DCIT, New Delhi V. M/s Gunvardhan Vyapaar Pvt. Ltd., New Delhi

ITA 4668/DEL/2012

• Counselvise Citation: 466820114 RSA 2012
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 27-11-2013
• Assessment Year: 2004-2005
• Appeal Filed On: 30-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Keywords: Search and seizure; Additional evidence; Block assessment
• Section: 153A; 132; 144; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI D.K. SRIVASTAVA ITA NOS. 4667 & 4668/DEL/2012 ASSTT. YR: 2003-04 & 2004-05 DCIT CEN. CIR. 5, VS. M/S GUNVARDHAN VYAPAAR PVT . LTD., NEW DELHI. 13-B, 3 RD FLOOR NETAJI SUBHASH MARG, DARYA GANJ, NEW DELHI-110002. PAN: AABCG 2647 M AND C.O. NOS. 445 & 446/DEL/2012 (IN ITA NOS. 4667 & 4668/DEL/2012 ) ASSTT. YR: 2003-04 & 2004-05 M/S GUNVARDHAN VYAPAAR PVT. LTD., VS. DCIT CEN. CI R. 5, 13-B, 3 RD FLOOR NETAJI SUBHASH MARG, NEW DELHI. DARYA GANJ, NEW DELHI-110002. ( APPELLANT ) ( RESPONDENT ) DEPARTMENT BY : SHRI SATPAL SINGH SR. DR ASSESSEE BY : SHRI GAUTAM JAIN FCA O R D E R PER R.P. TOLANI, J.M: : THESE ARE TWO APPEALS FILED BY THE REVENUE AGAINST SEPARATE ORDERS OF CIT(A)-XXXI, RELATING TO A.Y. 2003-04 & 2004-05 WIT H CORRESPONDING CROSS-OBJECTIONS BY THE ASSESSEE ARISING FROM THE S AME PROCEEDINGS I.E. 153C. THESE DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. THE REVENUE IN ITS APPEALS HAS RAISED ONE COMMON GROUND, EXCEPTING DIFFERENCE IN QUANTUM, FOR BOTH THE YEARS, WHICH I S AS UNDER: ITA 4667 & 4668/DEL/2012 & CO NOS. 445 & 446/DEL/2012 M/S GUNVARDHAN VYAPAAR PVT. LTD. 2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 22,17,375 /- (FOR A.Y. 2003-04) & RS. 23,37,125/- (FOR A.Y. 2004-05) MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ESTIMATION OF NET P ROFIT @ 5% OF THE GROSS SALE OF SHARES BY ADMITTING ADDITIONAL EV IDENCE IN CONTRAVENTION OF RULE 46A OF INCOME TAX RULES, 1962 . 2.1. ASSESSEE IN ITS CROSS-OBJECTIONS HAS RAISED CO MMON GROUNDS, EXCEPTING DIFFERENCE IN QUANTUM, IN CROSS-OBJECTI ONS AS UNDER: 1. THAT NOTICE ISSUED U/S 153C OF THE ACT AND ASSE SSMENT FRAMED U/S 153A/144 OF THE ACT WITHOUT SATISFYING T HE STATUTORY PRECONDITIONS CONTAINED IN THE ACT WERE WITHOUT JUR ISDICTION AND THEREFORE, DESERVES TO BE QUASHED AS SUCH. 2. THAT WHILE UPHOLDING THE ASSUMPTION OF JURISDICT ION THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FA ILED TO APPRECIATE THAT SINCE NO MONEY, BULLION JEWELLERY O R OTHER VALUABLE ARTICLE OR THING OR BOOKS OF ACCOUNTS OR D OCUMENTS BELONGING TO THE APPELLANT WERE SEIZED AS A RESULT OF SEARCH ON RAJDARBAR GROUP, NOTICE ISSUED U/S 153C OF THE ACT WAS ILLEGAL, INVALID AND UNSUSTAINABLE. 