Pradeep Kumar Poddar, Chaibasa V. DCIT,C,C, Jamshedpur

ITA 42/RAN/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 4517 (ITAT-RANCHI)
• Duration Of Justice: 3 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 29-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Document seized; Question of law; Reasonable cause; Corroborative evidences; Documents seized
• Section: 132; 139; 143(3); 142(1); 153A; 143(1); 143(2); 264; 158BC; 73; 153; 145(3); 22; 153C

Judgement Text

IT(SS)A Nos. 15, 16, 17, 18, 19, 20/RAN/2019 Assessment Year: 2004-05, 05-06, 06-07, 07-08, 08-09, 09-10 & ITA No. 42 & 43,RAN/2019 Assessment Year: 2008-09 & 2010-2011 Pradeep Kumar Poddar, Chaibasa 1 IN THE INCOME TAX APPELLATE TRIBUNAL, ‘RANCHI BENCH’ AT KOLKATA, [Virtual Court Hearing] Before Shri Rajpal Yadav, Vice-President (KZ) & Shri Girish Agrawal, Accountant Member I.T.(SS)A. Nos. 15, 16, 17, 18, 19 & 20/RAN/2019 Assessment Years: 2004-05, 05-06, 06-07, 07-08, 08-09, 2009-2010 & I.T.A. No. 42 & 43/RAN/2019 Assessment Year: 2008-2009 & 2010-2011 Pradeep Kumar Poddar,...........................................................Appellant Prop. M/s. Poddar & Poddar, Sadar Bazar, Amlatola, Chaibasa-833201 [PAN:ALIPP8009K] -Vs.- Deputy Commissioner of Income Tax,.......................................Respondent Central Circle, Jamshedpur Appearances by: N o n e, appeared on behalf of the assessee Shri Sanjay Mukherjee, CIT(D.R), appeared on behalf of the Revenue D a t e o f c o n c l u d i n g t h e h e a r i n g : F e b r u a r y 2 4 , 2 0 2 2 D a t e o f p r o n o u n c i n g t h e o r d e r : A p r i l 1 8 t h , 2 0 2 2 O R D E R Per Rajpal Yadav, Vice-President (KZ):- T h e p r e s e n t e i g h t a p p e a l s a r e d i r e c t e d a t t h e i n s ta n c e o f a s s e s s e e a g a i n s t t h e c o m m o n o r d e r o f l d . C o m m i s s i o n e r o f I n co m e T a x ( A p p e a l s ) - 3 , P a t n a d a t e d 2 8 . 1 1 . 2 0 1 8 p a s s e d f o r A s s e s s m e n t y e a r s 2 0 0 4 - 0 5 t o 2 0 1 0 - 1 1 . I n r e s p o n s e t o t h e n o t i c e o f h e a r i n g , n o o n e w a s p re s e n t o n b e h a l f o f t h e a s s e s s e e . W i t h t h e a s s i s t a n c e o f t h e l d . C I T ( D R ) , we h a v e g o n e t h r o u g h IT(SS)A Nos. 15, 16, 17, 18, 19, 20/RAN/2019 Assessment Year: 2004-05, 05-06, 06-07, 07-08, 08-09, 09-10 & ITA No. 42 & 43,RAN/2019 Assessment Year: 2008-09 & 2010-2011 Pradeep Kumar Poddar, Chaibasa 2 t h e r e c o r d c a r e f u l l y a n d p r o c e e d t o d e c i d e t h e a p p ea l s e x - p a r t e q u a t h e a s s e s s e e . 2 . G r o u n d s o f a p p e a l s i n a l l t h e y e a r s a r e v e r b a t i m s a m e . B e f o r e t a k i n g u p s p e c i f i c g r o u n d s o f a p p e a l s i n s e r i a t i m , w e d e e m i t a p p r o p r i a t e t o t a k e n o t e t h e f a c t u a l b a c k g r o u n d g i v i n g r i s e t o t h e s e a p p e a l s . T h e l d . f i r s t a p p e l l a t e a u t h o r i t y h a s n o t i c e d s u c h d e t a i l s v e r y l u c i d l y i n t h e i m p u g n e d o r d e r a n d m o r e s p e c i f i c a l l y d e a l t w i t h t h e p r o c e e d i n g s f r o m A . Y . 2 0 0 4 - 0 5 . T h e r e f o r e , w e t a k e n o t e o f t h e s e d e t ai l s f r o m t h e o r d e r o f t h e l d . C I T ( A p p e a l s ) , w h i c h r e a d a s u n d e r : - “2. Brief facts of the case: A search and seizure operation u/s. 132(1) was conducted on 16.02.2010 at the residential and business premises of Shri Sanjay Kumar Poddar the brother of the appellant. The search action was part of the search operations conducted in the case of Shri Madhu Korah, former Chief Minister of Jharkhand and his associates. During the search, a bundle of loose sheets which are incriminating in nature and marked as PFR-1, BNP-2CB etc. belonging to the appellant were found and seized. Accordingly, the AO after duly recording the reasons (as evident from the order sheet) issued notice u/s. 153C/142(1) for A.Y.2004-05 to 2010-11 requiring the appellant to file the return of income within 30 days. In compliance the appellant filed the returns of income for the above assessment years. Thereafter the AO passed order U/S.153C and/or 143(3) on 24.12.2012 determining the total income as under: AY Income returned u/s139(1) or 142(1) Income returned u/s 153C/142(1) Order passed u/s Total income assessed 2004-05 55,300 55,300/- 153C rws 143(3) 1,80,000/- 2005-06 75,600/- 75,600/- -do- 2,40,000/- 2006-07 87,000/- 87,000/- -do- 2,64,000/- 2007-08 1,03,800/- 1,03,800/- -do- 3,12,000/- 2008-09 1,06,300/- 1,06,300/- -do 9,82,300/- 2009-10 1,65,600/- 1,65,600/- -do- 4,50,160/- 2010-11 2,17,520/- 2,17,520/- 143(3) 4,43,320/- Aggrieved against the additions made in the assessment order(s) the appellant raised seventeen grounds for each of the A.Y.2004-05 to 2009-10 and ten grounds for A.Y.2010-11. As the issues are common in all the assessment years., for the purpose of better understanding and appreciation of facts and issues, the grounds of appeal for A.Y.2004-05 are dealt herewith and adjudicated as under. 3. Grounds of appeal for A.Y.2004-05 4. Ground No. 1, 7 & 8: These grounds are general in nature hence do not all for any adjudication. 5. Ground No.2, 3, 4.1 to 4.7 and 5.1 to 5.4: All these grounds are so interlaced and inter- connected that the appellant challenged the validity of assessment U/S.153C/143(3) in IT(SS)A Nos. 15, 16, 17, 18, 19, 20/RAN/2019 Assessment Year: 2004-05, 05-06, 06-07, 07-08, 08-09, 09-10 & ITA No. 42 & 43,RAN/2019 Assessment Year: 2008-09 & 2010-2011 Pradeep Kumar Poddar, Chaibasa 3 absence of incriminating material found/seized and accordingly objected to the addition made of Rs. 1,24,700/-. 5.1 Findings of the AO: The AO in the assessment order gave the finding as under: “The assessee has been deriving income from retail sale and purchase of furniture, primarily in the name and style of M/s Poddar & Poddar at Sadar Bazar, Amlaltola, Chaibasa-833201. 2.0 The Investigation Wing of Income Tax Department conducted searches u/s!32 of the Income -tax Act, 1961 (hereinafter “the Act”) was conducted on16.02.2010 in the residential and business premises of Shri Sanjay Kumar Poddar, (brother of the assessee). The action was part of the search operations conducted in the case of Shri Madhu Korah, former Chief Minister of Jharkhand and his associates. BACKGROUND OF THE CASE:- 3.0. Shri Madhu Korah is presently a Member of Parliament and former Chief Minister of Jharkhand. He was elected from Jagannathpur Assembly constituency in the year 2005 and held the office of Minister of Mines and Co- - operative for the period of February, 2005 to September, 2006. He was the Chief Minister of Jharkhand from September, 2006 to August, 2008. 3.1. A Public Interest Litigation petition (PIL) 4700 of 2008 was filed in the Hon’ble High Court of Jharkhand at Ranchi by one Shri Durga Oraon alleging corrupt practices by Shri Madhu Korah and others. The allegations in Public Interest Litigations before Hon’ble High Court of Jharkhand and media reports are that Shri Madhu Korah is having wealth disproportionate to his known sources of income acquired by illegal/corrupt means. It has also been alleged that Madhu Korah has acquired huge properties including those in the names of others including his close associates. 