ORDER
Joginder Pall, A.M.
1. By this order, we shall dispose of this appeal of the Revenue filed against the order of the CIT(A), Ludhiana, in the block assessment for the block period from 1st April, 1990 to 6th April, 2000.
In this appeal, the Revenue has taken (the) following two grounds:
1. The learned CIT(A) has erred both in law and on facts of the case in deleting the entire addition of Rs. 61,61,090 made to assessee’s income on account of excess stock found during survey under Section 133A found at the brick kiln of which the assessee is the proprietor.
2. The learned CIT(A) has erred both in law and on facts of the case in directing not to levy surcharge, being block assessment case.
2. As regards the first grievance relating to deletion of an addition of Rs. 61,61,090, the facts of the case are that IT Department had carried out search and seizure action under Section 132(1) of the IT Act, 1961 (in short “the Act”) both at the business as well as residential premises of the assessee on 6th April, 2000. The assessee was also running proprietary business of brick kiln and the business premises of the kiln were surveyed under Section 133A of the IT Act. During the course of survey operations, stock inventory of the bricks both inside the kiln and lying outside was prepared. The AO observed that after allowing margin of GP @ 20 per cent, the value of stock found at the time of survey worked out to Rs. 1,19,11,392 as against the stock shown at Rs. 21,13,205 in the books. When the assessee was supplied with a copy of stock inventory, several defects in the drawing of stock inventory were pointed out. It was submitted that the stock inventory was not prepared in the presence of some responsible person and the assessee was also not present at the relevant time. It was also pointed out that the capacity of the kiln was only 8 lakhs and it was not possible to stack the stock shown in the inventory in the premises of the assessee. It was also submitted that in fact, the authorized officer had not drawn the stock inventory after physically counting the stock. The person present at the time of survey was one Sh. Gian Chand, Pithaiwala of the brick kiln, who was an illiterate employee. His affidavit was filed, where he stated that he was not a party to the counting of the stock and he was asked to place his thumb impression. Another person whose presence was shown at the time of survey was one Sh. Ranjit Singh. The assessee also filed his affidavit stating that he owned tailor shop and he remained in the shop. He was asked to sign the papers after the working was completed by the survey team. Thus, the assessee strongly objected to the stock inventory drawn at the time of survey and repeatedly requested the AO to visit the brick kiln to see for himself as to whether the stock of bricks mentioned in the stock inventory could be stacked at the available place. This request was never accepted by the authorities below. It was also pointed out that while taking the stock of coal available at the time of survey, the authorized officer neither weighed coal nor indicated any basis how the same was found to be equal to 21 trucks. In fact, there were no separate heaps of coal at the site. The AO accepted that the stock of coal indicated by the authorized officer in the inventory was not based on actual weighment. However, as regards the bricks, the AO after taking into account the submissions of the assessee worked out the value of excess stock at Rs. 61,86,890 and made the addition of the same.
