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TMI Blog2013 (8) TMI 715X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction was allowed therein and as thereafter no incriminating evidence was found in the search relatable to this issue, the disallowance in respect of DEPB/ DDB cannot be made or for that matter disallowance can be reduced undertaken in proceedings u/s 153A of the Act - Decided in favour of assessee. - ITA Nos.184 & 185/JU/2011, ITA Nos.187 & 188/JU/2011, ITA No. 297/JU/2011, ITA No. 16/JU/2011, ITA No. 302 & 303/JU/2011 - - - Dated:- 22-2-2013 - Shri Hari Om Maratha And Shri N. K. Saini,JJ. For the Appellant : Shri Rajendra Jain For the Respondent : Shri Deepak Sehgal ORDER Per Bench These appeals are directed against the common order of learned CIT(A) dated 28.2.2011 passed for the assessment years 2005-06 and 2007- 08. 2. Briefly stated, the facts of the case are that the assessee is a partnership f i rm. For the assessment years 2005-06 and 2007-08 as a consequence of search conducted u/s 132 of the Act in the case of Shri Nand Kishore Malani and other members of his family and their business concerns generally known as Malani Group of cases of Jodhpur on 12.9.2007 wherein numerous incriminating documents were found and seized and assessment or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of similar reasoning. Before us, arguments have been reiterated from assessee s side and also from Revenue s side. 5. It was argued by learned AR that in the assessment proceedings undertaken consequent upon search and u/s 153A of the Act , where the assessment for the year has already been concluded on the basis of return filed before the date of search, the Assessing Officer is not empowered to make any addition / disallowance in the absence of any new material being found during he course of search proceedings to justify his stand. It was further argued that the proceedings u/s 153 A are meant for assessing the undisclosed income relating to the period following the provisions of the said sect ion detected as a result of search proceedings but does not give any blanket authority to the Assessing Officer to make a de novo assessment after the assessment is completed u/s 143(3) as on the date of search. It was argued that the Assessing Officer has reviewed his own assessment completed assessment without their being new fact -finding and without bringing any new material on record and that the provisions of sect ion 153A are specifically so framed to address to search c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment year 2007-08 made by learned Assessing Officer and confirmed by CIT(A) by disallowing deduct ion u/s 80IB of the Act on the impugned incomes u/s 153A after regular assessment had been completed u/s 143(3) before the date of search have to be deleted and ground No.3 of these appeals is liable to the allowed. Therefore, in both the assessment years, the similar issue are allowed in assessee s favour. Accordingly, this appeal is partly allowed. ITA No. 187/Ju/2011 assessment year 2005-06 8. This is the Cross appeal of the Revenue. The first issue which has been raised vide ground Nos. 1 to 3 pertain to purchase of beetle nuts and payment of under invoiced amount in respect thereof. 9. The facts apropos this issue are that Shri Nand Kishore Malani declared undisclosed income aggregating to Rs. 3,75,00,000/ - during the assessment years 2007-08 and 2008-09 as per return fi led by him in compliance of the notice issued u/s 153A towards unaccounted payments made for the import of Supari (beet le nuts) for M/s Dinesh Tobacco Industries, during the financial years 2006-07 and 2007-08 as per pages 33, 43 to 47 of Exhibit -3 seized from his residence. The above documents were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the seized documents and not on the basis of calculation made by the DRI regarding differential assessable value. However, the Assessing Officer did not find any merit in the assessee s reply and instead of assessing Rs.1,25,00,000/ -, assessed at Rs.2,50,00,000/ -surrendered by Shri Nand Kishore Malani in his hands in the assessment year 2007-08 and Rs. 1.25 lakhs in the assessment year 2008-09. In the cases of actual payment he made substantial addition of Rs. 33,91,766/ - in assessment year 2005-06 and of Rs. 3,12,57,509/ - in assessment year 2007-08 on the basis of difference in the assessable value determined by the DRI. In assessment year 2008-09, there being no purchase of beet le nuts by the assessee firm, the Assessing Officer was of the opinion that because Shri Nand Kishore Malani had made payment of Rs. 3,75,00,000/ - as unaccounted money, the payment relatable to the purchase of beetle nuts by the assessee firm comes to Rs. 3,46,49,275/ - and therefore, this excess actual payment of Rs. 28,50,726/ - can be added further in the case of the assessee firm in assessment year 2008-09. Accordingly the Assessing Officer has assessed the unaccounted payment for purchase of be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered in the hands of the firm and not in the hands of Shri Nand Kishore Malani . He also held that the additions are to be made in the year in which actual payments were made. Therefore, the addition of unaccounted cash payments made for under invoiced purchases of beetle nuts made by the assessee firm was held to be made in the hands of the assessee firm and Rs. 3,00,000/- in assessment year 2007-08 and Rs. 75,00,000/ - in the assessment year 2008- 09. The learned CIT(A) deleted the protective additions made in the hands of Shri Nand Kishore Malani and in the hands of M/s Dinesh Pouches Ltd. and confirmed the substantial addition in the hands of the assessee firm. In respect of the arguments that Shri Nand Kishore Malani has included the same income in his own returns and also paid taxes thereon, the assessee made approach to the competent authority as per due process of law for getting sui table remedial action. Regarding gross profit addition, the learned CIT(A) has also given telescoping effect and has not made any separate addition. But still both the parties are aggrieved. 12. We have heard the rival submissions and have carefully perused the entire record. Both the par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,019/- added by the Assessing Officer after rejecting the books of account . As against the GP declared, the Assessing Officer has found that there is a slight fall in GP rate in this year. Thus, by adopting the GP rate of 37.66%, The Assessing Officer has made the impugned addition. The learned CIT(A) has reduced the same by adopting GP rate of 36% by considering the increase in the turnover of the year resulting in sustained trading addition of Rs. 89,11,024/ -. He has also given set off of telescoping of this trading addition under the addition made on account of unaccounted investment in the purchase and has not made a separate addition. In our considered opinion, the finding of the learned CIT(A) does not require any interference at our ends because a logical and a correct decision has been taken by him in this regard. Accordingly, ground No.4 of this appeal stands dismissed. In the result, appeal of the Revenue stands dismissed. ITA No. 185/Ju/2011- assessment year 2007-08 14. In this appeal , all the grounds raised by the assessee namely ground Nos 1 to 4 stands covered by the decision taken in the above appeals of the assessee for assessment year 2005-06. Accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ogent reasons for the same. The said addition on account of disallowance of expenses deserves to be fully deleted. 3. That the learned Commissioner of Income Tax - Appeals (Central ), Jaipur, on the facts and in the circumstances of the case, erred in confirming the addition Rs. 78468.00.00 out of deduct ion u/s 80JB of the Income Tax Act , 1961, considering the income out of business activities as income from other sources. The said disallowance deserves to be fully allowed. 4. That the learned Commissioner of Income Tax - Appeals (Central ), Jaipur, on the facts and in the circumstances of the case, erred in confirming the addition to the extent of Rs. 3056999/ - made by the learned assessing officer by way of disallowance out of deduct ion claimed u/s 80 HHC. The learned Commissioner of Income Tax -Appeals (Central ), Jaipur has erred in confirming further disallowance made by learned assessing officer to the extent that he has allowed calculation to be made on the gross interest instead of net interest . The said addition deserves to be deleted. 20. Ground No.1 was not pressed. Ground No.2 pertains to certain disallowance on account of telephone, vehicle repairs and depre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd of appeal to maintain parity of reasons. In the result, this appeal of the assessee is partly allowed. ITA No. 302 303/JU/2011 assessment years 2005-06 2007-08 25. These are appeals by the Revenue against the same assessee namely M/s Dinesh Tobacco Industries for the assessment years 2005-06 and 2007-08. 26. The grounds raised in each appeals reads as under: - ITA No. 302/JU/2011:- On the facts and circumstances of the case Ld. C.I.T. (A) has erred in law in - 1. Whether on the facts and circumstances of the case the CIT(A) (Central). Jaipur has erred in law and on facts in deleting addition of Rs.33,91,766/- made by the AO on protective basis on account of unaccounted payments made for import of beetle nuts as on the Fax message found during the course of search operation it is clearly mentioned that on money was paid by M/s Dinesh Pouches Ltd and also the issue of substantive addition in the case of M/s Dinesh Tobacco Industries has not got finality. ; 2. Whether on the facts and circumstances of the case the CIT(A)(Central), Jaipur has eared in law and on facts in holding that there is no involvement of M/s Dinesh Pouches Ltd. in purchase of beetle nuts an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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