TMI Blog2022 (10) TMI 1060X X X X Extracts X X X X X X X X Extracts X X X X ..... d upon the documents seized during the course of search for Financial Year 201011 and 2011-12 even when the present batch of cases pertains to the Assessment Years 2005-06 to 2009-10. The Supreme Court in the case of Ram Kumar Aggarwal Anr. vs. Thawar Das (through LRs), [ 1999 (8) TMI 1008 - SUPREME COURT] has reiterated that under Section 100 of the Code of Civil Procedure the jurisdiction of the High Court to interfere with the orders passed by the Courts below is confined to hearing on substantial question of law and interference with finding of the fact is not warranted if it involves re-appreciation of evidence. Consequently, this Court is of the view that no substantial question of law arises of consideration in the present appeals and accordingly, the same are dismissed. - HON BLE MR. JUSTICE MANMOHAN AND HON BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA Appellant Through: Mr. Puneet Rai, Sr. Standing Counsel for the Revenue. Respondent Through: None J U D G M E N T MANMOHAN, J: 1. Present income tax appeals have been filed challenging the order dated 19th August, 2021 passed by the Income Tax Appellate Tribunal ( ITAT ) in ITA No. 3257-3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act sought to be drawn by learned counsel for the appellant is irrelevant for the purposes of Section 153A of the Act. 9. Further, this Court in the case of PCIT vs Anand Kumar Jain (HUF) [2021 SCC Online Del 3174] following the judgements in PCIT v. Best Infrastructure (India) P. Ltd [2017 SCC OnLine Del 9591] and CIT v. Harjeev Aggarwal [2016 SCC OnLine Del 1512] has held that though the statement recorded in search has evidentiary value and relevance as contemplated under the explanation to section 132(4) of the Act, yet the same cannot, on a standalone basis, without reference to any other material discovered during search and seizure operations, empower the Assessing Officer to frame the block assessment. The relevant extract of the aforesaid judgement is reproduced herein below: 7. The preliminary question under consideration before us is whether a statement under Section 132(4) constitutes incriminating material for carrying out assessment under S. 153(A) of the Act. A reading of the impugned order reveals that the statement of Mr. Jindal recorded under Section 132(4) forms the foundation of the assessment carried out under Section 153A of the Act. That state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the settled legal position, the first and foremost issue to be addressed is whether a statement recorded under Section 132(4) of the Act would by itself be sufficient to assess the income, as disclosed by the Assessee in its statement, under the Provisions of Chapter XIV-B of the Act. 24. In our view, a plain reading of Section158BB(1) of the Act does not contemplate computing of undisclosed income solely on the basis of a statement recorded during the search. The words evidence found as a result of search would not take within its sweep statements recorded during search and seizure operations. However, the statements recorded would certainly constitute information and if such information is relatable to the evidence or material found during search, the same could certainly be used in evidence in any proceedings under the Act as expressly mandated by virtue of the explanation to Section 132(4) of the Act. However, such statements on a standalone basis without reference to any other material discovered during search and seizure operations would not empower the AO to make a block assessment merely because any admission was made by the Assessee during search operation. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h as led, tin, selenium, arsenic etc. and that each of these items have different qualities having wide price fluctuation and therefore the Assessing Officer has erred in making a comparison between incomparable products. The relevant findings of the ITAT on merits in one of the cases is reproduced herein below: 37. The assessee has earned the gross profit for assessment year 2005-06 at 9.53%, 2006 07 at the rate 7.30%, 2007 08 at the rate 6.81%, 2008 09 at the rate of 6.5% and assessment year 2009 10 at the rate of 6.66%. These gross profit rates are excluding the additional income offered by the assessee. The facts also placed before us shows that for assessment year 2011 12 onwards the gross profit rate of the company is better than earlier years. The learned assessing officer has enhanced the gross profit rate for all these years to 24.38% and made the addition. The allegations of the learned assessing officer is that as per the seized documents the gross profit rate of the assessee is much higher than what has been disclosed by the assessee. The seized materials pertain to assessment year 2010 11. The learned assessing officer has recorded that instances of pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fferent time. The DR has agreed that the AO has computed the gross profit by taking transactions of the nearby dates. However, it is not denied that the learned assessing officer has taken the highest rate of sales as well as lowest rates of purchases for computing the additional gross profit that should have been earned by the assessee. -The assessee has produced the copies of the paper book, which are placed before the learned CIT-A wherein he has verified the details of the material sold, quantity sold with respect to the various bills placed in those paper books and found that the comparison of the gross profit made by the learned assessing officer is not comparable. 39. Another argument of the DR is that the subsequent year s acceptance of the book results by the AO cannot help the case of the assessee in deleting the addition in those years, which are in appeal. We find that the subsequent years assessments are also completed u/s 143 (3) of the act and no addition has been made by the learned assessing officer. Admittedly in subsequent years there was no seized material available and the learned assessing officer has not extrapolated the gross profit in subsequent y ..... X X X X Extracts X X X X X X X X Extracts X X X X
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