3. THAT ADDITION MADE OF RS. 22,17,375 (A.Y. 2003-0 4) & 23,37,125 (A.Y. 2004-05) BY THE LEARNED DEPUTY COMM ISSIONER OF INCOME TAX IS PERSE WITHOUT JURISDICTION SINCE T HE SAME IS NOT BASED ON ANY MATERIAL FOUND AS A RESULT OF SEARCH O N RAJDARBAR GROUP OF CASES AS HAS BEEN HELD BY SPECIAL BENCH OF TRIBUNAL IN THE CASE OF M/S ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT REPORTED IN 18 ITR (TRIB) 106. 3. BRIEF FACTS ARE: SEARCH & SEIZURE OPERATIONS WER E CARRIED OUT IN THE CASE OF ONE RAJDARBAR GROUP OF CASES ON 31-7-2008 . IN CONSEQUENCE THEREOF NOTICES U/S 153C WERE ISSUED ON 21-7-2010 T O WHICH ASSESSEE OBJECTED. DURING THE COURSE OF 153C PROCEEDINGS, A SSESSEE COULD NOT FILE REQUIRED DOCUMENTS ON THE GROUND THAT THE COMPANY AT THAT TIME WAS NOT ITA 4667 & 4668/DEL/2012 & CO NOS. 445 & 446/DEL/2012 M/S GUNVARDHAN VYAPAAR PVT. LTD. 3 MANAGED BY THE PRESENT MANAGEMENT, HENCE NO INFORMA TION PERTAINING TO THESE ASSESSMENT YEARS WAS AVAILABLE WITH THEM. THE REAFTER ASSESSING OFFICER PASSED EX PARTE ASSESSMENT U/S 144 READ WITH SEC. 1 53C OF THE I.T. ACT AND WITHOUT MAKING REFERENCE TO INCRIMINATING MATERIAL MADE THE AFOREMENTIONED ADDITIONS BY ESTIMATING THE INCOME OF THE ASSESSEE: 3.1. AGGRIEVED, ASSESSEE PREFERRED FIRST APPEAL, WH ERE APROPOS THE LEGALITY OF ADDITIONS THE ASSESSEE CONTENDED AS UNDER: WITH REGARD TO GROUND NO 3(I), THE APPELLANT HAS S OUGHT TO CHALLENGE THE ASSESSMENT ORDER PASSED BY THE AO BEI NG BAD IN LAW. THE APPELLANT HAS SUBMITTED THAT THE ORDER IS BAD IN LAW BECAUSE NO INCRIMINATORY PAPERS/ MATERIALS/ DOCUMEN TS/ INFORMATION'S WERE FOUND DURING THE 'SEARCH OPERATI ON AND THE ASSESSMENT U/S 153C WAS COMPLETED WITHOUT TAKING IN TO CONSIDERATION THE SEIZED MATERIAL AND DOCUMENTS FOU ND DURING SEARCH. THE ADDITION MADE WERE OUTSIDE THE SEARCH M ATERIALS AND FRESH ASSESSMENT OR REASSESSMENT ARE AGAINST TH E PROVISION OF SECTION 153C OF THE ACT ITSELF AS SUCH THE ASSES SMENT PASSED MAKING ADDITIONS OUTSIDE SEARCH MATERIAL AND CHANGI NG OF OPINION FROM THE EARLIER ORDERS PASSED BY THE DEPAR TMENT IS ILLEGAL AND BAD IN LAW THE ASSESSMENT ORDER PASSED U/S 153C IS IN PURSUANCE TO SEARCH CARRIED OUT AT THE PREMISES OF THE ASSESSEE AT NEW DELHI AND IN THE CASE OF RAJDARBAR GROUP U/S 132 OF THE INCOME TAX ACT, 1961 ON 31 072008 AND DU RING THE SEARCH OPERATION, NO SUCH MATERIAL WAS FOUND WHICH LEADS HIM TO EXERCISE THE POWERS CONFERRED UPON UNDER