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TMI Blog2012 (4) TMI 304X X X X Extracts X X X X X X X X Extracts X X X X ..... he three partners as also the appeals of the Revenue from the modified order of the first appellate authority. 2. We shall first deal with the appeal of the Revenue, ITA 18/2010 with respect to the assessee firm M/s. Kamadhenu Milk Products. M/s Kamadhenu Milk Products was a partnership firm consisting of 3 partners Sri. George Paul, David George Vettath and K.M Stephen. The firm, engaged in the business of trading of milk and milk products, filed returns up to 1999-2000. Consequent to a search conducted in the business premises of the firm and the residence of the partners, seizure of documents and books of account were effected and notice under section 158BC of the Income Tax Act was issued. The assessee filed return of income in Form 2B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e over the firm for Rs.2 crores appended along with an application made to People Urban Co-operative Bank, Thripunithura, the minutes of the Board of Directors of KMP Dairy Industry (P.) Ltd. and the balance sheet of the firm on 31.5.2000; all documents seized on search, as also a statement of the husband of Smt. Thenrajam and Sri. Nandakumar, two of the purchasers; found that the agreement dated 23.5.2000 is to be considered as a genuine one. On the basis of such finding the sale consideration was taken to be Rs. 2 crores as per the agreement dated 23.5.2000 and the profit on sale of business was computed at Rs. 81,33,546/-. The Assessing Officer also made additions coming to 20% of expenditure incurred violating the provisions of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as executed due to a fall in the processing of milk in the intervening period. Such fall could not have been predicted and the purchase of two sets of stamp papers reveal the intention of the parties to camouflage the actual terms of the agreement. On facts the Assessing Officer would further examine the contention put forward by the assessee with reference to the sale of milk before and after the agreements and discredit the sale by clear figures. The seized documents also would establish that the agreement dated 23.5.2000 disclosing the sale consideration of Rs.2 crores was the genuine one. The receipt of Rs. 118 lakhs dated 10.7.2000 signed by all the partners recovered from the residence of Sri David George Vettath is in consonance with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ath only would lend to an adverse inference in the matter of the actual consideration of sale. 6. On the veracity of the agreement dated 1.6.2000, the Assessing Officer has noticed in Annexure A order that the advance of Rs.75 lakhs as per the said agreement is categorically stated to be by pay order from Peoples Urban Co-operative Bank Thripunithura; while the application for loan itself was made to the Bank only on 24.6.2000. As noticed earlier the glaring absence of Rs. 5.5 lakhs as per the first agreement also raises valid doubts about the genuineness of the agreement dated 1.6.2000. On behalf of the assessee firm it was also submitted by the erstwhile partners that the amount actually received even as per the second agreement dated 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t lead to any question of law. 8. The remaining issue in the firm's appeal is with respect to the addition of Rs. 90,101/-which was shown in Form 2B for the year 2000-01, showing set off of carried forward loss from the assessment year 1999-2000. The Assessing Officer as well as the 1st appellate authority treated the same as undisclosed income for the assessment year 2000-01. The Tribunal merely found that set off can be granted only in regular assessment which is running parallel to the block assessment and allowed claim of the assessee. We find from the order of the Assessing Officer as well as the 1st appellate authority that no such parallel assessment is going on. The assessee failed to file a return in the assessment year 2000-01 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. We have today reversed the findings of the Tribunal in the firm's case and sustained the addition made by the Assessing Officer based on the sale agreement dated 23.5.2000 disclosing a consideration of Rs.2 crores. Hence the Tribunal, being the last fact finding authority has to consider the issues afresh based on our findings in the appeal filed by the Revenue against the firm. We also notice that the Tribunal, with respect to additions made on the basis of the statement under Section 132(4) has deleted it. This has been done on the premise that no additions can be made based on statement under Section 132(4) without any seized materials especially, since it has been retracted. We have held in CIT v. Abdul Razak [IT Appeal No. 1288 of 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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