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TMI Blog2015 (2) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... ee 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 inflated to reduce the profits. Assessee contested the matters before Ld. CIT(A) not o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued to verify the material found at the residence of Mr. Iswarlal Sonthalia. In this context it is relevant to refer to the provisions of 153C of the Act, which read as under: 153C. [(l)J Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that any money, bullion, jewellery or other valuable article or thing or books of account or documents seized or requisitioned belongs or belong to a person other than the person referred to in section 153A, then 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 shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 132A and in respect of such assessment year- (a) no return of income has been furnished by such other person and no notice under sub-section (1) of section 142 has been issued to him, or (b) a return of income has been furnished by such other person but no notice under sub-section (2) of section 143 has been served and limitation of serving the notice under sub-section (2) of section 143 has expired, or (c) assessment or reassessment, if any, has been made, before 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, such Assessing Officer shall issue the notice and assess or reassess total income of such other person of such as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant 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 inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incriminating material found as a result of search on the basis of which the addition has been made. The AO has considered materials which is the subject matter of regular assessment. On the aforesaid circumstances, we are of the view that in absence of any incriminating material found as a result of search, the addition made u/s 153A cannot be sustained and the assessment made is also unsustainable in law. " 5.3. On facts there is no evidence to indicate that the seized material found either at the residence of Mr. Vimal Kumar Sonthalia or Mr. Iswarlal Sonthalia, is relatable to the firm and formed basis for initiating the proceedings u/s. 153C, as per the conditions stipulated in the relevant provisions. In this case additions were made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 additions will not have any legs to stand. This finding has more relevance, for the search based assessments, as in the instant case. Thus, based on the facts, I am of the considered opinion that there is no basis for the assessing officer for making the additions to the total incomes without rejecting the books and without pointing out any specific defects. Accordingly, the assessment of total incomes of Rs. 7,72,985/-, Rs. 8,20,898/-, Rs. 9,33,963/-, Rs. 10,31,326/- and Rs. 9,87,908/- for the assessment years 2004-05, 2005-06, 2006-07, 2007-08 and 2008-09, re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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