SECTION 153A OF THE ACT AND TO PURSUE A FRESH ASSESSMENT OR REASSES SMENT AS HE HAS DONE IN THE CASE OF THE ASSESSEE, WHICH IS NOT PERMISSIBLE IN LAW AS THE ASSESSMENT UNDER SEE 153C CANNOT BE MADE DE-NOVO. THE AR PLACED RELIANCE ON THE FOLLOWING DECISIONS: - CIT VS. ASHOK DUA 177 TAXMANN 494 (DELHI) - CIT VS. PARSHURAM POTTERIES 106 ITR 1 (SC) - SH. ANIL KUMAR BHATIA VS. ACIT [ITA NO. 2660 TO 2665/DEL/2009] ITA 4667 & 4668/DEL/2012 & CO NOS. 445 & 446/DEL/2012 M/S GUNVARDHAN VYAPAAR PVT. LTD. 4 - SHIVNATH RAJ HARNARAIN (INDIA) LTD. (2008) 304 ITR (AT) 271 (DEL). - KOLKATA BENCH OF ITAT IN LMJ INTERNATIONAL CASE. - KAILASH AUTO FINANCE REPORTED AT 320 SOT 80 (AT)(LUCKNOW) - PANNALAL BAJAJ VS. UNION OF INDIA (1957) 31 ITR 565 (SC) - CIT VS. SIMON CARVES LTD. (1976) 105 ITR 212 (SC) - CIT V. RAMESHWAR PRASAD BAGLA (1968) 68 ITR 653 (AL L). 3.2. THE CIT(A), HOWEVER, REJECTED THE ASSESSEES C ONTENTION ON LEGALITY OF ADDITIONS BY HOLDING THAT BLOCK ASSESSMENT ENVISAGE D CONCEPT OF DUAL ASSESSMENT ONE FOR UNDISCLOSED INCOME FOUND AS A RESULT OF SEARCH AND THE OTHER REGULAR ASSESSMENT AS PER THE NORMAL PROVISIO NS OF THE ACT. U/S 153C BOTH THE ASSESSMENT PROCEEDINGS ARE MERGED TOGETHER AND THE ADDITIONS, THEREFORE, CANNOT BE RESTRICTED ONLY TO UNDISCLOSE D INCOME RELATABLE TO INCRIMINATING MATERIAL, DETECTED AS A RESULT OF SEA RCH. IN SUPPORT CIT(A) RELIED ON THE RATIO OF DECISIONS IN THE CASES OF: - TARU LATA SHYAM VS. CIT 108 ITR 345; - KESHAVJI RAOJI & CO. VS. CIT 183 ITR 1; - GURU DEVDUTTA VKSS MARYADIT VS. STATE OF MAHARAST RA IR 2001 SC 1980; - CIT VS. ANJUM M.H. GHASWALA 252 ITR (CONSTITUTION BENCH); - MR. GOPAL LAL BHADRUKA VS. DCIT 2012-TIOL- 357-HC -AP-IT. 3.3. CIT(A) THUS UPHELD THE LEGALITY OF ADDITIONS A ND IN FRAMING THE ASSESSMENT BASED ON NO INCRIMINATING MATERIAL. 3.4. APROPOS MERITS OF THE ADDITIONS, IT WAS PLEADE D THAT THE ADDITION IN QUESTION I.E. ESTIMATION OF PROFIT EARNED BY THE AS SESSEE HAS NOT BEEN MADE RELYING ON ANY INCRIMINATING MATERIAL, NO REASONS H AVE BEEN CITED AS TO WHY THE ASSESSEES GROSS PROFIT IS NOT ACCEPTABLE TO AS SESSING OFFICER. ITA 4667 & 4668/DEL/2012 & CO NOS. 445 & 446/DEL/2012 M/S GUNVARDHAN VYAPAAR PVT. LTD. 5 3.5. SINCE THE ADDITIONS UNDER SEARCH ASSESSMENT AR E BASED WITHOUT ANY INCRIMINATING MATERIAL, THE IMPUGNED ADDITIONS CANN OT BE MADE. RELIANCE WAS PLACED ON THE ABOVE CASE LAWS IN THIS BEHALF AL SO. AS THE 153C ASSESSMENT WAS BEFORE CIT(A) U/S 144, THE ASSESSEE FILED ADDITIONAL EVIDENCE UNDER RULE 46A TO SUPPORT ITS BOOK RESULTS . ALL EVIDENCE WAS FORWARDED TO THE ASSESSING OFFICER FOR HIS COMMENTS . CIT(A) HAS RECORDED THAT DESPITE SEVERAL REMINDERS ASSESSING OFFICER DI D NOT REPLY TO THE REQUISITION OF REMAND REPORT INCLUDING A FINAL NOTI CE. IN THE PECULIAR CIRCUMSTANCES CIT(A) ADMITTED THE ADDITIONAL EVIDEN CE BY FOLLOWING OBSERVATIONS: 53.1 I HAVE CONSIDERED THE SUBMISSION, PERUSED TH E ORDER OF ASSESSMENT AND, EVIDENCES ON RECORD. THE D ISPUTE, AS RAISED BY THE APPELLANT, PERTAINS TO THE ADDITIO NS ON ACCOUNT OF ESTIMATION OF INCOME @ 5% ON THE SALE OF SHARES AMOUNTING TO RS.22,17,375/- DURING THE ASSESSMENT, AO HAS ASKED TO FILE THE RELEVANT PAPERS AND IN THE ABSENC E OF THESE PAPERS, THE AO HAS PASSED THE ORDER U/S 144. IN THI S RESPECT AR OF THE APPELLANT HAS SUBMITTED THAT APPELLANT GR OUP HAS GOT CONTROL OF THIS COMPANY AFTER THE AY 2003-04 AN D THEREFORE THEY WERE UNABLE TO SUBMIT THE REQUIRED DOCUMENTS DURING THE ASSESSMENT PROCEEDINGS. THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PR ODUCING THE EVIDENCE WHICH HE WAS CALLED UPON TO PRODUCE BY THE ASSESSING OFFICER AND AS PER THE AR OF THE APPELLAN T THESE DOCUMENTS HAVE BEEN RECEIVED NOW AND HAS BEEN PRODU CED AS ADDITIONAL EVIDENCE. AFTER CONSIDERING THE SUBMI SSIONS AND ADDITIONAL EVIDENCE, THESE ADDITIONAL EVIDENCES WERE SENT TO THE AO FOR HIS COMMENTS. BUT DESPITE SENDIN G THE SEVERAL REMINDERS TO THE AO, NO REPLY WAS RECEIVED FROM THE OFFICE OF THE AO. I FIND THAT IN THE INTEREST OF NA TURAL JUSTICE WITHOUT CONSIDERING THE ADDITIONAL EVIDENCE IT MAY NOT BE POSSIBLE TO ADJUDICATE ON THE ISSUES. A FINAL REMIN DER WAS SENT ON 11042012 TO THE AO TO PROVIDE HIS REPORT LA TEST BY 20.04.2012 POSITIVELY FAILING WHICH APPEAL WILL BE DECIDED ITA 4667 & 4668/DEL/2012 & CO NOS. 445 & 446/DEL/2012 M/S GUNVARDHAN VYAPAAR PVT. LTD. 6 ON THE BASIS OF FACTS AND EVIDENCES AVAILABLE BEFOR E ME. HOWEVER, NO RESPONSE WAS RECEIVED TILL THE DATE OF PASSING OF THE ORDER. 3.6. CIT(A) ON MERITS ALLOWED THE CLAIM OF THE ASSE SSEE BY FOLLOWING OBSERVATIONS: 5.32 IN THE PRESENT SITUATION, I FIND THAT THE APP ELLANT HAS SUBMITTED THE DOCUMENTS, EVIDENCES OF PURCHASE AND SALES ALONG WITH BANK STATEMENT, REFLECTING THE NECESSARY ENTRIES IN THE BANK ACCOUNT, A TAX AUDIT REPORT BY A CHARTE RED ACCOUNTANT ALONG WITH A COPY OF STATUTORY AUDIT REP ORT. THE PROVISIONS OF COMPUTING PROFIT AND GAINS ON PRESUMP TIVE BASIS U/S 44AF(5) FOR RETAIL BUSINESS MENTIONS THAT 'NOTWITHSTANDING ANYTHING CONTAINED IN THE FOREGOIN G PROVISIONS OF THIS SECTION AN ASSESSEE