DEPUTY COMMISSIONER OF INCOME-TAX, CRICLE -1, AURANGABAD vs. SANJAYKUMARRAMKISHAN MANTRI HUF, JALNA

It emerges during the course of hearing that the Revenue’s identical first and foremost substantive ground in former three assessment years 2008-2009 to 2010-2011 in I.T.(S.S.)A.Nos.69 to 70/PUN./2022 pleads that the CIT(A) has erred in law and on facts in holding that no addition/ disallowance can be made in absence of any incriminating material found and seized during the course of the search action. Learned CIT-DR vehemently supported the Revenue’s pleadings that any such incriminating material found or seized during the course of search is nowhere a condition precedent before disallowing or adding any item of income or expenditure in the course of a sec.153A r.w.s. 143(3) assessment. He failed to dispute that no such incriminating material had been found or seized during the course of search in issue dated 02.05.2013. Various landmark judicial precedents CIT vs. Continental Warehousing Corporation (Nhava Sheva) Ltd., [2015] 58 taxmann.com 78 (Bom.) and CIT vs. Sinhgad Technical Education Society [2017] 397 ITR 344 (SC); to name a few, have already settled the instant issue against the department and in assessee’s favour that sec.153A r.w.s.143(3) assessment in absence of any incriminating material found or seized during the course of search is invalid. We thus find no reason to interfere with the CIT(A)'s above stated findings on the instant legal issue.

The Revenue’s remaining identical substantive in the former three appeals and sole issue in last appeal I.T.(S.S.)A.No.71/PUN./2022 for assessment year 2011-2012 seeks to revive the Assessing Officer’s action disallowing the alleged un-recorded purchases involving varying sums as reversed in the CIT(A)'s detailed discussion in last assessment year 2011-12 as follows :

There could be hardly any dispute that the CIT(A) has already confirmed the impugned addition of above stated un-recorded purchases outside books of account from M/s. Mahalaxmi, in principle. Suffice to say, the Revenue’s sole substantive grievance before us is that the same ought not to have been restricted only to the gross profit element @ 4% only. We see no merit in the Revenue’s instant sole substantive grievance as the CIT(A) has already taken note of various judicial precedents that such unaccounted purchases have not to be disallowed in entirety but to the extent of the gross profit element therein only. Hon’ble jurisdictional high court’s recent decision in [2019] 103 taxmann.com 459 (Bom.) PCIT vs. M/s. Mohammad Haji Adam And Co. also reiterates the very principle. Faced with the situation, we see no reason to interfere with the CIT(A)'s above stated detailed discussion partly restricting the impugned disallowance of unaccounted purchases to the extent of 4% G.P. rate in issue only. The Revenue fails in the instant latter issue on merits as well. Ordered accordingly.

No other ground or argument has been pressed before us.

These Revenue’s four appeals are dismissed in above terms. A copy of this common order be placed in the respective case files.