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2016 (7) TMI 1580 - AT - Income TaxUndisclosed income of the block period u/s 158BB - Hawala transaction in the sale of Neptha - HELD THAT:- CIT(A) while considering the addition on account of sale of Neptha observed that the addition to the income of assessee on account of sale of Neptha has been made on the basis of statement of Naresh B. Vora, the document impounded from his business premises and some other factor. Not a single word has been written specifically what evidence was collected during the course of search, the details gathered during the block assessment proceeding. AO has nowhere referred that any statement of assessee was recorded. Neptha is a buy product crude oil which is sold by the PSU for the license holder, who is actual user i.e. manufacturer of petro chemicals for which explosive license is mandatory. During the entire proceeding u/s 132, no incriminating material was found or seized which may show or prove that assessee was quote holder of Neptha or that he owned a factory having manufacturing of petro chemicals, the statement of assessee was recorded on 22.01.2001 exactly six days before the date of assessment order. The assessee was not confronted with the alleged material and the statement of Shri Naresh B. Vora which has been used against him, not a single question was asked about the sale of Neptha or his relationship with Ahmadabad and Baroda parties. After analyzing the fact and the alleged corroborative evidence a basic question here arises as whether the addition of income of the assessee can be made on the basis of the above referred material. CIT(A) find its answer in No. No illegality or infirmity in the order of CIT(A) in deleting the addition on account of sale of Neptha, thus, this ground of appeal raised by Revenue is dismissed. Addition on account of sale of delivery orders - HELD THAT:- Mr. Vora informed that Sunil Thakkar had obtained chemicals in the name of Galaxy Petrochem and sold it in the market. The assessee has totally denied his involvement and argued that no paper were found at the premises of the assessee nor were found during the survey of premises of Naresh Vora. Ld. CIT(A) while considering this ground concluded that the addition cannot be sustained u/s. 158BC in absence of independent, primary evidence found and seized during search operation. The name appearing on the backside of two bills “Sunil Bhai” is not proved and AO has not given any reasoning as to how he arrived at the conclusion that the signature were of the assessee. Thus, we are in agreement with the finding of Ld. CIT(A). This ground of appeal raised by Revenue is also dismissed. Addition on protective basis on the statement of Naresh Vora - HELD THAT:- AO made the addition merely on the statement of Naresh Vora dated 09.02.2001. Ld. CIT(A) while considering the contention of assessee concluded that the addition made by AO is not as per the provision of law. Except the statement of Naresh Vora, no other document seized during the search has been referred by AO for making the addition and deleted the addition. We have noticed that Mr. Vora has not alleged anywhere that assessee was working on behalf of Atlas, Avani or Ankini. With these observations, we do not find any illegality or infirmity in the order of ld. CIT(A), thus this ground of appeal of Revenue is also failed. Addition on account of Foreign Tour Expenses - HELD THAT:- The assessment order is silent about the evidence which may prove that assessee spend ₹ 2,00,000/- on foreign trip in AY-1998-99 and/or the said money was unaccounted income of the assessee. In fact, during the assessment proceeding, the assessee filed some details about the foreign travel/trip, on the basis of which the addition has been made and the same was deleted by the Ld. CIT(A). DR for revenue failed to disclose that there was any material to make any addition. Since there was no material in respect of unaccounted income for foreign travel during the search proceeding, hence, the same was deleted by Ld. CIT(A). With this observation, we do not find any infirmity in the order of CIT(A). Hence, this ground of appeal is also dismissed. Addition on account of Household Expenses - addition was made on the basis of one Gandhi Dairy in the premises of Sunil Chemicals - HELD THAT:- The Dairy is not in handwriting of the assessee or any of his family member, the said Dairy was of the Accountant and was written by the Accountant. The assessee has no concern with the said Dairy. The additions were made on conjecture and surmises. As per law for block assessment period, the estimated addition cannot be made. Ld. CIT(A) while considering this ground concluded that during the course of search and seizure action, no incriminating document or evidence was found that may prove the withdrawals made by assessee or his family members were inadequate to run the Household. AO has not mentioned that the total withdrawal made by members of the assessee’s family, whereas the assessee had strongly emphasized the point. AO has not done this exercise otherwise he would not have reached to the conclusion that Household Expenditure incurred by family was sufficient and deleted the addition. The finding of CIT(A) deleting the addition are quite reasonable - Decided against revenue.
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