MAY CLAIM LO WER PROFITS AND GAINS THAN THE PROFITS AND GAINS SPECIFIED IN S UB-SECTION (1), IF HE KEEPS AND MAINTAINS SUCH BOOKS OF ACCOUN T AND OTHER DOCUMENTS AS REQUIRED UNDER SUB-SECTION (2) OF SECTION 44AA AND GETS HIS ACCOUNTS AUDITED AND FURNISHES A REPOR T OF SUCH AUDIT AS REQUIRED UNDER SECTION 44AB' THE APPELLANT HAS MAINTAINED PROPER BOOKS OF ACCOUN T AND HAS GOT THEM AUDITED U/S 44AE3 OF THE ACT. THE PROV ISION WOULD HAVE BEEN APPLICABLE IF THE TURNOVER OF THE APPELL ANT WOULD HAVE BEEN LOWER THAN THE LIMITS SPECIFIED U/S 44AB OF THE ACT. IN THE CASE OF THE APPELLANT, THE TURNOVER OF -THE APPELLANT IS MORE THAN THE LIMITS SPECIFIED AS 'SUC H ON THIS ACCOUNT ALSO THE PROVISIONS OF SECTION 44AF COULD N OT BE MADE APPLICABLE IN THE CASE OF THE APPELLANT. 5.3.3. THE A.O. HAS PASSED AN EX PARTE ORDER U/S 15 3C/144. IN VIE OF THE JUDGMENT IN THE CASE OF CIT V. R.M.L. ME HROTRA (2010) 320 ITR (ALL HC) IT WAS HELD THAT AFTER THE SEARCH ACTION, THE ASSESSMENT CANNOT BE FRAMED U/S 144. TH EREFORE, THE ADDITIONS MADE BY THE AO U/S 144 IN THE ASSESSMENT U/S 153C CANNOT PASS MUSTER THE JUDICIAL SCRUTINY. ALSO IN T HE CASE OF FORT PROJECTS (P) LTD VS DCIT [(2011) 145 TTJ 340], ITAT CALCUTTA HAS HELD THAT 'AD HOC DISALLOWANCE OF 10 P ER CENT OF ITA 4667 & 4668/DEL/2012 & CO NOS. 445 & 446/DEL/2012 M/S GUNVARDHAN VYAPAAR PVT. LTD. 7 THE GENERAL EXPENDITURE AND INTEREST EXPENSES FOR A SST. YRS. 2002-03 TO 2008-09 MADE BY AO BY OBSERVING THAT ADD ITIONS ON ACCOUNT OF DISALLOWANCE OF INTEREST AND COMMON EXPE NSES DID NOT EMANATE FROM INCRIMINATING MATERIAL FOUND DURIN G THE COURSE OF SEARCH, THE SAME COULD NOT BE DISTURBED A ND THE SAID ISSUES COULD NOT BE SUBJECT-MATTER OF CONSIDERATION FOR PROCEEDINGS UNDER S. 153A ' THE DEPARTMENT HAS USED ITS LONG ARM OF SEARCH AND SEIZURE AND THERE IS NO JUSTIFICA TION TO MAKE THE ASSESSMENT U/S 144 FOR WANT OF DETAILS. THE DOC UMENTS AND DETAILS FILED AS ADDITIONAL EVIDENCE DURING APPELLA TE PROCEEDINGS HAS BEEN SENT TO THE AO FOR COMMENTS, H OWEVER NO COMMENTS WERE RECEIVED DESPITE REMINDERS. THESE DET AILS COULD NOT BE FURNISHED AT THE TIME OF ASSESSMENT DUE TO REASONS BEYOND CONTROL OF THE APPELLANT AS HAS BEEN STATED IN PARA 5.31 ABOVE. IN ABSENCE OF RESPONSE, THE ADMISS IBILITY OF THE ADDITIONAL EVIDENCE CANNOT BE REJECTED WITHOUT REASON THE AO HAS ALSO NOT COMMENTED ON MERITS OF THE SUBMISSI ON OF THE APPELLANT THEREFORE, THE ADDITION OF RS.22, 17,375/ - MADE ON PRESUMPTIVE BASIS CANNOT BE SUSTAINED AND HENCE DEL ETED. THE RETURN OF INCOME/LOSS FILED BY THE APPELLANT IS ACC EPTED IN RESULT THIS GROUND OF APPEAL IS ACCEPTED. 