3.2 Subsequently, the Investigation Wing of Income Tax Department conducted searches under section 132 of the Income-tax Act, 1961, (for brevity, "the Act”) on 31.10.2009 and subsequently dates at a number of premises of Shri Madhu Korah and his family members, his close associates & friends, his fund managers and business concerns (Madhu Korah Group) in which illegal money allegedly earned by the Group had been invested. The Directorate of Enforcement also joined these searches at some of the premises. Voluminous incriminating documents were found and seized. during the course of hearing in WP (PIL) No. 4700/2008, Hon’ble High Court of Jharkhand passed and order on 04.08.2010 for the investigation of the case to be transferred to Central Bureau of Investigation. Investigation under the provisions of Prevention of Mone: Laundering Act, 2002, was also initiated by Enforcement Directorate. 3.3.Seized documents as well as post search investigation has shown that Sr. Madhu Korah had a very close nexus with certain persons like Binod Sinha, Vikash Sinha, Sanjay Kumar Choudhary, Dhananjay Kumar Choudhary, Manoj Kumar Punamiya, Arvind Vyas, Anil Vastavade, Vijay Joshi, Rohitash Krishnan etc. Shri Binod Kumar Sinha was a very IT(SS)A Nos. 15, 16, 17, 18, 19, 20/RAN/2019 Assessment Year: 2004-05, 05-06, 06-07, 07-08, 08-09, 09-10 & ITA No. 42 & 43,RAN/2019 Assessment Year: 2008-09 & 2010-2011 Pradeep Kumar Poddar, Chaibasa 4 close associate and friend of Shri Madhu Korah and he managed almost all affairs of Shri Madhu Korah during his tenure of Chief Ministership. 3.4 It was alleged that Shri Madhu Korah Spent huge unaccounted money in connivance of Shri Binod Kumar Sinha to contest the Lok Sabha Election, 2009. On the basis of seized documents, statement on oath from various assessee and post search investigation indicated that the allegation has sufficient merit. 3.5.. Shri Sanjay Kumar Poddar, a resident of Chaibasa had played a crucial role and acted as a conduit in transferring and spending of huge unaccounted- money towards election expenditure of Shri Madhu Korah. Shri Sanjay Kumar Poddar in his statement on oath had also admitted the same. 3.6. In this connection Sri Madhu Korah was informed that various incriminating documents were seized/ impounded and statement on oath of various persons was also recorded. During the post search investigation these documents and statements were analyzed and it was found that Binod Kumar Sinha was the fund manager and Chief architect of election campaign of Sri Madhu Korah during Parliamentary Election, 2009. Further perusal of documents seized during the search operation and findings of the post search operation showed that undisclosed expenditure was incurred by the Sri Madhu Korah in the election in the Lok Sabha Election, 2009. 3.7. The documents (DS-S/A-1) seized from the residence of Shri Rohitash Krishanam refers ‘Poddarji’ on the page no.-14 of DS-S/A-1. The ‘Poddarji’ was identified as Shri Sanjay Poddar of Chaibasa in the statement of Shri Rakesh Prasad. The page no.-14 of DS-S/A-1 shows the entry as- “3.4 Poddarji” 3.8. The statement of Shri Sanjay Poddar was recorded u/sl31 of the IT. Act on 05.03.2010 and 06.03.2010. He admitted that not only Rs.3.4 crore have been received from Shri Rohitash Krishnam and Ritesh Sharaff of M/s Quantum Powertech Pvt. Ltd. for spending on Sri Korah’s election campaign at the direction of Sri Binod Sinha but that he has received a total of Rs. 6.28 crore [including Rs.3.4 crore as mentioned above] from Ritesh Sharaff of Chaibasa and Rohitash Krishnam of Quantum Powertech Pvt. Ltd., Ranchi. 3.9. A search & seizure operation was also conducted in the residential premises of Sri Sanjay Poddar on 16.02.2010. During the search, a bundle of loose sheets was seized and marked as PFR-1. Shri Poddar was confronted with the details of page no. -62 of PFR-1 which was a chart showing the details of money received, date of receipt, name of persons through whom money was received etc. in respect of the election expenditure of Shri Madhu Korah. 3.10. The business premises of the brothers of Shri Sanjay Kumar Poddar, namely Shri Surendra Prasad Poddar, Prop: M/s. Poddar Furniture, Shri Subodh Kumar Poddar, Prop: Poddar Electronics, Shri Pradeep Kumar Poddar, Prop. M/s. Poddar & Poddar etc. were also subjected to the said search/survey operations. During the course of IT(SS)A Nos. 15, 16, 17, 18, 19, 20/RAN/2019 Assessment Year: 2004-05, 05-06, 06-07, 07-08, 08-09, 09-10 & ITA No. 42 & 43,RAN/2019 Assessment Year: 2008-09 & 2010-2011 Pradeep Kumar Poddar, Chaibasa 5 search/survey many documents were seized/ impounded. On perusal of the same, various irregularities were noticed and discussed in the subsequent paragraphs. 4. Subsequent to the search operation the jurisdiction of this case was centralized at Central Circle-1, Ranchi vide notification of the Commissioner of Income-tax, Jamshepur, dated 11.06.2010 communicated under F.No.CIT/JSR/Tech/127/Vol- IV/2010-11/1544-73, dated 11.06.2010. Later on, the jurisdiction of this case was transferred to DCIT, Central Circle, Jamshedpur vide Notification dated 02/05/2011 of the Commissioner of Income-tax (Central), Patna vide memo No. CIT(C)/PAT/Juris. Gen./ Vol.-9/Part-II/2011-2012/598- 617, dated 02.05.2011. 4.1. Accordingly, proceedings under section 153C/142(1) of the Income-tax Act 1961 were initiated by issuing notice under section 153C/142(1) of the I.T. Act, 1961 on 16.06.2011 for filing the return of income for the assessment year within 30 days of the service of the notice and in response to the notice the assessee filed his return of income for the year under consideration on 05.11.2012 declaring total income at Rs.55,300/- . No additional income has been disclosed by the assessee from the return of income filed earlier u/s. 139 of the Act. A detailed questionnaire dated 14.07.2011 along with notice under section 142(1) was served upon the assessee. Also Notice under section 143(2) of the Income-tax Act, 1961 were issued and served upon the assessee. 4.2. In response to the aforesaid notices and questionnaire, the assessee time to time filed written submissions which were in conclusive and not addressing to the requirement of the case. In fact, neither the assessee nor any authorized representative appeared on behalf o f the assessee to explain the case. No books of account, bills & vouchers etc. were produced for examination during the course of assessment proceedings in spite of giving several opportunities. 4.3 The assessee, vide this office notice dated 03.11.2011, was requested to furnish the statement of asset & liability as required under section 142(l)(iii) of the Act. However, the assessee has failed to furnish any such statement. The assessee vide his submission dated 07.12.2012 stated that he has not maintained the books of account as such he is unable to submit the statement. 5. On an examination of the return of income, material available on record and the submissions of the assessee, the following issues emerged which are discussed in the subsequent paragraphs. 