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TMI Blog2020 (3) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... o.107/Viz/2018 to 111/Viz/2018) - - - Dated:- 28-2-2020 - Shri V. Durga Rao, Judicial Member And Shri D.S. Sunder Singh, Accountant Member For the Assessee : Shri G.V.N.Hari, AR For the Revenue : Shri Ravi Shankar Narayan, CIT, DR ORDER PER BENCH: These appeals are filed by the revenue against the orders of the Commissioner of Income Tax (Appeals) [CIT(A)]-3, Visakhapatnam in I.T.A.No.228 to 232/2016-17/CIT-(A)-3/VSP/2017-18 dated 30.12.2017 for the Assessment Year (A.Y.) 2010-11 to 2014-15 respectively and the cross objections are filed by the assessee. Since the facts of the case are identical, these appeals are clubbed, heard together and a common order is being passed for the sake of convenience as under. 2. Brief facts of the case are that the assessee firm is engaged in the business of quarrying and sale of sand and contract works. A survey u/s 133A of the Income Tax Act, 1961 (in short Act ) was conducted in the business premises of the assessee firm at D.No.20-8-5, Nadellavari Street, Tanuku on 22.01.2015 and during the course of survey, certain books of accounts, loose sheets were found and impounded u/s 133A of the Act vide proceedings date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... G.Dist. Total 2009-10 9.16 8.37 17.53 2010-11 40.16 1.66 41.82 2011-12 30.43 30.94 61.37 2012-13 37.13 2.44 39.57 2013-14 0.00 6.02 6.02 Avg. revenue to the Govt. from the past 5 years 33.26 4.1. The Ld.DR also invited our attention to page No.13 and 14 of the paper book and submitted that the assessee has written a letter dated 20th September, 2012 to the Hon ble Chief Minister, Government of Andhra Pradesh, stating that he is a sand contractor in various reaches in East Godavari and West Godavari Districts for the past 20 years. Taking the cue from the letter of the assessee dated 20.09.2012, the Ld.DR submitted that as per the submission made by the assessee to the Hon ble Chief Minister of Andhra Pradesh, he was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he past 5 years in East Godavari and West Godavari Districts in sand mining. Nothing mentioned in page No.84, 85 relates to either receipts, expenditure or investment of the assessee. Therefore argued that it has no bearing on the determination on the income of the assessee. Similarly page No.136 to 138 also related the general information and calculations made by the assessee for the cost to be incurred to excavate the silt sand, but none of the papers related to the income or expenditure of the assessee which has bearing on the determination of the income of the assessee. Therefore argued that by any stretch of imagination, the page No.84, 85, 136 to 138 can be called as incriminating material or the information having bearing on the income of the assessee. Since there was no incriminating material which has bearing on the income of the assessee, the Ld.AR argued that the Ld.CIT(A) has rightly quashed the notice issued u/s 153C, therefore requested to uphold the order of the Ld.CIT(A) and dismiss the appeal of the revenue. The Ld.AR relied on the orders of this Tribunal in I.T(SS)No.08-10/Viz/2018 in the case of Sri Pattapagalu Venkata Rao, Rajahmundry Vs. ACIT, Rajahmundry dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. 6. Responding to the argument of the Ld.AR, the Ld.DR submitted that with regard to irregular seized material, without having raised this issue at the time of drawing panchnama or subsequently before the income tax authorities, assessee cannot raise the issue on validity of the material seized. It is not permissible to declare whether the material seized is valid or invalid without deciding the validity of search in the case of Sri KVV Satyanarayana, therefore, argued that the argument of the assessee is not maintainable. 6.1. Similarly, the Ld.DR submitted with regard to satisfaction note that though the department has laid down the guidelines for writing the order sheet, since, the satisfaction was recorded in the case of searched person in a separate note merely because no entry was made in the order sheet, the same cannot be made invalid. The Ld.DR relied on the decision of Hon ble Gujarat High Court in the case of Principal Commissioner of Income Tax Vs. Dilip Avtar Construction Pvt Ltd 2019 (2) TMI 1471, the decision of ITAT Ahmedabad Bench in the case of Deputy Commissioner of Income Tax, Central Circle-2(2), Ahmedabad Vs. Sandip M.Patel (2012) 22 taxman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned the loose sheets and analysed the same as under : a) Page no.84 and 85 of Annexure A/KVVSN/02: These sheets consist of certain calculations made on estimate basis with regard to the River Sand usage in the districts of West and East Godavari and the cost to be incurred to excavate silt sand. The calculations were made to depict the Incremental Revenue to the State Government as per the estimated calculation. A proposal was made to the State Government to stop mining from the downstream area and to excavate sand from the upstream of barrage area. b) Page no.136 to 138 of Annexure A/KVVSN/02: These sheets also contain similar calculations on estimate basis prepared for the purpose of proposal sent to the State Government. On a careful perusal of the aforesaid material I find that all the aforesaid documents which are referred to in the satisfaction note are some estimated calculations prepared for the purpose of proposal sent to the State Government of Andhra Pradesh with regard to the additional revenues that may accrue to the Government in case upstream excavation of sand is substituted for downstream excavation. They do not contain details of any transaction whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmended sale price ₹ 1000 per unit Total Expected Sales (14,60,000 x 1,000) 1460000000 i.e. 146.00 crores Expenses : Removal, stocking, loading charges and other expenses (including normal profit) per unit is ₹ 500 Total Expenses (Inc. Normal Profit) for 14,60,000 units 730000000 i.e. 73.00 crores Total Revenue to Govt. for 1 year 73.00 crores The estimated revenue to the Govt. is too higher as compared to the past 5 years. The following are the revenue to Govt. from the past 5 years in East West Godavari Districts. Year E.G.Dist W.G.Dist. Total 2009-10 9.16 8.37 17.53 2010-11 40.16 1.66 41.82 2011-12 30.43 30.94 61.37 2012-13 37.13 2.44 39.57 2013-14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from the premises of the searched person. As discussed earlier the material found during the course of search was related to the A.Y.2014-15. Therefore, we hold that the notices issued u/s 153C of the Act, for the impugned assessment years are unsustainable. This view is upheld by the decision of Hon ble Supreme Court in the case of CIT Vs. Sinhagad Technical Education Society (2017) 84 Taxmann.com 290 (SC). This tribunal also considered the identical issue in the case of M/s. Sri Balaji Constructions, Kakinada in ITA No.387/Vizag/2014 dated 10/01/2018 and decided the issue in favour of the assessee. Respectfully following the decision of Hon ble apex court and the view taken by this tribunal we hold that notice issued u/s 153C without having incriminating material cannot survive, accordingly quashed. 7.3. In the instant case, as discussed earlier, the papers found and seized relates to the estimations, but not related to any income or expenditure of the assessee or investment made by the assessee which has bearing on the income. The AO did not make any addition on the basis of the loose sheets found during the course of search. The Ld.DR also did not bring any decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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