3.7. AGGRIEVED, REVENUE HAS PREFERRED APPEALS AND A SSESSEE HAS FILED CROSS OBJECTIONS BEFORE US. 4. LD. DR RELIED ON THE ORDER OF ASSESSING OFFICER AND CONTENDS THAT THE PLAIN AND SIMPLE READING OF PROVISIONS OF SEC. 153C LEAD TO UNAMBIGUOUS MEANING THAT WHILE EXERCISING POWERS U/S 153C, THE ASSESSING OFFICER CAN ASSESS AND REASSESS ANY INCOME. THUS, DURING THE BL OCK ASSESSMENT PROCEEDINGS U/S 153C ASSESSING OFFICER CAN MAKE THE REASSESSMENT OF THE ENTIRE INCOME AND THE POWERS OF ADDITIONS IS NOT RE STRICTED ONLY TO THE INCRIMINATING MATERIAL. ORDER OF CIT(A) ON THE ISSU E OF LEGALITY OF ADDITIONS IS RELIED ON. ITA 4667 & 4668/DEL/2012 & CO NOS. 445 & 446/DEL/2012 M/S GUNVARDHAN VYAPAAR PVT. LTD. 8 4.1. APROPOS RELIEF ON MERITS, LD. DR RELIES ON THE ORDER OF A.O. AND CONTENDS THAT CIT(A) HAS ADMITTED THE ADDITIONAL EV IDENCE WITHOUT PROPER JUSTIFICATION, THEREFORE, NO COGNIZANCE THEREOF SHO ULD BE TAKEN. BESIDES CIT(A) HAS NOT GIVEN ANY COGENT REASONS FOR DELETIO N OF THE ADDITION. WHEN THE ASSESSEE DOES NOT PRODUCE DOCUMENTS IN ORIGINAL PROCEEDINGS IN THAT CASE ASSESSING OFFICER CAN MAKE AN ESTIMATE OF THE INCOM E. THIS POWER OF ESTIMATE HAS BEEN EXERCISED BY THE LD. ASSESSING OF FICER IN A REASONABLE MANNER WHICH CANNOT BE FOUND FAULT WITH. 5. LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HAND W HILE ADDRESSING TO ASSESSEES CROSS-OBJECTIONS CONTENDS THAT THE ISS UE OF LEGALITY OF ADDITION DURING THE COURSE OF BLOCK ASSESSMENT PROCEEDINGS U /S 153A OR 153B IS DECIDED BY CATENA OF JUDGMENTS MENTIONED ABOVE INCL UDING THE JUDGMENTS OF HONBLE DELHI HIGH COURT IN THE CASES OF CIT VS. AN IL KUMAR BHATIA (SUPRA); AND SSP AVIATION 346 ITR 177 AS WELL AS TH E JUDGMENT OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF JAI STEELS 259 CTR 281 BESIDES, THE JUDGMENTS REFERRED BEFORE THE CIT(A). A COMBINED RE ADING OF THESE JUDGMENTS LEAD TO AN INESCAPABLE PROPOSITION THAT I N THE BLOCK ASSESSMENT, NO ADDITION CAN BE MADE UNLESS SOME INCRIMINATING M ATERIAL IS FOUND DURING THE SEARCH IN BEHALF OF ADDITIONS. NEITHER IN THE ENTIRE LENGTH AND BREADTH OF THE ORDER NOR IN THE REMAND PROCEEDINGS (WHICH IS N OT SUBMITTED BY A.O.), NO OBJECTION HAS BEEN RAISED TO THE ASSESSEES PROP OSITION. IN VIEW OF THE PROPOSITION SETTLED BY HONBLE HIGH COURTS IT HAS B ECOME A SETTLED PROPOSITION, NOW ACCEPTED BY VARIOUS BENCHES OF THE ITAT, WHICH ARE MENTIONED ABOVE THAT WHILE MAKING THE ASSESSMENT OR REASSESSMENT, IN BLOCK ITA 4667 & 4668/DEL/2012 & CO NOS. 445 & 446/DEL/2012 M/S GUNVARDHAN VYAPAAR PVT. LTD. 9 ASSESSMENT U/S 153A OR 153C NO ADDITION CAN BE MADE IN THE ABSENCE OR REFERENCE TO ANY INCRIMINATING MATERIAL QUA THE ADD IITONS. 5.1. APROPOS REVENUES GROUND ABOUT ADDITIONAL EVID ENCE IT IS PLEADED THAT DR HAS NOT DISPUTED THE FACT THAT AT THE TIME OF SE ARCH THE ASSESSEE COMPANYS MANAGEMENT WAS HEADED BY A DIFFERENT GROU P, WHICH WAS SUCCEEDED BY THE PRESENT INCUMBENT. THIS DIFFICULTY WAS COMMUNICATED TO THE ASSESSING OFFICER, WHICH ALSO REMAINS CONTROVER TED, THUS ASSESSEE WAS PREVENTED BY A SUFFICIENT CAUSE IN DEFENDING ITS CA SE. BY THE TIME OF APPEAL THE ASSESSEE AFTER MARATHON EFFORTS COULD PROCURE T HE RELEVANT INFORMATION WHICH WAS DULY FILED BEFORE CIT(A) IN THE FORM OF A DDITIONAL EVIDENCE. THIS WAS DULY FORWARDED BY LD. CIT(A) TO ASSESSING OFFIC ER FOR REMAND REPORT IN ACCORDANCE WITH LAW. IN FACT ASSESSING OFFICER HAS DEFIED THE POWER OF LD. CIT(A) AND COMMITTED AN ACT OF INSUBORDINATION INAS MUCH AS HE DID NOT CARE OR BOTHER TO ASK FOR ANY TIME OR SEND ANY REPLY FOR THE REMAND REPORT, WHICH IS FURTHER EVIDENT FROM THE FACT THAT CIT(A) ISSUED A FINAL NOTICE TO FILE A REMAND REPORT. THE A.O. TURNED DEAF YEAR TO THE ST ATUTORY REQUISITION OF A SUPERIOR APPELLATE AUTHORITY WHO HAD POWER TO DIREC T HIM TO FILE A REMAND REPORT. AFTER CONSIDERATION OF ENTIRE PROCEEDINGS L D. CIT(A) HAS GIVEN DEFINITE FINDING OF FACT THAT ASSESSEE WAS PREVENTE D BY SUFFICIENT CAUSE IN PRODUCING THESE DOCUMENTS AND THE ADDITIONAL EVIDEN CE WAS THUS PROPERLY ADMITTED AND NO INFIRMITY CAN BE FOUND IN THE ORDER OF CIT(A) IN THIS BEHALF. WHILE ADMITTING THE ADDITIONAL EVIDENCE LD. CIT(A) HAS RELIED ON RELEVANT JUDICIAL CITATION IN SUPPORT OF HIS ACTION IN ADMIT TING ADDITIONAL EVIDENCE. LD. DR ALSO HAS NOT CONTROVERTED TO ANY OF THE OBSERVAT IONS OR FINDINGS OF THE CIT(A) WHILE ADMITTING THE ADDITIONAL EVIDENCE EXCE PT RAISING SOME VAGUE ITA 4667 & 4668/DEL/2012 & CO NOS. 445 & 446/DEL/2012 M/S GUNVARDHAN VYAPAAR PVT. LTD. 10 AND GENERAL OBJECTIONS. THUS THE ORDER OF CIT(A) AD MITTING ADDITIONAL EVIDENCE IS PERFECTLY JUSTIFIED AND WITHIN THE FOUR CORNERS OF THE LAW. 5.2. SINCE ASSESSEES BOOKS OF ACCOUNTS ARE DULY AU DITED AND NO SPECIFIC OR GENERAL FAULT HAS BEEN FOUND THEREIN, LD. CIT(A) HAS RIGHTLY HELD THAT THERE IS NO SCOPE FOR REJECTING THE BOOKS AND ESTIMATING THE PROFITS WITHOUT ANY INCRIMINATING EVIDENCE OR GIVING ANY COGENT REASONS IN THIS BEHALF. THUS, THE ORDER OF CIT(A) ON THE ISSUE OF RELIEF ON MERITS IS RELIED ON. 6. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. FIRST ADDRESSING TO THE CROSS OBJECTIONS FILED BY THE ASSESSEE WE FIND MERIT IN THE ARGUMENT OF LD. COUNSEL, FROM THE RECORD IT CLEARLY EMERGES THAT ASSESSING OFFICER HAS NOT REFERRED AND LEAST O F ALL NOT INDICATED TO ANY INCRIMINATING MATERIAL FOR REJECTING THE BOOKS AND ESTIMATING THE PROFITS. THUS, THE ADDITIONS IN QUESTIONS ARE BEREFT OF ANY SUPPORT OR RELEVANCE TO ANY INCRIMINATING MATERIAL WHATSOEVER. SUCH ADDITIO NS ARE NOT PERMISSIBLE U/S 153C AS PER THE SETTLED PROPOSITION ENUNCIATED BY CATENA OF ITAT JUDGMENTS AND FURTHER LAID DOWN BY HONBLE DELHI HI GH COURT IN THE CASE OF ANIL KUMAR BHATIA, SPS AVIATION (SUPRA) AND HONBLE RAJASTHAN HIGH COURT IN THE CASE OF JAI STEELS (SUPRA). RESPECTFULLY FOL LOWING THEM WE ARE OF THE VIEW THAT CIT(A) ERRED IN UPHOLDING THE ACTION OF A SSESSING OFFICER IN MAKING ADDITIONS IN BLOCK ASSESSMENT WITHOUT INCRIM INATING MATERIAL. THUS, FINDING OF CIT(A) IS REVERSED AND ASSESSEES CROSS- OBJECTIONS ARE ALLOWED. 6.1. SINCE REVENUE IS IN APPEAL, IT WILL BE DESIRAB LE THAT WE ADVERT TO MERITS ALSO. IN OUR CONSIDERED VIEW THE ACTION OF THE CIT( A) IN ADMITTING THE ADDITIONAL EVIDENCE IS PERFECTLY VALID AND TENABLE. NO INFIRMITY THERETO CAN ITA 4667 & 4668/DEL/2012 & CO NOS. 445 & 446/DEL/2012 M/S GUNVARDHAN VYAPAAR PVT. LTD. 11 BE FOUND. WE MAY ALSO MAKE A PERTINENT MENTION THAT ASSESSING OFFICER CAN NOT SIT OVER THE REQUISITION OF A SUPERIOR APPELLA TE AUTHORITY I.E. CIT(A) FOR SUBMITTING THE DIRECTED REMAND REPORT. IF DESERVED TO BE DULY REPLIED, THIS TYPE OF ATTITUDE INDICATES SENSE OF INSUBORDINATION AND FRUSTRATES THE LEGAL MACHINERY PROVIDED TO PROMOTE SMOOTH DISPENSATION OF JUSTICE. BE THAT AS IT MAY, THE RECORD REFLECTS THAT NO ADVERSE COMMENTS A RE OFFERED BY THE ASSESSING OFFICER ON THE ADDITIONAL EVIDENCE AND ME RITS; THE BOOKS OF A/CS ARE DULY AUDITED; NO SPECIFIC OR GENERAL FAULT IS INDIC ATED THEREIN BY THE ASSESSING OFFICER AND THERE IS NO RELIANCE ON ANY INCRIMINATI NG MATERIAL. IN THESE FACTS AND CIRCUMSTANCES, WE SEE NO INFIRMITY THE ORDER OF CIT(A) IN DELETING THE ADDITIONS ON MERITS. WE UPHOLD HIS ORDER ON THIS IS SUE. 7. IN THE RESULT, REVENUES APPEALS ARE DISMISSED A ND ASSESSEES CROSS- OBJECTIONS ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 30-4-2014. SD/- SD/- ( D.K. SRIVASTAVA ) ( R.P. TOLANI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30-04-2014. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR