TMI Blog2015 (2) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... /H/2014 445/H/2014 446/H/2014 to 450/H/2014 - - - Dated:- 29-12-2014 - Shri B. Ramakotaiah And Shri Saktijit Dey,JJ. For the Petitioner : Mr. Rajat Mitra For the Respondent : Mr. Bhavesh R. Vithlani ORDER Per B. Ramakotaiah, A.M. These are 12 appeals emanating from the orders dated 18.11.2013 by Ld. CIT(A) passed separately in case of M/s. Fancy Silks and M/s. Fancy Cloths, Hyderabad arising out of orders of A.O. under section 143(3) read with section 153C dated 27.12.2010. 2. Briefly stated, assessee firms are engaged in the business of textile dealership and there were survey operations in this case in connection with search and seizure proceedings conducted in the case of partners Mr. Vimal Kumar Sonthalia and Mr. Eswarlal Sonthalia and Compaqny M/s. Sunder Steels Ltd where they are directors. A.O. initiated proceedings under section 153C on both the firms and made various disallowances and made additions by estimating the net profit at 5%, as against returned incomes shown by assessee in respective assessment years. The reason for rejecting the books of accounts was by merely observing that the stock details were not maintained and expenses were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r person notice and assess or reassess income of such other person in accordance with the provisions of section 153A:] [Provided that in case of such other person, the reference to the date of initiation of the search under section 132 or making of requisition under section 132A in the second proviso to [sub-section (1) of ] section 153A shall be construed as reference to the date of receiving the books of account or documents or assets seized or requisitioned by the Assessing Officer having jurisdiction over such other person : ] [Provided further that the Central Government may by rules made by it and published in the Official Gazette, specify the class or classes of cases in respect of such other person, in which the Assessing Officer shall not be required to issue notice for assessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made except in cases where any assessment or reassessment has abated.] [(2) Where books of accounts or documents or assets seized or requisitioned as referred to in subsection (1) has or have been received. by the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing or reassessing the total income for six assessment years immediately preceding the assessment year relevant to the previous year in which search is conducted or requisition is made.] As could be seen from the provisions of Sec. 153A, the A.O is entitled to assess or re-assess the total income of six assessment years immediately preceding the assessment year, relevant to Previous Year in which search is conducted u/s. 132 or requisition u/s. 132A was made. In case of provisions u/s. 153C, the language is specific to indicate that 'any money, bullion, the books of account or documents or assets seized or requisitioned shall be handed over to the Assessing Officer having jurisdiction over such other person and that Assessing Officer shall proceed against each such other person and issue such other person notice and assess or reassess income of such other person in accordance with the provisions of section 153A In the case under reference, there is no mention of such documents or valuables relatable to the assessee, to initiate the proceedings against the appellant, as such rendering the proceedings initiated u/s. 153C, questionable. Further, no base or information r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re was a responsibility cast on the assessing officer to arrive at the basis for adopting the reasonable rate of net profit, either based on the facts of appellant's own case or on the basis of information relatable to other assesses in similar trade/business. Thus, the basis adopted by the assessing officer in this case, is neither supported by facts nor the judicial decisions. Further, there was no indication through the findings of search in case of partners of firm or the survey proceedings in case of appellant firm, to indicate that the expenses were inflated to reduce the profit, as observed by the assessing officer. Under the circumstances, it is held that the additions as resorted by the assessing officer have no legs to stand, since such additions were made neither on basis of the facts of the appellant's own case nor in comparative cases. There were no additional findings to this extent though search/survey proceedings took place in this group. Hence, the additions are held to be made on surmises and probabilities, and without any basis. Catena of judicial decisions support the view that the assessing officer is not empowered to make additions on surmises and such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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