3. Aggrieved with the order of the AO, the assessee impugned the addition in appeal before the CIT(A). It was submitted before the CIT(A) that the entire addition has been made in an arbitrary manner and without any basis. It was submitted that despite request made by the assessee to supply the stock inventory immediately after the survey, the same was supplied only on 5th June, 2000. Immediately on receipt of the stock inventory, several defects were pointed out in the same. The AO was repeatedly requested to visit the premises to see for himself whether the space available with the assessee would be sufficient to store the quantity of stock of bricks. But this request was never accepted by the Revenue. It was submitted that the capacity of brick kiln was 7 to 8 lakhs only and taking this fact in view, it was not possible to believe that there was a stock of bricks equal to 81,76,700 bricks. Such quantity of stock required space measuring 80234 sq. ft. as against the space available with the assessee after excluding the space under the kiln, other area was 35800 sq. ft. It was also submitted that similar action was taken at the other premises belonging to other family members of the assessee and no variation in the stock was found at the time of survey and as per books was noticed. It was also submitted that despite detailed submissions made before the AO during the course of assessment proceedings, the AO summarily made the addition without dealing with the objections raised by the assessee. It was also submitted that when similar deficiencies were pointed out in the quantity of coal, stock shown in the inventory, the AO accepted the position and did not make any addition for the same. The learned CIT(A) considered the submissions and deleted the addition by accepting the submissions of the assessee that there was no space available to store/stock the quantity shown in the inventory. The stock inventory was drawn in the absence of some responsible person and suffered from serious flaws. Despite repeated requests made by the assessee, requesting the AO to visit the premises and ascertain for himself if the stock mentioned in the inventory could be stacked at the brick kiln, the request was neither accepted by the ADIT (Inv.) nor by the AO. The authorized officer in his comments had mentioned that the stock inventory was drawn in the presence of Sh. Manoj Kumar, Jamadar and Mrs. Sheela (called Pardhan) of brick kiln, who were taking care of the brick kiln in the absence of owner and his Munshi. The. assessee had pointed out that there was no Jamadar by the name of Sh. Manoj Kumar and Mrs. Sheela (called Pardhan). The stock inventory did not bear their signatures and no statements were recorded which could show their presence at the time of survey. He also took note of the affidavit of Sh. Ranjit Singh, who had nearby tailor shop and he stated in the affidavit that the stock inventory was not drawn in his presence and he was asked to sign certain papers at the close of the survey. Similarly, he also took note of the affidavit of Sh. Gian Chand, Pithaiwala. Thus, the claim of the authorized officer that he took assistance of the persons who could indicate number of bricks and their quantity/grade in the lots even by having a look alone, showed that no physical counting was done at the time of drawing inventory. He also observed that the claim of the Revenue that vast adjoining area was available for storage of bricks was not corroborated by any reliable evidence. On the contrary, the assessee had furnished photographs and Revenue records which indicated that the adjoining land belonged to S/Sh. Bakhshish Singh and Gurbachan Singh (and) was cultivated by them. He also took note of the fact that similar searches at the premises of the other brick kiln belonging to the family members did not yield any significant discrepancy in the stock found at the time of survey. Thus, the learned CIT(A) deleted the entire addition. Revenue is aggrieved by the order of the CIT(A). Hence, this appeal before us.
4. The learned senior Departmental Representative, Sh. Jayant Kumar heavily relied on the order of the AO. He submitted that apart from search at the business and residential premises of the assessee, survey under Section 133A was also carried out at the brick kiln, the proprietary concern of the assessee on 6th April, 2000. He submitted that a copy of the stock inventory drawn at the time of survey in the presence of Sh. Gian Chand, Pithaiwala and Sh. Ranjit Singh is placed on pp. 2 to 9 of the paper book filed by the assessee. He further drew our attention to pp. 8 and 9 of the paper book which indicates the difference between the stock found at the time of survey and as shown in the books. He referred to para 4.2 of the assessment order which indicates the position in regard to excess stock. He referred to pp. 10 and 11 of the paper book which indicate the value of excess stock found at the time of survey at Rs. 61,61,091. He submitted that the learned CIT(A) has deleted the entire addition simply by accepting the arguments of the assessee that space available with the assessee was inadequate to store the stack mentioned in the stock inventory. The learned senior Departmental Representative submitted that such finding is not based on proper appreciation of facts. He submitted that the stock inventory was drawn by a responsible authorised officer. The same could not be based on figment of imagination. The same contained details of 96 stacks. He submitted that findings recorded by the CIT(A) about the space does not appear to be based on any valid evidence and he finally submitted that even if there were some flaws in drawing up of inventory, the learned CIT(A) ought to have not deleted the entire addition. He should have at least maintained part of the addition. Thus, he concluded his arguments by relying on the order of the AO and submitted that the order of the CIT(A) may be set aside and that of the AO restored.
5. The learned Counsel for the assessee, Sh. S.S. Kalra, on the other hand, strongly supported the order of the CIT(A) and reiterated the submissions made before him. He submitted that survey action under Section 133A took place on 6th April, 2000. He submitted that at the time of survey neither the assessee nor any other responsible persons were present. He drew our attention to p. 1 of the paper book which is a copy DDIT (Inv.) letter dt. 18th April, 2000 where in reply to assessee’s letter requesting for supply of copies of stock inventories and other seized documents, it was stated that since he was busy in operating the lockers, there would be delay in supplying the photocopies desired by the assessee. Thus, he submitted that the observations made by the AO that the assessee did not request for supply of copies immediately after the survey and did not raise any objection to the inventory drawn at the time of survey are factually incorrect. He further drew our attention to p. 11 of the paper book, which is a copy of assessee’s letter dt. 7th June, 2000 addressed to ADIT (Inv.), which clearly shows that the copies of documents including stock inventory were given only on 5th June, 2000 at 5 P.M. The assessee promptly submitted before the AO that on scrutiny of the stock inventory, it was found that the same was drawn without the presence of some responsible persons. The same was signed by one Sh. Ranjit Singh, who happened to be a tailor-master having a nearby shop and other person was Sh. Gian Chand, an illiterate labourer. The various defects in the inventory were particularly highlighted. It was mentioned that the capacity of the brick kiln was only 7 to 8 lakhs. This was also admitted by the authorized officer. Still, the authorized officer had taken the number of bricks inside the kiln at 8 lakhs though it was not possible to load the kiln with more than 6 to 6.5 lakhs bricks. It was also pointed out that looking to the length, width and thickness of the bricks, the space required for stacking 2.5 lakhs bricks was 5250 sq. ft. Therefore, it was stated that the space available with the assessee could not stack the number of bricks mentioned in the inventory. The assessee also requested the ADIT (Inv.) to depute the authorized officer along with his team to visit the brick kiln and to prove that the stock shown in the inventory could be stored at the space available with the assessee. He submitted that this request was not acceded to. He further drew our attention to p. 14 of the paper book which is a copy of reply sent to AO stating therein that the authorized officer had wrongly taken the value of stock found at Rs. 1,19,11,392 as against the correct value of stock at Rs. 21,13,215 available as per books. He further referred to p. 16 of the paper book where again ADIT (Inv.) was requested to personally visit the kiln in the presence of assessee and to show how the stock shown in the inventory could be kept at the space available with the assessee. He further drew our attention to pp. 17 and 18 of the paper book which is a copy of letter dt. 11th April, 2002 of the AO to the assessee where he stated that the previous letters of the assessee were sent to the authorized officer for his comments. The authorized officer had sent a written reply stating that survey team had taken the assistance of Sh. Manoj Kumar, Jamadar and Smt. Sheela (called Pardhan) who were taking care of the brick kiln in the absence of the owner along with Sh. Gian Chand, Pithaiwala and one Sh. Ranjit Singh. The authorised officer has denied that any responsible person was not present at the time of survey. He has stated that the persons present and who assisted the survey party were so expert that they could tell the number of bricks and their quality or grade stocked in the lots even by having a look alone and just by counting the length, breadth and height of the stack. Thus, there is a clear admission on the part of the authorised officer and no actual counting of the stock had taken place. He then referred to pp. 19 to 21 of the paper book which is a reply of the assessee dt. 18th March, 2002. He submitted that it was clearly mentioned that there was no Manoj Kumar, Jamadar and Smt. Sheela (called Pardhan). Besides, the stock inventory did not bear their signatures, there were no evidence in the form of statements recorded or any other documents signed which could show their presence. It was submitted that Sh. Gian Chand, Pithaiwala was an illiterate labourer and his affidavit dt. 15th April, 2002 was filed, where he stated that the counting of the stock was done by the survey party and he had only placed his thumb impression on the stock inventory prepared. He submitted that affidavit of Sh. Ranjit Singh, a tailor-master having a shop nearby, was also filed (copy placed at p. 23 of the paper book) where he stated that he attended to his work in the shop and signed the papers prepared by the survey party at the end of the day. He also stated that stock inventory was prepared in his presence. He submitted that these affidavits have not been controverted by the Revenue and these persons were never cross-examined by the AO. Therefore, the contents of the affidavits should be accepted to be true. He relied on the judgment of Hon’ble Supreme Court in the case of Mehta Parikh & Co. v. CIT (1956) 30 ITR 181 (SC). Thus, he contended that this is absolutely clear that stock inventory was not drawn in the presence of any responsible person. It was also stated that the space required to store 81,76,700 bricks mentioned in the inventory was 80234 sq. ft. As against the same, the space available with the assessee was only 35800 sq. ft. He further drew our attention to pp. 29 and 30 of the paper book which is a detailed map of location and the space available with the assessee along with photographs indicating clearly that it was not possible to stock the number of bricks indicated in the stock inventory. He submitted that despite repeated requests made to the AO to visit the premises to verify himself the contention of the assessee, his request was not acceded to. He further stated that the assessee had produced the copies of Revenue record of the adjoining land to show that the same was under cultivation, where wheat was being grown. He drew our attention to copies of the Revenue’s record placed at pp. 26 to 28 of the paper book. Thus, he submitted that claim of the authorised officer that even the adjoining land was available for storing the bricks was factually incorrect and this has not been rebutted by the AO. He further stated that the assessee had also pointed out to the AO that brick kilns were controlled by the State Government and the officers of the District Food & Supply Controller, carried out the periodical inspection. He drew our attention to p. 31 of the paper book which is a copy of certificate of District Food & Supply Controller, where it was clearly mentioned that the total bricks manufactured by the assessee were 36,50,100 as per stock inventory and consumption of coal was 831.541 tonnes. He further drew our attention to pp. 32 to 35 of the paper book which are copies of the daily stock register and coal register maintained by the assessee and inspected by the Food & Supply Department. He further drew our attention to p. 36 of the paper book which is a summary of stock variation in the stock found and stock inventory prepared in respect of six other premises belonging to the family members of the assessee and submitted that in four cases, there was no variation and in two cases small variations of the value of Rs. 83,380 and Rs. 1,31,073 were found. He further drew our attention to pp. 37 to 40 of the paper book which is a copy of assessment order in the case of Smt. Gursharan Kaur, sister-in-law of the assessee, where against the capacity of 8 lakhs bricks, the number of bricks inside the brick kiln were found 3,04,666 as against the number taken at 8 lakhs by the AO which is just not possible to load the kiln with full capacity. He then drew our attention to para 4.3 on p. 9 of the assessment order where the AO has mentioned that the assessee strongly objected to the valuation of coal that how the survey team had reached a conclusion that there were 21 trucks of coal lying at the site without any physical weighment of the same. There were no separate 21 heaps of the coal at the site. Thus, how could simply by visual look one reached the conclusion that there were 21 trucks load of coal. After considering these submissions, the AO has recorded a clear finding that stock of coal has not been reasonably measured and therefore, no cognizance was being taken in the variation of coal Stock. He further submitted that despite the fact that very detailed submissions were made before the AO about the discrepancies in the inventory drawn, the AO made the addition by recording only 11 lines without dealing (with) any of the objections and contentions of the assessee. He submitted that whole exercise was only to defend the authorized officer who had not drawn the stock inventory on physical counting. Thus, he submitted that the learned CIT(A) has rightly deleted the addition. Relying on two decisions of Tribunal, Visakhapatnam Bench in the case of Smt. Bommana Swama Rekha v. Asstt. Crr (2005) 94 TTJ (Visakha) 885 and the decision of Tribunal, Nagpur Bench in the case of Parkash Tulsidass v. Asstt. CIT (2000) 68 TTJ (Nag) 479, the learned Counsel submitted that since the discrepancy, if any, in the stock was found during the course of survey under Section 133A, no addition for the same could have been made in the block assessment. Thus, the learned Counsel concluded his submissions by saying that the order of the CIT(A) does not merit any interference.
6. We have heard both the parties at some length and given our thoughtful consideration to the rival contentions, gone through the evidence and material placed on record and also the orders of the authorities below. We have also referred to the relevant pages of the paper book to which our attention has been drawn. From the facts discussed above, it is obvious that at the time when survey under Section 133A was carried out, neither the assessee nor any responsible person, i.e., Munshi, well acquainted with the working of the brick kiln was present. In fact, at the time when search and seizure or survey action takes place, it is incumbent upon on the authorized officer to ensure presence of two independent witnesses. However, in the present case, the stock inventory bears the thumb impression of Sh. Gian Chand, an illiterate labourer and the signatures of one Sh. Ranjit Singh, a tailor-master of a nearby shop. In fact, in his affidavit dt. 15th April, 2002, Sh. Gian Chand has clearly stated that he was alone present at the time of survey and nobody else such as ‘Munshi’ or any other responsible person was present. He also stated that counting was done by survey party itself and he was never made a party to it. He was asked to place his thumb impression on certain papers. Similarly, an affidavit of Sh. Ranjit Singh dt. 15th April, 2002 has also been filed before the AO, wherein he stated that he owned a tailor shop at a distance of 100 ft. from the brick kiln and on the date of survey, he was present in his shop and the survey party asked him to sign certain papers as a witness. He has also stated that he was not aware as to what happened to the brick kiln as he was not present at the relevant time. These affidavits were filed before the AO and the assessee has been repeatedly asking ADIT (Inv.) to depute the survey party to see for themselves as to how the stock mentioned in the stock inventory could be stocked at the space available with the assessee. The Revenue has not controverted the contents of the affidavit of Sh. Gian Chand and Sh. Ranjit Singh filed before the AO. Therefore, the contents thereof have to be accepted as true because if the AO had any doubt, he should have recorded the statements. This only shows that survey party did not carry out physical counting of the stock in the presence of some responsible persons. Further, when the attention of the AQ was drawn to these facts and he was repeatedly informed that the space available with the assessee was not adequate to store the stock of bricks mentioned in the stock inventory drawn at the time of survey, the AO referred these objections to the authorized officer of the survey team. In his comments, the authorized officer submitted that apart from these two persons one Sh. Manoj Kumar, Jamadar and Smt. Sheela (called Pardhan) who were well acquainted with the working of the kiln were also present at the time when stock inventory had been drawn. The authorized officer further mentioned that they were so expert in such work that just by having a simple look at the Chakka (lot of bricks), could easily indicate the number of bricks and their grade without physical counting and he mentioned that the assistance of these people was taken at the time of drawing stock inventory. This claim of the authorised officer has been found to be factually incorrect because the assessee immediately pointed out that there was no jamadar by name of Sh. Manoj Kumar and there was no Smt. Sheela (called Pardhan). This fact has not been controverted by the authorized officer or by the AO. Further, it is also a fact that neither stock inventory bears signatures of Sh. Manoj Kumar nor Smt. Sheela nor there is any statement recorded at the time of survey to show that they were present at the time when stock inventory was drawn. Now in a case where there is no direct evidence about the physical counting of the stock in the presence of some responsible person or even to support that actual counting was done at the time of survey, we have to take other circumstantial evidence to see whether such inventory had actually been drawn or not after counting the stock.
7. We have found that in the stock inventory, the survey party had reported 21 trucks of coal. However, it is admitted fact that no separate heaps of coal were found by the survey party. No physical measurement of the coal was also taken. In fact, the authorized officer himself admitted that he depended on the verbal replies and not the actual measurement of the quantity of the coal mentioned in the stock inventory. On consideration of these facts, the AO himself observed that simply on visual look, it was not possible to know about the exact truckload of coal lying in a heap. Thus, agreeing with the assessee, the AO has himself accepted the position that there was no variation in stock of coal as per books and as per stock inventory. It is also a fact that the total capacity of the brick kiln was 7 to 8 lakhs. In the stock inventory, the stock of bricks inside the kiln has been taken equal (to) the capacity of 8 lakhs bricks. The assessee has repeatedly submitted before the authorities below that the entire capacity cannot be loaded in the kiln. This fact has also not been rebutted by the AO. Further, the assessee has repeatedly mentioned that the space available was not sufficient to stock the quantity of bricks mentioned in the inventory and the assessee has repeatedly requested the Revenue authorities to visit the premises to verify this fact. This request fell on the deaf ears of the authorities concerned. The claim of the authorized officer that adjoining land was also available for stacking the bricks was found factually incorrect because the adjoining land belonged to Sh. Bakshish Singh and Sh. Gurbachan Singh which was actually used for agricultural operations where the crop of wheat was grown. The assessee has supported this fact by filing necessary evidence in the form of Revenue records. Further, survey action was also carried out at the other bricks kilns belonging to the family members/sister-concerns of the assessee. It is a fact that at four out of six places, a very negligible variation was found in the stock for which no addition was made and in two cases variation in the stock was only to the extent of Rs. 83,380 and Rs. 1,31,073. Considering the fact that the capacity of the brick kiln belonging to the assessee was also 8 lakhs, i.e., the same as the brick kilns belonging to the other family members/sister-concerns. It is not possible to believe that variation could be to the extent of value of Rs. 61,61,090.
8. Moreover, it is not possible to accept that the stock actually found was 81,76,700 bricks, i.e., equal to 11 times of the capacity of brick kiln. If the assessee had made bricks of such magnitude, it is obvious that the huge quantity of coal was also required for baking bricks, but no variation in stock of coal was found. This fact again confirms that stock inventory prepared by the survey party was not correct. Further, the assessee had also filed a certificate from District Food & Supplies Controller, where it was mentioned that the assessee had made 36,50,100 bricks and coal used was 831.541 tonnes. This evidence again supports the case of the assessee that stock mentioned in the stock inventory was not based on actual counting of the stock.
9. Thus, in the light of abovementioned facts and circumstances of the case, we are of the considered opinion that survey team had adopted slip-shod procedure for preparing stock inventory which was not based on actual counting of the stock and, therefore, the learned CIT(A) was justified in deleting the impugned addition. We do not find any justification to interfere with the order of the CIT(A). The same is upheld and this ground of appeal of the Revenue is rejected.
10. The next grievance of the Revenue is that the learned CIT(A) was not justified in directing the AO not to levy surcharge on the undisclosed income determined during block period. The facts of the case are that at the time of completing block assessment, the AO also levied surcharge on the undisclosed income. However, on appeal, the learned CIT(A) deleted the surcharge by recording following findings on p. 12, para 3 of the impugned order:
3. The next issue in appeal is regarding the non-levy of surcharge in block assessment proceedings. The learned Authorised Representative has made a fervent plea for the non-levy of surcharge by relying on the judgment of Hon’ble Tribunal, Amritsar Bench in the case of Hemco Inds. v. Asstt. CITIT(SS)A No. 5/Asr/1996, dt. 25th Oct., 2002 where, following the judgment of the Hon’ble Calcutta Bench in the case of Builcon Towers (P) Ltd. v. Asstt. CIT(2000) 113 Taxman 74 (Cal)(Mag), it was held that surcharge was not leviable before 1st June, 2002 as this amendment has not been made applicable with retrospective effect. A recent judgment of the Hon’ble Tribunal, Chandigarh Bench in the case of V.S. Fab. Investment Co. (P) Ltd., Ludhiana v. Asstt. CITin ITA No. 1218/Chd/1996, dt. 27th Nov., 2002 has also adopted a similar view. In deference to these judgments, I allow this ground of appeal in favour of the appellant, and direct the AO not to levy surcharge.
