the book entries already disclosed to the department. Further, reliance is also placed on the decision of the Hon’ble Jurisdictional High Court in the case of PCIT Vs. Subhash Khattar in ITA No. 60/2017 dated 25.07.2017. 14. Further, the additions made in the case of Dharampal Satyapal Ltd. pertaining to the said sale of perfumery compounds stands deleted by the Co-ordinate Bench of Tribunal in the case of DCIT Vs. Dharampal Satyapal Ltd. in ITA Nos. 3877 to 3881/Del/2016 for A.Y. 2005-06 to A.Y. 2009-10 and in the case of Dharampal Satyapal Ltd. Vs. DCIT in ITA Nos. 3738 & 3739/Del/2016 for A.Y. 2010-11 and A.Y. 2011-12. 15. Hence, keeping in view, the entire factum of the case, we hold that the addition made vide the assessment u/s 153A in the absence of any incriminating material is not sustainable. 16. In the result, the appeals of the assessee are allowed. Order Pronounced in the Open Court on 28/04/2023. Sd/- Sd/- (C. M. Garg) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 28/04/2023 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR