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TMI Blog2023 (5) TMI 789X X X X Extracts X X X X X X X X Extracts X X X X ..... because, when there is similarity in the products sold, there cannot be much difference in the GP rate. We hold that the additions sustained by Commissioner (Appeals) in different assessment years under dispute deserves to be deleted. Appeal of assessee allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Dee Kay Trade Centre and M/s. J.S. Enterprises are proprietary concern of Sh. Ram Kishan. He observed that the address given on the two bank accounts are bogus and not real address of the concerned person. The Assessing Officer observed that the photograph of Sh. Ram Kishan attached to the bank account does not indicate that he is a business man having turnover of more than Rs. 70 crores. The Assessing Officer observed, independent inquiry carried out by him to ascertain the existence of M/s. Dee Kay Trade Centre and M/s. J.S. Enterprises did not bear any result as the letters/summons issued returned back undelivered. In view of the aforesaid, the Assessing Officer called upon the assessee to produce the proprietor of M/s. Dee Kay Trade Centre and M/s. J.S. Enterprises. However, the assessee failed to produce them. From the sale invoices relating to these two entities, the Assessing Officer observed that such invoices do no bear vehicle number, GR number, date of discharge etc. No gate pass was also produced. Thus, based on the aforesaid facts available before him, the Assessing Officer concluded that the amount received from the aforesaid two parties towards sale of products ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer. 8. Before us, learned counsel appearing for the assessee submitted that the additions made by the Assessing Officer and partly sustained by learned First Appellate Authority are not based on any incriminating material found in course of search and seizure operation conducted on the assessee. Drawing our attention to the assessment orders, he submitted, there is no reference to any incriminating material while making additions. He submitted, the Assessing Officer has made the additions purely on estimate basis by substituting the GP rates disclosed by the assessee. Thus, he submitted, the additions made in absence of any incriminating material in unabated assessment proceedings are unsustainable. In support of such contention, learned counsel relied upon a decision of the Hon'ble Supreme Court in case of PCIT Vs. Abhisar Buildwell Pvt. Ltd., Civil Appeal No.6580 of 2021 and others, judgment dated 24th April, 2023. 9. Without prejudice, he submitted, the additions are unsustainable on merits as well. He submitted, the Assessing Officer as well as the first appellate authority have treated the sales made to M/s. Dee Kay Trade Centre and M/s. J.S. Enterprises by raising doubt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s effected by the assessee to the concerned parties are non-genuine. She submitted, when the assessee indulged in the activity of bogus sales and the books of account have been rejected, the GP rate adopted by the Assessing Officer has to be applied to the entire sales turnover. Thus, she submitted, the additions made by the Assessing Officer may be restored. 12. We have considered rival submissions and perused the materials on record. Insofar as factual aspect of the issue is concerned, there is no dispute that as on the date of search on 16.03.2011, assessments for the assessment years under dispute stood concluded. In other words, as on the date of search, no assessment has abated. It is trite law, in respect of any assessment year for which assessment has not abated on the date of search, no addition can be made in absence of any incriminating material found in search relating to such addition. In a recent decision of the Hon'ble Supreme Court in case of PCIT Vs. Abhisar Buildwell Pvt. Ltd. (supra), the following ratio has been laid down: "11. As per the provisions of Section 153A, in case of a search under Section 132 or requisition under Section 132A, the AO gets the juris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... left with no remedy. Therefore, even in case of block assessment under section 153A and in case of unabated/completed assessment and in case no incriminating material is found during the search, the power of the Revenue to have the reassessment under sections 147/148 of the Act has to be saved, otherwise the Revenue would be left without remedy. 12. If the submission on behalf of the Revenue that in case of search even where no incriminating material is found during the course of search, even in case of unabated/completed assessment, the AO can assess or reassess the income/total income taking into consideration the other material is accepted, in that case, there will be two assessment orders, which shall not be permissible under the law. At the cost of repetition, it is observed that the assessment under Section 153A of the Act is linked with the search and requisition under Sections 132 and 132A of the Act. The object of Section 153A is to bring under tax the undisclosed income which is found during the course of search or pursuant to search or requisition. Therefore, only in a case where the undisclosed income is found on the basis of incriminating material, the AO would assu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs are saved. The question involved in the present set of appeals and review petition is answered accordingly in terms of the above and the appeals and review petition preferred by the Revenue are hereby dismissed. No costs." 13. As could be seen from the aforesaid observations of Hon'ble Supreme Court, in case, no incriminating material is unearthed during the search, the Assessing Officer cannot assess or reassess income taking into consideration the other materials in respect of completed unabated assessments. Keeping in perspective the aforesaid ratio laid down by Hon'ble Supreme Court, if we examine the facts involved in the present appeals, it can be seen that the addition made by the Assessing Officer by estimating the GP rate is not with reference to any incriminating material found as a result of search and seizure operation conducted on assessee. At least, there is no reference of such material in the assessment orders. Though, before us, learned Departmental Representative made a valiant attempt to establish a link between the search and seizure operation conducted in case of the assessee and the survey authorization issued in the name of M/s. Dee Kay Trade Centre, ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to various banks, wherein, the concerned purchasing parties were having their accounts. In response to the notices issued under section 133(6) of the Act, the concerned banks have provided details of bank accounts of the concerned parties/entities. On verifying these bank accounts statements, the Assessing Officer has noticed that just prior to issuance of cheques to the assessee, cash deposits have been made in bank accounts. The Assessing Officer has further stated that from the photograph of the proprietor in the bank account, it does not appear that party will be having a turnover of more than Rs.70 crores. The aforesaid reasonings of the Assessing Officer are totally irrelevant. When the concerned parties are having so many bank accounts, it has to be believed that the parties were in existence at the relevant point of time, as the bank accounts reveal regular transaction. In any case of the matter, though, the Assessing Officer has disbelieved the sales effected by the assessee to the aforesaid two parties, however, consciously, he has not disallowed the entire sales made to the parties but has estimated the GP rate. This presupposes that, to some extent, the Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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