5.1.Estimation of Income from Business: 5.2. For the year under consideration the assessee has shown net profit under section 44AF of the Act. The net profit was calculated at Rs.55,300/-, i.e. @ 12% of the gross turnover of Rs.4,06,830/-. No supporting evidence to justify the genuineness of the turnover has ever been produced for verification even after several opportunities. In this context, it is worth mentioning that the case of the assessee is a part of search & seizure assessment which covers seven assessment years, i.e. A.Y. 2004-05 to 2010-11. Hence, to understand the business as well as financial activities of the assessee, all the seven IT(SS)A Nos. 15, 16, 17, 18, 19, 20/RAN/2019 Assessment Year: 2004-05, 05-06, 06-07, 07-08, 08-09, 09-10 & ITA No. 42 & 43,RAN/2019 Assessment Year: 2008-09 & 2010-2011 Pradeep Kumar Poddar, Chaibasa 6 assessment years have been taken into consideration before framing this assessment order. 5.3. No bank book for the year under consideration has been furnished, but on perusal of the bank statement as available on record, it has been seen that almost all the business has been performed in cash. In several years the cash credit in the bank are much higher than the turnover shown in return of income. For, instance, in A.Y. 2009-10, the gross receipt has been shown at Rs. 18,50,500/-, however, on perusal of the bank statement at Bank of India, Chaibasa it has been seen that only cash deposits during this period is about 28.84 lakhs. Even in A.Y. 20084f^/^^^estimated profit has been shown at Rs. 1,03,800/- (turnover not disclosed but bank statement for a period of only six months (18.09.2007 to 31.03.2008) shows cash deposit of more than rupees 32.66 lakhs. Although repeatedly requested for, no specific clarification of the cash deposits has ever been made by the assessee. The only submission made by the assessee in this regard is that “there are certain cash deposits in CC A/c which inter-alia are from sale proceeds of goods as well as re-depositing/recycling of withdrawals made earlier from the same bank account.” It is worth mentioning that no supporting evidence whatsoever has ever been produced for verification. 5.4. Certain seized documents, such as page nos. 3 to 6 of BNP-2CB, which are Carbon copies/office copy of Trading Account, Profit & Loss Account, Capital Account and balance sheet of M/s Poddar & Poddar for the year 2007-08. The aforesaid papers/documents were made on the letter head pad of M/s. Poddar & Poddar, Chaibasa and under the seal & signature of the proprietor Shri Pradeep Poddar, and admittedly the same were prepared for the purpose of bank. The stock statement enclosed with these papers were duly inspected and signed by an Inspector and apparently acknowledged by Bank of India, Chaibasa. 5.5. For a man of ordinary prudence, all the issues discussed above are enough indication to treat these papers as genuine and belonging to the assessee in question. However, despite specific queries made, the assessee failed to justify the treatment of the transactions on the basis of projection report filed before the Banking Authority vis-a-vis the return of income filed before the Income Tax Department. No supporting evidence such as sales register/cash book etc. was produced to quantify the sales vis-a-vis the estimated total income. 5.6. In response to this office show-cause letter dated 21.11.2012, the assessee preferred a mere denial about the contents of the seized documents. Although the primary onus to prove the documents as fit to be brushed aside’ lies with the assessee, he failed to do so just by a mere denial instead of specific reply. Under this circumstance, mere denial of the onus to justify the treatment of the transactions/entries as projected, holds no merit and found to be untenable. 5.7. It has been held in the case of CIT Vs. British Paints India Ltd. (1991) 188 ITR 44 (SC) that the method of accounting adopted by the assessee should disclose a true picture of his profits and gains. Therefore, the important question to be determined here is whether or not income can properly be deducted from the accounts maintained by the assessee. In the instant case, no cash book and ledger were found to be maintained. Even though the income was estimated u/s 44AF of the Act, not even the sales and purchases registers were IT(SS)A Nos. 15, 16, 17, 18, 19, 20/RAN/2019 Assessment Year: 2004-05, 05-06, 06-07, 07-08, 08-09, 09-10 & ITA No. 42 & 43,RAN/2019 Assessment Year: 2008-09 & 2010-2011 Pradeep Kumar Poddar, Chaibasa 7 produced by the assessee as a minimum requirement to verify the genuineness of the turnover. Any accounting system is incomplete unless such entries could be cross verification with the documents and vouchers. In the instant case, there is a complete lack of vouching of the minimum requirement that was needed to support the estimated profit disclosed by the assessee. The true income, profits and gains cannot be properly ascertained in the instant case and the assessee cannot deny his liability to this regard with a mere contention that the case is a ‘no account case’. 5.8. Thus, the position that obtains in the instant case is that the word ‘account’ implies a formal record which includes journals, ledgers, bills, vouchers and other supporting material. Without these being available in entirely, the income shown by the assessee cannot be said to have any evidentiary value. The assessee has offered no reasonable cause for his failure to maintain and produce even the minimum requirement of accounts. 5.9 It is well settled that in cases such as the one under consideration, the estimation of income has to necessarily involve an element of guess work and there is no mathematical formula to determine the same. 5.10. In view of the above discussion, it can be said that the turnover as shown by the assessee is not verifiable and certainly shrouded with too much doubts to be true. Under this circumstances, the undersigned has no alternative but to estimate the sales/turnover at Rs.15,00,000/- and recalculate the net profit at Rs. 1,80,000/- @ 12%of the estimated sales/turnover for the year under consideration. Accordingly a sum of Rs. 1,24,700/- (1,80,000 minus 55,300/-) is hereby added to the total income of the assessee.” Appellant’s contention: During the course of appellate proceeding, the appellant submitted as under: 1.1 “That the first dispute in this case is with regard that in the facts and circumstances of the case, the Assessing Officer has erred in initiating the proceeding u/s 153C. 1.2. That from perusal of the order sheet entry it has transpired that there is no valid initiation of proceeding u/s 153C. The ingredients laid down u/s 153C are not satisfied. The initiation u/s 153C could be made only on the basis of undisclosed income found as a result of action u/s 132. 1.3. That the initiation of proceeding u/s 153C vis-a-vis assessment order can be made on the basis of evidence found in the course of search and other post search material or information available in the record related to the evidence found in course of search. Without prejudice to above, it is respectfully submitted that there is no material in record nor any material has been found during impugned / alleged search and seizure operation from which it could be presumed that the assessee has hidden any particulars of receipt or any particulars of expenditure. Further ingredients laid down u/s 153C are not satisfied. There is no valid initiation. Since the very initiation of proceeding u/s 153C is ab-initio void and as such further proceeding initiated at and completion of assessment u/s 153C r.w.s. 143(3) is arbitrary, unjustified, void ab-initio and bad in law. The assessment as completed u/s 153C r.w.s. 143(3) is fit to be annulled / cancelled. 1.4. That the assessee is placing the reliance on the decision of (a) Delhi High Court in the case of CIT vs Kabul Chawla, reported in 380 ITR 573 (Del) and (b) Hon’ble IT AT Mumbai IT(SS)A Nos. 15, 16, 17, 18, 19, 20/RAN/2019 Assessment Year: 2004-05, 05-06, 06-07, 07-08, 08-09, 09-10 & ITA No. 42 & 43,RAN/2019 Assessment Year: 2008-09 & 2010-2011 Pradeep Kumar Poddar, Chaibasa 8 Special Bench in the case of All Cargo Global Logistics Ltd vs DCIT (Mumbai), reported in 147ITTJ 513 (Mumbai) (SB). 1.5.That the controversy of addition being made in the absence of any incriminating material being found in the course of search operation has now been laid to rest. Further, following judgments clearly lays down that no addition can be made u/s 153A or 153C, if no incriminating material is found in the search:- (a) All-cargo Global [374 ITR 645 (Bom)]) (b) ACIT Vs. M/s Pratibha Industries Ltd. (ITA No. 2197 to 2199 / Mum /2008, 2200 to 2201 / Mum / 2008, ITA No. 2202 / Mum 2008. (c) CIT Vs. Priyanka Ship Breaking Co. Ltd. (2012) 26 Taxmann.com 321 (Del.) (d) Gurinder Singh Bawa Vs. DCIT (2012) 28 Taxmann.com 328 (Mum) (e) LMJ International Ltd. Vs. DCIT (2008) 22 SOT 351 (Kol) (f) ACIT Vs. Mrs. Utara S. Shorewala (2011) 12 Taxmann.com 460 (Mum) (g) S.K. Jain Vs. ACIT Bhopal in IT(SS).A.Nos 210 to 216 / Ind / 2007 dated 28.01.2010 (h) CIT Vs. Anil Kumar Bhatia (2012) 24 Taxmann.com 98 (Del.) (i) CIT Vs. Lachman Das Bhatia (2012) 24 Taxmann.com 167 (Del.) (j) ACIT vs. Asha Kataria , 3105, 3106, & 3107/Del/2011, A. Yrs. :2002-03, 2003-04 5-6 2006-07 dt. 20-05-2013) (k)DCIT, Jaipur Vs Kayakalp Herbal Pvt Ltd., (ITA No. 609, 627,628,629,630, 631, 85 632/JP/2016) (ITAT-Jaipur) 1.6. That it is respectfully submitted that in recent judgment in the case of DCIT, Jaipur vs Kayakalp Herbal Pvt. Ltd., Jaipur (ITA No. 609, 627,628,629,630,631 & 632/JP/2016), the Income Tax Appellate Tribunal, Jaipur on the appeals filed by the department against orders of the CIT(A) pertaining to assessment year 2005-06 to 2011-12 had held that no addition can. be made in the assessment made u/s 153A / 153C r.w.s. 143(3) consequent to the search unless some incriminating material in support of the addition is found as a result of search even after the rejection of the books of accounts and application of section 145(3) of the I.T, Act, 1961. 1.7. That in view of the various judicial pronouncements no addition can be made in absence of any incriminating material found/seized in an unabated assessment/concluded assessment. 1.8. That it is respectfully submitted that in the instant case, the AO has not referred to any incriminating material found relating to this assessee during the search based on which addition had been made. It is respectfully submitted that the addition of Rs. 1,24,700/- is fit to be knocked out. W ITHOUT PREJUDICE: - 2.1.That the next dispute in this case is with regard that the learned AO has erred in adding a sum of Rs. 1,24,700/- on estimate by estimating the sale at Rs. 15,00,000/- as against the actual sale of Rs. 4,60,823/- as shown in the return of income. 2.2. That there is no material on record nor any papers during the course of search and seizure operation in the case of Sri Sanju Poddar has been found which would suggest that the sale of the assessee was Rs. 15,00,000/- for the year under IT(SS)A Nos. 15, 16, 17, 18, 19, 20/RAN/2019 Assessment Year: 2004-05, 05-06, 06-07, 07-08, 08-09, 09-10 & ITA No. 42 & 43,RAN/2019 Assessment Year: 2008-09 & 2010-2011 Pradeep Kumar Poddar, Chaibasa 9 consideration as estimated by the Assessing Officer. Further, it is respectfully submitted that there is no material on record which could suggest that the assessee had more profit than what has been shown in the return of income. The adoption of net profit at the rate of 12% on enhanced turnover is arbitrary and unjust. 2.3 That in any view of the above, the estimate of sales / turnover at Rs. 15,00,000/- as against actual sale of Rs. 4,60,830/- and thereby the addition of Rs. 1,24,700/- as made by the Assessing Officer is arbitrary, unjustified and bad in law. In any case the addition of Rs. 1,24,700/- as made is fit to be deleted”. 3 . T h e l d . 1 s t A p p e l l a t e A u t h o r i t y h a s c o n s i d e r e d t h e s e s u b m i s s i on s o f t h e a s s e s s e e . S h e t o o k i n t o c o g n i z a n c e s e c t i o n 1 5 3 A, w h i c h h a s b e e n r e p r o d u c e d i n p a r a g r a p h n o . 5 . 3 . 2 . T h e r e a f t e r s h e ma d e r e f e r e n c e t o t h e j u d g m e n t o f t h e H o n ’ b l e D e l h i H i g h C o u r t i n t h e c a se o f C I T – v s . - A n i l K u m a r B h a t i a r e p o r t e d i n 3 5 2 I T R 4 9 3 . T h e l d . C I T ( Ap p e a l s ) a l s o m a d e r e f e r e n c e t o t h e j u d g m e n t o f t h e H o n ’ b l e K e r a l a H i gh C o u r t i n t h e c a s e o f E . N . G o p a k u m a r – v s . - C I T r e p o r t e d i n 3 9 0 I T R 1 3 1 . Th e l d . 1 s t A p p e l l a t e A u t h o r i t y h a s t h e r e a f t e r m a d e r e f e r e n c e t o t h e d e c is i o n o f t h e H o n ’ b l e A l l a h a b a d H i g h C o u r t i n t h e c a s e o f C I T – v s . - R a j Ku m a r A r o r a r e p o r t e d i n 3 6 7 I T R 5 1 7 . T h e l d . C I T ( A p p e a l s ) w a s o f t h e v i e w th a t t h e r e a r e t w o s e t s o f j u d g m e n t a t t h e e n d o f H o n ’ b l e H i g h C o u r t s . S h e f o l l o w e d t h e p r o p o s i t i o n s l a i d d o w n i n t h e j u d g m e n t s , w h i c h a r e a g a i n s t t h e a s s e s s e e . O n t h e o t h e r h a n d , t h e a s s e s s e e h a s r e l i e d u p o n a la r g e n u m b e r o f d e c i s i o n s , w h i c h h a v e b e e n n o t i c e d b y t h e l d . C I T ( Ap p e a l s ) i n p a r a g r a p h n o . 1 . 4 o f t h e i m p u g n e d o r d e r . M u c h e m p h a s i s w a s p ut b y t h e a s s e s s e e o n t h e j u d g m e n t o f t h e H o n ’ b l e D e l h i H i g h C o u r t i n t h e c a s e o f C I T – v s . - K a b u l C h a w l a r e p o r t e d i n 3 8 0 I T R 5 7 3 . T h e a s s e s s e e a l s o r e l i e d u p o n t h e S p e c i a l B e n c h d e c i s i o n o f I T A T , M u m b a i i n t h e c a s e o f A l l C a r g o G l o b a l L o g i s t i c s L t d . – v s . - D C I T ( 1 4 7 T T J 5 1 3 ) . 4 . I n b r i e f , t h e p r o p o s i t i o n c u l l e d o u t f r o m t h e s e t w o s e t s o f j u d g m e n t i s t h a t a c c o r d i n g t o t h e l d . C I T ( A p p e a l s ) , o n c e a se a r c h h a s b e e n c o n d u c t e d a n d a s s e s s m e n t s h a v e b e e n i n i t i a t e d u n d e r s e c t i o n 1 5 3 A , t h e n a l l t h e i s s u e s a r e o p e n . O n t h e o t h e r h a n d , s t a n d of t h e a s s e s s e e i s t h a t i n IT(SS)A Nos. 15, 16, 17, 18, 19, 20/RAN/2019 Assessment Year: 2004-05, 05-06, 06-07, 07-08, 08-09, 09-10 & ITA No. 42 & 43,RAN/2019 Assessment Year: 2008-09 & 2010-2011 Pradeep Kumar Poddar, Chaibasa 10 c o m p l e t e d a s s e s s m e n t s , a d d i t i o n s c o u l d o n l y b e m a d e o n t h e b a s i s o f s e i z e d m a t e r i a l f o u n d d u r i n g t h e c o u r s e o f s e a r c h . W e h a v e d u l y c o n s i d e r e d t h e s e a s p e c t s . I t i s p e r t i n e n t t o o b s e r ve t h a t a s s e s s m e n t s i n t h e c a s e o f a s s e s s e e u p t o A . Y . 2 0 0 9 - 1 0 h a s b e e n p a ss e d u n d e r s e c t i o n 1 5 3 C . I n A . Y . 2 0 1 0 - 1 1 , i t i s a r e g u l a r a s s e s s m e n t be c a u s e i t i s a s e a r c h y e a r . A p e r u s a l o f s e c t i o n 1 5 3 C w o u l d c o n t e m p l a t e th a t d u r i n g t h e c o u r s e o f s e a r c h , i f i n c r i m i n a t i n g m a t e r i a l e x h i b i t i n g t h e e s c a p e m e n t o f i n c o m e f r o m t a x a t i o n b e l o n g i n g / p e r t a i n i n g t o o f s o m e o t h e r p e r s o n t h a n t h e s e a r c h e d p e r s o n i s f o u n d , t h e n A s s e s s i n g O f f i c e r o f t h e s e a r c h e d p e r s o n w o u l d r e c o r d h i s s a t i s f a c t i o n t h a t a c t i o n u n d e r s e ct i o n 1 5 3 C i s r e q u i r e d t o b e t a k e n a g a i n s t s u c h o t h e r p e r s o n t o w h o m d o c u me n t s b e l o n g i n g t o w e r e f o u n d . A f t e r r e c o r d i n g h i s s a t i s f a c t i o n , h e w il l t r a n s m i t h i s s a t i s f a c t i o n n o t e a l o n g w i t h t h a t m a t e r i a l t o t h e As s e s s i n g O f f i c e r , w h o h a s t e r r i t o r i a l j u r i s d i c t i o n o v e r s u c h o t h e r p e r s o n a n d t h e A O o f t h a t o t h e r p e r s o n w o u l d a l s o r e c o r d h i s s a t i s f a c t i o n b e fo r e i s s u a n c e o f n o t i c e u n d e r s e c t i o n 1 5 3 C . O n c e t h i s p r o c e d u r e i s c o m p l e t ed t h e n a s s e s s m e n t o r d e r i s t o b e p a s s e d i n i d e n t i c a l t e r m s a s i s r e q ui r e d t o b e p a s s e d u n d e r s e c t i o n 1 5 3 A . A n a s s e s s m e n t u n d e r s e c t i o n 1 5 3 A i s to b e p a s s e d o n t h e b a s i s o f t h e s e i z e d m a t e r i a l . B e f o r e a d v e r t i n g t o th e f a c t s o f t h e p r e s e n t a p p e a l s , w e d e e m i t appropriate to bear in mind the position of law propounded in various authoritative judgments expounding scope of section 153A of the Act. We are of the view that in this regard, there were large numbers of decisions. First we refer to the decision of Hon'ble Delhi High Court in the case of CIT Vs. Kabul Chawla, 380 ITR 573 (Del). Hon'ble Delhi High Court after detailed analysis has summarized the following legal position: 37. On a conspectus of Section 153A(1) of the Act, read with the provisos thereto, and in the light of the law explained in the aforementioned decisions, the legal position that emerges is as under: (i)Once a search takes place under Section 132 of the Act, notice under Section 153 A(l) will have to be mandatorily issued to the person searched requiring him to fde returns for six AYs immediately preceding the previous year relevant to the AY in which the search takes place. IT(SS)A Nos. 15, 16, 17, 18, 19, 20/RAN/2019 Assessment Year: 2004-05, 05-06, 06-07, 07-08, 08-09, 09-10 & ITA No. 42 & 43,RAN/2019 Assessment Year: 2008-09 & 2010-2011 Pradeep Kumar Poddar, Chaibasa 11 (ii)Assessments and reassessments pending on the date of the search shall abate. The total income for such AYs will have to be computed by the AOs as a fresh exercise. (iii) The AO will exercise normal assessment powers in respect of the six years previous to the relevant AY in which the search takes place. The AO has the power to assess and reassess the 'total income' of the aforementioned six years in separate assessment orders for each of the six years. In other words there will be only one assessment order in respect of each of the six AYs "in which both the disclosed and the undisclosed income would be brought to tax". (iv)Although Section 153 A does not say that additions should be strictly made on the basis of evidence found in the course of the search, or other post-search material or information available with the AO which can be related to the evidence found, it does not mean that the assessment "can be arbitrary or made without any relevance or nexus with the seized material. Obviously an assessment has to be made under this Section only on the basis of seized material." (v)In absence of any incriminating material, the completed assessment can be reiterated and the abated assessment or reassessment can be made. The word 'assess' in Section 153 A is relatable to abated proceedings (i.e. those pending on the date of search) and the word 'reassess' to completed assessment proceedings. (vi)Insofar as pending assessments are concerned, the jurisdiction to make the original assessment and the assessment under Section 153A merges into one. Only one assessment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. (vii)Completed assessments can be interfered with by the AO while making the assessment under Section 153 A 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." IT(SS)A Nos. 15, 16, 17, 18, 19, 20/RAN/2019 Assessment Year: 2004-05, 05-06, 06-07, 07-08, 08-09, 09-10 & ITA No. 42 & 43,RAN/2019 Assessment Year: 2008-09 & 2010-2011 Pradeep Kumar Poddar, Chaibasa 12 ITAT. Delhi Bench in the case of DIT Vs. Smt. Shivali Mahajan and others, rendered in ITA No.5585/Del/2015 has considered this aspect in its decision. Thereafter, the Tribunal has specifically held that serial no.(iv) of the above proposition, the Hon'ble Delhi High Court has specifically held that assessment under section 153 A of the Act has to be specifically made on the basis of seized material. ITAT Delhi Bench was considering an aspect whether the evidence in the shape of books of accounts, money, bullion, jewellery found during the course of search relates to other person than the searched person, can that be considered while making assessment under section 153A of the Act. ITAT Delhi Bench has specifically held that material recovered from the premises of other person cannot be used in the hands of the searched person. For that purpose an assessment under section 153C or 147 is to be made. At this stage, in order to fortify ourselves, we would like to make reference to the following paragraphs of the ITAT Delhi Bench's order. It reads as under: “15. Thus, when during the course of search of an assessee any books, document or money, bullion, jewellery etc. is found which relates to a person other than the person searched, then the Assessing Officer of the person searched shall hand over such books of account, documents, or valuables to the Assessing Officer of such other person and thereafter, the Assessing Officer of such other person can proceed against such other person. However, in the case under appeal before us, admittedly, Section 153C is not invoked in the case of the assessee and the assessment is framed under Section 153A. We, respectfully following the above decisions of Hon'ble Jurisdictional High Court, hold that during the course of assessment under Section 153A, the incriminating material, if any, found during the course of search of the assessee only can be utilized and not the material found in the search of any other person." Order of the ITAT Delhi Bench in other cases viz. Asha Rani Lakhotia vs. ACIT and Subhag Khattar Vs. ACIT are on the same line. Hon'ble Delhi High Court in the case of Subhag Khattar in Tax Appeal No.60 of 2017 has considered the following question of law: "Did the Income Tax Appellate Tribunal (ITAT) fall into error in holding that the additions made under Section 153A read with IT(SS)A Nos. 15, 16, 17, 18, 19, 20/RAN/2019 Assessment Year: 2004-05, 05-06, 06-07, 07-08, 08-09, 09-10 & ITA No. 42 & 43,RAN/2019 Assessment Year: 2008-09 & 2010-2011 Pradeep Kumar Poddar, Chaibasa 13 Section 143(3) of the Income Tax Act, 1961 in the circumstances of the case, were not justified and supportable in law? " After putting reliance upon its decision in the case of CIT Vs. Kabul Chawla (supra) has replied this question as under: "6. The Assessee went in appeal before the Commissioner of Income Tax (Appeals) who dismissed it by an order dated 27th November, 2014. A further appeal was filed by the Assessee before the IT AT. The IT AT, inter alia, found substance in the contention of the Assessee that the assessment under Section 153(A) of the Act, in the absence of any incriminating material found during the search on the premises of the Assessee was not sustainable in law. Reliance was placed on the decision of this Court in Commissioner of Income Tax v. Kabul Chawla, [2016] 380ITR 573. 7. A question was posed to the learned counsel for the Revenue whether in the present case anything incriminating has been found when the premises of the Assessee was searched. The answer was in the negative. The entire case against the Assessee was based on what was found during the search of the premises of the AEZ Group. It is thus apparent on the face of it, that the notice to the Assessee under Section 153A of the Act was misconceived since the so- called incriminating material was not found during the search of the Assessee's premises. The Revenue could have proceeded against the Assessee on the basis of the documents discovered under any other provision of law, but certainly, not wider Section 153A. This goes to the root of the matter." 5.Hon'ble Court has specifically observed for the purpose of section 153A that only seized material is required. However, if there is any other incriminating material belong to the assessee found at the premises of the some other person, then the assessment has to be made under other provisions and not under section 153 A of the Act. 6. Hon'ble Gujrat High Court has also considered the decision of Hon'ble Delhi High Court in the case of CIT Vs. Kabul Chawla (supra). Hon'ble Gujarat High Court framed the following question of law in the case of Pr.CIT Vs. Saumya Construction (supra): "[A] Whether the order of Tribunal is right in law and on facts in deleting the addition made in assessment made u/s 153A of the Act? IT(SS)A Nos. 15, 16, 17, 18, 19, 20/RAN/2019 Assessment Year: 2004-05, 05-06, 06-07, 07-08, 08-09, 09-10 & ITA No. 42 & 43,RAN/2019 Assessment Year: 2008-09 & 2010-2011 Pradeep Kumar Poddar, Chaibasa 14 [B] Whether the Tribunal is right in law in holding that the addition should be based on the incriminating material found during the course of search under new procedure of assessment u/s 153A which is different from earlier procedure u/s 158BC r.w.s. 158BB of the Act and by reading into the section, the words 'the incriminating material found during the course of search' which are not there in section 153A? [C] Whether the Tribunal erred in relying on the ITAT order in Sanjay Aggarwal v. DCIT (2014) 47 Taxmann.Com 210 (Del) which has interpreted undisclosed income unearthed during the search to imply incriminating material, as against the finding of the Delhi High Court in Filatex India Ltd. v. CIT- IV (2015) 229 Taxman 555 wherein it is held that during the assessment u/s 153A additions need not be restricted or limited to incriminating material found during the course of search? " 35. Hon'ble Court concurred with the decision of Hon'ble Delhi High Court. We deem it appropriate to take note of relevant part of the decision, which reads as under: "16. Section 153A bears the heading "Assessment in case of search or requisition". It is well settled as held by the Supreme Court in a catena of decisions that the heading of the section can be regarded as a key to the interpretation of the operative portion of the section and if there is no ambiguity in the language or if it is plain and clear, then the heading used in the section strengthens that meaning. From the heading of section 153, the intention of the legislature is clear viz., to provide for assessment in case of search and requisition. When the very purpose of the provision is to make assessment in case of search or requisition, it goes without saying that the assessment has to have relation to the search or requisition. In other words, the assessment should be connected with something found during the search or requisition, viz., incriminating material which reveals undisclosed income. Thus, while in view of the mandate of sub-section (1) of section 153A of the Act, in every case where there is a search or requisition, the Assessing Officer is obliged to issue notice to such person to furnish returns of income for the six years preceding the assessment year relevant to the previous year in which the search is conducted or requisition is made, any addition or disallowance can be made only on the basis of material collected during the search or requisition. In case no incriminating material is found, as held by the Rajasthan High Court in the case of Jai Steel (India) (supra), the earlier assessment would have to be reiterated. In case where IT(SS)A Nos. 15, 16, 17, 18, 19, 20/RAN/2019 Assessment Year: 2004-05, 05-06, 06-07, 07-08, 08-09, 09-10 & ITA No. 42 & 43,RAN/2019 Assessment Year: 2008-09 & 2010-2011 Pradeep Kumar Poddar, Chaibasa 15 pending assessments have abated, the Assessing Officer can pass assessment orders for each of the six years determining the total income of the assessee which would include income declared in the returns, if any, furnished by the assessee as well as undisclosed income, if any, unearthed during the search or requisition. In case where a pending reassessment under section 147 of the Act has abated, needless to state that the scope and ambit of the assessment would include any order which the Assessing Officer could have passed under section 147 of the Act as well as under section 153A of the Act. 17. In the facts of the present case, a search came to be conducted on 07.10.2009 and the notice was issued to the assessee under section 153A of the Act for assessment year 2006-07 on 04.08.2010. In response to the notice, the assessee filed return of income on 18.11.2010. In terms of section 153B, the assessment was required to be completed within a period of two years from the end of the financial year in which the search came to be carried out, namely, on or before 31st March, 2012. Here, insofar as the impugned addition is concerned, the notice in respect thereof came to be issued on 19.12.2011 seeking an explanation from the assessee. The assessee gave its response by reply dated 21.12.2011 calling upon the Assessing Officer to provide copies of statements recorded on oath of Shri Rohit P. Modi and Smt. Pareshaben K. Modi during the search as well as the copies of the documents upon which the department placed reliance for the purpose of making the proposed addition as well as the copy of the explanation given by Shri Rohit P. Modi and Smt. Pareshaben K. Modi regarding the on-money received, copies of the assessment orders in case of said persons and also requested the Assessing Officer to permit him to cross-examine the said persons. The Assessing Officer issued summons to the said persons, however, they were out of station and it was not known as to when they would return. In this backdrop, without affording any opportunity to the assessee to cross-examine the said persons, the Assessing Officer made the addition in question. 