The Revenue is aggrieved by the order of the CIT(A). Hence, this appeal before us.
11. The learned Departmental Representative for the assessee (sic-Revenue) heavily relied on the order of the AO.
12. The learned Counsel for the assessee on the other hand relied on the order of Tribunal, Amritsar Bench in the case of Dy. CITv. Harmanpreet Singh in IT(SS)A No. 3/Asr/2005, for the block period 1st April, 1990 to 6th April, 2000. A copy of this order was also placed on our file.
13. We have heard both the parties and carefully considered the rival contentions. We find that this issue is squarely covered in favour of the assessee and against the Revenue by order dt. 5th April, 2006 of Tribunal, Amritsar Bench, in the case of Dy. CITv. Harmanpreet Singh (supra), where by relying on earlier order dt. 14th June, 2005 in the case of Dy. CITv. Charanjit LalChauhan in IT(SS)A No. 31/Asr/2003, for the block period 1st April, 1990 to 1st March, 2001, the Tribunal held that since search was carried out prior to 1st June, 2002, i.e., date of amendment, no surcharge could be imposed. The relevant findings recorded in para 8.2 of the order are as under:
8.2 We have heard both the parties and considered the rival contentions. We find that the same issue came up before us in the case of Dy. CTT, Jalandhar v. R.K. Jewellers, in IT(SS)A No. 10/Asr/2004 where on identical facts, the order of the CIT(A) was upheld by recording following findings in para 6 of the order:
6. We have heard both the parties and considered the rival submissions with reference to facts, evidence and material on record. From the facts discussed above, it is obvious that search and seizure action in the present case was carried out by the IT authorities on 1st March, 2001. Chapter XIV-B of the IT Act, has been specifically inserted in the IT Act, w.e.f. 1st July, 1995 and the same prescribes special procedure for completion of block assessments. The purpose of inserting such chapter was to make expeditious assessments in respect of cases where searches had taken place and to compute the undisclosed income of the block period. This was in addition to the regular assessments provided under normal provisions of the Act. The rate of tax to be levied on the undisclosed income was different from the rate of tax on normal income disclosed in the regular returns. As per provisions of Section 113, as these stood in the statute prior to 1st June, 2002, it was not provided that in addition to tax on undisclosed income, surcharge should also be levied. However, the proviso to Section 113 was inserted by the Finance Act, 2002 w.e.f. 1st June, 2002 as per which levy of surcharge on the undisclosed income was specifically provided w.e.f. 1st June, 2002. However, such proviso has not been given retrospective effect and is applicable only to cases where searches had been carried out after 1st June, 2002. In the present case, the search had been carried out prior to 1st June, 2002 and, therefore, no surcharge on tax on undisclosed income was leviable. This view also finds support from the decision of the Tribunal Chandigarh Bench in the case of V.S. Fabrics & Investment Co. (P) Ltd. v. Asstt. CIR, Cir-1 (2), Ludhiana (supra) and decision of Tribunal, Bombay Bench in the case of D.G.P. Windsor (India) Ltd. v. Dy. CIT(supra) and also the decision of Tribunal, Amritsar Bench in the case of Hemco Indus, v. Asstt. CITin ITA No. 5/Asr/1996, dt. 25th Oct., 2002. Having regard to these facts and the legal position, we are of the opinion that the order of the CIT(A) does not merit any interference. The same is upheld and this ground of appeal is dismissed.
In the present case also search took place prior to 1st June, 2002, i.e., before proviso to Section 113 was inserted. Therefore, the ratio of the aforesaid decision is directly applicable to the facts of the present case. Respectfully following the same, we confirm the order of the CIT(A) and reject the ground of appeal of the Revenue.
The facts of the present case are the same as for the abovementioned cases. Therefore, respectfully following the aforesaid orders of the Tribunal, we confirm the order of the CIT(A) and reject this ground of appeal of the Revenue.
14. In the result, the appeal filed by the Revenue is dismissed.