18. In this case, it is not the case of the appellant that any incriminating material in respect of the assessment year under consideration was found during the course of search. At the relevant time when the notice came to be issued under section 153A of the Act, the assessee filed its return of income. Much later, at the fag end of the period within which the order under section 153A of the Act was to be made, in other words, when the limit for framing the assessment as provided under section 153 was about IT(SS)A Nos. 15, 16, 17, 18, 19, 20/RAN/2019 Assessment Year: 2004-05, 05-06, 06-07, 07-08, 08-09, 09-10 & ITA No. 42 & 43,RAN/2019 Assessment Year: 2008-09 & 2010-2011 Pradeep Kumar Poddar, Chaibasa 16 to expire, the notice has been issued in the present case seeking to make the proposed addition of Rs.l 1,05,51,000/- on the basis of the material which was not found during the course of search, but on the basis of a statement of another person. In the opinion of this court, in a case like the present one, where an assessment has been framed earlier and no assessment or reassessment was pending on the date of initiation of search under section 132 or making of requisition under section 132A, while computing the total income of the assessee under section 153A of the Act, additions or disallowances can be made only on the basis of the incriminating material found during the search or requisition. In the present case, it is an admitted position that no incriminating material was found during the course of search, however, it is on the basis of some material collected by the Assessing Officer much subsequent to the search, that the impugned additions came to be made. 19. On behalf of the appellant, it has been contended that if any incriminating material is found, notwithstanding that in relation to the year under consideration, no incriminating material is found, it would be permissible to make additions and disallowance in respect of all the six assessment years. In the opinion of this court, the said contention does not merit acceptance, inasmuch as, the assessment in respect of each of the six assessment years is a separate and distinct assessment. Under section 153A of the Act, an assessment has to be made in relation to the search or requisition, namely, in relation to material disclosed during the search or requisition. If in relation to any assessment year, no incriminating material is found, no addition or disallowance can be made in relation to that assessment year in exercise of powers under section 153A of the Act and the earlier assessment shall have to be reiterated. In this regard, this court is in complete agreement with the view adopted by the Rajasthan High Court in the case of Jai Steel (India), Jodhpur (supra). Besides, as rightly pointed out by the learned counsel for the respondent, the controversy involved in the present case stands concluded by the decision of this court in the case of Jayaben Ratilal Sorathia (supra) wherein it has been held that while it cannot be disputed that considering section 153A of the Act, the Assessing Officer can reopen and/or assess the return with respect to six preceding years; however, there must be some incriminating material available with the Assessing Officer with respect to the sale transactions in the particular assessment year. 20. For the foregoing reasons, it is not possible to state that the impugned order passed by the Tribunal suffers from any legal infirmity so IT(SS)A Nos. 15, 16, 17, 18, 19, 20/RAN/2019 Assessment Year: 2004-05, 05-06, 06-07, 07-08, 08-09, 09-10 & ITA No. 42 & 43,RAN/2019 Assessment Year: 2008-09 & 2010-2011 Pradeep Kumar Poddar, Chaibasa 17 as to give rise to a question of law, much less, a substantial question of law, warranting interference. The appeal, therefore, fails and is, accordingly, dismissed." 7. It is also pertinent to note that, in the case of Kabul Chawla (supra), the Hon’ble Delhi High Court in its concluding paragraph has observed that, on the date of the search, the assessments for assessment years 2002-03, 2005-06 and 2006-07 already stood completed and the returns in these years were accepted under Section 143(1) of the Act and these acceptance of returns processed under Section 143(1) of the Act was construed by the Hon’ble Delhi Court as completion of assessments and this acceptance of return, according to the Hon’ble Delhi High Court, could be tinkered with if some incriminating material was found at the premises of the assessee. 8. The position of law in other decisions referred by the assessee is identical; particularly we have considered the judgment of Hon’ble High Court in the case of PCIT vs. Salasar Stock Broking Pvt. Ltd. (supra). 9 . F o r b u t t r e s s i n g o u r a b o v e c o n c l u s i o n , w e f u r t h e r f o r t i f y o u r s e l v e s w i t h t h e f o l l o w i n g j u d g m e n t s : - Sl.No. Particulars 1. PCIT –vs.- Kurele Paper Mills (P) Ltd. [2017] 81 taxmann.com 82 (Delhi) 2. PCIT –vs.- Rashmi Infrastructure Pvt. Ltd. ITAT 99 of 2019, GA No. 1211 of 2019 (Calcutta HC) 3. CIT –vs.- Veerprabhu Marketing Ltd. [2016] 73 taxmann.com 149 (Calcutta) 4. PCIT –vs.- Salasar Stock Broking Ltd. ITAT No. 264 of 2016, GA No. 1929 of 2016 (Calcutta HC) 5. M/s. Mani Square Ltd. –vs.- IT(SS)A Nos. 15, 16, 17, 18, 19, 20/RAN/2019 Assessment Year: 2004-05, 05-06, 06-07, 07-08, 08-09, 09-10 & ITA No. 42 & 43,RAN/2019 Assessment Year: 2008-09 & 2010-2011 Pradeep Kumar Poddar, Chaibasa 18 ACIT [IT(SS)A Nos. 58/KOL/2019 & others 6. ACIT –vs.- Majestic Commercial (P) Ltd. [2020] 116 taxmann.com 412 (Kolkata Trib.) 7. PCIT –vs.- Anand Kumar Jain & Others[ITA 23/2021 & others (Delhi High Court) 8. DCIT –vs.- Bhavya Merchandise (P) Ltd. [2020] 121 taxmann.com 112 (Kolkata Trib.) 9. Sarva Priya Holdings Pvt. Ltd. –vs.- DCIT [IT(SS)A Nos. 97 & 98/KOL/2014 10. Purulia Metal Casting –vs.- DCIT [ITA No. 1217/KOL/2019) 11. DCIT –vs.- Shri Ram Realcon Pvt. Ltd. [IT(SS)A No. 14 & 15/KOL/2017 12. Vikram Financial Services Ltd. –vs.- DCIT [IT(SS)A No. 81/KOL/2010 13. DCIT –vs.- M/s. Bohra G. & NN Brothers Pvt. Ltd. [IT(SS)A No. 89/KOL/2017 1 0 . L e t u s r e v e r t b a c k t o t h e f a c t s o f t h e p r e s e n t c a s e , t h e a s s e s s e e h a s b e e n o f f e r i n g h i s i n c o m e u n d e r p r e s u m p t i v e t a x a t i o n a s c o n t e m p l a t e d i n s e c t i o n 4 4 A F . H i s t u r n o v e r n e v e r e x c e e d e d t o t h e o ut e r l i m i t p r o v i d e d i n t h i s s e c t i o n . T h i s s e c t i o n 4 4 A F p r o v i d e s t h a t w h e r e t h e a s s e s s e e e n g a g e d i n r e t a i l t r a d e i n a n y g o o d s o r m e r c h a n d i s e , a s u m e q u a l t o 5 % o f t h e t o t a l t u r n o v e r i n p r e v i o u s y e a r o n a c c o u n t o f s u c h b u s i n e s s o r a s t h e c a s e m a y b e , a s u m h i g h e r t h a n t h e a f o r e s a i d s u m a s d e c la r e d b y t h e a s s e s s e e i n h i s r e t u r n o f i n c o m e s h a l l b e d e e m e d t o b e t h e pr o f i t s a n d g a i n s o f s u c h b u s i n e s s c h a r g e a b l e t o t a x u n d e r t h e h e a d “ p r of i t s & g a i n s o f b u s i n e s s o r p r o f e s s i o n ” . T h e a s s e s s e e w a s n o t s u p p os e d t o m a i n t a i n a n y IT(SS)A Nos. 15, 16, 17, 18, 19, 20/RAN/2019 Assessment Year: 2004-05, 05-06, 06-07, 07-08, 08-09, 09-10 & ITA No. 42 & 43,RAN/2019 Assessment Year: 2008-09 & 2010-2011 Pradeep Kumar Poddar, Chaibasa 19 b o o k s . T h i s a s s e s s m e n t o f t h e a s s e s s e e u n d e r t h i s pr e s u m p t i v e p r o v i s i o n h a s b e e n s o u g h t t o b e c h a r g e d b y t h e l d . A s s e s s i n g O f f i c e r u n d e r s e c t i o n 1 5 3 C o f t h e I n c o m e T a x A c t a f t e r t h e s e a r c h o n d i f fe r e n t p e r s o n s / e n t i t i e s . O n e o f t h e a l l e g a t i o n s n a r r a t e d b y t h e A s s e s s i n g O ff i c e r i s t h a t i n c e r t a i n y e a r s , t h e c a s h d e p o s i t e d i n t h e B a n k w a s m o r e t h a n t h e t u r n o v e r o f t h e a s s e s s e e . D e p o s i t i o n o f c a s h i n i t s e l f i n a n y B a n k a c c o u n t w o u l d n o t c o n s t i t u t e a n i n c o m e . T h e r e m i g h t b e d i f f e r e n t n a t ur e o f a v a i l a b i l i t y o f s u c h c a s h . I t m i g h t b e a t a x - f r e e i n c o m e e a r n e d b y a n a s s e s s e e i . e . c a p i t a l g a i n e t c . A p e r u s a l o f t h e a s s e s s m e n t o r d e r s w o u l d i n d i c a t e t h a t b e f o r e e s t i m a t i n g t h e b u s i n e s s i n c o m e o f t h e a s s e s s e e a t a h i g h e r f i g u r e u n d e r s e c t i o n 1 5 3 C o f t h e I n c o m e T a x A c t , t h e A s s e s s i n g Of f i c e r h a s n o t m a d e r e f e r e n c e t o a n y s e i z e d m a t e r i a l . H e h a s s i m p l y p a ss e d t h e a s s e s s m e n t o r d e r a s i f h e i s r e v i s i n g t h e r e g u l a r a s s e s s m e n t . W e h a v e t a k e n n o t e o f t h e f i n d i n g o f t h e l d . A s s e s s i n g O f f i c e r w h i l e n o t ic i n g t h e f a c t . T h i s a s p e c t i s d i s c e r n a b l e f r o m p a r a g r a p h n o . 5 . 1 o f t h e a s s e s sm e n t o r d e r r e p r o d u c e d b y t h e l d . C I T ( A p p e a l s ) a n d a l s o n o t e d b y u s . T h e r ef o r e i n o u r v i e w , t h a t t h e a d d i t i o n s m a d e b y t h e l d . A s s e s s i n g O f f i c e r a r e n o t s u s t a i n a b l e . 1 1 . A s f a r a s A . Y . 2 0 1 0 - 1 1 i s c o n c e r n e d , i n t h i s y ea r a r e g u l a r a s s e s s m e n t o r d e r h a s b e e n p a s s e d b y t h e l d . A s s e s s in g O f f i c e r u n d e r s e c t i o n 1 4 3 ( 3 ) b u t w e f i n d t h a t h e e s t i m a t e d t h e p ro f i t o f t h e a s s e s s e e a t 1 2 % o f t h e t o t a l t u r n o v e r . A p e r u s a l o f p a r a g r a p h no . 5 . 1 2 w o u l d i n d i c a t e t h a t t h e t u r n o v e r o f t h e a s s e s s e e i s o f R s . 3 6 , 8 7 , 0 00 / - . I t i s b e l o w t h e t u r n o v e r p r o v i d e d u n d e r s e c t i o n 4 4 A F . O n c e t h e a s s es s e e h a s o f f e r e d t h e i n c o m e u n d e r s e c t i o n 4 4 A F , t h e n w i t h o u t a n y r e a s o n s u c h i n c o m e c a n n o t b e r e - e s t i m a t e d . T h e r e f o r e , t h e a d d i t i o n i n t h i s y ea r i s a l s o d e l e t e d . 1 2 . I T A N o . 4 2 / R A N / 2 0 1 9 i n t h i s G r o u p i s a n a p p e a l a g a i n s t t h e o r d e r o f l d . C I T ( A p p e a l s ) d a t e d 2 8 . 1 1 . 2 0 1 8 . T h i s a r i s e s ag a i n s t a p e n a l t y p r o c e e d i n g u n d e r s e c t i o n 2 7 1 A o f t h e I n c o m e T a x A c t f o r n o t m a i n t a i n i n g IT(SS)A Nos. 15, 16, 17, 18, 19, 20/RAN/2019 Assessment Year: 2004-05, 05-06, 06-07, 07-08, 08-09, 09-10 & ITA No. 42 & 43,RAN/2019 Assessment Year: 2008-09 & 2010-2011 Pradeep Kumar Poddar, Chaibasa 20 t h e p r o p e r b o o k s o f a c c o u n t . W e f i n d t h a t t h e l d . As s e s s i n g O f f i c e r h a s w o r k e d o u t a n e s t i m a t e d t u r n o v e r b y t a k i n g i n t o c o ns i d e r a t i o n t h e c a s h d e p o s i t s m a d e i n t h e B a n k a c c o u n t . H e w a s o f t h e v ie w t h a t d u r i n g t h e y e a r , t h e a s s e s s e e h a s d e p o s i t e d R s . 3 2 . 6 6 l a k h s i n c a s h w i t h i n a p e r i o d o f s i x m o n t h s . T h e r e f o r e , h e a s s u m e d t h a t t h e a s s e s s e e m u s t h a v e c a r r i e d o u t m o r e t r a n s a c t i o n s i n t h e l a t t e r p e r i o d . H e e s t im a t e d t h e t u r n o v e r a t R s . 8 1 , 6 4 , 9 5 0 / - a s a g a i n s t R s . 1 8 , 5 0 , 5 0 0 / - . T h i s B a n k a c c o u n t w a s d i s c l o s e d t o t h e R e v e n u e b e f o r e t h e s e a r c h . N o t h i n g n e w w a s r e c o v e r e d a s s u m i n g t h e c a s h d e p o s i t s i n t h e B a n k a c c o u n t a s un d i s c l o s e d r e c e i p t s a n d t h e r e a f t e r e s t i m a t i n g t h e t u r n o v e r t o a f i g u r e o f R s . 8 1 , 0 0 , 0 0 0 / - i s n o t s u p p o r t e d b y a n y p r o v i s i o n o f t h e l a w . T h e l d . A s s es s i n g O f f i c e r h a s f i r s t a s s u m e d t h e e n h a n c e d t u r n o v e r , t h e r e a f t e r e s t i m a t e d t h e i n c o m e a t 1 2 % a n d a l s o o b s e r v e d t h a t t h e a s s e s s e e s h o u l d h a v e m a in t a i n e d t h e b o o k s o f a c c o u n t a n d i n t h e a b s e n c e o f s u c h , h e i m p o s e d a p en a l t y o f R s . 2 5 , 0 0 0 / - . W e h a v e d e l e t e d t h e a d d i t i o n i n t h e q u a n t u m b y h o l di n g t h a t t h e r e i s n o e v i d e n c e w i t h t h e l d . A s s e s s i n g O f f i c e r o n t h e b a s is o f w h i c h t h e a s s e s s m e n t u n d e r s e c t i o n 1 5 3 C c a n b e m a d e o n a n e n ha n c e d f i g u r e o f i n c o m e b y e s t i m a t i o n . T h e a l l e g e d B a n k a c c o u n t c a n no t b e c o n s i d e r e d a s i n c r i m i n a t i n g p i e c e o f e v i d e n c e b e c a u s e i t w a s i n th e k n o w l e d g e o f t h e R e v e n u e e v e n b e f o r e t h e s e a r c h . I t i s a p a r t o f t h e r e g u l a r r e t u r n s o f i n c o m e . T h e r e f o r e , t h e a s s e s s e e w a s n o t s u p p o s e d t o m a i n t a i n h i s b o o k s o f a c c o u n t a n d n o p e n a l t y i s i m p o s a b l e u p o n t h e a s se s s e e . 13. In the result, we allow all the appeals, delete the additions in all the years as well as the penalty in A.Y. 2008-09. O r d e r p r o n o u n c e d i n t h e o p e n C o u r t o n A p r i l 1 8 t h , 2 0 2 2 . Sd/- Sd/- (Girish Agrawal) (Rajpal Yadav) Accountant Member Vice-President (KZ) Kolkata, the 18 th day of April, 2022 IT(SS)A Nos. 15, 16, 17, 18, 19, 20/RAN/2019 Assessment Year: 2004-05, 05-06, 06-07, 07-08, 08-09, 09-10 & ITA No. 42 & 43,RAN/2019 Assessment Year: 2008-09 & 2010-2011 Pradeep Kumar Poddar, Chaibasa 21 Copies to : (1) Pradeep Kumar Poddar, Prop. M/s. Poddar & Poddar, Sadar Bazar, Amlatola, Chaibasa-833201 (2) Deputy Commissioner of Income Tax, Central Circle, Jamshedpur (3) Commissioner of Income Tax (Appeals)-3, Patna (4) Commissioner of Income Tax- (5) The Departmental Representative (6) Guard File TRUE COPY By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S.